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HOYA Group to Set Up Joint Venture with Wassenburg Medical Devices in the Field of Endoscopy

HOYA announces that it has signed an agreement to acquire a majority shareholding in Wassenburg Group, an automated endoscope reprocessing (AER) market leader in the Netherlands. The planned closing date was Nov. 1, 2013.

This strategic acquisition enables HOYA through its division PENTAX Medical to give its global customers complete access to a wider portfolio in the field of flexible endoscopy, from endoscopes to AERs. The same synergies will also be driven by Wassenburg as the respective installed base customers and new customers will have a wider portfolio from which to benefit.

Flexible endoscopy is approximately a $2.5 billion market globally and growing at an average 8 percent to 10 percent annually. The AER market is approximately a $1 billion market globally and growing at 10 percent to 12 percent annually. With this joint venture HOYA will now have access to a $3.5 billion market globally and also heralds a shift from a capital equipment company to enter the segment of consumables too.

The growth of the endoscopy market is driven by changing demographics, new minimally invasive procedures, new diagnostic technologies and new therapeutic endoscopic procedures which are increasing the number of endoscopy procedures. At the same time every endoscope after clinical use must be decontaminated with the same degree of rigor following every endoscopic procedure to prevent cross-contamination of patients. This underscores the importance of endoscope reprocessing and following disinfection guidelines to attain best practice and improve patient care. The trend in the market is the shift from manual to standardized automated reprocessing of endoscopes and presents a great growth opportunity.

This joint venture is about product synergies, channel synergies and geographic expansion. Wassenburg Medical Devices has direct operations and significant presence in western European countries with their leading edge AERs. Through this strategic alliance with HOYA they will now have a platform for entry in the world’s largest Endoscopy market, the USA and also into the emerging markets of Asia Pacific, Latin America, Eastern Europe and Middle East Africa. This strategic deal not only widens the portfolio for the HOYA customers but also offers a platform for growth into new markets and new segments.

“This is a great match for us and a significant step forward for our global endoscopy strategy,” says Jayant Saha, senior vice president, Global BD, PENTAX Medical, HOYA Group. “Wassenburg is a fantastic company. Their management have done a great job building the company and we look forward to taking advantage of the strengths of our combined companies as we expand the product offerings globally into existing and new markets.”

The transaction will involve the purchase of more than 50 percent of the shares of Wassenburg Group. The share acquisition is the latest step in HOYA’s plan to gain share in all markets globally and the widening of the product portfolio positions HOYA to capture market share everywhere.

“Instilling greater clinical confidence by delivering high performance, reliability and value to our customers is at the core of everything we do,” says Ganesh Ramaswamy, global president of PENTAX Medical. “Now PENTAX Medical along with Wassenburg look forward to offering seamless product offerings in the field of Endoscopy to our customers.”

Medical Endoscope Business Potential

The medical endoscope business, one of HOYA’s growth drivers,
has the following characteristics and growth potential.

Key for sustainable growth
Growth Driver Medical Endoscope
Growth Drive Eyeglass Lens
Medical Endoscope Business in the HOYA Group
Fiscal 2013 Sales Components
The global medical endoscope market has high growth potential.
Flexible endoscopes' global market Growth driver of the market
Minimally invasive medical treatment is expected to revolutionalize the medical world.
Minimally invasive medical treatment is designed to minimize pain, fever, bleeding, scar formation, and other manifestations in the patient’s body that are, associated with surgery or medical treatment. The benefits of this method (such as reduced pain and shortening of hospital stays) have proved attractive not only to patients but also to national governments seeking to restrain the growth of expenditures for medical care. The medical endoscope is indispensable for minimally invasive medical treatment. Importantly, it facilitates early detection, accurate diagnosis, and reduced ancillary effects of the treatment (and surgery) on the patient, playing a vital role in all those processes.
Development of minimally invasive medical diagnosis and treatment, and the endoscope's roles
HOYA's global medical endoscope business
No.2 market share in the world Overseas sales ratio

HOYA has a global network of bases for R&D, sales and marketing, and customer service for its endoscope business. Overseas group companies in 14 countries and R&D bases in Japan, the U.S., and Germany are promoting development and use of products that match the needs of each local market.

HOYA's technologies support its growth. Most-advanced flagship model's capabilities.
PENTAX EPK-i & 90i series
PENTAX EPK-I & 90i series is a high-end series of HOYA’s medical endoscopes. It combines the videoscope 90i series, which mounted a Megapixel CCD for the first time in the world for endoscopes, with the video processor EPK-i which realizes a high-resolution output by adopting the patented image processing function called i-scan. Combining these two devices satisfies the medical field’s requirements for better pictures, high resolution, and multiple functions.

In October 2012, EPK-i7000 was released in some markets, with other countries pending regulatory approvals.
In May 2013, “OE” (Optical Enhancement), a new advanced optical enhancement technology for the i-scan, has been launched for the Japan market, and soon other countries as well. This technology digitally enhances the visibility of blood vessels, ducts of the glands and surface structures.

Targets: Driving Sustainable Double Digit Growth

In order to drive and sustain double digit growth, we have developed and implemented a strategy that consists of 6 key points:

  1. Broaden our portfolio with M&A into complementary & adjacent spaces while simultaneously focusing our internal R&D on innovative products that are DIFFERENTIATED from competitors by ease of use, clinical relevance, and quality.
  2. Strong focus on a global quality system.
  3. Grow in emerging markets through localization of resources and management teams.
  4. Globalize company operations to reduce our cost position.
  5. Build our reputation as #1 in customer satisfaction.
  6. Build an energized and world class team.

Against the backdrop of aging populations and global expansion of medical services, the market for flexible endoscopes and related products and services is expected to remain strong in the foreseeable future and continue to grow. We are determined to concentrate on continuing to gain global market share in flexible endoscopy with game changing products as well as enter new endoscopy-related fields, in cooperation with leading medical institutions and research universities.
As a result, I expect the strong growth and share gain that we have achieved over the past 3 years will continue into the future and even strengthen, as our strategies become fully implemented.

Key for sustainable growth
Growth Driver Medical Endoscope
Growth Drive Eyeglass Lens

Hoya endoscopes bussiness overview

High levels of advancement in flexible endoscopy technology, and market growth, are anticipated.
Endoscopes are used not only to accurately diagnose lesions but also to take samples of mucous tissue and enable direct treatment of disease in a single series of steps. This kind of treatment, which goes beyond observing the disease, is called “minimally invasive medical procedure” and is replacing conventional laparotomy.
Flexible endoscopy not only minimizes the physical burden to the patient’s body resulting from medical practice but also reduces medical costs. It will provide valuable assistance to many governments’ initiatives in curtailing medical expenditures.

High growth expectation as medical device for low-invasive medical treatment
Pentax technological advances demonstrated in the mega pixel age
A global operational structure promises response to diverse needs and accelerates growth
Target 10% annual growth in sales
High growth expectation as medical device for low-invasive medical treatment
The market for flexible endoscopes is expected to increase by 7-8% a year.
Minimally invasive medical treatment is a promising medical procedure which not only minimizes the burden to the patient’s body but also reduces time and cost spent for medical treatment, by enabling early detection and treatment. In addition to medically developed countries, emerging countries such as China and India are facing the need to establish medical infrastructure associated with their economic growth, and improve the people’s quality of life (QOL). Against this background, use of endoscopic diagnosis and treatment is projected to grow solidly. Moreover, efforts at curtailing medical expenditures in many countries will further increase the adoption of flexible endoscopes in medical practice as one of the ways to detect disease early through physical checkup or to avoid adverse effects of the disease.
Pentax technological advances demonstrated in the mega pixel age
Since the launch of a bronchial fiberscope in 1977, Pentax has been engaged in the development of medical devices, using its optical and precision processing technology, which was accumulated in its camera business. While Pentax was consolidated with Hoya in August 2007 and subsequently merged with it in March 2008, the endoscope business has kept the PENTAX brand for its products. At present, we offer endoscopes for bronchial, digestive tract, ears, nose, and throat uses, and video processors which offer high-definition endoscope images. In October 2012, we released EPK-i7000, the highest-end model of the i-series, that is also the next-generation high-function video processor. Combining the video processor with the i-series endoscope, which mounted a Megapixel CCD, high-definition images can be provided to facilitate diagnosis and treatment in endoscopic examination.In May 2013, “OE” (Optical Enhancement), the latest image enhancement technology for the i-scan, was released.This technology digitally enhances the visibility of blood vessels, ducts of the glands and surface structures, in addition to conventional optical enhancement functions (enhancement of surface, contrast, and tones.) The OE facilitates more precise detection and characterization of lesions in digestive organ.

Clinical images provided by Dr. Shinya Odajima and Dr. Mitsuhiro Fujishiro, the University of Tokyo Hospital.
A global operational structure promises response to diverse needs and accelerates growth
The endoscopy market is growing globally. We have established a global organization in order to capture growth opportunities in China, India, and other high-growth emerging markets, in addition to Europe and North America. Through efficient deployment of R&D, sales, and service bases worldwide, and establishment of a system to provide innovative solutions that respond to diverse needs in each country and region, we are intent on promoting our growth on a global scale.
Target 10% annual growth in sales
Hoya aims to achieve 10% annual growth in sales and outperform market growth rates. In addition to globalizing our organization, we have focused on strengthening our organization in all aspects including research and development, quality and cost control, and after services in recent years. This has resulted in establishing an efficient and strategic business structure. Going forward, by further strengthening our alliances with medical professionals, we plan to speedily offer to the market innovative products that use our proprietary technology, and other products that satisfy diverse needs. Our goal is to expand our business in the globally expanding endoscopy market.

Transnasal Endoscopy

In order to counter increasing cost pressure in modern endoscopy, Fujifilm has developed a complete product range for transnasal endoscopy (TNE). While TNE helps to reduced costs, at the same time it facilitates greater patient comfort. It is exceptionally reliable for routine procedures and training clinicians to carry out the procedure is very simple.
The cost-effective answer to new legislation and changes in the public health sector
Complete range of video endoscopes, disposable catheters and accessories
Brilliant images with a high level of diagnostic information
Patient-friendly procedures that do not require sedation or after-care

Better performance, greater savings potential.

More comfort for patients.
Transnasal endoscopy is virtually pain-free and can be carried out without sedation. It is far more patient-friendly than conventional gastroscopy because this examination technique does not induce any pharyngeal reflex. Similarly, it is suitable for patients with swallowing difficulties or people who cannot be given an anaesthetic. In routine use, transnasal endoscopy means considerably less discomfort for all patients undergoing treatment and the patient is able to talk to the doctor during the examination.
Endoscopy without sedation or aftercare.
Transnasal endoscopy does not require sedation and, as a result, there is no need for a specially trained assistant to monitor the patient. The patient can also leave the surgery or the clinic as soon as the procedure is over doing away with the requirement for recovery facilities or monitoring equipment. This, in turn, leads to greater cost efficiency.

Reliable diagnostics thanks to top-quality images.
Fujifilm is synonymous with high image quality and Fujifilm transnasal endoscopes are no different. The unrivalled excellence of the Super-CCD chip in these ultra-slim video endoscopes produces high-resolution images in brilliant colours. This means every single detail is clearly visible and enables reliable and safe diagnosis.
Ultra-slim video endoscopes

The innovative video endoscopes EG-530N and EG-530NP combine an ultra-slim design with high manoeuvrability and ease of intubation.
The high-specification miniature Super-CCD chip and two fibre-optic cables guarantee excellent images and optimum illumination. For minor therapeutic procedures or biopsies, both models feature an instrument channel with a diameter of 2 mm.
Thanks to the small diameter of the endoscopes, they can both be used on patients with stenosis or for paediatric endoscopy.

Fujinon EVE 590 series

The next generation of endoscopy.

With the pioneering 4400 endoscopy system, Fujinon is already meeting tomorrow’s standards in endoscopy today. As a platform, VISIONARY ENDOSCOPY provides the world’s first fully digital endoscopy system, with a complete network of perfectly coordinated individual components.
One of these is the EVE 500 series. It combines the very latest digital image display with an ergonomic and easy-to-use design to form a perfect whole. Technological innovations and digital image processing with the EPX-4400 processor ensure maximum resolution and outstanding clarity during examinations.