Dialogue | Operating Robots at the “Pinnacle of the Pyramid”
In the medical field, surgical robots represent the pinnacle of cutting - edge technology. As the "crown jewels" of medical technology products, surgical robots have complex structures. Not only do they have a long R & D cycle, but they also require extensive experience in multiple dimensions, including scientific research, technological development, clinical translation, and industrialization of medical robots.
After six years of exploration and development, Cornerstone has established four R & D centers globally. It has fully mastered core technologies such as mechanical architecture, electrical architecture, software architecture, complex algorithms, and visual imaging, and independently built the underlying technology platform for surgical robots. Meanwhile, Cornerstone has a mass - production factory covering an area of over 10,000 square meters in the Guangdong - Hong Kong - Macao Greater Bay Area, successfully achieving "independent manufacturing" of surgical robots. The Sentire® laparoscopic surgical robot independently developed by Cornerstone was officially approved for marketing by the National Medical Products Administration (NMPA) of China on September 29, 2024.
At the 16th RMB Fund Annual Meeting and Investor Summit of Qiming Venture Partners, Hu Xubo, the managing partner of Qiming Venture Partners, and Ou Guowei, a professor at the Chinese University of Hong Kong, the founder, and CEO of Cornerstone, had a dialogue themed "Creating Surgical Robots at the 'Pinnacle'." Professor Ou Guowei shared his entrepreneurial journey and thoughts, the technological breakthroughs and leading advantages of Cornerstone, AI technological innovation, as well as the corporate culture and business philosophy.
Hu Xubo, the managing partner of Qiming Venture Partners (left), and Ou Guowei, a professor at the Chinese University of Hong Kong, the founder, and CEO of Cornerstone (right)
When talking about his entrepreneurial motivation, Professor Ou Guowei said that he hoped to provide doctors with safe and effective tools so that patients could receive high - quality services at a reasonable price. He pointed out that the global penetration rate of the surgical robot market is still at a low level, and the Chinese surgical robot market has 20 times the growth potential. There are a large number of unmet clinical needs in the market. He emphasized that the R & D of surgical robots has high requirements and difficulties. Cornerstone has consolidated the foundation of product safety and stability through independent R & D and a high localization rate, and has proven that its products have reached the international top - level through excellent clinical test results.
Hu Xubo believes that the surgical robot market has broad prospects. The domestic market is far from saturated, and there is also huge demand in international emerging markets. As an investor, he hopes to support enterprises in R & D of globally innovative products through investment, and use China's industrial chain advantages to meet the unmet market needs.
The following is a refined and organized transcript of the dialogue, with editing and abridgment.
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The Chinese surgical robot market has 20 times the growth potential
Hu Xubo: Thank you, Professor Ou, for flying all the way from Hong Kong, China. First, could you please tell us why you started your business in the surgical robot field? We all know that Intuitive Surgical, the parent company of the world's largest surgical robot enterprise, da Vinci, has a market value of up to $200 billion, and its products are excellent. Against this background, why do you still have the courage to challenge this industry giant? Could you share your experience and how you came up with the idea of starting a business?
Ou Guowei: Cornerstone is like a child I created with my own hands, and I need to treat it well. So I decided to serve as the company's CEO and manage it with all my heart. I'm an engineer and have been focusing on the research of intelligent robots, especially in the field of surgical robots for nearly 30 years. Just now you asked me why I chose to start a business. When I returned from the United States in 2016, my idea was very simple. At that time, I had worked in a world - renowned surgical robot company for nearly 10 years. I always had a belief in my heart, which was to create some safe and effective tools for doctors to serve patients, so that patients could get good services at a reasonable price and have more choices. So I came back alone. I joined the Chinese University of Hong Kong and established different teams at the same time. In the university, I had the opportunity to find a great team. Whether it was Johns Hopkins University in the United States, Imperial College London, or universities in Hong Kong, China, there were like - minded people who could work together.
Our entrepreneurship started from such a simple belief. It's not too complicated. It's just to serve patients and assist Chinese doctors in treating more patients. At the same time, we also saw unmet clinical needs. We all know the world - renowned surgical robot brands, but if you look closely at the data, you'll find that there are about 45 million minimally invasive surgeries globally each year, but the proportion of surgeries performed by robots does not exceed 5%. This means that 95% of surgeries are not performed by robots, that is, 95% of clinical needs are unmet. This doesn't even include open surgeries. There are also 45 million open surgeries each year. So the number of surgeries not covered by robots is as high as 90 million. The imported brand you mentioned earlier may account for less than 6% of the global surgical volume, which is very small. Currently, only 1% of surgeries in the Chinese market are performed by robots. There are only more than 400 surgical robots in China, while there are 7,000 in the United States. So when comparing the Chinese and American markets, there are 5,000 hospitals in the United States with 7,000 robots, and there are 20,000 hospitals in China. Currently, there are only 450 surgical robots in China, but in fact, there could be at least 10,000. This means there is still 20 times the growth opportunity, including the consumables and maintenance services of surgical robots.
Why is the popularization of surgical robots so slow? An important point is that surgical robots are very expensive. A surgical robot system costs $2 - 4 million. Before I returned to China, the price of a surgical robot system in China was more than 20 million yuan, and in Hong Kong, China, it was about HK$30 million. In addition, each surgical robot requires an annual maintenance fee of 2 million yuan, and the cost of consumables for a single surgery is about 30,000 yuan. As I mentioned earlier, there is a demand for 45 million surgeries globally, and the potential is huge. We saw this demand and hoped to create safe, effective, and reliable surgical robots to serve patients, giving patients better choices and bringing the benefits of surgical robots to every hospital. This is our simple mission. At the same time, we also have a dream, which is that in the future, every hospital will have at least one surgical robot, just like every hospital now has at least one MRI (Magnetic Resonance Imaging) and CT equipment. So making surgical robots a basic configuration in medical institutions is what we've wanted to achieve since the first day of our entrepreneurship.
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The "Aviation - Grade Robot" in the field of medical robotic arms
Hu Xubo: I can feel that the surgical robot market has great potential, especially when comparing the penetration rates of the Chinese and American markets. Surgical robots are one of the most technically complex and demanding categories in the entire medical device industry. If we take da Vinci as a benchmark, how is the hardware strength of Cornerstone's robotic equipment? Is it a me - too product or something different? Please introduce it.
Ou Guowei: First, what's the difference between surgical robots and ordinary medical robotic arms? I believe you're familiar with image - guided robotic arms. The common feature of this type of robotic arms is that they don't directly affect the patient's life safety. Even if the investment effect is not ideal or the image - guiding effect is poor, it generally won't cause a fatal risk to the patient on the operating table. However, surgical robots are different. If the robot malfunctions during surgery, the patient may face an immediate life - threatening situation. So that's why we often say that surgical robots are the "Aviation - Grade Robotics" in the field of medical robotic arms because they have an extremely low tolerance for errors, and any mistake can cause serious consequences, just like an airplane. So we never compare surgical robots with medical aesthetic systems but rather with airplanes because the common point between them is that once an error occurs, it may lead to an irreparable tragedy.
One of the difficult points is that a surgical robot has more than 10,000 components. Maybe you don't have a specific concept of "10,000." Let me give you an example for comparison: An ordinary industrial robot has only 1,000 components, while a surgical robot has 10,000. The surgical robot we developed has 13,000 components. An ordinary electric vehicle has 28,000 components, but most of them have nothing to do with the power structure. They are designed for comfort. In fact, the power structure of an electric vehicle has only 8,000 components. So the complexity of a surgical robot system far exceeds that of an electric vehicle we're familiar with.
Another crucial point is that surgical robots are fundamentally different from ordinary equipment. For example, if a mobile phone malfunctions, it can be restarted or repaired. But if a surgical robot makes a mistake during surgery, it may directly endanger the patient's life. So we need to control every aspect of the surgical robot well, including the control of components, software, and the operating system. If not controlled well and completely relying on externally purchased components, the system may malfunction due to compatibility or insufficient performance, leading to serious consequences. So compared with imported brands, we have a clear R & D concept. The first requirement is to design all components ourselves, from motors, gearboxes, sensors, operating systems to camera systems, all independently developed. Just for the motors, our robot is equipped with more than 100 independently developed units because externally purchased motors often cannot meet the precise requirements of clinical surgeries. Also, our system has more than 300 PCB circuit boards, while an ordinary industrial robot usually has only 20 or 30. So there is a ten - fold difference in quantity. It's not easy to completely control so many precision components. Overall, the safety requirements for surgical robots are very high, far higher than those of image - guided medical robotic arms.
Why is our company called Cornerstone? Actually, I clearly chose this English name when I founded the company six years ago. Cornerstone means the cornerstone. Six years ago, we were determined to lay a good foundation for surgical robots and insisted on independently developing every component. Now many people are concerned about the stability and regional issues of the supply chain. In fact, I started to solve these problems when I returned to China in 2016. Because we know that any sub - standard performance of components will ultimately affect the clinical effect. Now, our localization rate has reached 99%, and only 1% of non - core components need to be imported. We can be said to be in a leading position in the domestic surgical robot field. In contrast, some imported brands still rely on external procurement for about 20% of their key components. We fully utilize China's industrial advantages and integrate the high - end talent resources in Hong Kong, China, and Shenzhen. We have successfully built the most fundamental cornerstone. If this cornerstone is well - built, we can develop different types of robots. Because we have laid a good foundation from the bottom, in terms of system stability and safety, we can reach and partially exceed the level of international benchmark products.
At the same time, we've also conducted many clinical tests. Our surgical robot has completed more than 250 clinical surgical applications. Many data and clinical test results show that our product has reached the same level as international top - tier brands, and some key parameters even have more advantages. For example, in terms of intraoperative bleeding control, doctor's operation efficiency, and system set - up time, it can outperform international brands. So if we use car brands as an analogy, if the imported brand represents the "Ferrari in the surgical robot world," then our product can be regarded as a "Lamborghini." While maintaining excellent performance, we've also incorporated more innovative technologies. Most importantly, our cost is controllable, and we can provide customers with surgical robot solutions comparable to international top - tier products at a more competitive cost structure. This is like getting the performance experience of a "Ferrari" at the price of a "BMW." This is our overall direction.
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Product strength is the core competitiveness
Hu Xubo: Cornerstone's surgical robot has obtained approval in the Chinese market and started commercialization. Many doctors in Europe and the Middle East have started using our products. From a clinical perspective, what kind of feedback do you think our products will receive from clinical doctors in the Chinese and overseas markets? Do you think our products are on the same level as the world's best products, or are there some performance gaps?
Ou Guowei: I also mentioned just now that the video shows the results of the clinical tests carried out by our team in Hong Kong, China. Doctors in Hong Kong started using surgical robots in 2005 and have used international top - tier surgical robot systems for nearly 20 years. The data after they used our robot for clinical tests shows that it has reached the global leading level. The various data indicators fed back by doctors are comparable to those of international top - tier products. Based on our successful verification in Hong Kong, China, we've had the opportunity to cooperate with many top - tier hospitals in the Chinese mainland, such as the First Affiliated Hospital of Zhejiang University. Recently, we just conducted some clinical tests at Peking University First Hospital. The doctors' feedback is that our robot is the domestic surgical robot closest to imported ones, and its operation performance has reached the level of imported brands, and it even has more advantages in terms of the clarity of the surgical field.
Relying on these clinical results, we're jointly building a global robot network with the scientific research strength of universities, which is crucial. The field of surgical robots has a very high professional and technical threshold. If using the traditional commercial promotion model, it's often difficult to establish in - depth cooperation. Therefore, we choose to cooperate with the top - tier hospitals. Starting from Hong Kong, China, we've initiated clinical cooperation with Nanyang Technological University and are conducting clinical trials with Imperial College London and Portsmouth Hospital. This is the first time a domestic brand has conducted clinical trials in a global medical high - ground like the UK. There is also scientific research cooperation with Johns Hopkins University in the United States, all expanded through our resource advantages in the academic circle. We can quickly promote our surgical robots to global medical high - grounds. At the same time, these world - class surgeons will come to Hong Kong, China, to give academic lectures and conduct clinical tests. After many international experts experience our products in person, they actively invite us to promote our products in their countries. Three weeks ago, an authoritative expert in the field of gastric cancer surgery in Japan tested our products. He thought that our product performance could rival international top - tier brands and even surpass domestic Japanese products. So now he is very willing to help us promote our products in Japan, and we're also planning to go to Japan to discuss further clinical cooperation.
At the same time, we've submitted an application for the EU CE certification and are expected to obtain market access in the EU by the end of the year for global promotion. The Middle East region shows huge market demand for medical robots, and medical institutions in Southeast Asian countries have also expressed their intention to cooperate. In this highly specialized field, product strength is the core competitiveness. If they test your product and approve it, they'll be interested in cooperating with you. So it's completely based on product strength, promoting the product in the medical high - ground through R & D and innovation capabilities. This is an important business model for us now.
Hu Xubo: Thank you, Professor Ou. We have a strong sense of achievement when making investments. We especially like to communicate with founders about products. Every time we hear feedback like "our products are excellent and are among the top - level globally," as investors, we're often very excited because our original intention of investment is to see that the enterprises we invest in can truly create globally innovative products, especially in some very difficult fields. One of today's topics is artificial intelligence. Do you think there is an element of artificial intelligence in our industry?