Domestic makers ramp up efforts for TLA niche

As the core technology for in-vitro diagnostics (IVD), total laboratory automation, or TLA, has become a niche market for domestic IVD companies.

TLA lines realize the automation of the whole process of sample collection, test and sample output. With high test efficiency and accuracy, it meets about 70 percent of the test needs of public 3A-grade hospitals and effectively alleviates hospital congestion.

"However, China's TLA market has long been dominated by multinational corporations. Benefiting from early market entrance and brand protection, the TLA lines installed in major hospitals in China were designed in closed-type structures. The lines are incompatible with other brands and greatly limit hospitals' ability to expand testing scales and control costs," said Che Weiwei, an expert in IVD at VBData.cn, a Chongqing-based healthcare service platform.

"The domestic market is in urgent need of TLA lines that are more cost-effective and have strong compatibility," Che said.

Back in the 1980s, to cope with the shortage of medical technicians in labs, Japan invented the world's first TLA line. Then, such lines were launched in the United States and European markets and promoted to the rest of the world. Global leading companies such as Thermo Fisher Scientific, Roche and Abbott had started the reform on lab intelligence and launched various TLA lines.

The installation of China's TLA lines started in 2001 when the First Affiliated Hospital of the Zhejiang University School of Medicine introduced TLA lines made in Japan. In 2012, China's TLA market entered a rapid growth stage with a compound annual growth rate of over 100 percent.

In December 2017, the National Development and Reform Commission issued an action plan on the industrialization of key technologies of high-end medical devices and drugs, encouraging the industrialization of homegrown TLA lines.

"By the end of 2020, there were 2,000 TLA lines nationwide and the figure had been growing by 300 lines every year. The market growth potential is huge," Che said.

She said although TLA lines installed in China's public 3A-grade hospitals were mainly dominated by MNCs, in recent years, leading domestic companies have been increasing research and development investment and some of their products have successfully entered public 3A-grade hospitals.

For example, Shenzhen, Guangdong province-based medical device provider Mindray Bio-Medical Electronics Co Ltd, as a leading industry player, launched its new-generation cellular analysis line CAL 7000 in 2021.

In terms of morphological reexamination, CAL 7000 realizes online image reading and the image-reading mode can be flexibly set according to alarm information and reexamination requirements. In addition, it can realize inter-hospital recognition and interdisciplinary communication to boost the development of intelligent hospitals.

Data from Mindray's first-half report showed that by June 30, the company's smart labs were installed in nearly 90 hospitals nationwide, among which 70 percent were public 3A-grade hospitals. In the first half of this year, newly added installations were recorded in nearly 30 hospitals, including Sichuan Cancer Hospital & Institute, Shenzhen Maternity & Child Healthcare Hospital and the First Affiliated Hospital of Xi'an Jiaotong University.

When asked about how Mindray broke technical barriers and realized import substitution, the company said in its 2021 annual report, "We have always attached great importance to R&D, as patent innovation and technology upgrading are the lifeblood of medical device companies."

For years, the company spent 10 percent of its sales revenue on R&D every year. In 2021, it spent a record high of 2.7 billion yuan ($386.6 million).

Industry experts said TLA lines will be the strategic commanding standard for future enterprises to compete in the market.

Speaking of suggestions for domestic companies, Che said although grade-3A hospitals are every company's final vision, the hospitals have high requirements for quality and are already equipped with existing lines.

"Therefore, companies can start from secondary hospitals and grassroots-level hospitals, build the lines first, and then expand the product line. Secondary hospitals value cost efficiency, offering domestic companies more opportunities," she said.