Shockwave's Coronary IVL Product Achieves Local Manufacturing in China Following Johnson & Johnson Acquisition Amid Intensifying Market Competition

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Recently, the first coronary IVL product by Shockwave has officially been localized in China: Jianwei Medical Technology (Wuxi) Co., Ltd. has completed the technology transfer of Shockwave’s disposable coronary intravascular lithotripsy catheter, and after review and approval, obtained the NMPA medical device registration certificate (Registration No. 20243012026).

It is reported that this product, used in conjunction with the Shockwave intravascular lithotripsy device (Model: IVLGCCDC), is intended for pre-treatment of de novo coronary artery calcified lesions and balloon dilation prior to stent implantation in adult patients. This approval marks that Shockwave now holds two IVL product registration certificates in China.

Shockwave, the pioneer of intravascular lithotripsy, was acquired by Johnson & Johnson in May 2024 and will operate as one of its business units. According to financial reports, Shockwave's revenue in Q1 2024 reached $219 million, marking a year-over-year increase of 35.85%.

In fact, the import price of Shockwave products into China is relatively expensive, reaching up to 28,900 RMB. Compared with the more affordable domestically-produced coronary IVL products, Shockwave does not have a significant competitive edge, as the difference in treatment effectiveness is minimal. In this regard, Shockwave is indeed slightly inferior in cost-effectiveness compared to Chinese-made products.

The editor believes that this is precisely the reason why Johnson & Johnson chose to localize production and obtain certification in China: the cost of production in China is lower, which will help reduce prices and thereby capture market share in the highly competitive Chinese IVL product market.

The competition in China's IVL market is intense, reflecting a large market prospect, which has attracted numerous capital investments. As of now, multiple registration certificates for domestically produced IVL products have been approved, including:

Shenzhen Saihe Medical LiqMagic C14 Coronary Shockwave Lithotripsy System, Beijing Lepu Medical Angiocrack™ Pulsed Ultrasonic Balloon System, Shanghai Puchuang Medical SONICO-CX® Coronary Shockwave System, Suzhou Zhonghui Medical C-Wave® Shockwave Therapy System, Shanghai Lanfan Medical Soni Cracker™-CL Shockwave Balloon Catheter, Jiangsu Zhenyi Medical DEEPQUAKE™ Peripheral Intravascular Shockwave System, Jianwei Medical Technology (Wuxi) Disposable Coronary Intravascular Shockwave Catheter.

Among them, DEEPQUAKE™ by Jiangsu Zhenyi Medical, promoted by Grand Pharmaceutical, is the second domestically produced peripheral intravascular shockwave product approved for marketing by the National Medical Products Administration (NMPA) in China, and also the third such product globally.

Zhenyi Medical recently announced the successful completion of its B+ round of financing. This round was jointly led by Xiamen High-Tech Investment and Yixing Jiayi. The funds will be used to accelerate Zhenyi Medical's product development and market promotion, further solidifying its leading position in the field of structural heart disease treatment. Notably, Zhenyi Medical had already completed a financing round exceeding 100 million yuan in May this year. This B+ round once again demonstrates the high recognition from investment institutions of its technical strength and market prospects.

In addition, the SONICO-CX Coronary Intravascular Lithotripsy (IVL) System developed by Spectrum Medical Technology (Shanghai) Co., Ltd. has recently received registration approval from Ecuador's National Health Regulatory Agency (ARCSA). This marks the first time that a Chinese-produced IVL device has been approved overseas. It is reported that Ecuador is a country participating in China’s "Belt and Road" initiative and serves as a "compass" for optimizing resource cooperation between China and Latin American countries. Adhering closely to the guiding principles of China’s "Belt and Road" cooperation, Spectrum Medical Technology brings hope to local cardiovascular patients while laying a solid foundation for further expansion into the Latin American market.

Industry data shows that the global potential market space for intravascular lithotripsy (IVL) technology is vast, making it one of the most anticipated subfields in the vascular intervention area in recent years. Technically, IVL is simple to operate with a low complication rate. Moreover, since the acoustic impedance of vascular soft tissue equals that of liquid, shockwaves directly penetrate the vessel wall without causing a squeezing effect, avoiding stretching and shearing forces. This effectively disrupts both the intima and deep calcified plaques without damaging the vessel wall.

According to Shockwave, over 400,000 patients globally have received IVL treatment in the past five years, with 182,000 in 2023 alone, marking a year-on-year increase of approximately 49.2%. Currently, Shockwave has been introduced into hundreds of hospitals, including many grassroots-level hospitals.

According to iData Research, the global IVL market was valued at $25.87 billion (187.577 billion RMB) in 2023, with a compound annual growth rate of 9.3%, and is expected to reach a new level by 2031. Following the significant market success of Shockwave Medical, research institutes and companies in similar fields in China have begun to follow suit.

According to incomplete statistics, more than 20 manufacturers in China are developing IVL products, and this year will mark a peak period for the approval and registration of IVL products. With more domestic companies entering the market, it is believed that there will be more options for the treatment of vascular calcification, further advancing the localization of IVL in China.

It is worth mentioning that as early as the first half of this year, Johnson & Johnson, a globally renowned healthcare giant, announced that it had reached a definitive acquisition agreement with Shockwave Medical.

According to the agreement, Johnson & Johnson will acquire all outstanding shares of Shockwave Medical at a price of $335 per share in cash. The total value of the transaction is approximately $13.1 billion (equivalent to about 94.8 billion RMB), which represents a 4.7% premium over Shockwave's SWAV closing price of $319.99 on Thursday.

It is reported that this acquisition has been approved by the boards of directors of both companies. Johnson & Johnson intends to fund this transaction through a combination of cash and debt. The deal is expected to be completed by the middle of 2024, subject to approval by Shockwave shareholders and satisfaction of other closing conditions.

Data shows that Shockwave Medical was founded in June 2009 in California, USA. The company focuses on developing products for the treatment of calcified cardiovascular diseases and launched the world's first "shockwave balloon catheter." The company aims to establish a new standard for medical device treatment of atherosclerotic cardiovascular diseases through its differentiated and proprietary localized delivery of acoustic pressure waves for treating calcified plaques, known as Intravascular Lithotripsy (IVL).