Optometric Services Industry Reaches a Tipping Point in Medical Investment and Innovation

The ophthalmology industry is experiencing a shift in trends.

VCBeat observed that optometry, as a traditional branch of ophthalmology, is receiving more attention and gradually becoming an independent business segment separate from ophthalmology hospitals, leading to the rise of a growing number of optometry centers/clinics.

At the same time, optometry and optical services are increasingly attracting the attention of capital. Recently, a number of institutions have invested, including Temasek, Jingtuo Investment, BlueRun Ventures, Lake Bleu Capital, Remiges Capital, Taikang Life, and Yaoshi Capital. Companies such as MetaVision, Vision Xlab, and NovaSight have successfully secured financing.

"The optometry industry has not received enough attention in the past. The traditional understanding of optometry services is more about fitting glasses, but in fact,The demand for optometric services, represented by the treatment of strabismus and amblyopia, myopia prevention and control, recovery from occupational eye diseases, and post-surgical visual rehabilitation, has always been strong. These needs lean more towards medical care and require professional optometrists and solutions."Senior industry investor Wu Feng told VCBeat that in recent years, with the increase in people's awareness, there has been a greater demand for professional optometric services."

The explosive demand can be seen from the annual reports of major listed ophthalmology companies. According to the data disclosed by each company, in the first half of 2023, the optometry business revenues of Aier Eye, Huaxia Eye, Bright Eye, and He Eye increased year-on-year by 30.5%, 17.75%, 52.87%, and 17.48%, respectively, becoming a significant revenue support and growth driver.

Facing opportunities, companies including Aier Eye, Huaxia Eye, and New Vision have all entered the competition, making it increasingly fierce. Regarding the recent status of the service sector, VCBeat has provided a detailed explanation in the article "Ophthalmology Industry Enters a Period of Great Change: Capital and Giants Enter the Field, 'Optometry War' Officially Begins." Several industry insiders believe that this field may produce new unicorns or even recreate an "Aier Eye."

And reflected in the upstream product end,An increasing number of pharmaceutical and device companies are beginning to expand their business and product lines into the optometry field, sparking a race centered around eye care.

Previously, eyeglasses were the largest single product in the optometry industry. It is no exaggeration to say that, for a certain period in the past, the eyeglasses retail market was almost equivalent to the optometry market.

"With the launch of more innovative products, the optometry industry now has a wealth of solutions," investor Ma Bing told VCBeat, adding that the tremendous driving force in the market comes from the diversification of myopia prevention and control needs.Myopia has become very prevalent in China, making the demand for prevention and control increasingly urgent.”

Data can provide supporting evidence. According to data from the National Health Commission of China, there are over 700 million people with myopia in China, among which the overall myopia rate for children and adolescents is 52.7%. The myopia rate among Chinese children and adolescents ranks first in the world.

Therefore, a product battle has unfolded among major pharmaceutical and device manufacturers around the prevention and control of myopia.How fierce is the competition? In addition to normal price wars, the industry is rife with chaos.According to reports from Xinhua News Agency, some businesses, in pursuit of profit, are marketing products that lack scientific evidence, such as myopia pressure therapy devices, myopia eye drops, and eye-brightening ointments. These products not only fail to deliver the claimed therapeutic effects but may even harm the health of children and adolescents.

In this regard, Wu Feng, a senior industry investor, stated,Currently, the ophthalmic optics industry recognizes products that can be roughly divided into three types.One category is drugs such as low-concentration atropine eye drops, the second category is devices such as multi-point defocus spectacle lenses and orthokeratology lenses (OK lenses), and the third is the newly emerging digital therapeutics.

“The time for the full domestic launch of low-concentration atropine in China is approaching."This type of product may rewrite the market logic of the optometry industry." In Wu Feng's view, low-concentration atropine is currently the only recommended anticholinergic drug in the "Guidelines for Appropriate Technology for Myopia Control in Children and Adolescents," with huge market potential. "Based on the sales situation of its overseas launch, low-concentration atropine has tremendous explosive potential."

However, this niche market will also face fierce competition in the future. The CDE official website shows that companies including Xingqi Eye Drops, Zhaokew Eye, Hengrui Pharmaceutical, Ocumension Therapeutics, Santen Pharmaceutical, Jimo Bio, Hels Technology, Shapuaisi, and Qilu Pharmaceutical are involved.Atropine Eye Drops from a Number of Companies Have Entered the Clinical StageAmong them, Zhejiang Ophthalmology (Megafusion Ophthalmology) completed the final patient's exit from the "Mini-CHAMP" study on August 3, 2023. Additionally, low-concentration atropine eye drops from companies such as Ocumension Therapeutics and Hengrui Medicine have entered Phase III clinical trials.

Among device类产品,Multi-point defocus frame glasses and orthokeratology lenses (OK lenses) are gaining more popularity.First, let's look at multi-point defocus frame glasses. Unlike traditional glasses, the core feature is the use of special optical design to alter light signals in front of the retina, thereby slowing axial growth to improve vision.

More crucially, multi-point defocus frame glasses are low-cost, easy to use, and although they are classified as Class II medical devices in the United States, they are not regulated as medical devices in China. Therefore, in addition to ophthalmic hospitals and optometry centers, they can also be fitted in optical stores, offering broad terminal channels. As a result, the product has rapidly increased its penetration rate among the adolescent myopia population.

Orthokeratology lenses, also known as OK lenses, have become the hottest product in the optometry industry in recent years. "If the OK lens had not been introduced, there would be no optometry industry in China," said the founder of OcuScience. This statement is closely related to the significant effect of OK lenses in controlling myopia. Clinical studies have shown that long-term use of orthokeratology lenses can reduce or eliminate peripheral hyperopic defocus, slow down the growth of the eye axis, and significantly slow the progression of myopia.

From the layout of Chinese companies, the R&D and production of OK lenses have gradually formed a trend of leading aggregation. The popularity of OK lenses can be seen from financial reports. Taking Aier Eye as an example, the sales volume of its OK lens products has maintained a significant increase for three years, achieving a revenue of 105 million yuan in the first half of 2023, a year-on-year increase of 38.97%. Oupukang's rigid corneal contact lenses achieved a revenue of 380 million yuan in the first half of 2023, with a year-on-year increase of 10.88%. Although Haohai Biotech did not separately disclose the income from OK lenses, its financial report shows that the optometry terminal product business achieved a revenue of 95.68 million yuan, a year-on-year increase of 11.31%, mainly driven by the growth of the OK lens business.

"OK lens business is growing rapidly, but it is undeniable that the number of industry entrants is increasing, and market competition is gradually intensifying." Senior industry investor Wu Feng stated that currently, nine rigid gas-permeable contact lenses for orthokeratology have been approved, with the majority of approvals occurring in 2022 and 2023.The upcoming period will be crucial for product scaling, with a price war for OK lenses "on the verge of breaking out."。

Investor Ma Bing also stated that subsequent participants in the ophthalmic pharmaceuticals and devices sector will become more diversified. Low-concentration atropine eye drops, multi-point defocus frame glasses, and orthokeratology lenses will continue to attract strong multinational companies and emerging enterprises, driving changes on the supply side. Additionally, he noted,Investment in optometry must prioritize innovation on the supply side. Only with excellent products and solutions from the supply end can the industry achieve faster growth. "The enormous market demand is sufficient to bear the cost of innovation, and this field will definitely produce several unicorns and listed companies."

In addition to the aforementioned pharmaceutical and device products, many industry experts believe that digital therapeutics are becoming a current hotspot in the optometry and ophthalmology industry.

"After years of development,The application of digital therapeutics in the field of ophthalmology has become quite extensive and relatively mature."Including the treatment of amblyopia, strabismus, nystagmus, cataracts and other diseases have all achieved certain results." Senior industry investor Wu Feng told VCBeat.

In addition,The advantage of digital therapeutics also lies in their scalable and replicable capabilities, as well as their ability to integrate with pharmaceuticals, medical devices, or combination therapies, thereby improving patient compliance and leading to better clinical outcomes.

Professor Kang Ying from Zhongshan Ophthalmic Center, Sun Yat-sen University, also pointed out at the "First National Forum on Innovation and Development of Ophthalmic Medical Popularization and Digitalization" that due to the high repetitiveness, low interest, and poor self-discipline of children in traditional strabismus and amblyopia treatments, poor compliance among pediatric patients significantly affects treatment outcomes in clinical amblyopia therapy. Once the treatment window is delayed and amblyopia persists into adulthood, treatment becomes even more challenging. To address this issue,Enhancing the Initiative and Compliance in the Treatment of Children with Strabismus and Amblyopia: The Innovative Application of Digital Therapeutics in Ophthalmology Becomes a Key Focus in the Industry.

Currently, in the field of digital therapeutics for vision care, China has gathered a group of emerging companies such as DOBOSO, Vishbop, Precision Optics, FarVision, Polk Medical, MetaVision, Juehua Medical, Shuangqi Medical, Vision Xlab, and Jiacheng Vision.

For instance, DOBOSO has launched digital therapy products such as the Beibei Le VR Myopia Prevention and Control Instrument and Duobaoshi, a vision training product for amblyopia and strabismus. Taking Beibei Le as an example, this product integrates VR-based visual function training (including accommodative training and vision function training) with red light therapy. It enables ciliary muscle accommodative training through hand-eye-brain coordination while promoting blood circulation in the fundus of the eye via red light exposure, aiming to slow down axial elongation and control myopia progression.

Another product, DOBOSO Visual Function Training and Treatment Software, adopts high-energy biowave visual bio-information stimulation combined with perceptual learning training programs. It is developed using network multimedia technology as a software for treating strabismus and amblyopia and improving visual function. This software can create personalized treatment plans based on each patient's vision and visual function status, allowing users to undergo effective strabismus and amblyopia rehabilitation training, enhance visual function, and improve eyesight.

Vishbop's approach is to collaborate with Hainan Eye Hospital of Zhongshan Ophthalmic Center, Sun Yat-sen University, to jointly establish a digital health service system for myopia prevention and control. This includes high-precision sensor 3D-printed eyeglass frames, collecting and recording multiple eye-use data, establishing an eye health big data center, and integrating various components. By utilizing microelectronics, artificial intelligence, information technology, and other means, it assists doctors in identifying medical clues to formulate effective strategies for preventing myopia and controlling the rapid progression of myopia in patients.

In addition, in order to upload and analyze eye-use data, and evaluate myopia-related factors such as eye-use habits, eye-use environment, and eye-use duration, Vishbop is also developing a vision prevention and healthcare APP, making attempts in data accumulation.

"Digital therapeutics holds great potential in the fields of myopia prevention and control, as well as amblyopia treatment. Taking amblyopia as an example, firstly, the current incidence rate of amblyopia in China is about 3%, with more than 40 million existing amblyopia patients, including 12 million children, but the product penetration rate is still at a low level; secondly, in terms of scenarios, traditional amblyopia treatment mainly takes place in hospital settings, and the treatment cycle is long, so the transition from hospital to home scenarios represents a new area yet to be developed. This is also why digital therapeutics is currently more concentrated in the field of amblyopia treatment," said Wu Feng, a senior industry investor.

In addition to focusing on product refinement, several industry experts also believe that,In the future, the field of digital therapeutics for eye optometry will gradually see product-oriented companies evolve into platform-oriented enterprises.For example, based on data, platform enterprises can: first, collaborate with universities and experts to convert scientific research achievements in various ophthalmic subfields; second, aggregate users through high-quality products to achieve comprehensive ophthalmic health management.

However, the industry is still in the market expansion period at present.Building a good digital therapeutics product for optometry remains the top priority., how to accelerate user education and bring more products to market will become key factors for investors to judge whether the development of this细分领域 is stable.

What new possibilities are emerging in the optometry industry as it continues to grow?

In this regard, VCBeat, combining first-line observations from multiple industry insiders and data analysis, believes thatTechnological breakthroughs remain the core issue in the ophthalmic optics industry for the foreseeable future. This includes, but is not limited to, the application of new materials and the expansion of new technologies, as well as the validation of new therapies.

For instance, in the application of new materials, take orthokeratology lenses (OK lenses) as an example. The earliest products used polymethyl methacrylate, which has poor oxygen permeability and can easily cause corneal edema in wearers, ultimately preventing long-term use. To improve breathability, the industry gradually shifted to using Rigid Gas Permeable materials, which have ideal oxygen permeability. Currently, the industry continues to seek better material solutions to drive greater breakthroughs in the market.

In the expansion of new technologies, a typical representative is gene sequencing technology, which has driven the development of precision ophthalmology diagnosis and treatment. For instance, whole exome sequencing can achieve eye disease risk screening, genetic diagnosis, and guide personalized treatment plans.

The verification of new therapies mainly refers to the validation of the actual efficacy of digital therapies in optometry during their popularization. Currently, the industry still has doubts about the effectiveness of large-scale applications of digital therapies in optometry. In addition, the scaling of digital therapies also depends on reimbursement from payers. How to address the issue of long-term growth on the payment side will be a key focus moving forward.

In addition to technological breakthroughs, mergers and acquisitions integration will become a new trend in the optometry and ophthalmology industry.From the experience of foreign countries, the story of mergers and acquisitions in the optometry industry, where "big fish eat small fish, and small fish eat shrimp," continues to unfold.

For example, in January 2017, Essilor, the world's largest optical lens manufacturer, merged with Luxottica, the world's largest eyewear manufacturer, in a deal worth 46 billion euros; in August 2022, Alcon acquired Aerie Pharma for 770 million US dollars; in December 2023, Carl Zeiss Meditec announced the acquisition of the Dutch Ophthalmic Research Center for 985 million euros.

In China, mergers and acquisitions in the optometry industry are also beginning to accelerate. For instance, Aier Eye, Vision Xlab, and Huaxia Eye are expanding their product lines and channels through acquisitions.

In this regard, the Shanghai Biopharmaceutical Fund mentioned in the article "Seeing is 'Vision', Investment in Ophthalmic Devices under the National Eye Health Policy" that with the continuous expansion of optometric products and eye health services, integration and mergers among the three channels of ophthalmic hospitals, clinics, and eyewear stores will occur more frequently in the future. The trend towards groupization and centralization will be further strengthened.The companies leading this merger and integration will mainly be publicly listed chain ophthalmology hospital groups, while innovative product companies will need to cooperate more closely with such industry groups at an earlier stage.

It is believed that, with the continuous influx of innovative enterprises, high-quality products, and solutions, the future of the optometry and vision care field will provide safer, more stable, and effective full-life-cycle eye health solutions for people of all ages.