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Lepu's transformation: outside the VBP wall, funding innovation with cash flow
In 2025 Lepu Medical posted a 'contradictory' result: revenue RMB6.483B (+6.22%), net profit RMB962M (near 3×) — yet IVD and surgical anesthesia together bled over RMB600M. This is not decline but a transfusion. From a device-and-materials view, we read it as a representative transformation sample — its neuromodulation and BCI thread in particular carrying implicit material needs.
A transfusion: VBP squeezes low-barrier lines, and a leader trims
In 2025 Lepu's profit rebounded near 3× from a 2024 trough (RMB247M); the low base is the surface, business restructuring the core. Under VBP, Class-II, low-barrier lines are pressured: surgical anesthesia fell 25.24% and was pushed out of clinical use, so Lepu cut it deliberately; IVD fell 15.63% and is only 4.3% of the book, taking a 'precise-and-focused' subtraction toward cardio-cerebrovascular and coagulation testing. The device base (coronary, structural heart) holds cash flow, but growth is slowing.
Three new fronts: self-pay, self-priced, away from VBP
Lepu redirects cash flow into three self-pay innovation tracks:
- Metabolic innovative drugs: subsidiary Minwei's MWN109 (GLP-1/GIP/GCG tri-agonist, injectable + oral), with a proven BD-out loop (MWN105 licensing, upfront plus milestones);
- Neuromodulation & BCI: a rechargeable implantable DBS is approved and contributing revenue from 2026, VNS/SCS are in trials, a non-invasive BCI is in 100+ hospitals, and an interventional multi-channel BCI has entered human trials;
- Dermatology consumer medicine: a poly-L-lactic-acid filler did RMB115M in three months, and an RF device won NMPA approval.
Materials view: the materials-relevant thread
For material supply, the most relevant thread in the Lepu sample is neuromodulation: implantable DBS, VNS and SCS are all long-term implantable stimulators, where the biocompatibility and long-term stability of electrode insulation, lead sheathing and device encapsulation are hard requirements — the same class of problem as the 'hidden encapsulation gate' in the Lixiao implantable tibial stimulator above. The more device companies pivot from the VBP red ocean to self-pay innovation, especially implantable neuromodulation, the more medical-grade encapsulation/insulation selection and supply deserve upfront consideration. BIO's position is to make medical-grade silicone a specifiable, documented, traceable link in exactly these long-term implant scenarios.
(The risks are clear too: innovative-drug Phase-III data are pending, neuromodulation and BCI commercialisation are early, and aesthetic medicine is fiercely competitive; the direction is clear but delivery takes time.)
The BIO angle
FAQ
What is Lepu Medical transforming into?
From a single-focus cardiovascular-device leader to a multi-track innovation platform spanning metabolic drugs, neuromodulation & BCI, and dermatology consumer medicine — all self-pay, self-priced and away from VBP.
How does this relate to medical materials?
Its implantable neuromodulation (DBS/VNS/SCS) are long-term implantable stimulators, where electrode insulation and device-encapsulation biocompatibility and long-term stability are hard requirements, directly tied to medical-grade encapsulation/insulation materials.
Where are the transformation risks?
Innovative-drug Phase-III data are pending, neuromodulation and BCI commercialisation are still early, and aesthetic medicine is fiercely competitive; the direction is clear but scaled delivery takes time.
Related reading
- Is China a Medical-Device Exporter or Importer? Finding Position from Trade Data (1) | BIO Insights
- China's Device Export Share and Growth: Finding Position from Trade Data (2) | BIO Insights
- How Did the Global Device Trade Market Form? Finding Position from Trade Data (3) | BIO Insights
Note: an original analysis compiled from public industry information; figures and conclusions per official/original sources. Not investment advice.
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