Major global players ‘understandably’ K-Medical devices that promise to become… “Is the dream of becoming an export powerhouse far away?”

Innovative medical device companies attending the 16th Medical Device Day ceremony held at the Westin Chosun Hotel in Jung-gu, Seoul on the 26th present their products. / Reporter Myungji Kim

“It is good that a Korean medical device company has been evaluated as a KRW 1 trillion company in the global market. Still, it’s unfortunate that it will be sold overseas. “

On the 26th, Medtronic, an American medical device company, EOflow (294090)Lee Jae-hwa, chairman of the Korea Medical Devices Cooperative (CEO Daesung Maref), who heard the news that the company would acquire the company for about 971 billion won ($738 million), said, “Isn’t is Medtronic an American company?”

Chairman Lee received the Silver Tower Industrial Service Order of Merit at the ’16th Medical Device Day’ event held at the Westin Chosun Hotel in Jung-gu, Seoul. He was recognized for his achievements in securing foreign certifications in more than 20 countries and achieving $10 million in exports to 74 countries worldwide. Daesung Maref is a refrigeration and air conditioning medical device company established in 1986 and known as a medical device manufacturer.

Chairman Lee said, “If it is difficult to grow into a global company, it would have been better if a large domestic company bought EOflow and nurtured it as a Korean company.” Most of the medical device industry officials who attended the event had this kind of response.

Since last year, there have been reports of mergers and acquisitions (M&A) by strong domestic medical device companies. In February, Olympus, a Japanese medical device company, bought Taewoong Medical, a gastroenterology metal stent specialist, for 480 billion won.

In November last year, Boston Scientific (BSX), the 10th largest medical device company in the world, announced that it would acquire MI Tech, a Korean stent manufacturer, for 291.2 billion won. BSX’s acquisition of MI Tech collapsed on the 17th as it failed to get business combination approval in many countries. However, BSX continues to cooperate with a 9.9% stake (3.18 million shares) in MI Tech.

EOflow wearable automatic insulin injection system. / Cross-governmental Medical Device Research and Development Project Group

In January last year, Bain Capital, a global private equity fund, acquired Classis, a beauty and medical device company, for around 670 billion. In January this year, domestic private equity fund Ruha bought an in vitro diagnostic device company. Labgenomics (084650)in Korea for 182.7 billion won, and in the same month, Osstem Implant, the No. 1 implant company in Korea, was acquired by a consortium of private equity (PE) funds MBK Partners and Unsain Capital Korea (UCK). The consortium is pursuing delisting through a tender offer, but the tender offer alone cost more than 3 trillion won.

Industry reaction to the news of this Korean medical device merger and acquisition is very mixed. An official from a medium-sized company said, “I think it was sold well just from a business owner’s point of view, but I feel like it’s a waste.” The startup that completed Series A investment said, “I envy you.”

At the Taewoong Medical Research Center in Ilsan Technotown, Gyeonggi-do, workers test the performance of a stent, a medical device.

Medtronic’s purchase of EOFlow for 1 trillion won is proof that Korean medical device technology is recognized worldwide, but the general reaction of the industry is that it can be interpreted that an advanced medical device company was stolen by a multinational company.

Experts interpreted this situation as Korea’s medical device industry in the process of maturing. Korea’s medical device technology has been recognized globally, so if a medical device startup with growth potential emerges in the future, it will be an opportunity to pursue new markets not only through domestic listings but also through global mergers and acquisitions (M&As).

Mirae Asset Securities (CFA) analyst Kim Choong-hyun said, “The main exit strategy for the global medical device industry is mergers and acquisitions, and it is positive that this phenomenon is active.” he said. Since medical devices and pharmaceuticals are subject to strong government regulations, there is a limit to targeting the global market by promoting Korean products.

In academic and medical circles, however, the general response is “It’s a waste”. They lamented that EOflow was recently acquired by a foreign company shortly after the government selected it as one of the top 10 key technology companies aiming to become the world’s fifth largest export powerhouse by 2027. EOflow also received a government contribution of 2.666 billion won for the government’s trans-governmental medical device research and development project. A university professor I met at the event said, “It’s painful for tax-supported medical technology to be sold to a global company.”


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