The application of artificial intelligence in medical robots is unstoppable!

In 2023, technological developments and political changes bend time and space. By 2030, this will be the prime time window for artificial intelligence!

The application of artificial intelligence in medical care is the theme of Haoyue Capital in 2024. We spent nearly seven months deeply studying this field, communicated a lot with friends in the circle, and found that we had different views on the future prospects. Some people are optimistic that this stage is a better opportunity, while others are confused about the future, especially those backed by institutional shareholders, given the prolonged investment cycle. The good news is that more and more founders begin to return to the essence of the enterprise, focusing on research and development and sales, raising the self-hematopoietic ability of the enterprise to the height of life and death, especially the middle and late commercial projects, and more cautious about capital operation. This is good for investors, the market to breed better enterprises.

Market overview of surgical robots

In 2022, North America has the largest market for surgical robots. China's surgical robot market has developed relatively late, and it is still mainly imported surgical robots. China has a large number of patients and a high frequency of robot use. With the popularity of surgical robots and the emergence of various kinds of domestic surgical robots, the market size of surgical robots in China will continue to grow;
According to ReportLinker's Global Market Report 2023, the global surgical robot market is expected to grow from $5.68 billion in 2022 to $6.68 billion in 2023, with a compound annual growth rate (CAGR) of 17.8%. The surgical robot market is expected to reach us $12.73 billion by 2027, with a compound annual growth rate of 17.5%.

The combination of artificial intelligence and surgical robots

Integrating machine vision, enhanced intelligence and deep learning techniques are crucial. These techniques are able to provide surgeons with critical information during the procedure, assist them make more precise decisions, and improve the predictive nature of surgery. At the same time, AI systems can also learn and improve by observing and analyzing the surgical operations of human doctors, and then optimize the surgical skills."Learning from demonstration" (LfD) is one of the effective ways to train artificial intelligence. The process of LfD is divided into two stages: task decomposition and simulation execution.
Artificial intelligence can work together with human doctors to improve the quality and safety of surgery. The field of orthopedic robotics includes joint replacement and spine surgery, which can make prosthetic installation more accurate, assist less experienced doctors and shorten the learning curve. Although the intelligence degree of surgical robot is low, the completion of automatic operation is expected under the further development of artificial intelligence in the future.
In terms of spinal surgery, the robot improves the problems of "complex structure, deep position, poor visual field and high risk" through accurate navigation and positioning. Preoperative and intraoperative image processing is particularly critical, and the application of artificial intelligence in image processing will be more. The integration of artificial intelligence and robot-assisted systems can achieve real-time data analysis and predictive modeling, providing decision support and intraoperative guidance for orthopaedic surgeons.
The field of imaging is closely related to artificial intelligence, and intraoperative imaging is one of the key links of surgery. In the future, with the mature application of AI in most therapeutic fields, it is possible to achieve simultaneous diagnosis of multiple therapeutic indications. The combination of artificial intelligence, imaging and surgical robots is the trend in the future.

Future applications of artificial intelligence in medical robots

The University of California, Michael Yip et al. (2023) published an article titled "Artificial intelligence meets medical robotics" in Science Robotics, discussing the application, prospects and challenges of artificial intelligence in medical robotics technology. The use of artificial intelligence in this field covers computer vision, medical image analysis, haptics, navigation, precision manipulation, and machine learning, enabling autonomous robots to perform diagnostic imaging, remote surgery, and even entire surgical procedures.
Generally speaking, the surgical robot system consists of three parts: physician operating table, robotic surgical arm system and 3 D imaging system. The surgeon can observe the lesion by using the three-dimensional imaging system while leaving the operating table and manipulate the control lever to drive the simulated robotic arm on the operating table for fine surgical manipulation. The application of this technology not only successfully solves the problems of inaccurate positioning, long operation time and vision loss of three-dimensional high-definition images in traditional open surgery, but also has better surgical effect, less postoperative trauma, less bleeding and faster recovery.

Source: Future think tank

At present, the research and application of surgical robots are very extensive. In clinic, robot surgery has basically covered all surgical fields, such as general surgery, cardiac surgery, urology, gynecology, otolaryngology, plastic surgery, neurosurgery and orthopedics, which have good application cases.

Surgical robot species

Surgical robots are mainly divided into endoscopic surgery robot, orthopedic surgery robot, panvascular surgery robot, transnatural cavity surgery robot and percutaneous puncture surgery robot. At present, laparoscopic and orthopedic surgery robots are well developed worldwide. Laparoscopic surgery robot has the advantages of minimally invasive, accurate, master and slave control, and doctors also gradually accept this technology.

Surgical robot autonomous level (LoA)

The autonomy level of the surgical robot varies from pure remote operation to complete autonomy. The LoA includes:
- remote manipulation
- Part of the autonomy
- All autonomy

The world's most successful surgical robot

Intuitive health care (Intuitive Surgical)

Intuitive Medical, a leading global robot-assisted minimally invasive surgical technology company, founded in 1995, headquartered in Sunnyvale, California, USA, is committed to developing new surgical robot technologies. Our products include the Da Vinci surgical system and the Ion minimally invasive lung cancer biopsy system. The Da Vinci Surgical Robot System is one of the most popular and widely used surgical robot systems on the market. The system allows surgeons to perform a variety of procedures through tiny incisions, improving surgical efficiency and safety, and reducing patient complications and recovery time.
In June 2024, Insight Fosun Company (Da Vinci China) announced the official opening of its Zhangjiang production base, which includes research and development, production and training functions. In China, the Da Vinci surgical robot has served more than 540,000 patients and installed more than 380 units. With the localization and the launch of Ion bronchial navigation operation and control system, intuitive Fosun will bring advanced treatment plans to more patients. Whatever the type of surgical robots, artificial intelligence can empower them. The Da Vinci surgical robot has created the first laparoscopic surgical robot, transforming the traditional open surgery into minimally invasive surgery. Although Da Vinci is still an outstanding representative of surgical robot innovation technology worldwide, it is still preparing for the future of robot automation and intelligence.

Leonardo Da Vinci's global installed capacity

In 2023,1,370 Da Vinci surgical robots were installed in China, an increase of 8% from 1,264 in 2022.

Surgical volume and income

In 2023, the number of operations performed using the Da Vinci surgical robot was about 2.286 million, an increase of about 22% from about 1.875 million operations in 2022. The company's increase in total operations in 2023 was mainly attributed to a 25% increase in general surgery in the United States and a 27% increase in total operations outside the United States (mainly driven by cancer surgery). The company expects the number of Da Vinci operations to increase by about 13 percent to 16 percent worldwide in 2024. Initial revenue in 2023 was approximately $7.12 billion (approximately 51 billion yuan), up 14% from US $6.22 billion in 2022.
In China, the number of operations completed by Leonardo Da Vinci is growing even faster. In 2006, Beijing 301 hospital introduced the first Da Vinci surgical robot, after 2015 into the incremental outbreak, annual operation more than ten thousand cases and continue to increase, from 2012 to 2019 "Da Vinci" operation in our country increased year by year, the annual compound growth rate of more than 60%, 2019 about 40000 cases, by the end of 2019, "Da Vinci" in China to complete the operation has more than 130000 cases.

Stryker

Strykeris a medical device company based in Michigan. Mako surgical robot is the most mainstream imported equipment in the domestic market. It was acquired by Sk in 2013. The number of joint replacement surgical robots has exceeded 1,500 units worldwide, and the total number of operations has exceeded 1 million. It has two core technologies: intelligent surgical planning technology and intelligent assisted osteotomy technology. At the same time, it is launching a new function, myMako APP, which will be used in Apple Vision Pro and iPhone devices in the future to provide better visual experience and digital solutions. This protocol will improve personalization and operation, provide better preoperative education and preparation for patients, and thus provide postoperative rehabilitation guidance. In 2024, the Mako Spine and Mako Shoulder will be launched. Trauma pipeline to for Pangea.
By the end of 2023, Mako was used in 60 percent of knee surgeries and 34 percent of hip surgeries in the United States, according to The Group. Globally, more than 40% used Mako by the end of 2023, compared with nearly 20% with Mako. The installed capacity is expected to be about 300 units per year.

Zimmer Biomet

It is a US-based medical device company that has developed ROSA robotics for knee replacement surgery. ROSA Robotics Data collected before and during surgery are used to inform the surgeon about the basic details of the anatomy of a particular patient. According to public data, in 2020, about 350 ROSA surgical robots will be installed worldwide, and about 30 ROSA surgical robots will be installed in China. The installed capacity in 2021 was less than expected, but doubled the sales volume in 2020. Data released in the 2023 annual report showed that ROSA robot business revenue declined, and some sales turned to leasing. The specific data were not released.

Development of China's medical device industry

China's economic development model has shifted from high-speed growth to ensuring high-quality development while ensuring a certain growth rate. The current challenge facing the medical device industry is the inevitable result of the industrial development and transformation, and saving medical insurance expenses is the direct reason of the current medical policy. However, under the logic of top-level design, collective collection and medical anti-corruption are also inevitable in the historical stage. This environment helps clarify the industrial atmosphere and bring truly strong startups to the fore, but the process is not short and is painful for companies that lack r & D capabilities. This is a great opportunity for long-term value investing.
China has a population of nearly 1.412 billion. With the increase of health awareness, the increase of health expenditure and the increase of average life expectancy, the need for advanced medical means is becoming more and more urgent, and the overall medical industry has a broad market space. Under the background of increasingly perfect medical infrastructure and rapid improvement of medical efficiency, China has become an important map that cannot be ignored in the world high-end medical device market. The Chinese engineer dividend has just started, and the white-hot market competition will help to cultivate the team of high-end medical device engineers, which is expected to have significant growth in the future.

Breakthroughs in independent research and development of key raw materials, core components / components, and key equipment for medical devices are the key to the long-term healthy development of medical devices in China, affecting the original innovation and cutting-edge exploration and research in various segments. There is a great opportunity for entrepreneurial teams that focus on differentiation and really address clinical pain points.
The development path of medical devices in Europe, America, Japan and other countries shows that the division of industrial functions is clear. In the domestic secondary market, there are usually three or four top listed companies in each segment, making them a leader of enough size to coordinate industrial development and compete with multinational giants. The mainstream fate of small and medium-sized enterprises is to be absorbed by leading enterprises to achieve a win-win situation.

Industry's outlook；industry's prospect

The prospects of the surgical robotics industry demonstrate the possibilities of diversification and technological innovation. Here is where the industry may go going forward:
Technological evolution: With advances in artificial intelligence (AI) and machine learning (ML), surgical robots will improve in accuracy, flexibility, and intelligence. Surgical robots of the future will have the ability to perform more complex and elaborate operations, and will be able to adapt to changes in the surgical environment.
Broadening of application fields: The application fields of surgical robots will be further expanded, covering cardiac surgery, neurosurgery, thoracic surgery, pediatric surgery, and more complex minimally invasive surgery and interventional therapy.
Market expansion: The global surgical robot market will maintain a rapid growth trend. As the population ages and the demand for surgery increases, and expectations for the quality and effectiveness of medical services improve, the market demand for surgical robots will continue to grow.
Regulatory and policy environment: Governments and health regulators around the world will continue to focus on the safety, effectiveness and economy of surgical robots, as well as their impact on the quality and outcomes of medical services. In the future, more regulations and policies will be introduced to regulate the research and development, production, sales and use of surgical robots, protect the rights and interests of patients, and promote the healthy development of the industry.
Business model and service model innovation: With the popularization and application of surgical robots, their related business model and service model will continue to innovate and develop. More surgical robot rental and sharing services are likely to reduce the initial investment costs of medical institutions; more remote surgery services to allow top doctors to operate on geographically remote patients; and more surgical robot training and certification services to improve physician skills and capabilities.
Increasing patient engagement: With the development of information technology and the change of medical service models, patient participation in surgical decision-making and process will be further improved. For example, surgical robots can provide a clearer and more intuitive display of surgical procedures to help patients better understand the procedure and results; patients can also be more actively involved in the operation through a remote control and feedback system.

Why are surgical robots still worth investing in?

The investment value of surgical robots is still very significant. According to the latest market analysis, the surgical robot market is expected to grow significantly over the next decade. The market is now valued at more than $3 billion and is expected to continue to grow. Technological advances have made surgical robots more and more favored by medical institutions in improving surgical accuracy and efficiency. Although high costs are one of the major challenges, surgical robotic systems will become more widespread as technology advances and costs decrease. In addition, surgical robots have shown great potential in highly specialized surgical fields, such as neurosurgery. Overall, the expansion of the surgical robot market and multiple positive market drivers suggest that investments in the sector are still highly of strategic value.

Conclusion

Return to the long-term essence, surgical robot is still a long term investment layout of high-quality track! Keep doing what is difficult and worth having!

This official account focuses on the investment and financing of the primary medical and health market, mainly sharing relevant industry knowledge, consulting and related original industry research.
Important Statement: The information in this report is derived from public information and does not represent the views of any institution. The conclusions are for reference purposes only and do not constitute an offer or invitation to sell or purchase securities or other investment targets. In no circumstances shall the information and comments contained in this report constitute an investment recommendation to any individual. Investors shall determine on their own whether to adopt the contents and information contained in this report and bear their own risks.

Personal opinion, for reference only.

References:

1. Bain & Company (2023). Navigating the Next Wave of Surgical Robotics. Available from: Bain

2. Bain & Company (2023). Surgical robotics, now a more than $3B market is poised for huge growth, advancement and adoption over next 10 years. Available from: Bain

3. Globalnewswire (2023). Surgical Robots Market Report 2023-2033. Available from: Globenewswire

4. MaximizemarketResearch (2023). Surgical Robots Market: Global Industry Analysis and Forecast (2023-2029). Available from: Maximize Market Research

5. Yip, M., et al. (2023). Artificial intelligence meets medical robotics. Science, 381(6654), pp.141-146.

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