Keynote: Unlocking APAC's Medtech Potential — A Gateway to Global Success | LSI Asia '25

Liang Lu  0:05  
Good morning, ladies and gentlemen, thank you for being here. Appreciate you wake up early and join the presentation. My name is Liang. I'm the general manager and managing director for BD Southeast Asia and Pakistan. We are a region featuring around 1 billion population, and it's very diverse and dynamic region. So today, I just want to share some of our perspectives on how you should look at APAC market as a gateway to your global success as an innovator. So let me start with some numbers. APAC is actually the fastest growing region, featuring about 7% growth year over year. Of course, if you look at the size, it's still trading behind us and the European countries, but it is actually the number one growth contributor in the five year spectrum, and it's really driven by the demographics in this region, which you know is accountable for more than half of the population in the world, More than 1 billion population over 50 years old, and every year there is over 65 million babies born. So good news for the neonatal business. It also represents two thirds of the disease burden, especially in a lot of the emerging economies. Are some, definitely tremendous amount of unmet needs to be addressed. And in BD, when we look at our markets in APAC region, and we usually cluster them into three categories, obviously, if you look at the health expenditure the countries like Japan, Singapore, South Korea, Australia, they are more at these more than $5,000 per capita range. So for these markets, usually you wouldn't expect them to grow too fast. Usually it's around, you know, you know, two to 6% sometimes, again, get to 8% but they have sizable market and relatively more mature. Usually, the kind of a breakthrough technology are more suitable for these markets, and it also demands, you know, good data to show its efficacy, and also, generally speaking, the type of innovations that feature better quality of care usually has a better acceptance in these markets, like, for example, in BD, some of Our most advanced robotic solutions for pharmacy automation or catheters that features reduced infection that very well adopted in markets like Japan or Singapore right. Then move down to the countries like Thailand, Malaysia, including China, the healthcare expenditure per capita is more around 400 to $700 per capita. These are the markets that actually always welcome cost effective innovations. But of course, because of the diversity and the sheer size, especially in China, break through technology can also find the addressable market, very sizable addressable markets as well, and countries like China particularly appreciates localized dissolution tailored to the local market. BD, since we entering China as early as the 90s, we have tailored our products to the China markets. For example, one of the most success story is our peripheral catheter that's tailored to the Chinese nurses, and now it's becoming a golden standard, lots of copycats and having exactly the same design. So that's the kind of feature for what we call developing markets. Now there are a lot of countries actually in the emerging markets category. These are the countries usually the per capita healthcare spending is somewhere between $50 to $200 per capita. Actually, it's a sizable market. There are more countries in this category, including like Pakistan and Myanmar Cambodia. They're rapidly emerging. They have. Good growth rate. Indian India is the recent growth star. Lots of people are paying more and more attention, no matter innovators or investors, the growth rate may be even higher than this now in these markets, the typical feature is they given the relatively lower affordability, the priority for the healthcare system at this point is still just to address the access for more population and affordable innovation is quite popular in these markets. Of course, across these three clusters, there are some very interesting dynamics as well, right? For example, a lot of the in China, there's actually a very fast growing, thriving innovation ecosystem. And a lot of the innovators actually come into Singapore as well, not only to unlock the potential in the South East Asia region, but also to unlock the potential in US market, given the trade tensions as a context, and also when we talk about emerging markets and developing markets, There's actually also some interesting dynamics in some countries. For example, Thailand is actually the one of the major medical tourism country. A lot of people from, especially from Middle East or European countries, traveling to Thailand. Very good healthcare quality, but more affordable. I think a lot of us folks come to Philippines to seek care. Malaysia is also a hub for medical tourism, more of a Regional Medical Tourism hub. A lot of people from Indonesia and also for Middle East people also a lot of them coming to Malaysia. So when they have this kind of dynamics, you actually boost the demand for a lot of the advanced med tech solutions. Now I want to zoom into China a little bit more, because what's happening in China is very, very interesting. Not only it's because it's a major market in terms of the size. Actually it's the number two market in the world, and still growing at about 8% I think recently, I heard somebody saying China is actually the most competitive market with the fastest innovation pace. I think the point is, if you can succeed in China, you can succeed anywhere in the world. And I think this is a very interesting market that features three dynamics that you should pay attention to, and these are the three pillars that's really driving this market to grow at a relatively faster speed, demographics, innovation, capital markets and regulation. So let me dive into this a little bit more one by one. So speaking of the demographics China, obviously one of the largest population in the world. What's interesting is the rapidly paid aging population. Now it has expected to have around 258 million population by 2030 aged over 65 years old. And this is about the same size of the whole population in Pakistan, which is the fifth most populous country in the whole world. So by 2030 you know, almost 20% of the population will be above 65 years old. And this silver tsunami creates a tremendous unmet needs and medical needs. So just to show you a few data points, more than 75% of the population, Asian population, has more than one chronic disease every year, there is more than five to 7 million cases, new cancer cases, and also, when you think about the people with diabetes, there is actually more than 160 million people with diabetes. And that creates a tremendous amount of needs for a large

Liang Lu  9:45  
range of med tech solutions, maybe also to share a bit more about the point of a surviving ecosystem emerging in China. So China is at. Actually, well, affordability wise, not as much as the developed countries, but it's actually very welcoming market for these advanced technologies. If you think about robotics, if you think about wearable technology, printing, all have been enjoying very fast growth or adoption over the past few years in China, and recently, I actually been looking at why the China, China innovation ecosystem has been thriving. I think there are some fundamental reasons to it. Over the past weekend, I was reading a recent report from the Harvard Kennedy School, which published a research report about the critical technologies index around the world, measuring the kind of development level of each country in the key technology sectors. Biotech is one of them. I think among others, there are like quantum computing, semiconductors, etc. But if you look at biotech sector, China is actually featuring an index of 86 sorry, 84 rank closely after us as the second most developed in the world. And behind this development, I think it's really the long term R and D investment by the country. Every year, there are more around $400 billion into the R D. And actually, many people may think it's a lot of investment by the country or the government. As a matter of fact, more than 70% I guess maybe it's 77% of the R and D investment is from enterprise. Only 19% is from the government, and talent is the other key factor for these ecosystem success. Every year, there are around 77,000 PhD in the STEM field. About 20 to 30% of these PhD graduates are in the science or medical field, in terms of patent filings or in terms of the medical related publication. It is also a very important contributor to the world, and people may, you know, hear maybe just the volume, but people have also looked into the quality of these patents and publications, and has also been improving significantly over the years. Okay, speaking of regulation, this is something definitely people have been talking about a lot, especially I think these days, everyone in the US or European countries may have heard VP volume based procurement. That seems to be the keywords that's catching a lot of attention, but I'm saying there are a lot more progressive regulation reform in the country that's supporting innovation and its adoption in the country, all the way from pre market to post market. Right. In terms of pre market, there are lots of policies supporting the earlier access and faster regulatory approval for innovative products. The country created the green channel for innovative products, and they allow people to use overseas cleanup data as the submission. And there are some dedicated zones in China that you can leverage real world data to as part of your submission, while you are piloting your products in those region, M, a, H means market authorization holder policy that basically allows the medical innovators to use outsourced manufacturing without having to spend their cap ex to build up their own manufacturing capability. And when it comes to post market, you know, in China is relatively a complex go to market model and with a lot of policies involved. But essentially, you want to get the bidding code for pricing so that you can set the price for the medical procedure using the innovative products. And the government actually gives some priorities to the innovative medical devices, and now coming to the tendering policy, because in China, it is predominantly a public hospital system which accounts to, you know, more than 60% of the of. Hospitals on 80% of the inpatient volume. So winning in the public hospital tender is the most important thing for you to tap into the Chinese market, right? And that's where you hit. You heard a lot of conversation about VBP. I think in the VBP, there is also a policy that allows you to apply for exemption from BPP if it is an innovative solution. And when it comes to hospital listing and reimbursement, there's also some policy related to exemptions, or better payment for innovative med tech solutions. So overall, I think the regulators made it very clear they want to support innovation. They want to welcome innovators, not only in China, but around the world, to come to China and on top the market and serve vast needs in the country. Now moving a little bit into the capital side. Obviously, I'm not the expert in the capital market. I didn't even keep up very close track of what's happening in the market right now. But I think if I look at the some of the old data, it shows basically there has already been a relatively mature capital ecosystem in China for companies to raise capital and even go public, and also for investors to have a clear exit pathway. The deal volume might have been relatively muted over the past couple of years, but what I heard is actually in the past year, there has been some recovery in the deal volume. Last year, there are a total of 1.8 billion transactions for Medtech deals, a total of 91 deals, I think with these trade in trade tension going on, maybe it could be muted for a bit longer, but I think the market is relatively resilient. What I can tell is actually in China, if you do have a good technology, there's definitely no challenge to raise capital in the market. And over the years, there has been more than 100 med tech companies listed in the market, and they have raised capital. They have gone much bigger, and some of them have actually set up their own investment fund to nurture the innovations. So there's actually about 1020, very sizable med tech companies in China looking out for innovation, ideas or innovators. Okay, shifting gear a little bit more towards multinational med tech companies in China. BD is one of them. So over the past four decades, global Medtech companies have actually played a pivotal role in China in shaping the markets as well, as you know, educating more than a generation of healthcare professionals. So it's definitely a key contributor to the ecosystem in China. Of course, all these companies have enjoyed great success. BD, for example, as early as 1995 we started setting up our first manufacturing facility in China at Suzhou, actually in the Suzhou, Singapore Industrial Park, one of the first few MNCs, setting up manufacturing there. And over the years, not only we have built up our commercial footprint, but also gradually, we have localized our manufacturing and set up R and D facilities in China. I think the Recently, there has been a survey by AdvaMed, one of the leading med tech Association. You know, their presence in China is also quite prominent. It suggests that they have created all these MNC med tech companies have created more than 73,000

Liang Lu  19:32  
jobs in China, with more than 60 manufacturing facilities, 20 8r and D facilities, and, more importantly, trained over a generation of healthcare professionals. And that is something very important to, you know, get the market to where we are right now. Because something very unique about the med tech market is that you need a tremendous amount of market. Shaping and customer education to build the market. Otherwise, if you don't educate the market, people will not adopt your solution, right? So zoom in a little bit more into BD presence. Like I mentioned, BD has a large presence in China. It is the number two market after us for BD globally, and actually represents about half of our business in APAC region. And over the years, we have established three manufacturing plants, 2r and D centers, one Innovation Center as well, with more than 3000 employees, we have, you know, more than 220 distributors, and this is just the tier one distributors that we have. Actually, there are about more than 1000 sub distributors within this network covering all the provinces across the country. The other thing I want to mention is we also have established very strong market access capability, which is a critical success factor to win in China given the complex regulation landscape. So including a dedicated HR team working together with our commercial team to generate evidence data to shape the market or drive adoption. And over the years, our leadership team in China, especially our general manager, James dung, has established very extensive industry wide presence, serving as the founding chairman for advomat in China, and also building up very strong relationship with some prominent industry associations or the China international import Expo, serving as the subcommittee. Of these organizations to nurture the innovations in Medtech sector, maybe just to share a bit more of our portfolio and some stories about nurturing innovation in China by bd, so some of the people may well aware of the company, especially if you're from us, but one of the key interesting factor effect about BD is that we serve the most, the widest healthcare customers in the whole ecosystem, not just hospitals, not just doctors, but also nurses, labs, pharmacies. We also serve pharmaceutical companies. We have a B to B business. And so I think we have a better exposure to the whole ecosystem and get to know the a lot of the unmet needs in the whole system, right? Some of our solutions, especially in ICU, peripheral intervention, breast intervention, HPV, cancer microbiology diagnostics, are in these categories, where, typically the category leader in these across the world, two stories to share, which is really the innovative companies that BD recently acquired, that we how do we boost their growth in China? One story is a company called strop. It's actually a Swiss company, Swiss innovator. Maybe folks from European countries are aware of this company. BD acquired this company in the middle of 2020, this is a company with a very innovative, minimally invasive, catheter based solution to treat peripheral artery disease, right? And their solution basically can mechanically remove the thrombus and the plaques in the peripheral artery. So there's a talking acquisition, and it has a little bit presence in China, but after we acquired this company, we quickly set up a dedicated specialist team, working alongside with our existing sales team and distribution network to quickly expand its customer base in China. So over the past four years, it actually enjoined 69% gross CAGR and becoming an important growth driver for our company as well. But more importantly, this is a innovation that used to be only adopted by hundreds or 1000s of patients, and now we're talking about a. Hundreds of 1000s of patients every year benefiting from the innovative solution in China. The other example I want to share with you is another company called tissue Matt. It's actually also a European company. It's originated from UK. BD acquired it in late 2021, I think. And, well, the numbers here show it doesn't show a tremendous growth, but the story is, when we acquire the company, it has a sizable base in China. But if you look at the business, is actually only concentrated in about in about three provinces, and there's one hospital that accounts for about 30% of the business, and unfortunately, they just lost that big account. So BD, you know, after the acquisition, we took over the business by one of our business units, which is responsible for our hemostats portfolio. And this team basically has the same core points with tissue mat solution. By the way, the solution is a surgical sealant, quite popular in the neurovascular, or vascular surgeries, and we use that team to uncover the potential for this innovative surgery in China. So over two years, we were able to expand the presence to from, you know, just a few hospitals in three provinces to more than 300 hospitals in China, and we stabilize the business despite the key account loss. And in the fiscal year 2024, I think there is 24% growth for the trade sales, and if you look at the end customer in market sales, it's actually even higher towards the 30% range. So this is another example how you know leveraging DDS strong commercial presence and market access capabilities that can really unlock the potential of innovative solution in China. So now in our PD China vision, which has evolved over the years, at the beginning, we were more of the company, rooted globally, headquartered in the US and serving China. Later on, as we speed up our China presence with the manufacturing facilities R and D capabilities, we moved to a stage of being rooted in China and for China, I think now we have moved to a new era when we say we're rooted in China, but impacting globally, meaning a lot of the capabilities we build in China, even a lot of the innovative solutions growing out of China, can be adopted in a bigger region, Actually the region I'm taking care of Southeast Asia. We're also looking for innovative solutions, originally out of China or across the region. And the capabilities we built, the R and D the labs, is also serving as a key capability centers serving the whole APAC region. You you. So with that, I'd like to just call for your attention to reach out, and we really, we're really, really looking forward to partnering with the stakeholders in the ecosystem and CO create more promising future for Medtech innovations, not only in China, but in a pack. So please feel free to reach out. Jen is our business development leader in China. Also, please feel free to reach out to me. I'm based here in Singapore,

Liang Lu  29:17  
and our purpose is really just to drive the adoption of innovation across the world, advancing the world of health. Okay with that, I'd like to turn it over to William Yao from China international import Expo, just to quickly given give you an introduction of these prominent events, and also kind of incubation, gateway for med tech innovators, right? Thank you very much.

William Yao  29:52  
Thank you, Liang, for inviting me on the stage, joining you with the speech. Distinguished guests. Lei. Ladies and gentlemen, my name is William Yao, representing the China international Import Export organizer, also working as a five year partner of Beck and Becton Dickinson company in China. To make it short speech, I will continue with the landscape of the open market, of med tech industry in China, of course, under the microscope of what we do China, international import Expo. China is, no doubt, a med tech promising market in terms of its size and innovation atmosphere. This is a promising market with 1.4 billion population, and just among them, the middle income group takes up around 400 million. And the number shows that there are 3 trillion US dollars, goods and services imported per year in China. And in 2018 we started to host the China international import Expo, or cIie. And since then, it has become a major step taken by us to further open its market, its import market, to the rest of the world. You may ask, why we hold such an import Expo rather than export one? Well, I think the answer is quite simple, for two reasons. One, because we need to import more to satisfy the domestic consumers needs, and also to improve their better life. And second, in China, we have this national initiative of healthy China, 2030, a blueprint for better people's healthy life in the near future. So basically, we need more good products, more good med tech devices as well as pharma products coming to China to improve those people's the medical future in the hospitals or in institutions. And back to what we do the China international import Expo. We have a total size of 420,000 square meters of exhibition area with more than 3000 overseas exhibitors from 152 countries and regions attracting 430,000 visitors and lots of journalists. And my second part is about why cIie, why this import seemed Expo first. This is the world's first import themed Expo with a significant attention from the China market, the access policy makers as well as the media. Let's take a further insight to the feature story of cIie and BD company in the year of 2020. BD joined the CIA as an exhibitor in the medical equipment and healthcare exhibition zone. You know, as a mature company who has come into the China market as early as in the 1990s Billy joined the CI as one of the top 10 Global Medical Equipment Manufacturers and exhibitors in this expo, and then in the year of 2021 just a year after their debut show in CIE, they raise up the idea of creating a innovation and incubation special zone within the CIA. This is a brand new idea for us, and also for the whole CI system and the Billy company China as an initiative, initiative, initiative of such an idea, we co create this special zone welcoming the global startups in Medtech industry coming to China to showcase in this public platform of cIie, that is in the year of 2021, and now, after three years, BD, company and US has worked together to welcome and attracted hundreds of new projects and startups in this platform to showcase their latest technology and ideas to the China market and back to the market. We would like to mention more about the access and the special, unique opportunities that has been brought by this open platform over the. Past years. Okay, we, based on the experience and the development trend of these med tech industry companies in China, we helped set up the dialog, the system between the business and access policy makers via this import themed Expo. During these exhibition each year, which happens in November, we create these dialogs with what Lian has just now mentioned with China's NPA, the National Medical Products administration, as well as the NHS, a national health security administration, and, of course, the regulatory body who is the key player when it comes to regulating Chinese hospitals and the medical institutions that is called the NHC, National Health Commission. And in China, it is very interesting. We call these the three pivot, Pivotal regulatory bodies in terms of the medical industry regulation and development, we have dialogs, or what we what is called by the media or the the exhibitors described as the closed door meetings with these regulatory bodies during the CI period, and as well, we set up these dialog platforms, not only with the national level regulatory bodies, but as well, have this dialog prior to The Ci time with the provincial level of those access policy makers. The meaning here for doing this is to combine these three bodies together, not, you know, to have these suggestions raised up by our exhibitors and foreign companies to make them have the common effort to bring more policy that is oriented to the market needs, to the exhibitors, needs in the future. That is what we do. And the second I want to mention is within these these years, I You mean I mean, the seven years of CIE a lot of new products come into China, has been commercialized gradually. This is a very interesting phenomenon, and described by a lot of companies as the rebirth, the birth of CIE babies. Which means, like in the first year when the companies come to this exhibition, the format that they have showcasing in this CI is like a document, a documentary, or just a photo of the new product, which means it has not been commercialized in the market. And maybe the second year, when they come to showcase this has become a medical product box or a packaging so it means it is now coming to the real ind phase, coming to closer to a result in China, and maybe the third year in line, when they joined the CI you could find a new product just on their booth, and also a prescription from the hospital, which means the products have been approved by China's NPA, equivalent to The US FDA, or it has been commercialized in the hospitals. So this phenomenon has been called the acceleration of drug and med tech, technology approval in China, with the unique opportunities brought up by cIie. And that is what we show. I'll share to all of us in this LSI tour Asia. And it is very interesting yesterday, when I was talking with one of the companies outside this room,

William Yao  39:14  
he just mentioned to me, could you please explain more to me what is the VP just now Lian has mentioned, so we just think this is quite, you know, quite good for each companies globally to come into China via this international import Expo, and also with the help of the BD company, and Also joining this great market, huge market of China, we welcome the new products, the new projects and new startups come into this market and to explore more in this import themed Expo in the future. And thank you for your listening today. Thank you.