Sanyou Medical Secures RMB 100 Million Exclusive Investment from Yingke Capital to Advance Indigenous Innovation in Orthopedic Devices

VCBeat (WeChat ID: vcbeat) has learned that Shanghai Sanyou Medical Co., Ltd. (“Sanyou Medical”) has secured a RMB 100 million investment from Yingke Capital. The funds raised in this round will be used for product research and development and channel construction.

As early as 2010, Sanyou Medical had already completed its restructuring, with a registered capital exceeding RMB 100 million. In the first half of 2016, the company transformed from a “limited liability company” into a “joint-stock limited company,” thereby initiating its IPO process. Prior to this, Sanyou Medical had successively secured financing totaling tens of millions of U.S. dollars from Qiming Venture Partners and Taifu Capital.

This exclusive capital increase by Yingke Capital also marks Sanyou Medical’s first round of financing following the completion of its management buyout (MBO), with Yingke Capital securing a seat on the board of directors.

In June 2016, Sanyou Medical participated in research and development efforts, and the world’s first combined rigid-and-flexible minimally invasive spinal system, the “Z-Series Minimally Invasive Spinal Surgical Instruments,” was put into clinical use.

Schematic Diagram of Z-Series Minimally Invasive Spinal Surgery Instruments (Image Source: Shanghai Jiading Enterprise Channel)

With this system, the time required for rod insertion is reduced to mere seconds, thereby addressing the challenges associated with traditional minimally invasive surgery—namely, the prolonged duration of rod passage in long-segment fixation, larger incisions, and difficulty in ensuring precision. Furthermore, surgical incisions are reduced by more than 30%, and operative time is shortened by over 50%, significantly minimizing trauma to surrounding tissues during the procedure.

It also reduces X-ray radiation exposure to both surgeons and patients by approximately 80% during surgery. The product series has obtained five patents and has been promoted and applied in more than 20 large hospitals across over 10 provinces and municipalities in China, demonstrating extensive use in minimally invasive surgeries.

For many years, Sanyou Medical has been dedicated to the research and development, production, and sales of orthopedic implants. Leveraging the Tuoteng Laboratory established in 2011 and its international R&D team, Sanyou Medical has now established a comprehensive product R&D system. Previously, Liu Mingyan, Chairman of Sanyou Medical, stated in an interview with the media that the Tuoteng Laboratory is an R&D center meeting international standards. Based on this platform, Sanyou Medical can collaborate with some of China’s top orthopedic experts and research institutions to jointly develop new products.

In the high-end medical device sector, 90% of the market share has long been monopolized by foreign companies, with most domestic medical device firms confined to competing in the low- and mid-end markets. However, this status quo is now gradually being broken.

Previously, VCBeat published a review of financing and investment transactions involving global private medical device companies in 2016 (for details, please click “Top 57 Best-Funded Medical Device Startups Globally: U.S. Companies Rank First with 77% of Financing Deals, While Israel and the UK Tie for Second》), which points out that as the world's largest medical device market, the United States boasts cutting-edge innovative technologies and robust R&D capabilities. Consequently, U.S. medical device startups have garnered favor from most investors. In reality, however, medical device startups outside the United States are gradually emerging worldwide, attracting increasing attention from investors.

Among the 57 most heavily funded medical device companies globally, three Chinese medical device companies made the list:

Total Funding: $72.72 million (excluding funds raised after IPO)

WuXi AppTec is a globally leading open-access capability and technology platform company for the research and development of pharmaceuticals, biotechnology, and medical devices, with business operations in both China and the United States. WuXi AppTec provides a comprehensive suite of laboratory R&D and research and manufacturing services to global pharmaceutical companies, biotechnology firms, and medical device manufacturers, covering the entire process from drug discovery to market launch. The company aims to help its global clients shorten the R&D cycle and reduce costs for drugs and medical devices through cost-effective and highly efficient R&D services.

Total Financing: $100 million

Suzhou Xinrong Medical Device Co., Ltd. is a specialized manufacturer of orthopedic medical devices. The company primarily produces hip joint prostheses, spinal internal fixation systems, locked intramedullary nails, threaded bone plates and screws, and related specialized surgical instruments. Equipped with state-of-the-art production technologies and manufacturing facilities, the company was among the first batch in China to pass the simulated pilot inspection for the Good Manufacturing Practice (GMP) for Medical Devices quality management system.

Total Financing: USD 66.98 million

Venus Medtech is a medical device company dedicated to the minimally invasive treatment of heart valve diseases, holding a leading position in China and winning the National Grand Prize in the Biopharmaceutical Category of the 3rd National Innovation and Entrepreneurship Competition. Its transcatheter aortic valve product, the Venus A-Valve, ranks first globally and is the only transcatheter aortic valve product that has completed the clinical trials required by the China Food and Drug Administration (CFDA), possessing fully independent intellectual property rights.

Technological innovation and advancement are key to the development of the global medical device industry, with R&D consistently serving as a critical driver for the growth of leading enterprises. According to Liu Mingyan, their independently developed minimally invasive spinal fixation products were co-developed by Sanyou Medical in collaboration with domestic experts.

Shanghai Sanyou Medical Co., Ltd. is a company dedicated to the independent innovation, research and development, production, and sales of orthopedic implants. Established in April 2005, its R&D center is located in the Medical Device Park within the Zhangjiang Hi-Tech Park in Shanghai.

Sanyou Medical Breaks the Monopoly of Multinational Corporations in the High-End Orthopedic Medical Market. Currently, the company's R&D investment has increased by 16% year-on-year; over the past five years, cumulative R&D investment has reached approximately RMB 40 million, resulting in 21 granted invention patents and 48 utility model patents, with three international invention patent applications filed.

It is reported that in recent years, Sanyou Medical has maintained rapid revenue growth. In the first half of 2016, its sales revenue increased by 26% year-on-year; among which, spine business sales increased by more than 30% year-on-year. The company's profits showed a steady upward trend, with net profit increasing by over 40% year-on-year, and the annual tax payment is expected to reach RMB 15 million.

Founded in 2010, Yingke Capital is a professional institution specializing in Pre-IPO investment strategies and the only firm in China that has consistently focused on this sector. Renowned as China’s “King of Pre-IPO” and the “Factory for Corporate IPOs,” Yingke Capital counts four listed companies as its cornerstone investors, with numerous large financial institutions and listed companies serving as limited partners (LPs) in its managed funds. Currently, Yingke Capital manages over 40 equity investment funds, with assets under management reaching RMB 20 billion.

Yingke Capital’s equity investment in Sanyou Medical marks another strategic move in its healthcare investment portfolio, adding a leading domestic enterprise in the research, development, and manufacturing of orthopedic devices to its holdings.

References:

http://news.sina.com.cn/c/2017-09-06/doc-ifyktzim8235455.shtml

http://www.jiading.gov.cn/qypd/jjxw/content_250406

https://36kr.com/p/5091767.html