Lioncet Medical Files IPO Prospectus: Pioneering Disposable Endoscopes to Simplify Clinical Procedures

In 2019, Liansert completed a tens-of-millions-yuan Series A financing round led by Med-Fine Capital. This also marked the first time Med-Fine Capital publicly disclosed this information.

For hospital infection control departments, the management of endoscopy units is often a top priority. However, despite repeated directives, cross-infections caused by endoscopes remain persistently high. Ultimately, in addition to inadequate cleaning and disinfection practices in some hospitals, the endoscope’s own structure—characterized by small, long, open channels—provides an environment conducive to cross-infection by allowing the retention of microorganisms, secretions, and blood residues.

Mainstream sterilization methods, such as ethylene oxide sterilization, require up to a week. Hospitals typically cannot wait for such an extended period. Although low-temperature plasma sterilization significantly reduces the duration to 1–2 hours, plasma sterilization equipment is often expensive. Due to these reasons, the disinfection and sterilization of endoscopic equipment has become a significant challenge. To address the issues faced by endoscopes, disposable endoscopes have emerged. However, similar products from abroad are often prohibitively expensive, and some even suffer from imaging quality defects. As more domestic manufacturers enter this sector, new changes are continuously emerging.

Founded in 2017,LainsertIt is one of the companies focusing on the field of disposable endoscopes. Currently,They are deeply rooted in gastroenterology and have developed products such as single-use ERCP (Endoscopic Retrograde Cholangiopancreatography) electronic endoscopes.The difference is that, for them, cross-infection is not the primary issue that single-use endoscopes aim to address.The problem they aim to solve is simplifying the complexity of surgical procedures for clinicians.

Zhang Jian, the founder of Lianserte, graduated from Nanchang University with a major in Computer Science and Technology and previously worked as an engineer at several companies. His observations regarding the purchasing power of medical equipment manufacturers during his tenure led him to be highly optimistic about the development prospects of the medical device sector.

With the support of the group company,In 2007, Zhang Jian established a medical device company engaged in the research and development of medical device products.Over a decade, Zhang Jian’s company developed more than ten products spanning multiple medical specialties. However, only a few ultimately achieved commercial success. Even so, these products generated substantial profits for the company.

Throughout this process, in order to better develop products, Zhang Jian has participated in numerous training sessions, even studying anatomy and conducting clinical trials alongside physicians. Starting as a newcomer with no prior knowledge of the healthcare industry, Zhang Jian rapidly grew professionally, gradually built his own team, and explored areas such as quality system establishment, product compliance, and market promotion.

Driven by new ideas for business development, Zhang Jian left his former company in 2016 to embark on a new entrepreneurial venture. By then, the original company had entered a phase of rapid growth after more than a decade of development. However, he felt no regret; his earlier explorations had equipped him with rich and valuable experience.

In 2016, he successively rallied friends from the industry, and in 2017, he founded his own company, Liancert.The core team members include professionals in technology, regulatory affairs, clinical trials, and quality management, among others.All team members have over ten years of experience in the medical device industry."Recognizing the importance of patents, he also invited patent specialists to join his team."

Everything is in place, awaiting the official commencement.

Long before founding the company, Zhang Jian had already determined its strategic direction. He was acutely aware of the substantial market potential in the field of gastroenterology.On the one hand, major medical device companies have not yet entered this space; on the other, there are significant gaps in the field of gastroenterology that urgently need to be filled by medical devices.

According to statistics, the current actual demand for ERCP procedures exceeds 1 million cases. However, due to the technical complexity of the procedure, there are fewer than 2,000 physicians in China who are proficient in performing it. Theoretically, clinical practice requires 5,000 to 8,000 physicians skilled in ERCP. Endoscopy serves as the primary tool for improving procedural techniques and reducing complications.

Lessons learned from failed products in his early entrepreneurial ventures made Zhang Jian realize the importance of product positioning. In his view, the failure of those early products was largely attributable to incorrect product positioning. Furthermore, factors such as a lack of forward-looking technical insights into relevant clinical departments and an overly extended operational front that hindered effective resource integration prompted Zhang Jian to rethink the strategic positioning of his new company:He set his sights on endoscopes, aiming to establish a foothold in gastroenterology and gradually expand the range of surgical instruments through the endoscopic platform.

If the first entrepreneurial venture stemmed from insights into the behaviors of medical device manufacturers, then the insight behind the second venture was more direct: Zhang Jian realized, while following physicians in clinical settings, thatImported flexible endoscopes account for the vast majority of the endoscopy market, which is nearly monopolized by foreign enterprises. Domestic companies are primarily engaged in the manufacturing of consumables related to the digestive system. There has been limited effective synergy between the two parties.In clinical practice, the two must be used in combination to achieve their intended efficacy.

The push into disposable endoscopes stems from Zhang Jian’s recognition that people hold different expectations for long-term reusable devices versus single-use devices.Single-use surgical instruments and devices require greater consideration of safety and efficacy, with no need to consider durability.This enables Lainsert to reduce product prices by switching materials. Zhang Jian also stated,Reducing costs and preventing cross-infection are not the ultimate goals of single-use endoscopes; rather, the ultimate goal is to maximize the functional value of the product and address the critical challenges faced by physicians in clinical practice.

For instance, during endoscopic submucosal dissection (ESD) performed via gastroscopy, the current surgical procedure is highly challenging. Surgeons often need to adapt to the limitations of the instruments and consumables, leaving little room to fully utilize their skills. Furthermore, it typically takes years of training for physicians to properly master the use of imported surgical instruments from abroad. For a general physician to become a qualified ERCP specialist, they must complete at least 100 ERCP procedures and 30 endoscopic sphincterotomies (EST) under supervision, perform no fewer than 40 ERCP procedures annually, and achieve a selective cannulation success rate of over 80% before being permitted to operate independently.

For physicians, the constraint lies not in the diagnosis and treatment of clinical patients or in clinical judgment, but in the proficient use of medical devices.After decades of training to become a medical postdoctoral fellow, followed by several more years of training to master the use of surgical instruments, doctors are left with only a brief ten-year golden window for performing surgeries. This cost is simply too high.Moreover, innovations in surgical instruments that simplify procedures can significantly address the challenge of training young surgeons.

This is also the fundamental reason why Lainsert chose to establish its roots in gastroenterology and is committed to solving problems.

In fact, before finalizing the product direction, Zhang Jian invited clinical experts for discussions and sought oversight from leading academic authorities in China. The outcome of these discussions indicated that the industry desired products that were both user-friendly and affordable. However, to Zhang Jian, these two objectives were somewhat contradictory: usability inevitably hinges on material selection and equipment design, which would drive up the product’s price.

Lainser ultimately opted to provide certain practical features, adopting a low-margin, high-volume strategy to drive product sales, with the aim of fostering downstream development in the industry chain and further reducing product prices.

Combined with clinical R&D,Rainsert has developed its first-generation product—the single-use electronic endoscope for ERCP.The device significantly improves intubation efficiency through rapid assisted intubation. Furthermore, it enables real-time differentiation between the pancreatic and biliary ducts, and can access the cystic duct to facilitate gallbladder-preserving treatments for benign polyps and stones. In terms of radiation exposure, the use of a daughter scope substantially reduces the frequency of X-ray usage, thereby lowering radiation dose. Additionally, the provision of single-use sterile components helps prevent surgical infections. By reducing the complexity of surgical procedures, Lainsert also enhances physicians’ surgical cure rates.

Currently, the device is expected to submit its registration application by the end of 2020, while its CE certification is pending issuance. Lainsert, which has been deeply engaged in the field of gastroenterology, is also developing its second- and third-generation products.Lionsert has a clear understanding of its positioning, aiming to develop multiple surgical solutions for gastroenterology centered around its endoscopy platform.

In terms of the market, Lainsert believes that there will be demand for equipment in both primary care hospitals and tertiary hospitals. Currently,Foreign endoscopic equipment is expensive, and once damaged, it enters a lengthy repair period. County-level hospitals are unable to bear the substantial purchase costs. For large tertiary hospitals, high patient throughput is required in outpatient services; however, routine equipment needs for disinfection, maintenance, and protection result in low turnover rates., while the use of disposable endoscopes eliminates concerns about excessive cost burdens, as well as issues related to maintenance and sterilization. County-level hospitals can leverage disposable endoscopes to create more opportunities for training physicians in familiarizing themselves with equipment operation procedures.

Zhang Jian pointed out that the healthcare industry has high barriers to entry. However, once medical devices and equipment gain physicians’ endorsement, they secure a relatively stable market position. For Liancert, realizing the social value of its products will naturally generate economic benefits for the company. He also stated,To secure international market access and recognition, Lianse Te has dedicated personnel responsible for patent compliance and files international patents for its products.

In 2019, Liancert completed its tens-of-millions-yuan Series A financing round, led by Med-Fine Capital.Currently, it is planning a new round of financing.Given the unique developmental dynamics of the healthcare market, Zhang Jian expressed his desire to engage with investors who possess a deep understanding of the medical industry. The funds from this financing round are planned to be allocated to product research and development, market promotion, mass-production equipment for later-stage industrialization, and international registration and certification, among other areas.

Zhang Jian pointed out that Liancert may obtain domestic registration approvals for two to three products this year. In the United States, Liancert has already received FDA clearance for two products.In the future, Liansete will use Hangzhou as its base to continuously launch patented products featuring its own intellectual property. The company is also actively advancing its overseas expansion, targeting the international market.For Liancert, the next decade will be dedicated to deepening its expertise in the field of gastroenterology.

Zhang Jian stated, “We will continuously improve our products, streamline the surgical procedures for clinicians, and transform costly and cumbersome solutions into affordable ones with an excellent user experience. We will remain true to our original mission and proceed with every step in a down-to-earth manner.”