"ArtiSential has practically carried Livsmed's revenue alone for seven years. But in the second half of this year, the vascular sealing device ArtiSeal joined the lineup, and three more will be added next year. With a total of five product families, Livsmed's growth trajectory will completely change."
Jeon Ji-hwan, an executive director at Livsmed, met with ChosunBiz at the company's Bundang headquarters in Gyeonggi Province on the 1st and said, "Livsmed has secured five product families, including ArtiSential, with multi-joint technology, and this lineup is changing the landscape of the existing laparoscopic surgical instrument market."
Livsmed was founded in 2011 by Korea University professor Lee Jeong-ju, a former artificial heart researcher. Although it had the technology to develop the world's fifth propeller-type artificial heart, it shifted to the field of surgical instruments due to massive development expenses and market limitations.
Former SK Chemicals executive Jeon Ji-hwan joined a year ago as the company's chief operating officer (COO) and chief strategy officer (CSO), and the company is set to list on KOSDAQ on the 24th.
◇ Laparoscopic surgery market sees a generational shift from "Da Vinci" to "ArtiSential"
Laparoscopic surgery spread in the 1990s as a minimally invasive alternative to open surgery. But the straight instruments of the time made it difficult to adjust angles and secure visibility. What complemented this was Da Vinci, a surgical robot from U.S.-based Intuitive Surgical released in 2000. While it precisely replicated hand movements, high expenses and the lack of haptic (force feedback) transmission were cited as drawbacks.
Livsmed solved these limitations with ArtiSential, a laparoscopic instrument equipped with multi-joint articulation that bends 360 degrees in all directions and can be operated with one hand. Complex motions to open, close, and rotate the grasper (end tool) can be controlled directly by hand, and unlike Da Vinci, tissue feedback is transmitted, enabling precise surgery.
ArtiSential received approval from the Ministery of Food and Drug Safety in 2018 and obtained U.S. Food and Drug Administration (FDA) clearance and European Union Medical Device Regulation certification (CE MDR) last year. It is currently used in more than 250 hospitals in Korea and exported to 72 countries, including the United States, Europe, Japan, and Australia. The company plans to launch the smaller, lighter ArtiSential 2.0 in the second half of next year.
Jang Dong-gyu, chief intellectual property officer (CIPO, senior managing director), who oversees Livsmed's technology patent strategy, said, "We are reducing the handle's size and weight to ease the burden on physicians' wrists and strengthening cost competitiveness through production efficiency."
ArtiSential posted 27.1 billion won in revenue last year, and first-half revenue this year was 21.1 billion won. The operating loss narrowed from 26.5 billion won last year to 16.6 billion won as of the third quarter this year. The company expects 150.7 billion won in revenue and 15.1 billion won in net profit next year.
◇ Despite losses, a 1.3 trillion valuation… "Five product families drive growth"
Livsmed's expected market capitalization amounts to 1.35 trillion won. Although it is still in the red, the reason the company presented this level of enterprise value is confidence in improved performance driven by product lineup expansion.
In April, the company signed a supply contract with U.S. group purchasing organization (GPO) HealthTrust, expanding its overseas distribution network. Global sales are expected to ramp up in earnest starting next year.
In addition, ArtiSential has been listed on a separate platform that sources and supplies medical devices to ambulatory surgery centers (ASC) and hospitals in the United States, numbering about 12,000. The company plans to target 1,800 hospitals and 2,500 ASCs secured by this platform as strategic customers to boost sales.
Livsmed has more weapons beyond ArtiSential. After ArtiSential received approval from the Ministery of Food and Drug Safety in 2018, it drew attention as an innovative device in oncologic surgery, but growth stalled as global roadshows and meetings were canceled due to COVID-19. During this lull, the company instead focused on research and development (R&D) and expanded its product families.
Jeon said, "Developing the vascular sealing device and the stapler that physicians wanted was technically difficult at the time, but we focused during the two to three years of stagnation and ultimately completed them." The result was the vascular sealing device ArtiSeal and the multi-joint stapler ArtiStapler. Added to that, the 3D4K laparoscopic camera LivsCam and the laparoscopic surgical robot Stark brought the lineup to five.
Livsmed particularly views Stark as a next-generation growth engine. In July, the company partnered with SOVATO to successfully demonstrate remote surgery over roughly 3,000 kilometers between California and Chicago, and it is aiming for domestic approval in the fourth quarter of next year.
Jang said, "We will apply artificial intelligence (AI)-based real-time feedback and automation features to Stark."
As more products roll out, Livsmed is moving to expand its production base. Currently, ArtiSential is manufactured only at the Bundang headquarters. Jeon said, "After the listing, we plan to invest the funds first in expanding production facilities," adding, "We will also focus on global market expansion and AI-based R&D."