(27 November 2014 －Shenzhen, PRC) Just five years or even five months ago, it might have been hard to imagine implanting a medical device made in China into the body of a paediatric patient that would remain with them for the rest of their lives. But in the near future, such an event will become a reality in advanced western countries such as the UK, Germany, Italy and France, thanks to the strategic efforts of Lifetech Scientific Corporation (“Lifetech “, HKSE:1302) and Medtronic Inc. (“Medtronic “, NYSE: MDT). 


Lifetech has today announced that Medtronic has acquired the first batch of CeraFlex occluders from Lifetech. This order is significant beyond the value of the transaction as the self-developed CeraFlex is the first Chinese brand entering the western medical device mainstream market. This particular consignment is [prima facie] evidence of this product’s compliance with the strict international standards and regulations on medical devices designed for safe implantation into the human body, and the further cooperation between Lifetech and Medtronic. 


The disadvantage of being “the world factory”


In recent decades, China has impressed the world with its outstanding achievement in the manufacturing industry described as the “world’s factory”. This soubriquet has become the primary business perception in the US and European markets but has a negative connotation as a symbol of cheap and low-end products. In the area of innovation, in particular for the implanted medical devices sector with the strictest requirements on reliability, “made in China” is not a readily accepted specification in global markets. A number of the medical equipment companies in China have perspicaciously noticed the needs for transformation and earmarked considerable manpower resources to invigorate this industry and elevate it beyond the norm in China onto the international stage. Through rigourous efforts some have overcome substantial hurdles along the way, transforming their business models and entered the global market. 


However, in the Class III medical device  markets with the highest risk standards, no Chinese companies have succeeded in gaining market traction. While China today records a healthy trade surplus with most western countries, the medical device industry which plays a key role in the health and well-being of people still records a high trade deficit and this segment in China is largely dominated by major medical device manufacturers in the US and other western countries. Why is this still the case? Because patent and product quality are two fundamental factors in this specialist life-critical area. To break the barriers of entry and market domination by the western countries, the best way is to have self-developed international patent rights and improve product quality to meet international standards!


Lifetech, an innovative medical devices company from Shenzhen, is a pioneer in the Chinese medical device industry in one way because its innovative CeraFlex occluder will enter the western mainstream markets through Medtronic’s global leading sales channels, paving the way for distributing implanted medical devices in western countries. As one of medical devices in the highest risk grade, CeraFlex series has obtained the CE marking from the EU on 2 March 2011, which means the product is [safe/qualified] for use under EU standards. However, only one product has reached the application standard and the way to successful foreign sales has proven more difficult than imagined.


“When CeraFlex conducted clinical trials in western countries, doors were shut because consumers did not have any confidence in us. The engineer of Lifetech recalled his experience there citing an operation during a clinical trial in Germany six years ago. ‘At that time, the doctor and patient were ready for the operation and we, as the engineers, were recording the data of product use within the operating theatre, but when the patient heard me and my colleagues talking in Chinese on the operating table, he immediately pulled out the devices [connected to him] and refused to undergo the surgery. It was a heavy blow for us at the time but it also motivated us to [work harder] and increase their confidence in our products.”




Tireless dedication to substantial improvement in quality


Such determination and stamina have continuously spurred Lifetech to improve the technology and quality of its products. In 2012, the company signed a strategic investment agreement with Medtronic (NYSE: MDT), the largest medical device company in the world and a Top 500 global company. Under the business principle of “Absorbing the strengths of the partnership and serving cardiovascular patients in China and emerging countries,” through close and highly efficient communication with Medtronic, Lifetech has benefitted from Medtronic’s expertise in product development, QC systems, production technology, enhanced production capacity and an optimised supply chain in conducting clinical trials and adopted its techniques and systems to its own operations. In two years’ time, Lifetech invested nearly RMB50 million to perfect its QC system and complete registration requirements, optimise testing methodologies, enhance technology and training and ultimately made substantial improvement across its operations and quality systems. From implementing standardised workflow procedures to staff skill certification, awareness on quality, scientific control, improvement and preventive measures for workflow, continuous improvement in quality, these aspects have achieved the top standards of the world.


In addition to the substantial improvement of the soft and hard power of Lifetech, Medtronic signed an agreement with Lifetech which opened its overseas sales network to Lifetech and introduced the CeraFlex occluder to more than 20 western mainstream countries including the UK, Germany, Italy and France. Mr. Zhao Yiwei, Executive Director and CEO of Lifetech, said, “Medtronic opening its overseas distribution network to Lifetech marks a breakthrough of Chinese local brands matching the globally accepted stringent standards of medical devices.”


“The new CeraFlex is very practical! A key advantage is its residual shunt detection capability, attaining better positioning,” Professor Horst Sievert from The Cardiovascular Center Frankfurt, the main surgeon of clinical trial of CeraFlex in Europe thus stated his praise for the product.


Revolutionary Breakthrough in Globalisation


Today, Medtronic has placed its first order of CeraFlex Occluders with Lifetech, a revolutionary event in the globalisation of a Chinese brand and strong encouragement for Chinese brands to enter the global market even in sophisticated products. “The transaction marks a breakthrough in the traditional model of cooperation where Chinese manufacturers act as an agent of overseas imported brands as well as a landmark departure from the typical method for Chinese high-end medical devices to access international markets through OEM sales.


This not only ensures the promotion of Lifetech as an own brand, but facilitates entry into the global market by capitalising on the world’s leading marketing channels, thereby strongly demonstrating that Chinese brands can be recognised as world class enterprises and can be marketed to the mainstream market and gain the trust in the West through their brand awareness and channels network. We hope Lifetech’s breakthrough in the western mainstream market can serve as a reference for globalisation of Chinese enterprises and steer the entire industry towards high-tech, world-class quality and internationalisation, and inspire the development of more outstanding enterprises in China,” Mr. Zhao Yiwei, Michael said.


CeraFlex [occluders] will be used as a leader product by Lifetech to tap the western mainstream market to open up marketing channels and speeding up the global market penetration of other medical devices in order to shorten the globalisation process of Chinese brands. Riding on the in-depth strategic cooperation with Medtronic, more Lifetech medical devices meeting international standards are expected to be successfully introduced to the international market. We have sound reason to believe that Lifetech will blaze a trail to become one of the world’s highly respected Chinese brands and utilise advantages of process, quality, innovation and costs to achieve an equal position of Chinese and US medical enterprises in the area of structural heart diseases. 



About Lifetech Scientific Corporation
Lifetech Scientific Corporation is a public company listed on the Hong Kong Stock Exchange dedicated to research, development, manufacturing and marketing advanced minimally invasive interventional medical devices for cardiovascular and peripheral vascular diseases and disorders. It has a global reach and subsidiaries in China, the Netherlands, India, Russia, Slovakia, and France. As a leading medical device company in China with roots in healthcare going back 15 years, Lifetech has built up a strong worldwide sales network, offering a broad range of products and services to more than 70 countries across Asia, Europe, South America, North America and Africa. For details, please visit http://www.lifetechmed.com/ 
(HKSE: 1302)


About Medtronic Inc.
Medtronic, Inc., headquartered in Minneapolis, is the global leader in medical technology – alleviating pain, restoring health, and extending life for millions of people around the world. For details, please visit http://www.medtronic.com/ 
(NYSE: MDT)