Technology commercialization refers to the process of creating services from technologies or products developed using the government's research and development (R&D) budget and selling them in the market. Korea's technology commercialization rate is among the lowest among OECD countries. ChosunBiz will introduce successful cases of technology transfer or startups to promote technology commercialization and seek ways to improve the system by continuing the series titled 'Tap into the R&D Goldmine.' [Editor's note]
The flexible endoscope market used for upper and lower gastrointestinal examinations is dominated by Japanese corporations globally. Olympus holds over 70% of the market share, and when combined with Fujifilm and Pentax, Japanese corporations capture 95% of the market. The technology that utilizes a small camera to take images inside the body is crucial, and Japan's superior camera technology allowed them to seize the market early on. Similarly, the Korean market, which conducts approximately 20 million endoscopic examinations annually, faces the same situation.
Korean startup 'MedinTech' has thrown down the gauntlet in the fortress-like endoscope market dominated by Japanese corporations. MedinTech introduced a motorized system that amplifies hand movements instead of relying on mechanical devices operated by finger strength, reducing the weight of the endoscope to half and incorporating artificial intelligence (AI) technology to secure the camera on lesions or prevent blind spots.
On the 19th, at the MedinTech office in Jongno, Seoul, CEO Lee Chi-won noted, "There was full support from the Korea Electrotechnology Research Institute, and the fact that we could use the core patents necessary for commercializing flexible endoscopes for free was the secret to taking a 'shortcut.'"
MedinTech completed clinical trials involving 200 participants at Seoul National University Hospital and launched its product at the end of last year. The company plans to actively pursue product sales and entry into overseas markets starting this year. This achievement comes just five years after CEO Lee founded the company in February 2020 at the government-funded research institute, Korea Electrotechnology Research Institute.
What is the competitive advantage that differentiates you from the Japanese corporations dominating the market?
There are three keywords. First is innovation. By electrifying the endoscope hardware, doctors can perform procedures more comfortably, and patients can undergo safer treatments. The second is price. As Japanese corporations monopolized the market, prices have risen, but we intend to reduce them to a reasonable level. We plan to offer our endoscope at about 60% of the price of Japanese endoscopes, even after incorporating AI software. The last keyword is maintenance. Repairing endoscope devices has not been easy when they break down. Often, companies would require replacing the entire module instead of just the problematic part, and repair times could take as short as two weeks or as long as four weeks. Unlike Japanese corporations, we plan to establish a system that allows us to conduct direct maintenance and repair, thereby reducing both costs and lead times.
Last year, you conducted a large-scale clinical trial at Seoul National University Hospital. What were the results?
We conducted a clinical trial comparing our product with the endoscopes from the Japanese corporations that are the best-selling in domestic hospitals. This process aimed to confirm whether there were shortcomings compared to existing products and how similar in performance our product was. The clinical results indicated that there were no issues with equivalence, and we even found that our product performed better concerning the fatigue experienced by the practitioners. This year, we plan to increase the scale of the clinical trials with patients at five hospitals, including Seoul National University Hospital, to enhance credibility further.
Products have been developed just five years after the startup. Medical devices are notoriously difficult to launch; how did you overcome this?
The co-founder and vice president, Kim Myung-jun, and I first met in graduate school, and afterward, we both joined the Korea Electrotechnology Research Institute. We joined Korea Electrotechnology Research Institute solely with the goal of domesticating endoscopes. Although Kim had skills in scope technology and artificial intelligence machine learning, we lacked the lighting or image processing technology necessary to create an endoscope. Korea Electrotechnology Research Institute had developed these technologies early on. We believed that combining our technology with that of Korea Electrotechnology Research Institute would enable us to achieve endoscope domestication, which led us to join.
Did you always think about starting a business from the beginning?
We worked hard on research, but there were no domestic corporations willing to take this technology and commercialize it. Not wanting to let the research results go to waste, we decided to start our own business. MedinTech was established in February 2020, and with overlapping and leave periods, this year marks the last of my leave.
Is there a reason you started the business while still on leave from the research institute?
My status as a researcher at the Korea Electrotechnology Research Institute significantly aided the startup process. Venture capitalists (VCs) had a different perception of our venture. They seemed to think that a faculty member's startup or a startup without any affiliation could lead to technologies that were divorced from reality. In contrast, since research institutes often conduct research leading up to commercialization, VCs had a different perspective on our venture. Starting from a different point yielded substantial help.
Was it difficult to utilize the patent technology from Korea Electrotechnology Research Institute in the endoscope development?
We obtained licenses for 11 patents held by Korea Electrotechnology Research Institute. Generally, research institutes tend to focus more on technology transfers than on startups, so convincing them to choose the option of entrepreneurship took time. However, after sufficient persuasion, my co-CEO and I received significant support to concentrate on developing endoscopes. We were permitted to use exclusive and non-exclusive rights for the 11 patents held by Korea Electrotechnology Research Institute, requiring the consent of not just the institution but also the colleagues involved in technology development. Fortunately, everyone agreed, allowing us to utilize the patents for free and expedite product development. I believe we managed to take a 'shortcut.'
What challenges or improvements are needed when starting a business from a research institute?
While preparing for the startup, it took a long time to convince the heads of internal divisions at Korea Electrotechnology Research Institute, such as the center directors and the institute directors. This task was even more challenging than presenting an investment briefing (IR) to investment firms, but in hindsight, it seems it was a time to learn how to explain and persuade others about our technology externally. I view it as a practical training experience. From a systemic perspective, it would be beneficial if research institute researchers who take entrepreneurial leaves were excluded from the headcount. Currently, as entrepreneurial leave personnel are counted in the headcount, it makes it difficult for researchers or the organization to encourage taking such leaves.