Fosun Pharma and US Partner to Set Up Robot-Assisted Surgery Joint Venture in China for USD100 Mln

Wang Yue / Yicai

2016-12-12

(Yicai Global) Dec. 12 -- Shanghai Fosun Pharmaceutical Group Co., [SH:600196], a leading Chinese healthcare group will jointly invest USD100 million with its long-term partner, US-based Intuitive Surgical Inc. [NASDAQ:ISRG], which designs and builds the da Vinci Surgical System, a breakthrough platform for robotically assisted minimally invasive surgery.

The joint venture, will develop, manufacture and market innovative products based on robot-assisted catheter technology for the early diagnosis and treatment of lung cancer.

The two sides will jointly invest USD 100 million to set up a joint venture in Shanghai, of which Fosun Pharma will hold a 40 percent stake and Intuitive Surgical will hold a 60 percent stake as the controlling party.

Currently, lung cancer in China has a mortality rate that is ranked first among all kinds of cancer. Lung cancer is also recognized as the top killer among all cancers globally, with one of five fatal cancer cases being lung cancer.

“Lung cancer is one of the most common cancers in the world, particularly in China, so the early diagnosis and treatment are extremely important,” Chen Qiyu, chairman of Fosun Pharma said.

“Intuitive Surgical is a great company driven by cutting-edge technology. We hope that the costs on diagnosis and treatment of Chinese patients suffering from lung cancer can be reduced through the localization of research and development, manufacture and sales by establishing the joint venture company with Intuitive Surgical.”

“We expect that the cooperation will allow doctors to be equipped with innovative medical tools for precise diagnosis in order to upgrade the standard of medical treatment. We're confident that the innovative products developed by the new joint venture will be marketed to China rapidly, and then further benefit patients across the globe.” Chen said.

“China is likely to be the first country to complete the commercialization of the da Vinci Surgical System and the market demand is great. Chinese engineers and Chinese doctors should participate in the research and development of products in the Chinese market. So, for me it is not a simple technology transfer, but also a new opportunity for cooperation,” Gary Guthart, president and CEO of Intuitive Surgical, told Yicai Global.

The da Vinci surgical robotically assisted-system is priced at around CNY20 million (USD 2.9 million) in China. Since it was widely distributed in China in 2014, sales volumes increased to 10 units from two in 2012, 13 units were sold in 2015, while this year 15 units were sold, indicating a slow uptrend, Yicai learned.

Although the sales volume has not seen a significant breakthrough, the number of surgeries conducted in China using the da Vinci system has seen a rocketing growth along with massive profits from spare parts.

For example, the robotic arms used in the non-invasive surgery can only be used ten times at most. This, together with the disposability of thin films and machines, means every surgery costs over CNY20,000 in disposable items.

In 2006 when a surgical robot was still a rare product, the first da Vinci robot was introduced to the Chinese People’s Liberation Army General Hospital 301, in Beijing, which surprised staff but did not convince them at the time.

After a decade, the number of surgical robots introduced into major Chinese hospitals totals 59, becoming a must-have instrument in China’s top hospitals and godsend to surgeons in operating theaters.