TrendTec (hereinafter referred to as "TrendTec"),Announced the completion of an equity financing round exceeding 100 million yuan, led by Vivo Capital with participation from a fund under CICC Capital.This round of funding will be used for the construction of production lines and the iterative development of subsequent products.

TrendTec, formerly known as Suzhou TrendTec Medical Device Co., Ltd., was established in 2020 and is primarily dedicated to the research, development, production, and sales of ceramic materials for hip joints. Relying on the technical expertise of two Tsinghua University doctoral graduates in Materials Science with over 30 years of cumulative experience, TrendTec has successfully completed the R&D and production of ceramic femoral heads and liners (the core components of hip joints), with product performance fully comparable to leading international companies. The company has been approved for the 2023 MIIT and National Medical Products Administration "Challenge Project," the 2023 Jiangsu Province Major Achievements Transformation Project, and has received honors such as Jiangsu Province's Double Innovation Talent, Double Innovation Doctor, Gusu Entrepreneurship Leading Talent, Suzhou New District Entrepreneurship Leading Talent, and qualifications as a national technology-based and innovative small and medium-sized enterprise.

As a joint disease that is a typical reaction to aging, the patient base in China continues to expand. To date, the annual number of hip surgeries in China has exceeded 700,000. However, even so, the hip implant rate in China is still less than one-third of that in the United States. Therefore, the projected number of hip implants is expected to continue to grow rapidly with the further onset of aging.

After the introduction of the 2022 National Volume-based Procurement Policy in China, ceramic hip joints have become the market leader, with their market share surging to approximately 95%. However, in China, whether for imported or domestically produced manufacturers, the core components of the joints—ceramic femoral heads and liners—are all purchased from a foreign company. This company holds an absolute monopoly position, possessing a 100% market share in China and occupying around 95% of the global market share. China's "ceramic hip joint prostheses" are entirely in a situation of being "strangled" by this company. The national volume-based procurement policy has significantly reduced the end-market price of joints, with all joint manufacturers substantially cutting prices. For Chinese joint manufacturers, the cost of purchasing imported ceramic femoral heads and liners accounts for 50-70% of total production costs, placing them under tremendous cost pressure.

In response to this situation, the Ministry of Industry and Information Technology and the National Medical Products Administration jointly launched the "Open Competition for Innovation Tasks" in biomedicine materials in 2023, supporting the research, development, and application of biomaterials from multiple dimensions including policy, financing, and commercialization. TrendTec, as the winning unit responsible for undertaking the task of biomedical ceramic (powdered ceramics), fully demonstrates the strong R&D capabilities of TrendTec.The company owns more than thirty proprietary intellectual property rights, filling the gap in China's medical ceramic production field, breaking the monopoly of foreign enterprises, and accelerating import substitution.

As of August 2024, TrendTec's powder ceramic materials have completed the main documentation filing with the National Medical Products Administration (NMPA), meeting the conditions for downstream manufacturers to register. TrendTec is also one of the first material manufacturers in China to complete the main documentation filing. In terms of pricing, due to fully localized production processes in China, the price is less than 50% of similar products from foreign companies, offering a significant cost advantage. TrendTec can provide downstream manufacturers with more cost-effective material products.

Apart from powdered ceramics, TrendTec has developed a variety of innovative material products, committing to provide higher-quality upstream raw materials for more manufacturers. With the support of capital, TrendTec's development is expected to proceed more smoothly.

Dr. Zhang Lin, founder of TrendTec, stated: TrendTec is committed to providing more competitive and cost-effective upstream medical ceramic materials products for medical product manufacturers in China. Currently, our medical ceramics (powdered ceramics) have gained recognition from multiple sectors of the market. In terms of core indicators, they reach or even surpass the levels of imported products. We thank Vivo Capital and the funds under CICC Capital for their high recognition of TrendTec’s platform and products, and we also thank all existing shareholders for their long-term support. With this capital boost, we will quickly enhance and optimize the company's production system, contributing our efforts towards achieving the strategic goals of the country.

Shan Fu, Managing Partner of Vivo Capital, stated: The biomedical materials industry is an important foundation supporting the development of innovative medical devices, and has often been a bottleneck in the development of medical devices in China. Dr. Lin Zhang and her team have achieved significant breakthroughs in the field of orthopedic medical ceramic materials through over 20 years of technical accumulation, which will bring tremendous value and impact to the development of the global and Chinese medical ceramic materials and orthopedics industries. TrendTec's products enable a broader range of patients to access the most advanced products, reducing the medical burden on patients, while also achieving significant cost savings for the orthopedic medical device industry. Vivo Capital has long-term confidence in companies like TrendTec that deliver important social impact and commercial value, and will firmly support the development of TrendTec.

Xu Zhongchao, Managing Director of CICC Capital, stated: With the aggravation of aging in China's society and the improvement of medical technology, the volume of joint replacement surgeries continues to increase. At the same time, the national "volume-based procurement" policy for artificial joints has a significant impact on the restructuring of the industry landscape. The domestic substitution of ceramic femoral heads and liners has become an inevitable trend with considerable market potential. TrendTec has launched its proprietary artificial hip joint prosthesis products — zirconia-toughened alumina (ZTA) ceramic femoral heads and liners. These products can fill the domestic gap, with technology rivaling global benchmarks, and are expected to gradually break the long-term monopoly of foreign enterprises, becoming a more cost-effective choice for joint manufacturers both in China and internationally. CICC Capital is optimistic about TrendTec’s development prospects and is willing to provide long-term support.

Vivo Capital, established in 1996, is a globally leading healthcare investment firm dedicated to strategic empowerment and resource integration through an ecosystem approach. Vivo Capital operates a multi-fund investment platform across venture capital, growth private equity, buyouts, and public markets, managing a total of 16 USD and RMB funds with assets under management reaching $7.5 billion. The firm has invested in over 420 companies globally. All fund strategies under Vivo Capital are extensively focused on the healthcare sector, including biotechnology, pharmaceuticals, medical devices, and healthcare services, with a particular emphasis on the world's largest healthcare markets. Vivo Capital boasts a team of more than 70 professionals, headquartered in Palo Alto, California, with offices in Beijing, Shanghai, Hong Kong, Taipei, and Singapore.

CICC Capital is the private equity investment fund business operation platform of China International Capital Corporation Limited (referred to as "CICC"), managing CICC's domestic and overseas private equity investment fund businesses. It has developed into one of China's leading private investment management institutions. Currently, the types of funds managed by CICC Capital cover RMB corporate equity investment funds, fund of funds, infrastructure funds, USD corporate equity investment funds, etc.

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