In July 2017, Pentax Medical and Shanghai AoHua Photoelectricity formed a joint venture (JV) company to develop products in the field of flexible medical endoscopy.

The partnership is expected to build a stronger force within the endoscopy space, especially in emerging markets. Although Pentax struggled with overall slow endoscope sales in 2015 and 2016, its performance in the Asia-Pacific and other emerging markets has led to strong growth. The primary drivers for this growth include a rise in medical infrastructure development and an increasing demand for minimally invasive interventions.

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When developed economies such as North America and Europe are considered, bigger competitors such as Olympus Corporation have a stronger foothold in most of the countries in these regions due to the launch of new technologies and products that often give them the ‘first mover’ advantage. An example of this is narrow band imaging (NBI) supported endoscopes from Olympus that help the user to have more clarity on the field of vision. Olympus launched this technology before Pentax released its I-Scan system.

Olympus also has a broad product portfolio within the general surgery space, which puts the company in a better position when it comes to contract agreements and purchasing habits of hospitals, especially if a hospital prefers to deal with a single provider for an entire set of product suites rather than multiple providers.

Pentax seems to be alleviating the problem of this competition through its collaboration with Shanghai AoHua Photoelectricity Endoscope, an emerging player based in China that has a focus on endoscopy. In June 2017, Shanghai AoHua Photoelectricity Endoscope signed up for strategic cooperation with Garson, another China-based manufacturer of non-vascular stents. Although the partnership is expected to support the endoscopy accessory product lines, GlobalData believes that it will also have a positive influence on the flexible endoscopy product offerings due to the joint venture between Pentax Medical and Shanghai AoHua.

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A closer analysis of GlobalData’s clinical trials database reveals that Pentax is currently involved in a number of trials focused on testing the efficacy of some of the company’s newer endoscopy products, which revolve around endoscopic visualisation systems and colonoscopes. In terms of research and development (R&D), Pentax has an increasing focus on developing more compact and miniaturised scopes, as well as advanced image processing technology platforms.

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According to GlobalData’s research, other major players within the endoscopy area include Fujifilm Corporation, Karl Storz, Olympus Corporation, and Richard Wolf. Increasingly, the market share in this space has been driven by incremental innovations within this area, which are primarily driven by improvements in visualisation outputs such as 3D and 4K. A more recent trend is the development of endoscopes that are used in conjunction with disposable protective barriers, such as EndoSheath from Cogentix Medical. Using a single use barrier on an endoscope is meant to reduce the complexities associated with the decontamination of used scopes. 

Competition within the endoscopy space is high, and the distinctions between different product offerings are unique to each company. Supported by the current advancements in visualisation output, there is ongoing research to determine whether or not these endoscopes can be used for other applications such as the diagnosis of cancerous cells via a sort of optical biopsy. The development of an endoscope that can address newer medical applications, such as cancer, is likely to have a more disruptive effect on the endoscopy area compared to the current scale of innovations. To create a significant competitive edge, companies within the endoscopy area would need to develop products or technologies that can help redefine the applications of endoscopy.

The combination of expertise and knowledge in the flexible endoscopy area caused by the joint venture between Pentax Medical and Shanghai AoHua is expected to generate excitement among those in the endoscopy industry, particularly as Pentax Medical has an established product portfolio with a global infrastructure and Shanghai AoHua is an emerging regional player.

With the combined resources of both companies, the partnership increases the chances of developing new products in flexible endoscopy, and could possibly lead to a product that redefines the application of endoscopy entirely. Only time will tell how far and wide this collaboration’s influences will be on the endoscopy industry.