Breaking the Monopoly: Domestic Innovators Challenge Multinational Giants in China's Intracardiac Echocardiography Market

Against the backdrop of a capital winter, intracardiac ultrasound continues to be favored. Industry players such as TINGSN, SONOSEMI, ICE, and CARDIOACC all completed new rounds of financing in 2022.

At the same time, the products laid out by China's intracardiac ultrasound companies have gradually entered the animal experiment and clinical trial stages, and are about to be approved for marketing. The product launch has reached a critical moment.

On the other hand, globally, medical device giants such as Siemens, Philips, GE Healthcare, Johnson & Johnson, Abbott, and Boston Scientific have all entered the intracardiac ultrasound market. Among them, Siemens, Johnson & Johnson, and Philips have launched or developed the latest generation of 4D intracardiac ultrasound products in the past two years.

In the press releases of domestic companies moving towards clinical trials and overseas multinational companies launching new products, the increasingly prosperous market state of intracardiac ultrasound is presented.

Currently, how is the development of the intracardiac ultrasound field in China? Where are the gaps compared with overseas enterprises? Are multinational device companies invincible? Do Chinese manufacturers still have opportunities? VCBeat has explored these questions to understand the industry status and hopes to find answers.

Data shows that intracardiac echocardiography (ICE) is an innovative echocardiographic diagnostic technology that places the ultrasound probe inside the heart chambers to emit and receive ultrasound signals, enabling...Real-time imaging of cardiac anatomy, cardiac hemodynamics, and cardiac function。

Based on different technical principles, intracardiac ultrasound catheters are divided into two types: mechanical rotational ultrasound catheters and phased-array ultrasound catheters. Currently, phased-array ultrasound catheters are mainly used in clinical practice.

Initially, intracardiac echocardiography was only used for atrial septal defect and patent foramen ovale closure procedures. As intracardiac echocardiography does not require general anesthesia or the assistance of an ultrasound specialist, it is more convenient to use. Moreover, its imaging quality is comparable to that of transesophageal echocardiography, leading to its wider application.

As of now, intracardiac echocardiography has been widely used in various cardiac interventional procedures. In October 2022, the world's first expert consensus on intracardiac echocardiography, "Chinese Expert Consensus on Intracardiac Echocardiography," was published in the internationally renowned journal *Frontiers in Cardiovascular Medicine*. The consensus states that intracardiac echocardiography can be used to guide and monitor catheter ablation for arrhythmias, interventional treatments for congenital heart disease, interventional treatments for valvular heart disease, and other cardiac interventional procedures.

(Applicable Surgeries for Intracardiac Ultrasound)

Tang Yi, Managing Director of Matrix Capital, believes: "Intracardiac echocardiography is like the DSA in the field of coronary intervention or the endoscope in endoscopic surgery; it serves as the doctor's 'eyes.' Regardless of how interventional procedures such as mitral valve intervention, tricuspid valve intervention, or atrial fibrillation ablation evolve, doctors will always need a pair of 'eyes' to help them perform surgeries more easily and directly."

Dr. Liu Fangde, CEO of CloudCentury Technology, stated: "Cardiac interventional surgery is extremely challenging, and there is still much room for improvement in imaging technology. Existing solutions are far from perfect. The use of intracardiac echocardiography in corresponding surgeries can enhance the safety and effectiveness of the procedures."

For example, in clinical practice, intracardiac ultrasound can enhance the precision and safety of surgeries such as atrial fibrillation radiofrequency ablation and left atrial appendage closure, reduce surgical risks, minimize complications, lower surgical costs, and improve patient comfort and surgical efficiency. Additionally, intracardiac ultrasound can effectively decrease the use of X-ray equipment, reducing radiation exposure for both patients and doctors.

According to a 2020 statistical report spanning 14 years and covering nearly 300,000 patients who underwent atrial fibrillation ablation, the use of intracardiac echocardiography during catheter ablation for atrial fibrillation significantly reduced in-hospital mortality. The overall complication rate was decreased by 52%, and the length of hospital stay was also significantly shortened.

TINGSN CEO Zhang Dongyu stated: "For special patients who cannot tolerate DSA or are allergic to iodinated contrast agents, intracardiac echocardiography can also provide intraoperative guidance to ensure their surgeries are conducted safely."

It is worth mentioning that among the top ten global medical device companies, Siemens, Philips, GE, Johnson & Johnson, Abbott, Boston Scientific, and others have already laid out intracardiac ultrasound. This indicates that intracardiac ultrasound holds significant clinical value and will bring substantial revenue to enterprises. Perhaps intracardiac ultrasound will become a necessity for electrophysiology and structural heart disease interventions in the future.

For the intracardiac ultrasound niche, Tang Yinan, Managing Director of Yuan Yi Capital, believes that it has extremely high technical barriers and a relatively high entry threshold. At the same time, with the flourishing development of various interventional cardiac procedures such as cardiac electrophysiology and structural heart disease, intracardiac ultrasound has encountered a "selling water" opportunity.

Intracardiac echocardiography is mainly used in various surgeries such as cardiac electrophysiology and interventional structural heart disease. These surgeries correspond to patients with atrial fibrillation, congenital heart disease, cardiogenic stroke, atrial septal defect, mitral stenosis, tricuspid stenosis, aortic stenosis, etc.

Data released by Frost & Sullivan shows that in 2021, China had approximately 133,400 congenital heart disease patients, about 4.5 million cardiogenic stroke patients, around 3.9 million aortic regurgitation patients, approximately 4.4 million aortic stenosis patients, about 5.9 million mitral stenosis patients, around 10.8 million mitral regurgitation patients, and nearly 20 million atrial fibrillation patients.

Globally, there are approximately 1.7 million patients with congenital heart disease, about 19.7 million patients with cardioembolic stroke, and around 220 million patients with valvular heart disease.

Driven by the enormous patient demand, the field of cardiac intervention has attracted a large number of innovators. Among them, many companies have developed various devices through innovative research and development, such as radiofrequency ablation systems, transcatheter aortic valves, transcatheter mitral valve replacement systems, transcatheter tricuspid valve replacement systems, and left atrial appendage closure devices. These are used for minimally invasive interventional treatments for patients with atrial fibrillation, congenital heart disease, valvular diseases, and more.

Currently, there are only about 140,000 cases of electrophysiology and structural heart disease interventional surgeries in China, which, compared to tens of millions of patients, indicates an extremely low penetration rate.

According to the "2021 China Structural Heart Disease Industry Report," in 2021, there were approximately 6,500 transcatheter aortic valve implantation (TAVI) procedures, about 350 transcatheter mitral valve edge-to-edge repair procedures, around 14,000 left atrial appendage closure procedures, and approximately 75,000 congenital heart disease interventional surgeries performed in China.

According to the "Report on Cardiovascular Health and Diseases in China 2021," in 2020, the number of atrial fibrillation radiofrequency ablation surgeries in China was approximately 35,000 cases.

However, as innovative devices for treating structural heart disease, such as mitral annuloplasty interventional repair, tricuspid annuloplasty rings, transcatheter valve replacement products, and transvenous tricuspid repair devices, are gradually approved in China, related companies are increasing market education and academic promotion. The penetration rate of interventional procedures for structural heart disease will rapidly increase. Meanwhile, driven by centralized procurement, policies, enterprises, and clinical experts, electrophysiological surgeries are also experiencing a phase of rapid growth in procedure volume.

It is worth mentioning that,In electrophysiological and structural heart disease interventional procedures such as atrial fibrillation ablation and atrial septal puncture, the use of intracardiac echocardiography will yield significant clinical benefits.Therefore, with the promotion and popularization of electrophysiological interventional surgeries and structural heart disease interventional surgeries, the use of intracardiac echocardiography will also accelerate.

In the market, the price of intracardiac ultrasound catheters is about 20,000 yuan each. If calculated with a 10% penetration rate, the market potential for intracardiac ultrasound catheters in China will exceed 10 billion yuan. The main system of intracardiac ultrasound costs approximately 1 million yuan per unit. If only one tertiary hospital is equipped with one main system (excluding non-tertiary hospitals), the market potential for intracardiac ultrasound main systems will surpass 1.4 billion yuan.

At present, the intracardiac echocardiography market in China is completely monopolized by multinational medical device companies. On one hand, there are only four intracardiac echocardiography products approved for marketing in China, all of which are from multinational brands such as Johnson & Johnson, Abbott, and Boston Scientific. On the other hand, domestically produced intracardiac echocardiography products have not yet been approved for marketing.

TINGSN CEO Dongyu Zhang stated: "From a purely technical perspective, multinational medical device companies such as Johnson & Johnson and Abbott have obvious advantages. They have been deeply involved in this field for nearly 20 years, with rich experience and deep technical accumulation. Chinese companies still need to increase R&D innovation to narrow the technological gap with imported products."

However, multinational medical device companies also have their limitations. The development and commercialization of intracardiac echocardiography products by these companies are highly cross-disciplinary. For instance, the intracardiac echocardiography product that Johnson & Johnson primarily promotes in China was previously developed by Siemens; Abbott collaborates with Philips, where its ViewFlex Xtra intracardiac echocardiography catheter is used in conjunction with Philips' CX50 xMatrix ultrasound system; Johnson & Johnson partners with GE Healthcare, pairing its NuVision intracardiac echocardiography catheter with GE Healthcare's Vivid Ultra Edition ultrasound system.

Relying on cooperation between giants, it is difficult to efficiently connect and打通 product全周期链条 from研发 to商业化. As a result, the development speed in the field of intracardiac ultrasound is far behind临床需求. Many pain points in clinical practice remain unmet, which presents an opportunity for innovative enterprises.

On the other hand,Giant enterprises such as Johnson & Johnson and Abbott mainly focus on global clinical needs, especially those in the U.S. and Europe, to research, develop, and innovate products. Therefore, intracardiac ultrasound products launched by multinational medical device companies may not necessarily be suitable for the Chinese market.。

For example, in the Chinese market, the turnover rate of surgeries is extremely high, leading to a strong demand for surgical efficiency. However, the payment capability is relatively weak, resulting in a high demand for cost-effective products. The differences in the domestic market make local doctors' requirements for intracardiac ultrasound products somewhat distinct from those in overseas markets.

Tang Yi, Managing Director of Matrix Capital, stated: "Based on the unique characteristics of the Chinese market, directly introducing foreign solutions into China is not necessarily the optimal approach in the field of device innovation. Even skilled outsiders may not always perform best in China."

TINGSN's CEO, Zhang Dongyu, believes that domestic companies should add some distinctive features to address clinical pain points in China (and possibly abroad) when innovatively developing intracardiac echocardiography products, which could provide an advantage in clinical applications. Additionally, considering cost and pricing, due to the advantages of China's supply chain and labor costs, domestically produced intracardiac echocardiography products have a significant cost-performance advantage compared to imported products.

Besides, the current macro environment is also extremely favorable for domestic intracardiac ultrasound companies. In terms of policies, the state supports import substitution, encourages the procurement of domestically produced products, and provides support for products selected in the innovative medical device green channel in aspects like DRG payment.

From a capital perspective, intracardiac ultrasound companies such as TINGSN, SONOSEMI, ICE, and CARDIOACC all completed new rounds of financing in 2022. Many well-known investment institutions, including Vivo Capital, Yuanmu Capital,楹联Health Fund, Noyu Capital, Titanium and Capital, Yahu Investment, and Eight Roads Capital, have invested significant resources to promote the development of China's intracardiac ultrasound enterprises.

In summary, given China's unique market conditions and demands, domestic intracardiac ultrasound companies still have significant opportunities and vast room for future development.

Currently, Siemens, Johnson & Johnson, Philips and other companies have launched or developed the latest generation of products - 4D intracardiac echocardiography. In China, TINGSN, ICE and other companies are closely following the pace of multinational medical device enterprises, and are simultaneously deploying R&D resources for 4D intracardiac echocardiography.

According to the introduction, compared with the previous 2D intracardiac echocardiography that provides two-dimensional images, the 4D intracardiac echocardiography catheter can directly generate real-time three-dimensional images and includes most of the functions available in 2D intracardiac echocardiography. For example, 4D intracardiac echocardiography can provide 2D and 4D intracardiac imaging, 2D and 4D color Doppler flow imaging, as well as spectral Doppler.

Based on technological breakthroughs, the 4D intracardiac echocardiography catheter has expanded its application scope, enabling patients who were previously unable to undergo structural heart interventional procedures to receive treatment with the support of 4D intracardiac echocardiography. These include patients with contraindications for transesophageal echocardiography, general anesthesia contraindications, and tricuspid regurgitation.

Compared with 2D intracardiac echocardiography, 4D intracardiac echocardiography can provide more intuitive and realistic ultrasound images, which will guide doctors to make more precise judgments in complex and difficult cardiac interventional surgeries.

However, 4D intracardiac echocardiography and 2D intracardiac echocardiography are not in a substitutive relationship but rather a coexistent one.This is because 4D intracardiac echocardiography has a smaller penetration depth and is more suitable for complex surgeries that do not require high penetration depth in clinical practice; 2D intracardiac echocardiography is more suitable for simple surgeries that require high penetration depth but have lower resolution requirements.

In addition, the cost of 4D intracardiac ultrasound is higher, making it more expensive; whereas 2D intracardiac ultrasound is less costly, with relatively lower clinical charging standards.

It is worth mentioning that the application of 4D intracardiac echocardiography will generate a large amount of data. This places new demands on enterprises' capabilities in data transmission and data processing.

For Chinese companies, although the prospects are promising, the most important task at present is to develop high-quality products that are clinically and commercially recognized. This requires Chinese companies to possess the ability to define products based on clinical needs, the capability for engineering implementation, and the quality control necessary for mass production.

At this stage, due to the absence of intracardiac ultrasound-related R&D centers established by multinational medical device companies in China, there is an extreme lack of talent in this field. Domestic start-up teams need to start from scratch, engage in deep communication with doctors, maintain long-term interactions, and continuously iterate to optimize their products.

Tang Yi, Managing Director of Matrix Capital, believes: "The relative threshold in the intracardiac ultrasound field is relatively high. Domestic companies need to put in two hundred percent effort and sufficient time to develop a product that meets clinical needs, gains clinical recognition, and has market competitiveness."

In this process, companies will inevitably "fall into pits," and how they face failure will shape them into different forms. Those that fall less often and can quickly climb out of the pit after falling in will accurately identify directions based on clinical needs, efficiently organize scarce industry resources, and rapidly iterate their products. Such companies are sure to secure a place in the future market.

Reference: VCBeat Intracardiac UltrasoundOnline Roundtable《How Far is Intracardiac Ultrasound, the Hottest Topic in the Capital Market, from Clinical Application?