Lunion Medical and Mechuang Medical Forge Strategic Alliance to Build a Unicorn in ENT Medical Devices Amid Soaring Market Trends
VCBeat Exclusively Learns: Leno Medical Technology (Shanghai) Co., Ltd. and Chengdu Mechan Electronic Technology Co., Ltd. Officially Form Strategic PartnershipVCBeat has exclusively learned that Leno Medical Technology (Shanghai) Co., Ltd. and Chengdu Mechan Electronic Technology Co., Ltd. have officially entered into a strategic partnership in recent days. The two parties will engage in in-depth collaboration in technology, products, and services, jointly striving to build the leading domestic platform for medical devices in otolaryngology–head and neck surgery.
Over the past two decades, the global field of otorhinolaryngology–head and neck surgery (abbreviated as ENT) has achieved rapid development, driven by the application and widespread adoption of advanced technologies such as lighting systems, endoscopy, navigation techniques, and minimally invasive surgical instruments.
Influenced by environmental factors such as air pollution in recent years, the number of patients suffering from various otolaryngological diseases in China has rapidly increased, reaching hundreds of millions. Alongside the overall trend of pursuing higher quality of life and consumption upgrading among Chinese citizens, patient demand for diagnosis and treatment in otolaryngology has become increasingly prominent, with a significant rise in willingness to pay. This has greatly promoted the upgrading of medical services and created new growth opportunities for the otolaryngology diagnosis and treatment market.
Taking the treatment of tonsillitis with low-temperature plasma ablation as an example, compared with conventional excision surgery costing only a few hundred yuan, this technique offers less bleeding, reduced patient pain, and greater comfort and safety. Although the treatment cost is more than 2,000 yuan higher and is not covered by medical insurance, it meets patients’ demands for surgical safety and rapid recovery, resulting in an annual growth rate of 30% in the number of procedures performed.
In 2020, the global medical device market size is projected to reach $477.5 billion, with the otolaryngology segment accounting for approximately 2%, or nearly $10 billion. In China, the medical device market size is expected to exceed RMB 760 billion in 2020, while the otolaryngology segment holds only a 1% share, amounting to less than RMB 10 billion. The unmet market demand presents immense potential.
The market size of otolaryngology-related medical devices in China is currently growing at a compound annual growth rate (CAGR) of up to 20%, making it one of the fastest-growing segments within the medical device industry. The market size for otolaryngology in China is projected to exceed RMB 10 billion in 2021.
Since 2010, global medical device giants have frequently acquired targets in the otolaryngology sector:
Stryker acquired Arrinex Inc., a startup specializing in cryoablation devices for chronic rhinitis, for $60 million in February 2019;
In November 2017, Scopis, a company specializing in surgical navigation systems using augmented reality technology for otolaryngology, was acquired at a premium;
In December 2017, it acquired Entellus Medical, a company specializing in minimally invasive treatments for chronic rhinosinusitis, for $662 million in cash, bolstering its ambitions in the otolaryngology business. Previously, Stryker had already incorporated Nasopore, an ENT hemostatic material produced by the Dutch company Polyganics B.V., into its portfolio.
Johnson & Johnson acquired Acclarent, a manufacturer of sinus dilation balloons, for $785 million in 2010;
Medtronic has also been actively advancing multiple acquisition plans involving ENT-related manufacturers in recent times.
Thus, the next 3–5 years will present an excellent opportunity for leading domestic and international medical device companies to enter the otolaryngology sector and strengthen their future competitiveness in the market.
Chengdu Mechan Electronic Technology Co., Ltd., one of the partners in this collaboration, was established in 2002 and successfully listed on the National Equities Exchange and Quotations (NEEQ) on August 18, 2015. According to VCBeat, Mechan Medical’s products are applied in departments such as otolaryngology, orthopedics, urology, ophthalmology, and proctology. Meanwhile, it registered and established Mechan Medical (Europe) in the UK, and has mastered the core technology of low-temperature plasma through collaborations with universities such as Tomsk Polytechnic University in Russia, University of Electronic Science and Technology of China, and Shenyang Ligong University.
Currently, Meichuang Medical’s plasma knife has been listed as a strategic emerging product by the Chengdu Municipal Science and Technology Bureau, and the company has been approved to establish a Chengdu Academician (Expert) Innovation Workstation. Moreover, its sales and service network covers all of China, and its products have been exported to more than 20 countries and regions, including Europe, Israel, South Korea, Saudi Arabia, and Brazil.
The other partner is Leno Medical Group, which was established on August 14, 2015, with its operational headquarters in Shanghai. It currently operates two innovative R&D and manufacturing facilities in the Suzhou New District and recently completed a tens-of-millions-yuan Series B+ financing round in July.
Leno Medical independently develops high-value interventional consumables, and enhances its portfolio of diagnostic equipment and surgical instruments through introductions and mergers and acquisitions. This strategy strengthens market access and competitive barriers for its proprietary products, providing comprehensive solutions for the clinical diagnosis and treatment development in otolaryngology. Currently, the company owns multiple product lines, including diagnostic equipment, surgical instruments, and interventional consumables for otolaryngology and head and neck surgery. With over 20 products already launched or under development, its offerings cover seven major surgical procedures and twelve product lines in the field of otolaryngology and head and neck surgery.
Leno Medical Technology has entered into a deep strategic partnership with Chengdu Mechan Electronic Technology. This collaboration integrates Leno Medical’s strengths in introducing advanced domestic and international products and technologies, leveraging its in-house R&D capabilities to establish integrated ENT diagnosis and treatment solutions, and assisting hospitals in department development and surgical training. These advantages are combined with Chengdu Mechan’s leading R&D capabilities in low-temperature plasma energy platforms, its nationwide network of ENT experts, and its extensive distribution channels. By achieving complementarity and integration, the two companies aim to jointly enhance their brand influence in China’s ENT medical device market and strengthen their comprehensive capabilities in R&D, production, and sales within the ENT field.
Currently, the model of integrated medical device solutions is gradually becoming mainstream in the ENT diagnosis and treatment market. Through the synergy and support of multiple products within the integrated solution, Leno/Mechan Medical can further improve the efficiency of market promotion, corporate operations, and product R&D. After completing its layout in the target market, the internal compatibility features of Leno/Mechan Medical’s integrated solutions will create effective entry barriers for other competitors and latecomers.
For domestic ENT manufacturers that currently focus on single products, independently developing and rapidly iterating all the products and technologies included in an integrated solution presents a significant challenge.
As the only medical device platform company in China currently dedicated to the diagnosis and treatment of otolaryngology, Leno/Mechan Medical possesses industrial synergies, a combined model of proprietary R&D and licensed introduction, and integration-based innovation capabilities that single-product companies lack. For instance, Leno/Mechan Medical has integrated magnetic navigation probes with sinus dilation balloon catheters and plasma knife tips, providing otolaryngologists with a safer, more effective, convenient, and comfortable surgical experience. This meets the needs of hospitals at all levels, particularly primary healthcare institutions, in performing day surgeries and outpatient procedures.
In the foreseeable 5G era, real-time remote consultations and surgeries between tertiary Grade A hospitals and primary care institutions, as well as remotely controlled robotic surgeries, will gradually become a reality. In the future, Leno/Mechan Medical will rely on its integrated solutions to deeply cultivate the RMB 10 billion domestic ENT market, while further expanding into international markets, aiming to become another unicorn in China's medical device industry.