Dual Engines Promote Commercialization Total Revenue Increased by 253.2%
HONG KONG, April 2, 2022 /PRNewswire/ — Peijia Medical Limited (“Peijia Medical” or the “Company“, together with its subsidiaries, the “Group“, stock code: 9996), a leading player in the high-growth transcatheter valve therapeutic and neurointerventional procedural medical device markets in China, announced its audited consolidated annual results for the year ended 31 December 2021 (the “Year”).
In 2021, Peijia Medical’s product sales, financial position and results of procedures continued to grow rapidly with dual engines – the commercialization and business expansion of the Company’s two main business segments. During the year, the Group recorded a total revenue of RMB136.5 million, a significant increase of 253.2% from RMB38.7 million compared with the same period of last year.
The increase was primarily due to the launch of new products of Transcatheter Valve Therapeutic Business and Neurointerventional Business, which had a higher margin, as well as the Group’s achievements in continuously optimizing the supply chain and reducing production costs. The gross profit increased by 279.2% from RMB25.2 million for the same period last year to RMB95.7 million, with gross profit margin rising to 70.1% from 65.3% in the same period last year.
In particular, the gross profit margin of the Transcatheter Valve Therapeutic Business is as high as 82.8%, and the cost advantage is significant compared to peers.
During the Year, the Group recorded a net loss of RMB211.5 million after deducting one-time expensing business development project payments and foreign exchange losses. Although the Transcatheter Valve Therapeutic Business only recorded sales for half a year but related expenses in preparation for sales for the entire year, the net loss remained stable; the operating loss of the Neurointerventional Business continued to narrow, and the overall financial indicators were improved.
Core business continues to expand, pipeline enrichment and consolidation is accelerating
Peijia Medical focuses on the high-growth interventional procedural medical device market in China with a comprehensive product pipeline, leading the transcatheter valve therapeutic medical device market and the neurointerventional procedural medical device market in China. During the year, the Group obtained registration approvals from NMPA for seven products, including TaurusOne® and TaurusElite®, the first and second generations of Transcatheter Aortic Valve Replacement (“TAVR”) devices. As of March 31, 2022, the Group have had 16 registered products and 16 product candidates at various development stages.
2021 was the first year of commercialization of the Group’s Transcatheter Valve Therapeutic Business. The products and product portfolios were fully commercialized. During the year, the revenue generated from the sales of transcatheter valve therapeutic products amounted to RMB41.9 million. Besides, the first-and second-generation Taurus systems not only obtained NMPA approval earlier than expected, but also quickly gained market access. The provincial tendering and hospital entrance of such systems were progressing well, with a total of 95 hospitals (equivalent to 102 centers) entered by the end of 2021. Clinical feedbacks on the products were ideal, and the sales and implantation were progressing gratifyingly. In the first quarter of 2022, sales and implantation volume maintained an accelerating upward trend. The number of hospitals entered and the volume of implantations reached a new high, with 39 new admissions in the first quarter reaching 134, an increase of 37.9% over the end of 2021; the monthly volume of implantation in March reached 97 units, with an estimated market share reaching nearly 15%.
We have built a strong pipeline with a wide range of innovative product candidates through external acquisitions as well as internal development. Our strategy is to employ both approaches to build a comprehensive portfolio in the next-generation technologies. From late 2020 to the date of the announcement, the Company has harvested 4 BD projects, which are deployed in the fields of aortic regurgitation (“AR”), mitral valve replacement, tricuspid valve replacement, and mitral valve coaptation augmentation with broad market demand but yet no mature technology. The internal developed projects are also progressing smoothly. The exploration directions include improving the durability of valve materials, non-implant treatment solutions for valve disease and developing innovative mitral valve repair products. The Group has preliminarily completed its product layout on major heart valve diseases, which differentiated us from the peers in product innovation and widened the gap in the next-generation technologies.
The Neurointerventional Business also continued to expand by simultaneously deploying in the sizable hemorrhagic market and the fast-growing ischemic market. In addition to continuously consolidating the leading position in the hemorrhagic market with existing advantages, the commercialization of newly launched products of the ischemic and vascular access was also rapidly advancing and the results in R&D and sales were remarkable. During the year, the revenue generated from the sales of neurointerventional products amounted to RMB94.6 million, representing an increase of 144.7% from approximately RMB38.7 million recorded compared with the same period of last year. Among them, the total revenue generated from hemorrhagic products, ischemic products and vascular access and other products was RMB51.3 million, RMB19.5 million and RMB23.8 million respectively, an increase of 52.3%, 596.2% and 995.9% compared with the same period of last year. It is worth mentioning that the total revenue of the Neurointerventional Business segment accounted by ischemic and vascular access and other products rose rapidly from 12.9% in the same period last year to 45.8%, and the revenue of the Neurointerventional Business was further diversified.
With the successive launch of the core products targeting ischemic stroke treatment, including Syphonet® Stent Retriever, Tethys AS® Aspiration Catheter, and Fluxcap® Balloon Guiding Catheter together with the Tethys® Intermediate Guiding Catheter, the Group have been able to provide a fully-intergrated solution for treating acute ischemic stroke. The commercialization of the approved ischemic products progressed smoothly. For example, the SacSpeed® Balloon Dilatation Catheter which was fully commercialized in 2021, has quickly become the market leader since its launch. The launch of ischemic products will further increase the attractiveness of our product portfolio.
Strong financial performance with sufficient liquidity
During the year, the Group recorded a net loss of RMB574.2 million which was mainly due to the increase of R&D expenses. During the Year, the total R&D expense was RMB445.9 million. This included RMB314.6 million of one-time expensing R&D payments, resulting from the upfront and milestone payments in relation to four BD projects. The Group recorded a net loss of RMB211.5 million deducting the exchange losses and one-time expensing upfront and milestone payments for business development projects. Innovative medical devices companies continuously investing in R&D are expected to generate significant benefits for shareholders in the future.
Looking into two business segments, the operating loss of the Transcatheter Valve Therapeutic Business remained stable taking out one-time expensing upfront and milestone payments for business development projects; the operating loss of the Neurointerventional Business continued to narrow, and the overall financial indicators were improved. Excluding one-time expensing payments in relation to four BD projects into account, during the year, the operating loss of the Transcatheter Valve Therapeutic Business was RMB183.3 million, close to last year (RMB145.2 million). During the year, the operating loss of the Neurointerventional Business was RMB60.0 million, decreasing from RMB72.1 million in the same period last year. The operating loss of the Neurointerventional Business was narrowing, and the overall financial performance was improved.
The rapid advancement of commercialization has laid a solid cash foundation for the long-term development of the Company. As of the end of 2021, the cash was as high as RMB2.30 billion, according to the operating results of the two major business departments in 2021. With the further growth of sales, it is believed that the abundant cash position will be enough to meet the long-term operating needs of the enterprise.
Innovative R&D platform, backed by expanding commercialization capabiliy
Peijia Medical’s R&D team is led by industry veterans with an impressive academic and professional background, having previously worked in managerial positions at various leading players in the medical device sector. The Group has developed deep relationships with global leaders in both the transcatheter valve therapeutic and neurointerventional domains, including world-class scientists, physicians and industry practitioners, and established close working relationship with world-class consultants, which laid a good foundation for the Group’s strong R&D capabilities and innovative product pipelines. As of December 31, 2021, the Group had an in-house R&D team of 110 employees dedicated to the research and development of the transcatheter valve therapeutic products and neurointerventional products. As of December 31, 2021, the Group had a robust intellectual property portfolio, consisting of a total of 81 registered patents and 39 patents under application.
During the year, the Group had an expanded sales and marketing team of 157 employees, with 55 of whom dedicated to the sales and marketing of the neurointerventional products and 102 focusing on the sales and marketing of the transcatheter valve therapeutic devices. Among them, for the Transcatheter Valve Therapeutic Business, the Group has built an in-house sales and marketing team with professional background and experience in the innovative medical device industry and has established an effective sales and marketing team structure that matches the innovative nature of TAVR products. For the Neurointerventional Business, the Group has an experienced and professional sales team which has built a long term cooperation relationship with seasoned distributors. For the year ended December 31, 2021, we had 143 distributors, covering over approximately 1,700 hospitals nationwide. The Group will continually build on the sales team and distributor coverage in response to the expanding ischemic product portfolio.
Dr. Yi Zhang, Executive Director, Chairman of the Board, and Chief Executive Officer of Peijia Medical Limited, said “Peijia Medical has always upheld the corporate vision and continued the commitment to the development and commercialization of interventional solutions for structural heart and neurovascular diseases in China and globally. In the future, the Group will continue to enhance the pipeline, including Mitral Valve and Tricuspid Valve treatment device, and other transcatheter valve therapeutic and neurointerventional product candidates; keep strengthening the in-house R&D capabilities while seeking deeper cooperation and strategic partnership around the globe. The Group will continue to strengthen the international patent layout through collaboration and licensing and further advance the international strategy.”
About Peijia Medical Limited
Peijia Medical Limited is a leading domestic player in each of the transcatheter valve therapeutic medical device market and neurointerventional procedural medical device market in China. It focuses on the high-growth interventional procedural medical device market in China and globally. Peijia Medical has built a synergetic platform encompassing research and development, manufacturing and commercialization capabilities as well as a comprehensive product portfolio. Reverence for life, perseverance on innovation: Peijia Medical is committed to become a world-renowned medical device company that provides total treatment solutions for structural heart and neurovascular diseases.
This press release is issued by Porda Havas International Finance Communications Group for and on behalf of Peijia Medical Limited.