Who will take the throne in the aesthetic medical device industry this year?
Who will take the throne in the aesthetic medical device industry this year?
  • Cho Pil Hyun, Staff Reporter
  • 승인 2022.10.05 10:43
  • 수정 2022.10.05 10:43
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The global aesthetic medical device market has been heating up. As the coronavirus becomes endemic and more people go out to enjoy face-to-face social activities, the demand for skin care is rapidly on the rise.

In this environment, companies are fiercely competing for the global aesthetic medical device market.

According to the industry reports on the 5th, the top position is currently held by Inmode, a Nasdaq-listed company with USD 357.56 million of sales in 2021, a year-over-year sales growth of 73.5%. Nasdaq listed Cutera and KOSDAQ listed Lutronic are challenging the stronghold with high growth rates.

Cutera posted USD 231.3 million in sales with a year-over-year sales growth of 56.6%, while Lutronic recorded USD 132.2 million (KRW 173.6 billion), with year-over-year sales growth of 50.3%.

Lutronic has recently introduced five new products: LaseMD ULTRA™, HOLLYWOOD SPECTRA™, DermaV™, accufit™ and ACCUCURV®.

In addition, Lutronic currently invests about 10% of its revenue in R&D every year while enthusiastically recruiting some of the best talents in the industry. Lutronic now employs more than 500 people globally.

Lutronic’s US sales strategy has always been to establish and mobilize direct sales rather than to leverage local distributors. This has been the philosophy of the founder who believes that the direct sales model is a crucial imperative given the sophisticated customer base in the US (doctors and medical professionals).

These efforts by Lutronic in the US finally paid off in 2021, as its US operations became profitable, and, in the first half this year, Lutronic's US operation is seeing a 90% increase in sales over the past year.

On the other hand, the San Francisco-headquartered Cutera recently launched AviClear™, its first in-house developed product since the launch of enlighten® and excel® HR in 2014. Industry sources say that the announcement of the launch of self-developed products in eight years is that R&D is not operating smoothly.

Cutera underwent a major change when Voce Capital, a hedge fund run by Daniel Plants, took over much of its day-to-day management. Daniel Plants, who had been on the Cutera Board of Directors since 2015, was named the Chairman of Cutera’s BOD in 2016. Plants replaced much of Cutera’s technology and sales-focused management teams with his own team of people with less industry experience.

This strategic and cultural shift resulted in many key members of Cutera’s executive and sales team becoming dissatisfied and ultimately leaving Cutera for its competitors such as Alma, Inmode, Cynosure, and Lutronic, among others. Cutera's sales in 2020 has decreased 18.7% compared to 2019. It could be said that between 2018 and 2020, Cutera suffered a ‘brain drain’, leading to its revenue decline in the same period.

The heated competition led to a lawsuit between the two fierce competitors. In 2020, as dozens of senior members and employees left Cutera for a number of competitors, Cutera filed a lawsuit only against Lutronic's US subsidiary and former Cutera employees who moved to Lutronic, alleging breach of non-competition agreement and trade secret infringement.

According to a US labor lawyer, such lawsuits are common when key executives or employees move to a competitor and while the legal cause of action for this type of lawsuit is to claim damages, the real purpose is to deter further exodus of employees.

The lawsuit seems to be proceeding in Lutronic's favor. As of July 2022, the United States District Court for the Eastern District of California, where the lawsuit is pending, rejected Cutera's motion of March 2022 to add Lutronic's Korea headquarters as a co-defendant. The lawsuit between the two companies remains in the pre-trial stage.

An industry insider commented, “It is likely that Cutera's lawsuit against Lutronic is motivated by Lutronic's rapid growth as a competitor, given that Cutera chose to bring legal action only against Lutronic despite its former employees having moved to other competitors. It’s also likely that the lawsuit is a reflection of Plants’ background as a lawyer and wall street investment banker.”

The heated market of aesthetics medical devices is expected to show continuous growth worldwide for some time, at least. All eyes are focused on whether a Korean company that has consistently challenged the global market will be able to grab the throne and the grand title.

[WIKI KOREA=Cho Pil Hyun, Staff Reporter]

chop23@wikileaks-kr.org


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