-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
1/23
Growth opportunities for medical
device outsourcing in Malaysia
Dato’ Hans Brenner
Executive Chairman and Board Member, Small BoneInnovations Asia Pacific Sdn Bhd
CEO of GMMI Sdn Bhd
6/17/2012 All rights reserved 1
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
2/23
Content
- Market overview MEDTECH global, Asia
- Growth drivers and major growthsegments
- Trend of outsourcing to Asia- Contract manufacturer point of view
- Customer point of view
6/17/2012 All rights reserved 2
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
3/23
Global vs. APAC: The New Frontier
6/17/2012 All rights reserved 3
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
4/23
Growth drivers for health care in
Asia
> Fast aging Population> Increasing wealth> Funding and health insurance system available> Surgeons are much better trained in the
meantime
> Outsourcing to Asia - Main reasons: reducetime to market; focus on core competencies;access to low cost supply base; entry into newmarkets; augment R&D; rationalize complexoperations. “Without doubt, outsourcing ishere to stay. The value of the medical
device outsourcing sector is around $17billion globally “(Source CLINICA).
6/17/2012 All rights reserved 4
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
5/23
The Healthcare Industry Has Been Growing in Asia onAverage by 14-16% Annually Because of Rising Domestic
Demand and Increased Outsourcing
Rising domestic demand – the pull factor
Young populations with increasingdisposable income
Aging population requiring moreexpensive healthcare treatment
Increasing Contract Manufacturing, ContractResearch and Medical Tourism – the pushfactor
Outsourcing trend – transfer ofmanufacturing and R&D from developedcountries to Asia has only just begun
3.8
3.3
2.8
2.4
2.0
1.7
0
1
2
3
4
2006 2007 2008 2009 2010 2011
3.8
3.3
2.8
2.4
2.0
1.7
0
1
2
3
4
2006 2007 2008 2009 2010 2011
Revenues($bn)
2 0 0 6 - 2
0 1 1 C A
G R : 1 7. 7
%
Medical outsourcing to Asia
(Source: Broker’s research report)
14449
327
61 5
587
2,165
483
60 85 58 5
693 690
0
500
1,000
1,500
2,000
2,500
China India Japan Korea Singapore 5 Asian
Countries
US
2007E Incremental annual demand by 2015E
(US$ bn)Healthcare Expenditure
6/17/2012 All rights reserved 5
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
6/23
MedicalDevice Growth Areas
Cardiovascular Devices
Orthopaedic Devices
In Vitro Diagnostic Devices
Electro medical Equipment
Wound care products
Home-healthcare products
High Technology Medical Devices
Contract Manufacturing Organizations
Contract Research Organizations
Most growth areas represent a Large Cross Section of theMalaysian Focus Areas
6/17/2012 All rights reserved 6
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
7/23
Contract manufacturer point of view
- Capabilities
- Markets
- Pre requisites
6/17/2012 All rights reserved 7
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
8/23
Capabilities
Precision Molding & ExtrusionAssembly & Packaging
Box building/ElectronicsCNC machining
R & D / Process EngineeringCapabilities
Medical Quality
Control / RegulatoryISO 3485/FDA
TOTAL MEDICALDEVICE
SOLUTIONS
Technologies
6/17/2012 All rights reserved 8
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
9/23
Markets
Regional strategy – questions toanswerMalaysia as home market
Focus markets Asean, China andIndia first?Other emerging markets such asSouth America
Developed markets Australia,Japan, EU, US
6/17/2012 All rights reserved 9
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
10/23
Major Foreign MedicalDevices Companies in Malaysia
4
New Local Companies and MNC’s are Considering
Malaysia as a Home Every Day – potential customers6/17/2012 All rights reserved 10
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
11/23
Example 2011EOrthopedic Market (USD)
UnitedStates
Europe
APAC
Americas MiddleEast
APAC:$3.4 Billion
Growing >5%Annually
Total = $43 Billion
Source: Viscogliosi Bros., LLC
APAC Ortho Market Outpacing ROW Driven by strong Population,Technology, Education and GDP Trends
6/17/2012 All rights reserved 11
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
12/23
Orthopedic DiseaseDemographic
Large Bone &Joint60%
Spine25%
SB&J10%
CMF5%
25 Yrs Ago Now 15 Yrs from Now
“Specialty MedicalProducts”
“Orthopedics” “MusculoskeletalDisease Specialization”
“Grandparents”Hip & Knee
“WeekendWarriors”
“Everyone” Movement = Living
LargeBone &Joint
Spine
SB&J - 5%
CMF - 5%
71%
19%
Large Bone &Joint85%
Spine9%
SB&J3%
CMF3%
6/17/2012 All rights reserved 12
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
13/23
Top 5Why Focus on Orthopedics?
1. #1 Most Common Causes of Physical Disability &Severe Long-term Pain in the are MusculoskeletalRelated Conditions
2. #1 Reason For Doctor Visits MusculoskeletalImpairment
3. #1 Chronic Condition Reported by the Elderly in theis Arthritis
4. Arthritis is a More Frequent Cause of ActivityLimitation Than Diabetes, Cancer or Heart Disease
5. Over ½ of the Population Over 65 Years of Age
Has a Chronic Musculoskeletal Condition
100% of Population Living an Average Life ExpectancyWill Suffer From an Orthopedic Injury or Musculoskeletal Disorder
Source: AGV (USA Data)
6/17/2012 All rights reserved 13
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
14/23
Ortho Cluster GmbH'Tuttlingen
Aesculap – The “AnchorTenant”
Spawned 200+ Suppliers / Competitors
Attracted MNC’s toEstablish Operations
◦ Spine Solutions, Inc◦ Small Bone Innovations, Inc◦ Paradigm Spine, LLC◦ Smith & Nephew◦ Syntes
Employment Growth 5x
German Avg Leader In World Wide
Manufacturing Standards
The Orthopaedic Industry of Tuttlingen Provides its Workers withQuality of Life far Exceeding EU and German Averages
6/17/2012 All rights reserved
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
15/23
(eg.) Ortho ClusterNorthern Corridor, MY
Eco-system Has Evolved Over 40 Years
◦ Experience in dealing with large and small aswell an foreign and local corporations.
◦ Broad range of engineering-based baselineskills.
◦ Businesses are geared towards internationallyrecognized standards.
◦ Creation of an ideal base for the design,
development and manufacturing of “intelligent” life science technologies.
Readily Available Skilled and Industry-Relevant Workforce
◦ Setting up of Centers of Excellence to facilitatecollaborative efforts
Excellent Market Outreach viaExperienced Logistics Network
◦ The logistics sector has been a key enabler oftrade for the NCER, along with an establishedcluster of support services.
The Orthopaedic Industry of Malaysia Would Enable “The Malaysia
Brand” to be Recognized on a Global Scale
Source: 2011 Northern Corridor Implementation Authority
6/17/2012 All rights reserved
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
16/23
Plastics Prototyping Clean room moulding ISO 7/8 Injection moulding Precision Extrusion
(materials e.g. PEEK, PE, PP, PVC, PA, TPE)
Precision LSR moulding Injection mould fabrication Blow film extrusion Thermoforming
Manufacturing Fully-automatic assembly Semi-automatic assembly Manual assembly (cell based) Clean room assembly
e.g. Capabilities – Single used medicaldevice players in Malasysia
6/17/2012 All rights reserved 16
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
17/23
Packaging Form-Fill-Seal Blister pack Pouch pack
Sterilization (acc. to ISO 11135/11137) EtO (Ethylene Oxide) Gamma Irradiation
R&D / Designing Rapid Prototyping Product Improvements New Product Development Autocad, Unigraphic, Solidworks & Cimatron
e.g. Capabilities – Single used medicaldevice players in Malasysia
6/17/2012 All rights reserved 17
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
18/23
PACKAGING
STERIL-IZATION
Opportunities in Malaysia
MANUFACTURING
QUALITY
CONTROL R & D
TRAINING
CLINICAL
TRIALS
IMPORT–
EXPORT
Malaysia Has a Myriad of Opportunities to Exploit inDevelopment of a Medical device outsourcing Cluster
BIOTECH
6/17/2012 All rights reserved 18
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
19/23
Pre requisites
Knowing the target market – MOSTIMPORTANT!Competitive products/components (Price,quality) – FOCUS!
ISO 13485 and CE mark, SFDA, TGA etc.Supply chainSales team to build distribution networkMarketing back up
Exhibitions and congressesFunding
6/17/2012 All rights reserved 19
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
20/23
Customer point of view
What has Malaysia to offer forpotential contract manufacturercustomers?
6/17/2012 All rights reserved 20
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
21/23
Advantages of Malaysia
Asian footprint (service business from India thruJapan)
Better IP protectionExtensive high-tech electronics and medical device
environmentLower labor cost (Europe & NA)Scalability (growth opportunity for customers) – local
market as test marketLocal funding available for R&D investment to
accelerate new product developmentEnglish!
6/17/2012 All rights reserved 21
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
22/23
Summary
Population Dynamics – ↑ PopulationAge 65+
Growing Current Demand & Long-TermExpansion in the region and globally
Fragmented markets Penetrate &Capture Market Share Majority of Market is Controlled by Small
and medium Players
First Mover Advantage Available toCapture Opportunity
Move Now as Market Forces Converge
Opportunity to benefit from outsourcing trend toAsia
6/17/2012 All rights reserved 22
-
8/17/2019 Medical Device Outsourcing Opportunities in Malaysia
23/23
Thank you
6/17/2012 All rights reserved 23