What drove you to venture into the medical device business in China?
In 1998, I left the United States for Zhangjiang Hi-Tech Park to set up MicroPort Medical. At that time, it was only a vast parcel of untapped land with simple facilities but in my eyes it was a land full of hope. But it was the faith that we could eventually create a world-class medical device company here that encouraged me to keep up the hard work.
If you look at Zhangjiang today, it is already a magnet for technology firms. I think our hard work paid off.
What kind of diseases that are prevalent in China are targeted by MicroPort products and what are you doing to address the unmet health needs of Chinese people?
With our ageing population, increasingly more people suffer from chronic diseases such as cardiovascular disease and orthopaedic diseases. According to the China Cardiovascular Disease Report 2015, cardiovascular disease is the leading killer in China, accounting for more than 40 per cent of deaths. For instance, cerebral strokes are rampant in China and cause a high rate of paralysis, especially in young people.
MicroPort aims to find effective medical solutions to these problems. We are doing our utmost to deal with cardiovascular and orthopaedic diseases, and we also produce devices covering major medical disciplines including interventional radiology, electrophysiology, diabetes and endocrine management, surgical management, and others.
What is the business development plan for MicroPort Medical?
As the country’s first developer and manufacturer of implantable and interventional cardiovascular devices, we continue to take solid steps on the path towards becoming a global leading medical device company. A pool of talent and a pile of growth capital are the key issues in the development of our business. The central plank of our efforts will be developing and inspiring our people to create world-class products amid reliable and sustainable funding sources. We are going all out to upgrade our products and convince clients that they are high-quality, innovative and trustworthy.
Currently, we have over 200 products approved for use in more than 5,000 hospitals worldwide. For this year’s first half, we posted a profit, after reporting losses for two consecutive years. This was mainly attributable to an increase of gross profit driven by rapid revenue growth of key business segments, and such growth is sustainable due to our innovative capacity which leads to our rapidly increasing product offerings. In the second half of 2016, MicroPort will maintain its upward momentum with the increasing sales of our high-end cardiology products.
What are your observations on the prospects of China’s medical device market?
China’s medical equipment market has a huge potential to tap. China is now the world’s second-largest medical equipment market and it’s the world No 1 in terms of production of low-end products.
According to official data, the market size has jumped from 128.4 billion yuan (HK$149 billion) in 2010 to 276 billion yuan in 2014, recording an annualised growth of 20.8 per cent. Further economic growth, increasing awareness of health and the ageing problem are the major driving forces for the country’s medical equipment market.
I predict that the market could grow by five to six times in the future.
What can MicroPort do to help reduce Chinese patients’ medical costs?
Frankly, domestically made medical devices largely help save costs for Chinese patients. For instance, the country’s first drug stent we developed in 2004 sported a price tag only half of its imported counterpart despite being on the same level in terms of quality. That price competitiveness enabled us to win a certain market share shortly after the product hit the market. Our coronary drug stent now has the biggest share of the domestic market. We believe that the fast growth of our business and a bigger market share for our products are of benefit to Chinese patients, as they pay less to access medical services on a par with international standards.
Shanghai is abuzz with ambitious plan to turn itself into a city of innovation. What benefits can MicroPort reap from that campaign?
Shanghai is adamant about bolstering technological innovation. I think Shanghai has an advantage in finance as the city abounds with capital. Basically, Shanghai is not short of capital to support the development of technologies and the growth of technology start-ups.
We are a beneficiary of financial liberalisations and we hope to see more incentives come to fruition. We used an account at the free-trade zone to finance a US$60 million acquisition of foreign companies. Since we could borrow funds offshore via the account, it saved us 20 per cent of interest rate payments, or hundreds of thousands of dollars a month.
Are you worried about the economic slowdown in China?
We’ve seen some bearish views about the Chinese economy, but they were not a fair and correct assessment of the economic outlook. I am bullish about the economy, particularly the future growth of its medical industry.