Aibo Medical Soars Over 500% at Debut, Becomes First Ophthalmic Device Company Listed on STAR Market

On July 29, 2020, Eyebright Medical Technology (Beijing) Co., Ltd. (stock code: 688050; stock abbreviation: Eyebright Medical) was listed on the STAR Market, becoming the first ophthalmic medical device company in China to complete an IPO on the STAR Market. As of 9:40 a.m. on July 29, the total number of shares issued by Eyebright Medical was 26.29 million, with an issue price of RMB 33.55 per share. The opening price was RMB 188.88, reaching a high of RMB 233.55, representing an increase of over 500%.

According to VCBeat, Aier Medical is a leader in China’s ophthalmic medical device sector, having achieved numerous industry firsts. In 2014, Aier Medical pioneered the launch of a foldable aspheric intraocular lens (IOL) with premium refractive capabilities and fully independent intellectual property rights, breaking the monopoly held by imported products in both technology and market share for high-end IOLs. The prospectus indicates that funds raised from the IPO will be primarily allocated to the research and development of high-end ophthalmic medical devices, as well as expanding production capacity for ophthalmic lenses and related products.

Aibo Medical, founded by Dr. Xie Jiangbing in 2010, specializes in the independent research and development, manufacturing, sales, and related services of ophthalmic medical devices. It is China’s first manufacturer of high-end refractive intraocular lenses (IOLs) and one of the country’s leading manufacturers of foldable IOLs.

Jiangbing Xie holds a Master’s degree in Chemical Fiber Engineering from Donghua University and a Ph.D. in Agricultural and Environmental Chemistry from the University of California, Davis. He has served as the principal investigator for the National Key R&D Program of the Ministry of Science and Technology, as well as for multiple major national and Beijing municipal research projects. Previously, he was a Postdoctoral Research Fellow at Lawrence Berkeley National Laboratory in the United States, and held positions such as Senior Scientist at Abbott Medical Optics (AMO) and Chief Scientist at Abbott Laboratories.

The ophthalmic medical device market, in which Aier Medical operates, is the fifth-largest segment of the global medical device industry. According to the report “EvaluateMedTech World Preview 2018, Outlook to 2024,” the global market size reached USD 27.7 billion in 2017, with a compound annual growth rate (CAGR) of 6.2% from 2017 to 2024.

In 2017, the ophthalmic surgery market was valued at approximately $9 billion, with a projected compound annual growth rate (CAGR) of 4% from 2018 to 2023. Within this sector, the markets for implantable products, consumables, and equipment and others were valued at approximately $3 billion, $4 billion, and $2 billion, respectively. In the same year, the vision care market was valued at approximately $14 billion, also with a projected CAGR of 4% from 2018 to 2023, wherein the contact lens and eye health product segments accounted for approximately $8 billion and $6 billion, respectively.

Among the sub-sectors, implantable products (such as intraocular lenses and glaucoma surgical products) are projected to grow at a rate of 6%, making them the fastest-growing segment.

According to the prospectus of Aierbo Medical, ophthalmology comprises two major sectors: ocular surgery and vision care. Ocular surgery encompasses products, consumables, and equipment for various surgical procedures (including cataract surgery, vitreoretinal surgery, glaucoma surgery, and refractive surgery). Vision care includes contact lenses and various types of eye drops.

Aier Medical primarily targets the two major categories of ophthalmic diseases that cause blindness and visual impairment: cataracts and refractive errors. Its core products cover the two major fields of surgical treatment and optometry. Among them, the core product in the surgical field is intraocular lenses (IOLs), while the core product in the optometry field is orthokeratology lenses, along with a series of supporting products developed and manufactured around these two core offerings. Currently, Aier Medical’s revenue channels are relatively concentrated, relying mainly on intraocular lenses. For three consecutive years since 2017, revenue from intraocular lens products has accounted for more than 90% of the company’s total revenue.

Since 2020, Aier Medical’s business has been significantly impacted by the epidemic. To mitigate the risk of viral spread, ophthalmology departments in most hospitals and clinics suspended outpatient services and surgeries starting in February 2020. From late January to the end of the first quarter of 2020, there was a substantial decline in cataract surgery volumes and orthokeratology lens fitting procedures at terminal medical institutions, resulting in a year-on-year decrease of 39.15% in operating revenue. In the first quarter of 2020, sales volume of intraocular lenses (IOLs) dropped by 44.96% year-on-year, leading to a 46.28% year-on-year decline in IOL sales revenue. Revenue from orthokeratology lenses amounted to RMB 2.9188 million in the first quarter of 2020. Although services gradually resumed thereafter, the implementation of appointment-only systems and patient flow control measures caused a sharp drop in orders during the first quarter, resulting in a 39.15% year-on-year decrease in operating revenue and an 82.30% year-on-year decrease in net profit.

The prospectus indicates that Aier Medical’s end customers have gradually resumed operations, with order volumes steadily increasing. If the pandemic situation stabilizes, Aier Medical expects its performance in the second quarter to gradually return to the levels seen in the same period of 2019. Notably, orders for the company’s core products—intraocular lenses and orthokeratology lenses—surpassed those of the same period in 2019 in April.

Intraocular lenses (IOLs) are used to treat cataracts and represent the most widely used artificial organs and implantable medical devices worldwide. Aier Medical currently offers the PunoMing and PunoTe series of intraocular lenses. In 2014, Aier Medical’s first IOL, PunoMing® A1-UV, received registration approval from the National Medical Products Administration (NMPA). This product is a high-order aspheric IOL made from hydrophobic acrylic material and is the first domestically developed, independently owned foldable aspheric refractive IOL in China. By the end of 2019, this product had been sold in more than 1,000 hospitals across China.

In 2016, Aier Medical’s ProMing® Toric intraocular lens (IOL), featuring astigmatism correction capabilities, obtained registration certification through the National Medical Products Administration (NMPA) “Special Approval Procedure for Innovative Medical Devices.” To date, this product remains the only domestically produced astigmatism-correcting IOL. Approved by the NMPA as an “innovative product,” it was hailed on the NMPA’s official website as “a first among domestically manufactured IOLs, representing a significant advancement for Chinese medical devices in the high-end IOL sector.”

As of the end of 2019, Aier Medical had obtained NMPA registration certificates for five models of aspheric intraocular lenses (IOLs) and six models of toric IOLs, while its multifocal IOLs were undergoing clinical trials.

According to the prospectus, Aier Medical has developed a product portfolio comprising 20 models of intraocular lenses (IOLs). These products are currently used in over 1,000 hospitals across more than 30 provinces, autonomous regions, and municipalities directly under the central government in China, and have been exported to countries including Germany, France, the Netherlands, and Italy, with cumulative sales reaching 1 million units. Since 2015, the company’s products have been frequently selected for the “Bright Journey” medical aid initiative launched by the Chinese government for Africa and Belt and Road Initiative (BRI) countries, restoring vision to patients in more than 20 countries and breaking the previous reliance on imported IOLs in China’s overseas cataract treatment aid programs.

Aier Medical started with intraocular lens (IOL) products, developed a series of supporting products for cataract surgery, and leveraged its expertise in IOLs to research and develop optometry products such as orthokeratology lenses, thereby entering the field of myopia correction.

Orthokeratology lenses, formally known as rigid gas permeable contact lenses for corneal reshaping and commonly referred to as OK lenses, utilize a special design with a geometry reverse to that of the corneal surface. Through the mechanical and fluid dynamic effects generated by lens wear, they perform reasonable, controllable, and reversible programmed reshaping of the cornea, thereby altering its refractive power to achieve myopia correction.

In March 2019, Aiboyi Medical’s PnuTong® orthokeratology lens received registration certification from the National Medical Products Administration (NMPA), making it the second manufacturer in China to obtain such certification for this product. Currently, this design method has been granted invention patents in both China and the United States.

This product utilizes high oxygen-permeability materials, allowing the eyes to receive ample oxygen while wearing orthokeratology lenses, thereby enhancing comfort and protecting corneal tissue and cells. Additionally, the product incorporates a series of patented technologies, including a reverse curve non-concentric design, an alignment curve aspheric design, and low-temperature atmospheric plasma treatment, to ensure stable orthokerapeutic effects.

Building on the ophthalmic sales channels already established by Aibo Medical, the market promotion and sales of orthokeratology lenses are being rapidly rolled out.

Over the past decade, Aier Medical has continuously built its technological “moat.” Its ten-year development history is also a chronicle of numerous domestic firsts, consistently leading breakthroughs and advancements in China’s ophthalmic medical device industry:

According to Aier Medical's prospectus, the company has completed six rounds of financing since its establishment.

The prospectus shows that in 2014, Aier Eye Hospital received Series A investment led by Tus-Holdings Daily New, and subsequently entered into a strategic partnership with Fidelity Growth Partners (now SD Capital), securing an investment of RMB 62.5 million. In April 2016, Longpan Biology and Century Sunshine each injected RMB 35 million at a price of RMB 12.62 per share. In April 2018, Aier Eye Hospital completed its Series D financing round, jointly invested by Boxun Venture Capital, Boxun Investment, Changke Jin, Yingfu Taike, Shanghai National Medicine, Huaqing Bencao, and SD Capital.

On May 18, 2019, Aibo Limited (the predecessor of Aibo Medical) was converted as a whole into Aibonode (Beijing) Medical Technology Co., Ltd.

Chen Lei, Founding Partner of Boying Capital, was an investor in Aier Eye Hospital’s Series A round and one of the earliest investors to make a significant bet on China’s ophthalmic medical device sector. He also led the Series D financing round for Aier Eye Hospital. As Boying Capital’s first company listed on the STAR Market, Aier Eye Hospital exemplifies Boying Capital’s investment strategy of focusing on healthcare, leading Series A rounds, and making follow-on investments. It has been a “home run” project for two funds under Boying Capital, delivering substantial returns to its limited partners (LPs). Chen Lei stated, “Aier Eye Hospital operates in a blue-ocean market valued at hundreds of billions of yuan. Its IPO is merely a new starting point. We firmly believe that it is only a matter of time before Aier Eye Hospital becomes a leading enterprise with a market capitalization of hundreds of billions of yuan.”

Behind Aierbo Nuode’s push into the capital markets stands a cohort of VC/PE firms. Among them, Mingfeng Capital, an investor in Aierbo Nuode’s Series D+ round, has seen its paper gains reach approximately 12-fold through this investment. Jin Xuekun, Founding Partner of Mingfeng Capital, stated that Aierbo Nuode’s exceptional research and product development capabilities in the field of biomaterials have secured its leading position in ophthalmology. Although Mingfeng Capital is an investment firm focused on the upstream and midstream segments of the medical aesthetics industry, it was attracted by Aierbo Nuode’s advanced technologies in biomaterials and their potential for future applications in medical aesthetics. “Abroad, many ophthalmic giants offer medical aesthetic products, such as Johnson & Johnson. Similarly, numerous upstream medical aesthetics companies maintain ophthalmic product lines; for example, Allergan, a leader in medical aesthetics well-known for being acquired by AbbVie for over $60 billion. Investing in Aierbo Nuode represents a significant step in Mingfeng Capital’s strategic layout,” said Jin Xuekun.

Ophthalmology is a highly sophisticated and advanced discipline with high industry entry barriers, particularly in the field of high-value medical consumables, which demand a high degree of precision in materials and technology. Consequently, the global market is currently concentrated among a few large international medical device manufacturers, resulting in relatively low competition.

In the field of intraocular lenses (IOLs), Alcon (US), Johnson & Johnson Vision (US), Zeiss (Germany), and Bausch + Lomb (US) hold the majority share of the international IOL market. According to Alcon’s reports and estimates, in the 2017 global IOL market, Alcon held a 31% market share, Johnson & Johnson 22%, Bausch + Lomb 6%, and Zeiss 4%, with these four companies collectively accounting for 63% of the global market share. In the orthokeratology lens segment, Euclid, Alpha, Lucid, CooperVision, and OK Lens are the major market share holders.

In the future, in addition to powerful multinational medical device giants, Aibo Medical’s competitors will also include domestic innovative enterprises.

In the field of intraocular lenses, Aier Medical’s largest domestic competitor is Haohai Biological Technology. Founded in 2007, Haohai Biological Technology is a technology-driven enterprise engaged in the research and development, production, and sales of medical devices and pharmaceuticals, leveraging biomaterial technologies and genetic engineering techniques. The company was listed on the Main Board of the Hong Kong Stock Exchange in 2015. On October 30, 2019, Haohai Biological Technology was listed on the STAR Market, becoming the first biopharmaceutical company to achieve dual listing as an “H-share + STAR Market” entity.

Haohai Biotech has four business lines: ophthalmology, medical aesthetics and wound care, orthopedics, and anti-adhesion and hemostasis. Its subsidiaries, including Henan Universe, Zhuhai Aigao, Aaren, and Shenzhen New Industries, are suppliers of intraocular lenses. In 2018, Haohai Biotech generated revenue of RMB 1.558 billion, with the ophthalmology segment contributing RMB 673 million.

Notably, Contamac, which was acquired by Haohai Biological Technology in April 2017, is the largest material supplier for Aier Medical.

However, in its prospectus, Aier Medical stated that from 2017 to 2019, the amounts it paid to Contamac for contact lens material blanks and other items were RMB 971,700, RMB 5.801 million, and RMB 3.7632 million, respectively, with unit purchase prices of RMB 22.29, RMB 24.11, and RMB 24.81 per blank. The aforementioned fluctuations in unit prices were primarily attributable to exchange rate movements. The competition between Aier Medical and Haohai Biological Technology in the downstream sales of intraocular lenses did not affect the stability or pricing of Contamac’s raw material supply to Aier Medical.

In the field of orthokeratology lenses, Autek China is EyeMed Technologies' strongest competitor.

Autek China is a high-tech enterprise specializing in eye health and myopia prevention and control technologies and services. It was founded in Hefei, Anhui Province by Dr. Tao Yuequn, who holds an engineering doctorate from the United States. In January 2017, Autek China was listed on the ChiNext Board of the Shenzhen Stock Exchange, with its current market capitalization exceeding RMB 30 billion.

Autek China’s business primarily comprises two segments: ophthalmic and optometric medical devices (products) and medical services. Its main products include rigid gas permeable contact lenses, such as orthokeratology lenses, along with associated care products, with the “DreamVision” orthokeratology lens serving as the core product. In 2018, Autek China reported operating revenue of RMB 458 million, entirely generated from the rigid corneal contact lens industry. Among this, revenue from orthokeratology lenses (DreamVision) amounted to RMB 310 million, accounting for 67.6% of total revenue. In 2019, total operating revenue reached approximately RMB 647 million, with orthokeratology lenses (DreamVision) continuing to account for 67.6% of the total.

Amidst fierce market competition, the listing on the STAR Market marks only a new starting point for Aier Medical. In its prospectus, Aier Medical stated that it will consolidate its leading position in domestic intraocular lens technology while continuously expanding its product portfolio to develop a comprehensive range of ophthalmic medical products. These include implantable ophthalmic consumables, surgical instruments, surgical equipment, vision care products, and ophthalmic pharmaceuticals, covering areas such as cataracts, refractive errors, glaucoma, and fundus diseases. By enhancing the value of Chinese independent brands, Aier Medical aims to become an innovative leader in China’s ophthalmic medical sector.