Why Are These Innovative Medical Enterprises Expanding Aggressively in 2024?

Recently, a saying has been gaining increasing traction in the venture capital and investment community: "Pessimists are always right; optimists always move forward."

Different people interpret this statement in different ways. Some argue that, given the harsh market environment and significant future risks, it is advisable to cut losses promptly to minimize further damage. Others contend: while not all optimists will succeed, entrepreneurs must remain optimistic and move forward courageously. This is because ultimate success will belong to the optimists; pessimists who stand still are not even qualified to race toward the finish line.

Especially in the healthcare industry, even if optimistic entrepreneurs do not achieve success, their efforts still demonstrate value. This value may not necessarily be reflected in corporate growth and commercialization, but can also manifest in technological breakthroughs, product applications, patient benefits, and industry development.

It should be noted that optimistic entrepreneurs are not blindly optimistic; they also make strategic forecasts of future market conditions and formulate their corporate development strategies for the coming year based on these assessments.

At the dawn of 2024, what assessments do healthcare entrepreneurs have for the new year? What strategies will they formulate for their companies’ development? To address these questions, VCBeat interviewed numerous entrepreneurs in the healthcare industry, hoping that their insights and strategies would offer valuable references for the sector.

To most entrepreneurs, 2024 was a year fraught with peril.。

First, the market environment is fraught with significant uncertainty. On one hand, the state has frequently issued policies to bolster support for niche sectors such as high-end medical devices, innovative medical devices, upstream raw materials and core components, and innovative drugs. On the other hand, with the continued deepening of centralized procurement policies, the intensifying campaign against corruption in the healthcare sector, and heightened market competition, medical entrepreneurs are already feeling the mounting pressure, without any need for exaggeration.

Secondly, the capital market will continue the trend observed in 2023 by further clearing out bubbles. Changes in the secondary market often transmit to the primary market. Recent fluctuations in secondary market indices are likely to continue influencing the investment decisions of major institutions in the primary market. This will create a more challenging financing environment for healthcare startups. In particular, early-stage companies that have not yet achieved significant revenue scale may face substantial pressure on their survival.

Finally, healthcare enterprises that have achieved scale in revenue will also encounter operational and profitability challenges amid intensifying competition and a market downturn. Particularly in highly competitive segments, large-scale deregistrations, closures, and mergers and acquisitions are likely to occur. “The era of making easy money is gone for good,” said an anonymous entrepreneur.

Furthermore, numerous entrepreneurs and investors in the healthcare industry predict that a cohort of companies will reduce operational costs through measures such as layoffs and salary cuts, and even divest product lines that fail to contribute to revenue or profits, so as to focus on those capable of rapidly generating revenue.

Nevertheless, despite the harsh market environment, most of the entrepreneurs interviewed adhered to the principle of “despising the enemy strategically while taking them seriously tactically.” Strategically, these entrepreneurs maintained an optimistic outlook on future changes; tactically, they made targeted adjustments to their companies’ development strategies for the coming year based on forward-looking judgments.

Compared with the development plans previously formulated, most entrepreneurs made adjustments in 2024: placing greater emphasis on commercialization.。

“Currently, the external environment is imposing higher demands on innovative enterprises, shortening the cycle for them to validate their profitability. However, this will also compel outstanding innovative companies to accelerate their development,” said Qin Lan, Founder and Chairman of Qianglian Zhichuang, a company specializing in intelligent diagnosis and treatment of cerebrovascular diseases. “Achieving profitability is a fundamental requirement for commercial enterprises. Investment institutions assign higher valuations to companies because investors recognize the future profit potential of their products. In the past, however, high market enthusiasm and abundant capital led investment institutions to be more lenient in verifying the profitability of innovative enterprises, allowing them a longer period to explore and validate their business models.”

Nowadays, both the market and investment institutions require innovative enterprises to complete profitability validation as early as possible. It is expected that once a company’s product innovation and profitability are both validated, it will attract greater interest from more investors. After all, at this stage, high-quality resources tend to concentrate on leading enterprises and premium projects. Projects that possess technological innovation but fail to achieve profitability may be abandoned by the market.

Notably, in light of their assessment of the 2024 market environment, many innovative companies have prioritized profitability over revenue in their commercialization objectives.

Beyond commercialization, healthcare entrepreneurs have also adjusted their product strategies.Over the past two years, the normalization of centralized procurement has objectively brought about significant changes to the competitive landscape for enterprises. In response to this shift, some innovative companies have pursued product diversification. For instance, Yisi Medical, with minimally invasive surgery as its core focus, has established product lines including staplers, ultrasonic scalpels, electrosurgical units, and endoscopes. In 2024, Yisi Medical will continue to expand its product portfolio and plans to drive rapid growth in its overall revenue scale through income generated from multiple products.

In terms of product innovation direction,Different companies will adopt different strategies. For instance, Parmu Medical and StrongLink AI, which possess globally first-in-class products, will follow their established strategies to develop innovative products and iteratively optimize those already on the market. In contrast, Yisi Medical, which faces a larger number of competitors, will develop products tailored to market demands based on the characteristics of different markets.

Specifically, in the low- to mid-end market, Yisi Medical’s innovation focuses on core functionalities, enhanced quality assurance, and maintaining cost advantages, while additional features such as reduced surgical time and ease of use are no longer prioritized. In the high-end market, where customers have sufficient purchasing power, Yisi Medical will continue to pursue innovations driven by health economic value and clinical value.

In terms of marketing, some companies are reducing their investments, while others are increasing theirs.For instance, most companies that have won bids in centralized volume-based procurement (VBP) will reduce their marketing investments in the Chinese market; whereas in innovative therapeutic areas not yet subject to VBP, relevant companies will intensify their marketing efforts to drive product commercialization.

Additionally,More and more healthcare companies are planning to go overseas in 2024.. Despite the challenges inherent in global expansion, certain enterprises continue to lead the industry, forging ahead amidst a volatile macroeconomic environment. For instance, Panda Medical’s independently developed PADN product series received Humanitarian Use Device (HUD) designation from the U.S. FDA in 2023 for the treatment of Group I pulmonary hypertension. Furthermore, in January 2024, the product secured a U.S. healthcare reimbursement code, ensuring coverage for clinical applications. Notably, Panda Medical is the first Chinese company to achieve both this designation and reimbursement coverage.

In 2024, amid the severe market conditions anticipated by industry insiders, most entrepreneurs planned to “cut costs and weather the winter.” However, a select few companies intended to accelerate their commercial expansion despite the challenging market environment.

For example,To support the market promotion of its PADN series products, PAM Medical will steadily expand its commercialization team in 2024.Previously, Pamu Medical's globally pioneering PADN series products (the disposable circular pulmonary artery radiofrequency ablation catheter and the pulmonary artery radiofrequency ablation system) received approval from the National Medical Products Administration (NMPA) at the end of 2023.

It is understood that the PADN series of products are specifically designed for the treatment of pulmonary arterial hypertension (PAH), helping patients improve long-term prognosis and enhance quality of life. Compared with traditional treatment regimens, PADN therapy offers four major advantages: safety, stability, superior efficacy, and ease of operation.

As a globally pioneering technology and product, PADN is still in its early stages of development, requiring substantial academic promotion and training on standardized diagnosis and treatment protocols. Therefore, Pama Medical prioritizes disease awareness and technology accessibility, planning to carry out academic and clinical promotion across China.

Cynthia Chen of Pamu Medical stated, “In 2024, the company will intensify its efforts in commercial promotion and other areas to strongly support the market expansion of the PADN product series. We believe this will ensure that the commercialization of PADN products in China leads globally, establishing a clear market position through first-mover advantage and enhancing the company’s core competitiveness.”

Unlike Pamu Medical, which has just begun commercialization, Qianglian Zhichuang already possesses a certain degree of commercial experience.In the new year, StrongLink Intelligence has set a commercialization target of achieving multi-fold growth.。

Qin Lan, Founder and Chairman of UBrain, stated, “Based on the trends and data from the third and fourth quarters of 2023 and January 2024, we are fully confident in achieving this goal. This is because the company’s intelligent surgical solutions address core clinical pain points, and the human-machine collaborative surgical approach promoted by the company delivers better therapeutic outcomes compared to surgeries performed solely by physicians.”

To achieve its objectives, Qianglian Zhichuang will expand its marketing workforce in 2024. Unlike traditional sales roles, the marketing talent recruited by Qianglian Zhichuang will focus more on content creation and patient services.

Qin Lan stated, “With policy reforms such as centralized volume-based procurement and DRG-based payment, the pharmaceutical sales landscape has undergone dramatic changes. Traditional sales approaches that rely on customer relationships will become increasingly irrelevant in future marketing and promotion. For innovative businesses that differ from traditional medical devices, we aim to gain market recognition by leveraging the professionalism of our marketing talent.”

Previously, Qianglian Zhichuang attempted a traditional sales model, but it did not yield favorable results. In response to this situation, the company has abandoned its previous approach and is committed to diligently exploring new marketing models from the ground up.

Currently, across the Chinese market, the vast majority of clinicians are unfamiliar with UKnow® Intracranial Aneurysm Surgical Planning Software, the first Class III innovative medical device certificate for AI-assisted therapy launched by StrongWise Medical, and lack awareness of its “software + equipment + consumables” full-pathway intelligent surgical solution. Therefore, the marketing talent recruited by StrongWise Medical will focus on content creation and patient services.

Unlike traditional sales roles, StrongWise Intelligence aims for its marketing professionals to primarily assist physicians in cultivating new treatment protocols and habits, thereby streamlining surgical workflows. With a robust product and strong customer acceptance, we are confident that clients will proactively seek us out.

Not only Qianglian Zhichuang,Yisi Medical has also set ambitious commercialization targets for high growth, projecting a substantial increase in its domestic and overseas revenues in 2024.。

In the domestic market, Yisi Medical had previously won bids for multiple centralized procurement projects in Tianjin and other regions. As these centralized procurement initiatives are implemented in 2024, Yisi Medical anticipates a rapid increase in the volume of its minimally invasive surgical product series, driving high growth in sales scale.

In the international market, Yisi Medical has been strategically positioned for many years, having entered over 70 countries and regions worldwide and secured more than 150 registration certificates. Building on years of academic promotion and brand development, Yisi Medical anticipates that its overseas business will enter a phase of rapid growth in 2024.

Nie Honglin, Chairman of Yisi Medical, stated, “In 2024, the company will significantly increase its spending on brand promotion and technical outreach in overseas markets, while ramping up academic promotion across various surgical procedure fields. This aims to enhance the visibility of the Yisi Medical brand globally, spanning all countries and niche segments. The company’s overseas revenue growth is projected to outpace its domestic revenue growth.”

These companies, which accelerated their expansion in 2024, believe that their growth initiatives will yield twice the results with half the effort while competitors are scaling back investments and proceeding with caution.

For innovative enterprises, a single decision can either propel them to greatness or lead to their demise. Despite immense pressure, Palm Medical, StrongLink Intelligence, and Yisi Medical have all chosen to accelerate their expansion, demonstrating unwavering confidence in this strategic move.

Cynthia Chen of Pamu Medical stated, “At this stage, treatment options for pulmonary arterial hypertension (PAH) include lung transplantation and pharmacological therapy. The company’s globally first-in-class PADN product has ushered in a new era of interventional therapy for PAH. Compared with other approaches, PADN therapy offers advantages such as minimal invasiveness, low perioperative mortality, and favorable prognosis. The globally first-in-class product, a commercially scaled team, outstanding marketing talent, a unique commercialization strategy, and stringent cost-control measures will all safeguard the steady growth of Pamu Medical.”

In 2022, Ms. Lian Jia officially joined Parmu Medical as CEO. It is reported that Ms. Lian has over 20 years of experience in market commercialization, industrial strategy development, and global capital market operations. She successfully spearheaded the commercialization of the world’s first drug-eluting stent in China, pioneered cooperative models for domestic and international distribution with Chinese enterprises, and possesses extensive experience in business spin-offs, mergers and restructurings, and the successful commercialization of multiple products.

Regarding commercialization strategy, Cynthia noted that as the world’s first-of-its-kind product line, the initial step in advancing the commercialization of the PADN series is physician and patient education—namely, enabling doctors and patients to understand, accept, and utilize the product. To this end, Pulmonx Medical will collaborate with dozens of central hospitals across China to develop training and surgical proctoring programs, leveraging China’s physician training model to reach a broader network of hospitals and physicians through a top-down approach. The company will also work with industry associations and societies to establish and promote guidelines and expert consensus statements related to PADN therapy, thereby enhancing knowledge dissemination. Furthermore, through patient support initiatives, it aims to help patients gain a deeper understanding of pulmonary arterial hypertension (PAH) and PADN.

Similar to Pamu Medical, part of Qianglian Zhichuang’s confidence also stems from its products. Qin Lan stated, “The intelligent surgical solutions launched by Qianglian Zhichuang address core clinical pain points, and the human-machine collaborative surgical approach promoted by the company can achieve better therapeutic outcomes compared to surgeries performed solely by physicians.”

Specifically, QiangLian ZhiChuang obtained China’s first Class III innovative medical device approval for “AI + Therapy,” namely the UKnow® After the launch of the "Intracranial Aneurysm Surgical Planning Software," the product was upgraded in 2023 to a comprehensive intelligent surgical solution integrating "software, devices, and consumables." This solution not only provides physicians with automated surgical plans and intraoperative guidance but also enables automated execution of surgical procedures through specialized devices. This significantly reduces the complexity of neurointerventional surgeries and facilitates their adoption in primary-care hospitals.

In terms of efficacy, in the pre-market prospective, multicenter, randomized controlled clinical trial, the group assisted by the UKnow® Intracranial Aneurysm Surgical Planning Software was designated as the intelligent group, while the group following the traditional conventional operational protocol was designated as the manual group. Clinical results demonstrated that the intelligent group was significantly superior to the manual group in key evaluation metrics, including the first-attempt success rate of microcatheter placement, the success rate of microcatheter placement within 5 minutes, the time required for successful microcatheter placement, and microcatheter stability.

Another source of confidence is that UKnow®, the intracranial aneurysm surgical planning software, was successfully included in the “List of New Technologies, New Products, and New Services in Beijing for 2023 (Second Batch),” jointly released by five departments, including the Beijing Municipal Science & Technology Commission, at the end of 2023. It is understood that products on this list are eligible for policy support such as government procurement and promotion applications. This inclusion is expected to facilitate the commercialization process of Strong Intelligence Medical (Qianglian Zhichuang).

Unlike Parmed Medical and Joint Intelligence, Yisi Medical operates in a more complex environment, with many of its products facing multiple strong competitors.

Nie Honglin, Chairman of Yisi Medical, stated, “Undoubtedly, in the minimally invasive surgery market, giants such as Medtronic and Johnson & Johnson possess multiple advantages in terms of brand, distribution channels, and product offerings. However, compared with these overseas giants, we also have our own unique competitive advantages.”

Over the past two years, the global economy has generally declined, placing immense pressure on national healthcare insurance systems. Consequently, payers worldwide are in urgent need of high-quality, low-cost products. In this context, Yisi Medical’s high-quality, cost-effective offerings, which align with market demands, are well-positioned to gain market recognition and capture a larger share. Nie Honglin stated, “The company’s minimally invasive surgical products rival overseas counterparts in performance, with certain core metrics even surpassing them, while maintaining a cost advantage in pricing.”

Compared with other domestic minimally invasive surgical companies, Yisi Medical has consistently maintained a leading position in technological innovation and quality assurance, earning recognition from physicians both in China and abroad. Furthermore, as one of the earlier enterprises to establish a presence in overseas markets, Yisi Medical enjoys a significant first-mover advantage. Given that high-quality resources are scarce in the global market, Yisi Medical will leverage its access to such premium assets—including top-tier overseas distributors and key opinion leaders (KOLs)—to accelerate its international expansion.