On February 24th, 2023, Olympus Corporation announced it had agreed to acquire Taewoong Medical, a South Korea-based manufacturer specialising in gastrointestinal (including biliary tract) metallic stents. According to GlobalData predictions, the pancreatic and biliary metal stent market will be worth $1bn by 2030, up from $500m in 2015 and $700m in 2021.
Olympus already dominate market share in endoscopy devices and the acquisition of Taewoong Medical not only widens the Japanese company’s endotherapy portfolio, but also increases its share in the pancreatic and biliary stent market, which was at 0.9% in 2021 according to GlobalData.
The deal, expected to be completed in June 2023, will see Taewoong receive $370m in cash – $255.5m of which will be paid at closing and $114.5m will be paid depending on future milestones.
The incidence of biliary cancers is rising as global populations age. Stenosis – a narrowing of structures and ducts – is an effect of biliary cancer. Metallic stents are frequently used to manage this and can be applied non-invasively in the biliary duct, oesophagus, colon, and duodenum to help clear the occlusion. Biliary tract obstruction is frequent in biliary cancer and metallic stents are often a primary treatment path.
Despite the potential of the metallic stent market, GlobalData predicts that, although there has been increased adoption due to their improved patient outcomes, rising costs and reimbursement policies of metal stents (compared to plastic alternatives) may hamper its growth.
According to an Olympus spokesperson speaking to Medical Device Network, gastrointestinal disease is one of the key disease states it is targeting in future business strategies. Gaining primacy in the gastrointestinal stent market will help Olympus achieve its financial outlook. In its full year forecast for fiscal 2023, the Japanese company expects revenue of $6.37bn (871bn yen) with 16% YoY growth.
The takeover by Olympus is a significantly larger deal than the recent acquisitions of Quest Photonic Devices for $60m in February 2021 and announced (but not yet completed) Odin Vision (a cloud-AI endoscopy company) for $79m in December 2022. When asked about the size of the deal, Olympus told Medical Device Network that the unique design of Taewoong’s stents was financially attractive – highly flexible and radially strong stents allow conformation to curved anatomical structures which reduces risk of restenosis.
Taewoong Medical, founded in 1991, currently employs 273 staff and sells to more than 70 countries, with product qualification certificates in markets including Japan, US, China, Canada, and Russia. It saw a revenue of $49m (6.7bn yen) in 2021.