Ligatech Secures Tens of Millions in Funding to Advance Innovative Solutions in Sports Medicine

YiOu Health, July 22 news, ShanghaiLigatechLigatech Bioscience Co., Ltd. (hereinafter referred to as "Ligatech") has secured a new round of financing amounting to tens of millions of yuan, with the investor beingZHENGHE HUITONG. Lai Weiguo, Co-founder and General Manager of Ligatech, stated that due to the lengthy research and development and product launch cycles for orthopedic implant medical devices, the company’s core products are still in the R&D stage.The proceeds from this financing will also continue to be used for the research and development of the company's core products.

Ligatech, established in 2014, is a company specializing in the research, development, manufacturing, and sales of medical devices; the research and development and production of biomedical materials and products; and the provision of related technical consulting and technical services.It is understood that Ligatech has established a production line for artificial ligaments and ligament fixation systems., specializing in the production of artificial ligaments, interference screws, loop titanium plates, U-shaped staples, shavers, burrs, etc.Sports MedicineProduct.

Lai Weiguo stated that the company primarily focuses on developing a series of fixation, repair, and regeneration products used in surgical procedures initiated via arthroscopy. Notably, Ligatech’s artificial ligament technology has met the requirements for long-term implantation in terms of biomaterial compatibility. As is well known, although many materials are suitable for manufacturing artificial ligaments, favorable biocompatibility and mechanical properties remain the primary bottlenecks constraining material selection. Relevant literature reports indicate that follow-up records of similar foreign products show a maximum implantation duration of 19 years, and Ligatech aims to approach this benchmark in the future.“After five years of steady accumulation and breakthroughs, Ligatech’s products have achieved a high level of cost-effectiveness. The company’s future strategic focus is to provide comprehensive solution packages. Currently, compared with established international competitors, the company’s products are priced at approximately 40% of theirs.”

Data indicates that Ligatech has an affiliated relationship with the listed medical device company, Shanghai Kinetic Medical Technology Co., Ltd. (hereinafter referred to as “Kinetic Medical”). As a leading domestic enterprise in orthopedic products, Kinetic Medical holds a competitive advantage in the industry across various dimensions, including product portfolio, distribution channels, expert resources, hospital coverage, R&D reserves, and international cooperation. Its product sales have reached more than 2,000 hospitals.In the future, leveraging KellyTai’s mature sales channels, operational model, and complementary product portfolio, Ligatech’s technological innovation advantages may be fully realized. Meanwhile, the collaborative development of both parties will help establish a closed-loop industrial chain for a full range of implants in the field of sports medicine.

As a subspecialty of orthopedic surgery, sports medicine has a relatively short history of development in China. According to Lai Weiguo, Chinese physicians began to engage in sports medicine one after another starting in the 1990s, but the field has truly flourished only in the past decade or so.“The total value of China’s sports medicine market reached RMB 3 billion in 2018, with an annual growth rate of 20% in recent years, and is expected to continue expanding in the future.”According to the Delphi method, the reasonable growth value of China's sports medicine market is RMB 34.8 billion, with a five-year compound annual growth rate (CAGR) of 16.18%.

The orthopedic implant market can be divided into trauma, spine, joint, and sports medicine categories.Ligatech specializes in orthopedic implants for sports medicine.Data shows that in 2018, the top three categories accounted for 85.50% of the market share, with sports medicine representing 14.5%. It is reported that within the orthopedic implant market, import substitution has only been achieved in the trauma segment, which has relatively lower technical barriers. In contrast, the spine, joint, and sports medicine segments, which involve higher technological complexity, are predominantly dominated by foreign companies, resulting in a low level of localization. Consequently, prices for high-end domestic orthopedic implant products have remained persistently high.

Against the backdrop of numerous national policies encouraging domestic innovation and import substitution, Chinese-made products are poised to make significant strides in the orthopedics sector. Coupled with the broader environment of state-mandated cost containment and price reductions, domestic enterprises may leverage policy and cost advantages to achieve new breakthroughs. Consequently, it is foreseeable that the high-end orthopedic implant market will exhibit substantial potential for domestic substitution.

Ligatech has been deeply committed to the sports medicine segment of the orthopedic implant market, establishing a core research team of more than ten members with hard technology innovation as its breakthrough point. The company’s General Manager, Lai Weiguo, previously held positions at Stryker and Smith & Nephew, two well-known multinational corporations in the field of sports medicine, and brings 16 years of specialized industry experience.To date, Ligatech holds 27 utility model patents and 6 invention patents related to artificial ligaments, with one proprietary artificial ligament weaving technology currently under development.Lai Weiguo stated that the establishment of Ligatech was also aimed at seizing the opportunity presented by the burgeoning sports medicine sector in China, where domestic products remain scarce.

“In the future, with the rise in consumer spending power among Chinese residents, the improvement of the domestic medical insurance system, and the overall enhancement of clinical treatment standards, the market share of spinal and joint consumable products in China will further increase,” said Dong Geyun, Senior Investment Manager at ZHENGHE HUITONG.In addition to capitalizing on key inflection points in the development of the sports medicine market, Ligatech’s technological innovation capabilities and the breadth and depth of its product portfolio are at the industry forefront., which is also why ZHENGHE HUITONG is optimistic about Ligatech.

Overall, in high-end technological fields dominated by foreign capital, Ligatech’s ambition to carve out a market share with its proprietary hard-tech products has garnered support from ZHENGHE HUITONG, leveraging the tailwind of “import substitution” in the medical device sector. What exactly are the core products that Ligatech has been developing for nearly five years and is poised to launch? How will the company capture a share of the near-monopoly market currently held by foreign players? Yiou Health will continue to monitor these developments closely.

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