HASS Bio: discussing South Korea's dental revolution

South Korea currently faces a unique demographic situation. On top of becoming the world’s first country to see its fertility rate fall below 1.0, experts estimate that by 2025, more than 25% of the South Korean population will be over the age of 65, turning the nation into one of the first super-aging societies in the world. While this demographic trend presents challenges, it also provides the Korean medical and pharmaceutical sector with a unique opportunity. What challenges and opportunities does it create for medical companies?

From the perspective of a medical equipment manufacturer, I don't anticipate that the aging workforce in Korea would significantly impact companies like ours involved in medical equipment and device manufacturing. The majority of shares in medical equipment and device companies, including our own, are derived from the global market rather than the Korean market. This is due to the market size being proportional to the population, and Korea, with a population of only 50 million plus, may not offer extensive potential for market expansion. In summary, the aging workforce and population loss are unlikely to exert a significant influence on manufacturers like us.

As you are likely aware, South Korea boasts a long-standing and exemplary health insurance system supported by substantial fiscal backing from the government. There has been a gradual expansion of health insurance coverage, alleviating concerns in terms of medical services. For instance, the government is progressively working towards covering the costs of implants for senior citizens. Consequently, I believe the health insurance system will fortify our readiness for the demographic challenges ahead. Moreover, viewed from the perspective of medical and pharmaceutical companies, the government's increased coverage for health insurance presents itself as an opportunity for growth rather than a concern.

In 2021, the market size of the medical device market in South Korea reached 9.1 trillion KRW. However, critics such as Professor Sun Kyong of Kyung Hee University claim that this increase has mainly contributed to foreign companies, not domestic ones. The challenge for growing companies in the future is to regain market share in the domestic market. How do you assess the competitiveness of Korean companies at home and abroad compared to Western manufacturers?

In fact, for seven decades, Korea has heavily relied on imported medical devices and pharmaceutical goods. Many imported products still constitute the largest share in the Korean market, but over the past decade, this has gradually changed as indigenous or locally produced goods have gained an increasing share in the Korean market.

In the last decade, Korean companies have expanded their share in the Korean market due to their strong competitiveness. Technologies in the dental sector are typically modifications of established technologies, representing the final step in the technological process as they have already been applied in other sectors. Most dental technologies, including materials, medical devices, equipment, CAD/CAM systems, and 3D printing technologies for prosthetics manufacturing, and scanning, are not groundbreaking or innovative but rather established technologies modified for dental use. For example, lithium disilicate evolved from photosensitive glass and was adapted for dental purposes.

The strengths we have in established technologies, such as materials, mechanics, shipbuilding, automobile, 3D printing, scanning, and all CAD/CAM technologies that were already established, have contributed to explosive growth in the industry over the last six to seven decades. These established technologies have created an environment conducive to their use in the dental sector.

Overall, our greatest competitive strength lies in speed. Unlike incumbent Japanese or German companies, which tend to stick to past success formulas, Korean manufacturers, starting from scratch without a long history in the dental sector, are future-oriented to meet the needs and demands of dentists and patients worldwide. The combination of existing infrastructure and an entrepreneurial spirit has enabled us to make strides in the dental sector.

In the realm of medical and dental devices or equipment, it is not patients but dentists or dental technicians who choose which devices to use. Historically, people trusted overseas, especially Japanese or German-made products, because they were considered the most reliable. Medical practitioners, being conventional, rely on past data as most surgeries or therapies are performed on human bodies, creating a high barrier to entry in the dental sector. However, Korean companies, with their strong competitiveness, have gradually dismantled these barriers over the last decade. We have gained trust, and our quality has been recognized globally by dentists and patients. As a result, we are now gaining trust and recognition from medical practitioners, breaking down these high barriers. Building upon the foundational technologies we already possess, we maintain a forward-looking approach. In the next one or two decades, I am confident that Korean companies, including HASS Bio, will be able to increase our market share.

Dental is arguably the medical field experiencing the fastest advancements in automation technologies. The industry is rapidly evolving towards meeting ever-faster demand, thanks to these automation technologies. How do you foresee automation technologies impacting the dental market?

As you are aware, when companies introduce novel services or technologies, it inevitably opens new opportunities in the market. I believe the adoption of automation solutions in the dental sector will indeed usher in new opportunities, adding significant value to the market. However, given the conservative nature of medical practitioners and dentists, I don't anticipate an overnight transformation, as commercials might suggest. The acceptance and widespread distribution of these new technologies or services will likely take some time.

For instance, in the world of smartphones and electronic devices, new models are released annually, and the lifecycle of an electronic device is often less than a year. In the electronic devices market, the transition speed is rapid. However, in comparison, the pace of change in the dental sector or the broader medical field is notably slower. This is because medical practitioners prioritize safety over convenience; they wouldn't compromise safety or reliability for the sake of convenience. The same principle applies to dental materials—decades-old German-made materials remain steady sellers, and the adoption of CAD/CAM, which occurred two decades ago, has similarly exhibited a slow transition pace in the medical device sector.

The U.S. is a region where many dental customers originate, given that dental expenses are less costly here than in the U.S. This situation presents a significant opportunity for Korean companies due to their excellent visibility across various regions. What opportunities do you believe this evolution is creating for you? How do you envision taking advantage of dental tourism in the future?

To be direct, I believe it will unlock immense opportunities for us. Most dental tourists are unlikely to come to Korea for extensive surgeries that require long stays in hospital wards. Instead, the combination of aesthetic dental services and tourism offers an avenue for seizing opportunities, as dental tourists can avoid longtime discomfort as a result of invasive therapies. Korea stands out with strong competitiveness in dental aesthetics, boasting excellent aesthetics and prosthetics, with our materials being integral to both. These prosthetics are among the top-tier man-made materials globally, offering us significant opportunities.

Korea, in my view, is an ideal place where the synergy of aesthetic dental services and tourism can flourish. In places like the Gangnam district, numerous plastic surgery hospitals line the streets, with groups of Chinese or Japanese tourists sporting band-aids on their noses after nose surgery. However, compared to these more invasive procedures, dental aesthetics are relatively light, allowing patients to maintain their well-being without compromising their travel experiences in Korea. One of our significant strengths lies in Korean dental technicians who, by law, must graduate from specific schools, major in designated subjects, undergo on-the-job training, and pass a national exam to acquire a license. This professionalization sets us apart from others in the field.

For years, the limitation of the speed of fabrication was crystallization, which added extra time to prepare for the final product. I understand that you have developed the Amber Mill Direct, addressing some of these concerns. Could you provide more insight into this particular product and how you've managed to expedite table fabrication for the benefit of practitioners and patients?

Earlier, I highlighted the strengths of Korean companies, but I would now like to shift focus to the weaknesses. I believe we have weak influencing power compared to advanced nations, as these nations, including the UK, and France, typically set the standard for the universal patent system. The patent system serves as a weakness for us because companies with a rich tradition in Europe or Japan have already established high entry barriers, acting as a patent system for Korean companies. While patents usually last for 20 years, incumbent companies continue to develop and apply group or family patents for technology protection, giving them dominance in the patent system. Another weakness lies in the realm of design technology and software development. Despite Korea's cutting-edge ICT technology, there is a notable gap in investment compared to advanced nations, hindering progress in software development—a crucial infrastructure for pioneering innovative technologies. The Korean dental sector still lags in terms of becoming a source of establishing industry standards.

This gap is exemplified in design technology in semiconductors. For instance, prominent Korean companies excelling in foundry, which involves chip manufacturing. However, when it comes to design technologies, Korean semiconductor industry still needs to make progress. It doesn't happen overnight; it accumulates and becomes more sophisticated over time.

Our journey led to the development of lithium disilicate, an early innovation globally that had to build upon established technologies. Despite the best ideas, we faced patent entry barriers. Overseas clients consistently asked, "What distinguishes your technology from the established ones?" This drove our efforts toward creating Amber Mill and Amber Mill Direct. Originally, the first generation of lithium disilicate solutions we developed lacked a distinct difference in our products. Therefore, our first step was to create noticeable and distinguishable features in our products. Second, instead of passively avoiding patents, we aimed to create our unique patented technology. Hence, we heavily invested in R&D, and after a considerable time investment, Dr. Lim, our CTO, and R&D team made significant strides in developing Amber Mill and Amber Mill Direct.

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Meshing poses challenges, especially in adapting tools and materials to avoid breaks and achieve very thin details, as seen with steel and aluminum. However, when dealing with ceramics, additional considerations for compatibility with the mouth, tissues in the human body, and the need to pass patterns present a significant challenge. Could you provide more insights into how you addressed these challenges?

The primary weakness for ceramic materials is brittleness, leading to chipping, making it challenging to achieve sharpness and precision compared to metals. To overcome this, a multiphase crystal was implemented to prevent chipping during the milling process. Amber Mill, with greater hardness than Amber Mill Direct, undergoes two rounds of heat treatment to increase its strength. The crystalline size of Amber Mill is 20 times finer than that of traditional options, thanks to our proprietary Nano Lithium Disilicate (NLD) technology. While greater strength can pose processing challenges, the multi-phase structure aids machinability.

Despite early criticisms about Amber Mill's strength, Amber Mill is now widely used because, even with significant strength, its machinability is comparable to traditional materials, thanks to the finely tuned crystal size. A key strength of Amber Mill lies in the ability to vary translucency based on the temperature of heat treatment after milling, offering customization options optimal for each patient. This flexibility simplifies inventory management for dental clinics, as practitioners can achieve different translucency levels with a single product. In summary, Amber Mill streamlines inventory management for medical practitioners and provides optimal translucency for patients.

Amber Mill Direct, as the name suggests, does not require heat treatment for use and it indicates the appropriate strength for anterior use in the mouth. An innovative feature is the application of a graduated effect on a single milling block, achieving natural translucency. This graduated effect, from the cervical to incisal/occlusal regions, mimics the natural teeth, with less translucency towards the gum and more translucency towards the incisal part. Initially thought implausible, this technology differentiates Amber Mill Direct, offering unique translucency within a single product.

HASS Bio’s strength in rapid innovation, exemplified by Amber Mill and Amber Mill Direct, extended to another innovation – Amber Mill Abut-crown. Utilizing Amber Mill lines as the base, a screw access hole is created, offering a unique implant crown solution. This block will be also composed of a zirconia insert and a titanium link which will be combined with the block by an inorganic bond. This innovative design streamlines the complex and time-consuming process of traditional implant crowns, offering a one-day implant crown for dentists and dental technicians. Although not yet on the market, we plan to release it early next year, providing dental specialists with the ability to simply manufacture an all-ceramic implant crown. All these innovations are possible because HASS Bio is a company experienced in glass ceramics.

You possess various technologies, many of which have obtained FDA approval or CE certification. How do you envision their potential in different markets? Which region do you consider a key area for your expansion?

Amber Mill and Amber Mill Direct hold more potential and are likely to be more popular in advanced nations with established industries. If we categorize the world into two parts—advanced nations and developing countries—we observe that labor costs are higher in advanced nations, and there is a preference for processes that involve fewer manual tasks with minimal human touch. On the other hand, in developing countries, cost plays a significant role, and if processes, materials, or systems are deemed too expensive, they might not be adopted. Our glass-ceramics have a distinct advantage because they are versatile enough to be applied in both digital CAD/CAM prosthetics and the traditional casting methods of manufacturing prosthetics. For Amber Mill and Amber Mill Direct, the greatest potential lies in advanced nations at the moment due to their already-established infrastructure.

As the founder of HASS Bio, what goals or ambitions do you aim to achieve during your tenure as president before transitioning the company to the second generation?

My ultimate goal is not just an increase in revenue or market capitalization, as I believe both naturally accompany strong company performance. When the time comes for me to step down as president and pass the company on to the next generation, I aspire to achieve two main objectives. Firstly, I hope that the company will have gone public by then. Secondly, I aim for more than 50% of all insiders in the global dental field to recognize our company as an excellent manufacturer of quality products.

For more details, explore their website at https://hassbioamerica.com/