Ally Bridge Group (ABG) and LifeTech Scientific have joined forces to invest in medtech companies and help them access the Chinese market. The partners will create a joint fund that invests in technologies globally and then seeks to accelerate their progress in China.
The alliance draws on the experience of ABG, a Hong Kong-based investment firm, and LifeTech, a Chinese medtech company. ABG and LifeTech have a long history of working together—the former played a role the latter’s 2012 partnership with Medtronic—and this week’s development takes the relationship to another level.
ABG and LifeTech have created a deal with multiple parts. One part sees LifeTech commit to invest in ABG’s funds. Another makes ABG and LifeTech preferred partners for each other’s medtech investing and operational activities. But it is the third component that may have the biggest effect on the wider industry.
That component sees ABG and LifeTech commit to the creation of a joint investment fund. The fund will put money into leading medtech companies based around the world. Having established ties to these companies, the partners will then work to bring their products to market in China.
The plan seeks to leverage LifeTech’s experience to open up China to companies developing products overseas at a time when the country’s medical device market is in the middle of an important shift. In recent years, Chinese regulators have overhauled the rules governing medical devices in a bid to raise standards and encourage development of innovative products.
These changes have made a potentially-huge market more attractive but still left companies in the West with the conundrum of how to carve out a piece of the sector. ABG and LifeTech are offering a lower-risk, lower-reward approach for companies wary of trying to go solo in a foreign market they have little experience of.
"LifeTech has a proven track record in ... collaborating with global medtech companies in localizing world-class products in China, which is increasingly critical for foreign technologies entering into China," ABG CEO Frank Yu said in a statement. “This strategic partnership breaks new ground in coupling investments in—with operational value-add to—global medtech companies entering the China healthcare market.”