The market for annuloplasty rings is worth an estimated $250 million at end-user value in 2001, and is projected to grow at 3% per year according to professional forecasts published in specialized issues in 2000. Sources included The European Heart Institute and The National Center for Health Statistics in the USA.
Market leaders are Edwards Laboratories, Sulzer Medica, Medtronic. However, the industry is highly concentrated. The 10 major companies account for 95% of the total market.
The rings for annuloplasty belong to the heart valve repair industry.
We prefer a segmentation by addressed patients. This incorporates some of the product type differences, but in a more practical sense:
The following sections outline Bioring SA's target market segment strategy.
We understand that our target market needs more than just standard rings covered with a polyester mesh. The need grew out of the special needs of neonate cardiac surgery. Our target customer wants to have this new possibility which they consider as a major improvement. There is a need for a high-quality prostheses which solves patient and surgeon problems. We don't just sell a ring, we sell a new concept and a new surgical procedure.
Our market has finally grown towards more sophisticated technics of valve repair, where the surgeon will try to repair a portion a faulty valve. In the past years, he would have replaced the total valve. Fine repair of cardiac valve is the new trend.
According to The European Heart Institute, (Cardiovascular Device Update, August 98, page 2) the number of congenital heart defects treated in Europe in 1995 represented 24,400 procedures, which represent a rate of 48 surgical procedures per million. In 2002, it is projected to perform 28,000 surgical procedures (50 procedures per million). This market is growing at a annual rate of 1.9%.
According to the same source, the heart valve surgery market has accounted 66,700 procedures in 1995 (131 procedures per million). In 2002, it is projected to amount 84,000 procedures (150 per million), which represent an annual growth rate of 3%.
A recent article published in Cardiovascular Device Update, (December 2000), shows that the European and the U.S. market are practically the same size. The same issue of this paper indicated that the present potential U.S. market for cardiac abnormalities repair amounted $215 million per year, and that the congenital heart defects repair amounted for $149 million per year.
The major players in this industry are international companies. It is a concentrated industry in which there are a few major players.
We are mentioning: Baxter Corporation (U.S.), Boston Scientific (U.S.), Cryolife (U.S.), Edwards Corporation (U.S.), Guidant (U.S.), Medtronic (U.S.), St Jude Medical (U.S.), Sulzer Medica (Switzerland).
Distribution channels are of two types:
The cost of marketing a new class III device is becoming a serious barrier to enter a market. For bioring type of company, the best choice is to deal through national dealers in Europe and a major company in USA.
In the high-end specialty market, particularly in our niche, features are very important. Our target customer is not making selections based on price. The high-tech, innovative aspect, the easy-to-implant aspect, the reduced time of procedure, the anatomical shape, the physiological process and the clinical results are more important than pricing.
In the field of cardiac surgery prostheses, the general trend is to develop anatomical and physiological mimetic implants. The ergonomy of the implant is also important.
In the field of pediatric surgery, as previously mentioned, there is no real competitor. Therefore the strategy of the company is to enter the market together with a well-known market leader, to avoid to be considered as a weak company by the market leaders.
In the field of adult surgery, the company will benefit of the presence on the market of the chosen distributors for pediatric surgery. In this field, our main competitors are: Edwards Laboratories, Sulzer Medica, Medtronic.