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Transforming cancer treatment through Integrated high-frequency hyperthermia

Interview - September 6, 2023

DongSeo Medicare Co., Ltd's inception in 1995 marked the beginning of an exceptional medical journey. Through pioneering thermal therapy trials, the company aimed to alleviate pain, extend life, and synergize treatments like radiotherapy. The pinnacle of their innovation came in the form of a high-frequency hyperthermia device, reshaping cancer treatment. Amid a market dominated by giants, their approach defied convention, infusing technology to elevate performance and weaving a narrative of transformative advancement.

MR. KIM SANG-HAN, PRESIDENT OF DONGSEO MEDICARE CO., LTD
MR. KIM SANG-HAN | PRESIDENT OF DONGSEO MEDICARE CO., LTD

Given the reality of an aging global population, with countries like South Korea, Japan, China, and even the US experiencing this demographic shift, the medical industry worldwide, including in South Korea, is being tasked with a vital role that could be seen as essential for humanity's survival. How do you perceive this challenge, and more importantly, what opportunities does this demographic change present for the medical industry to step up and effectively address this issue?

The rapid aging of societies is mainly due to younger generations choosing not to have children. This demographic shift is driven by a preference for individualistic lifestyles and altered life values. Without a dramatic policy shift from the government to incentivize procreation, the current trend of low birth rates and stagnant population growth is unlikely to change.

Another factor influencing these demographic changes is the work preferences of the younger generation. Despite a plethora of job opportunities, many young individuals are reluctant to seek employment, often holding out for comfortable, high-paying jobs in major companies rather than considering small and medium enterprises (SMEs). This results in SMEs, like our company, experiencing a shortage of staff. The reluctance of young talent to join SMEs is despite the opportunities these enterprises offer to build expertise and gain extensive experience.

The challenge of recruiting young talent is apparent in our continuous posting of job openings on major job sites like Job Korea and Saramin, primarily for roles in marketing, sales, and AES engineering. However, the response is often inadequate, making it difficult to find suitable candidates.

To overcome this recruitment challenge, SMEs need to adopt more innovative technologies or highly specialized technologies. This strategic adaptation could help us navigate through this crisis and meet our staffing needs.

 

Given the natural health implications of an aging population, including increased disease prevalence and greater fragility, there is an escalated demand for advanced and high-tech medical treatments. Do you believe the medical industry at large is equipped to devise solutions that not only increase lifespan but also improve the quality of life so that what is considered old today may not feel as old in the future?

Absolutely, I concur. The bio-health industry is placing a significant emphasis on "silver care" (care for the elderly) because it recognizes the growing market potential. Numerous products and sectors are increasingly embracing this focus. We also see immense potential in this field, particularly in regard to the medical devices we produce, such as high-frequency hyperthermia devices for cancer treatment. Given that older individuals are more likely to utilize such devices, our potential for growth in this market is substantial.

 

With the increasing demand for medical services and products, whether it's pharmaceuticals or equipment, every domestic market is expanding, with South Korea's market reaching 9.1 trillion in 2021. However, there is a belief that South Korea still heavily depends on foreign technology, particularly for medical devices. Critics emphasize the necessity for Korean companies to grow alongside their domestic market, not just for financial gain but also to develop core competencies and increase competitiveness. Do you concur that South Korean companies need to enhance their competitiveness both domestically and globally, striving to become more significant players on the world stage?

To be candid, at the onset of the industry, many Korean manufacturers, including our company, used imported medical devices that were already approved in foreign markets as benchmarks for creating their own products. We believed there was a demand in the Korean market for such devices, which propelled us to develop our own. As we imported overseas medical devices and competed with them in the market, we found opportunities for growth.

An exemplary illustration of this concept lies in the evolution of our high-frequency hyperthermia device designed for cancer treatment. Back in its inception six years ago, the market was predominantly under the control of foreign manufacturers. The landscape was defined by major corporations monopolizing the production of hyperthermia devices. However, our approach transcended mere emulation of these industry giants. Rather than duplicating existing technologies, we embarked on a journey of innovation, seamlessly integrating cutting-edge advancements into our devices, thereby elevating their overall performance and capabilities.

 

Over the recent years, Korea's medical device exports have experienced significant growth, and today there are more than 4,000 medical equipment manufacturers in the country. For the first time, exports have surpassed imports, resulting in a positive trade balance for medical devices in Korea's economy. Given this context, how do you assess the global competitiveness of Korean medical devices today? Can Korean companies, including your own in the medical field, not only meet but exceed the global benchmark, positioning themselves as competitive players on the world stage?

The manufacturing environment we operate in provides us with numerous advantages due to our location within an industrial complex managed by the Industrial Complex Management Corporation. This complex houses a vast array of industries, totaling 3,500 companies. Consequently, we not only have access to the medical industry but also to software and mechanical engineering companies, among others. This setup offers significant networking opportunities and fosters valuable connections among diverse businesses.

One of the primary benefits of this arrangement is the ability to establish strong relationships and form connections with other companies. This networking opportunity proves to be a great advantage for us. Additionally, the presence of specialized entities within the complex enhances our competitiveness compared to our peers. Each company is highly specialized in their respective fields, allowing us to leverage their expertise and collaborate on various projects.

 

The government recently enacted a presidential decree in 2020, initiating a five-year comprehensive plan to develop and support the medical device industry, with the goal of elevating Korea to the fifth largest exporter of medical products. This initiative involves considerable investments in research and development, and provides opportunities for innovative medical device companies to gain access to grants and experience reduced regulatory hurdles. What is your perspective on these recent governmental measures in the sector? Do you believe their support is not only necessary, but also capable of producing substantial outcomes?

As I mentioned, there are around 3,500 companies based in this complex, most of which are engaged in research and development. However, these firms often lack the resources to independently carry out their projects, thereby relying on governmental aid. Instead of having to invest substantial amounts of their own funds into research and development – something many are not equipped to do – these companies are given the chance to grow through government funding and other benefits. We view this as a highly positive move from the government.

About three years ago, our company was chosen as a recipient for R&D funding, receiving roughly 800 million Korean Won. This funding allowed us to commence development on a new product titled Prostatitis, aimed at addressing prostate issues through the use of a hyperthermia device. As part of this project, we were required to collaborate with five other companies. Even though we received the funding, a portion of it had to be shared with our partners. For instance, we could secure 70% of government support, but the remaining 30% had to be contributed by us. Overall, this approach fosters collaboration and resource sharing, which we believe contributes to overall sector growth.

 

It is truly inspiring to see tangible examples of productive collaboration between the private and public sectors leading to innovation, as in your case. Shifting gears a bit, let's discuss the internationalization capabilities of South Korean medical devices. There have been notable success stories such as Newtronix, which managed to double its sales year on year, with nearly half of the revenue now coming from the U.S. market. What do you believe are the essential factors for Korean manufacturers to achieve more global reach? What is the formula for success when it comes to South Korean firms expanding internationally? And where do you see potential opportunities for your own company in the global market?

As a CEO, I acknowledge that global expansion is one of our key challenges. We are highly proficient at domestic sales due to our specialization in the local market. However, venturing outside of the country and stepping onto the international stage presents a different set of challenges. This expansion often incurs significant marketing costs, and the international market is not easy to navigate, making it a daunting task. However, I am confident that as long as our product remains competitive, we can succeed on the global stage. Nevertheless, we recognize that overcoming this perceived weakness is critical for our international growth.

 

For established corporations like Samsung and LG, global expansion is relatively straightforward, but for small and medium enterprises (SMEs), the local market can often be saturated, necessitating a search for revenue from international sources. Would you agree with this assessment?

Referring to the 3,500 companies in the complex, some of which operate in our sector, many have the potential to expand overseas and conduct international business. However, there are inherent limitations when it comes to independently financing international marketing activities, primarily due to the significant associated costs. Furthermore, while these companies excel at manufacturing or service provision, international marketing may not be within their area of expertise. So, venturing overseas presents a unique set of challenges. As such, these companies could greatly benefit from some form of governmental support to facilitate their international expansion.

 

The plan does include creating international networks, and initiatives like the Medical Device Association are making efforts to help SMEs expand globally. However, I would like to shift our focus to your company now. I am fascinated by your journey over the past 20 years - starting as a trading company and importer of foreign technology, and eventually evolving into a manufacturing entity and, crucially, an innovator. Could you share more about how this transformation occurred?

Our company was established in 1995, and during the initial years, we identified several exceptional overseas partners. One such partner was Instrumentarium from Finland, known for their breast imaging x-ray machines. Before our collaboration, they had only sold a couple of units in Korea, but with our help, they were able to sell 70 to 80 units. However, Instrumentarium was later acquired by GE.

Similarly, we partnered with an American firm, SenoRX, that produced a vacuum-assisted breast biopsy system. With our assistance, SenoRX went from having no presence in the Korean market to achieving a 30 percent market share. Later, this company was merged with BARD. Another example is our collaboration with Supersonic Imagine from France, enabling them to sell 80 units of their products in the Korean market annually. They were subsequently acquired by Hologic. These developments altered the business landscape unfavorably for us, prompting us to recognize the need to develop our own, homegrown devices to stay competitive.

The decision to develop a hyperthermia device for cancer treatment stems from my prior 5-year experience as a medical device salesman at Siemens Korea. There, I handled devices such as MRIs and CT scanners, and other cancer treatment devices, including linear x-rays. My educational background in physics further equipped me with the knowledge and expertise required to create a high-frequency hyperthermia device for cancer treatment.

Moreover, the decision was driven by the increasing number of senior care centers and sanatoriums in Korea. Many elderly cancer patients were admitted to nursing homes for treatment. These centers largely depended on inadequate government aid, with grants as low as 300,000 KRW per hospitalized patient. Therefore, our medical device was not only beneficial for these nursing homes to increase their revenue but also became a profitable solution. We believed that the demand for our device would inevitably rise in the future.

 

Cancer is indeed a devastating disease, often leaving patients grappling with the side effects of the treatments, sometimes even worse than the disease itself. The harsh reality of chemotherapy is that it can sometimes feel like a race against time, questioning whether it will eradicate the cancer first or severely impact the patient. It's also about halting the cancer before it metastasizes further into the body.

Can you elaborate on the role of hyperthermia in cancer treatment? How does it enhance the precision in targeting and eliminating cancer cells, as opposed to affecting all cells? Additionally, how does it complement other treatment modalities such as immunotherapy and other conventional therapies?

Hyperthermia treatment has a long history, stretching back to the time of Hippocrates, and has been extensively used in addressing cancer-related diseases. Our hyperthermia device works by increasing the body's temperature to around 42 or 43 degrees Celsius, which can effectively kill cancer cells. Reaching these temperatures would be revolutionary, however, directly monitoring this temperature increase is challenging due to the nature of biopsies. Our only verification method is through indirect data collected from clinical trials.

The objectives of our clinical trials for thermal therapy include curing the disease, relieving pain, extending life expectancy, and achieving a synergistic effect when combined with other treatments like radiotherapy. So, even if we cannot always achieve a precise temperature of 42 to 43 degrees Celsius, our thermal therapy device has been well received by patients and shows promising results.

In radiotherapy, it is critical to accurately target the cancer cells as the radioactive waves can potentially damage surrounding healthy organs. However, our hyperthermia treatment device can target cancer tissues more broadly. Even when a larger area is targeted, only the cancer tumor is heated to high temperatures, while normal cells remain unaffected. This is because normal cells are attached to blood vessels that dissipate the heat, whereas cancer cells lack these developed blood vessels. Therefore, we can heat the tumor to the desired temperature without affecting healthy tissues.

 

Cancer, unfortunately, has touched many of us personally, impacting friends or family. The quest for better treatment options is crucial, especially given that some patients may be reluctant to undergo treatments that might only prolong pain rather than providing a cure. I am eager to hear more about how hyperthermia can shift this perception.

Yet, let's pivot back to your product. Hyperthermia is now a globally recognized treatment approach. Could you elaborate on what differentiates your product in this field? What is the unique selling point of your hyperthermia device compared to competitors' offerings?

Our product stands out in several ways. First, we use a high-frequency 13.56 Megahertz, a popular choice in this field. What sets us apart is that we have designed our device to be an "all-in-one" system, integrating all essential components into a single unit, a feature our competitors currently lack.

Additionally, we use a water-filled mattress to help raise the patient's body temperature comfortably, contributing significantly to the treatment process. Our device also features a large 10.4-inch LCD screen, which allows easy input of the treatment protocol and comprehensive control of the device. It enhances real-time interaction between doctors and patients. For those who prefer, an additional PC can be provided, but most find the integrated screen sufficient.

Our device also includes an arm-type load, which eliminates the discomfort of traditional loads placed directly on patients.

Importantly, our product is the result of 100% homegrown technology. We have an integrated system where the lab, manufacturing plant, and sales/marketing are all part of the same ecosystem. This allows us to swiftly respond to clients' needs and quickly adapt to any necessary changes.

Since 2017, our medical devices have received swift regulatory approvals, allowing us to stay ahead of our competitors. We've introduced successive generations of our product, from CELIEF 1100, then CELIEF1200, and then the transportable version CPB-2000. We've recently developed CPB-2100, and it's currently awaiting approval.

Furthermore, doctors at the Catholic University of Korea have suggested that our device could be very useful in treating prostatitis. As a result, we've shifted our focus and are now conducting clinical trials in this area.

 

Transitioning from being a trader to a manufacturer and innovator certainly involves significant financial investment for ongoing research and development. To fund these, it's crucial that your company is successful in selling devices and maintaining financial health both locally and internationally. Given this context, could you share your projections or goals for your company's market share, considering both the Korean market and the global stage?

As a CEO, I am fully committed to investing in technology development as it's key to remaining competitive in today's market. Fortunately, our products are performing well in the market, which provides a strong foundation for significant R&D investments. Regarding market share, I project our new products will occupy around 40% of the market, although this is a rough estimate.

As previously mentioned, we are developing a Prostatitis device for treating prostatitis, but we're also considering expanding our device line to specifically target women. For instance, hyperthermia therapy can be utilized in gynecology for disease prevention and treatment, similar to how women in Korea frequent dry saunas for thermal benefits. Hence, our goal is to expand the application of this device to cater to both men and women.

Furthermore, I believe it is crucial for our company to expand globally. Currently, we are in the process of applying for the CE mark, which is our initial step towards internationalization.


Considering your company was established in 1995, you are nearing a significant anniversary milestone in two years. Do you have any specific goals or achievements that you aspire to accomplish by this important landmark?

Our current trajectory puts us on track to achieve 10 billion Korean won in revenue this year. Our primary goal, therefore, is to surpass 15 billion KRW in revenue, which would position us to go public on KOSDAQ. We aspire to reach this financial milestone and share the benefits with our entire team.

Furthermore, we see our mission extending beyond our immediate financial objectives. We are committed to cultivating a society centered around well-being and happiness. As a medical company, we are dedicated to fostering a healthier society and ensuring our workplace promotes wellness.

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