Medical device innovation is picking up pace, where are the new opportunities? | Frontline

By | Liu Lingguo

Editor | Hai Ruojing

"The next decade will actually be a favorable layout period for the medical device industry," noted Gao Yun, Executive Director of Lilly Asia Ventures, at the recently concluded Medical Device Forum of the Zhangjiang Pharma Valley Innovation Conference.

From August 28 to 29, the 2026 Medical Device Forum of the Zhangjiang Pharma Valley Innovation Conference was held at the Zhangjiang Science Hall in Shanghai. Centered on the theme of "Original Innovation · Global Linkage", the conference arranged a main forum, 10 sub-forums, and investment and financing roadshows, covering sectors including brain-computer interface, surgical robots, medical device globalization, biomaterials, and high-end implantable and interventional devices.

At the conference, Xiao Jian, Director of the Zhangjiang Science City Construction and Management Office and Director of the Zhangjiang Administration of China (Shanghai) Pilot Free Trade Zone, introduced that 14 Class III innovative medical devices have been approved in Zhangjiang since the start of this year, marking a record high. Among them are the implantable brain-computer interface hand motor function compensation system from BrainRoam, the interventional left ventricular assist device from Fonkel, as well as the first domestically produced dual-source photon-counting CT. During the event, the "World's First Humanoid Surgical Robot Project Based on the Surgical World Model" initiated by Linian Medical was also officially launched.

Over the past decade and more, "domestic substitution" has been a relatively clear growth path for the medical device industry. Enterprises carried out localized development around mature overseas products, and then entered hospitals relying on their advantages in cost, supply chain and other aspects.

However, as more enterprises pour into the same popular track, the competitive landscape has also changed, and the race among domestic enterprises has intensified. In the roundtable forum, Yin Jie, founder of AccuPulse, took the pulsed electric field ablation track as an example and mentioned: "When we started the business, we thought we were among the top three, but when we finally got the certification, we found that there were more than a dozen companies including us." He noted that after products targeting the same indication enter hospitals intensively, doctors have also faced "dilemma of choice".

While product supply is accelerating, the attitude of the capital side has become more prudent.

Factors such as homogenization, volume-based procurement, medical insurance cost control, and pressure on exit have led to differentiation in capital flow. In the roundtable discussion, Sun Shanshan, Partner of BioStar Capital, mentioned that in the past two years, while the overall financing frequency of enterprises has declined, large-scale financing has increased instead. "Where did the increased capital go? Those leading top-tier enterprises." She pointed out that the polarization has become quite obvious.

Capital has not stopped making investments, it is only accelerating its concentration to a small number of high-quality projects.

The direct impact of capital aggregation is that the threshold for "high-quality projects" has been raised, and the "domestic substitution" story can no longer support the valuation. Wang Zhiyong, Executive Vice President of Chillon Venture Capital and Director of Pam Medical, stated in a conversation that at present, the entrepreneurship logic needs to meet two conditions at the same time: technological innovation, and recognition from doctors and payers. Enterprises must not only prove the technical value to ensure that the product is safe and effective, but also attach importance to the cost-effectiveness of the product from the perspective of payers.

While the standards are being raised, many investors at the conference also said that for enterprises that truly have underlying technologies, the adjustment of the financing environment has brought new opportunities.

"Looking back at 2023, the IPO market tightened, many funds faced difficulties in fundraising, and enterprises faced difficulties in financing. But on the other hand, during this period, truly valuable innovative medical technologies that can secure financing have full opportunities to stand out." Gao Yun believes that for capital, making investments at the current time node is exactly a good opportunity. The reason is that the tightening of IPO has brought financing difficulties, and also brought asset prices back to a reasonable level. At the same time, the intensive capital investment in the past few years has precipitated a number of truly core underlying technologies.

This judgment has also been confirmed by some cutting-edge projects.

At the Cutting-Edge Brain-Computer Interface Technology and Regulatory Development Forum, Li Yi, researcher at the Chinese Academy of Sciences Center for Excellence in Brain Science and Intelligence Technology and founder of Bioridge Medical, introduced that his team has long been studying motor function reconstruction after nerve injury, and is currently trying to translate relevant research into a new generation of closed-loop brain-computer interface systems. "Our company also obtained financing led by HKUST Redbird Fund this year, and the financing amount has exceeded 100 million yuan." Li Yi mentioned.

The next round of growth will come more from underlying innovations that can pass through clinical, payment and commercial verification, which is the consensus of many guests at the forum.