Ilpo Kuronen

www.hyvinvointiklusteri.fiwww.kuopioinnovation.fi

Health and Well-being Cluster Program

Medical Device Gateway (MDG)A Chinese – Finnish network for commercialization of medical device technologies.

IDEA

Europeanization of Chinese medical device technology through Finnish ventures.

Opening up Chinese markets for Finnish medical device ventures.

WinWin

OPPORTUNITY

6,3 billion $

2,5 billion $

2,5 billion $

IVD China 2007

Promising IVD Market in China

There has not been a year in the last decade in which the IVD market in China has failed to grow. Combined with this impressive overall growth, a number of recent trends in the Chinese healthcare environment are making China an increasingly attractive and important market opportunity for in vitro diagnostics companies. Although there are a number of challenges for diagnostic manufacturers to understand and overcome, the market for clinical diagnostics in China (both reagents and instruments) remains one of the most promising emerging markets in the world. Meanwhile, the double-digit growth rate and opportunities for foreign firms will expand as China’s regulation of medical devices moves more in line with international practices.The State Food and Drug Administration of PRC (SFDA) promulgated the “Registration Management Act for In Vitro Diagnostics Reagent (Trial)” and put in force from June 1, 2007. It is widely expected that the future Chinese IVD market will become more regulated with clearer standards, enable further broadening and development of the industry segment.

OPPORTUNITY

6,3 billion $

2,5 billion $

2,5 billion $

Market Overview

Emergence of Niche Segments Drives Growth in European IVD Market

Valued at $6.60 billion in 2005, the European in-vitro diagnostics (IVD) market is expected to grow at a compound annual

growth rate (CAGR) of 6.0 per cent from 2005 to 2012, reaching $9.95 billion in 2012. While well-established segments such as those for immunoassay and clinical chemistry currently contribute more than half of the market revenues, future market growthis likely to hinge on the immense potential of two niche segments, molecular biology and point-of-care testing (POCT). "Despite increasing price erosion, competition and industry consolidation as well as lack of sufficient reimbursements, the European IVD market is growing due to the emergence and rising adoption of molecular testing and near patient testing," notes the analyst of this research service. "The genomics revolution, combined with developments in automation technology, has definitely set the pace in this market."

Major market participants are increasingly focusing on these potentially high-growth areas in an attempt to consolidate their positions in the IVD market. Despite growing maturity and fierce competition, leading participants continue to maintain a revenue growth of 3 to 5 per cent due to their market visibility, financial strength and customers’ brand loyalty.

Growing Awareness and Adoption of Emerging Technologies Augurs Well for IVD Market

An increase in the adoption of new technologies is likely to be a key factor driving the growth of the European IVD market over the forecast period. Awareness among patients and laboratories about emerging technologies is greater than ever before, especially in new areas such as molecular testing. Laboratories are realizing the need for automation and its many advantages. IVD manufacturers are cashing in on this trend and are actively working to innovate laboratory analyzers and other automated solutions as well as introduce novel technologies. In fact, the last decade has witnessed the emergence of numerous technologies that havegained popularity and carved a niche for themselves in the IVD market.

"Established participants and many start-up companies are constantly refining and developing new technologies in this market," says the analyst. "These developments are more intense in areas such as molecular diagnostics and POCT." One of the major reasons behind these huge investments is the emergence of strong intellectual property (IP) laws. The potential of acquiring financial gains from IP patents is driving continuous innovation by many of the smaller companies, which might otherwise be waryof entering the fiercely competitive IVD market.

Frost & Sullivan August 30, 2006

TECHNOLOGY

IVD & IVDD- reagents- measuring devices- platforms- sensors- radiation devices- orthopedical devices- surgery devices

Fitness & Health - measurement of physical condition

Who to participate

Who to participate

COMPETITORS

6,3 billion $

2,5 billion $

2,5 billion $

Ref: Medical product Outsourcing: June 2006

What creates value

Change of:- Ideas- Innovations- Technology- Products- Outscoring opportunities

How to create value

Acquisition of innovations

New technology

New products

New sales REVENUE

REVENUE New salesOld / tailored

productsOld innovation (technology)

New opportunity

Why us?

Born GlobalSharon Ballard in Superchoaching® program (Jyväskylä 2008). “During my visit in Finland I have seen this problem so many times, Finns wake up, you have to think globally”.

Do it fasterWhat means to be the first in markets? “Hi big shark, I have an innovation, I can develop a device which is much fancier that the one which is offered by your competitor. It may take a few years to develop it but then we make business”.

“Hi big shark, I have an idea and a business opportunity. To make business we need technology and fast. I know where to get it, are you interested in making business”.

Why program?

Regulatory barriersSFDA is our primary strategic alliance since we must know what they expect from us. This program can establish good practices and contacts to get over regulatory hurdles faster.

Finnish ventures are already placed products on EU markets under IVD Directive 79/98EU. Excising technology awaits for Europeanization which is an opportunity.

Innovation channel: China FinlandMedical industry is changing rapidly and new innovations must be placed on markets faster. If we don’t do it, someone else does. MDG program can create connections to Chinese research organizations and enterprises. These connections are valued as creation of new products and revenues.

Operations

Direct contacts and visits to potential partners

Strategic alliances conform the backbone of the program. The partners can be found from seminars, conferences, personal contacts etc. Our job is to locate the potential partners and lead them into the table.

- SFDA (Chinese federal drug administration) - Leading Science Parks- Chinese technology provides - Chinese retail ventures (marketing & sales)

Financials

Elucidation phase

Contacting phase / operative actions

Agreements, technology transfer, sales

2008 2009 2010

2000 €

20 000 €

200 000 €

Contact:

Ilpo Kuronen, PhDProgramme Director

Kuopio Innovation LtdB.O.Box 1188, FI-70211 Kuopio

GSM +358 45 139 3757ilpo.kuronen@kuopioinnovation.fi