On August 31, 2023, Peijia Medical Co., Ltd. (9996.HK) (the "Company") announced its results for the interim period ended June 30, 2023 (the "reporting period"). During the reporting periodThe company realized operating income of 224.9 million yuan (RMB, the same below), an increase of 89.3% over the same period last year.The increase in income mainly comes from:
(I) accelerated commercialization of transcatheter aortic valve replacement ("TAVR") products and further expansion of market share, including the first generation product TaurusOneAnd the second generation recyclable product TaurusElite
(ii) continuous expansion of existing neurointervention products, including TethysIntermediate guide catheter, SacSpeedBalloon dilation catheter, JasperIntracranial Electrolytic detachable coils and SyphonetThrombectomy stents, etc.; and
(iii) FastunnelNew ischemic products such as transport balloon dilatation catheters began to be commercialized, contributing to income increment.
During the reporting period, the company recorded an adjusted gross profit of 178.8 million yuan, an increase of 104.2% over the same period last year.Due to continuous cost optimization measures and the continuous release of ischemic products with higher gross marginsThe company's adjusted gross profit margin steadily increased to 79.5%, an increase of 5.8 percentage points over the same period last year.
Transcatheter valvular therapy business: share is rising rapidly, clinical progress is steady
During the reporting period, the business of transcatheter valvular therapy recorded 107.7 million yuan, an increase of 106.8% over the same period last year.Thanks to effective cost optimization measures, the segment gross profit margin significantly increased to 87.1%, an increase of 8.9% over the same period last year, with a segment gross profit of 93.8 million yuan. With the expansion of revenue scale, the rate of segment sales and management expenses decreased significantly, which decreased by 11.4% and 35.5% respectively compared with the same period last year.
With the recovery of the number of surgeries in the whole market and the improvement of per unit yield of the sales team, the terminal implantation of the company's first-and second-generation TAVR products has increased significantly, and the market share has further increased.During the reporting period, Peijia Medical products were implanted in more than 120 newly admitted hospitals, covering more than 410 hospitals.Complete the effective coverage of hospital admission comparable to the same industry.In the first half of the year, nearly 1250 of the company's first-and second-generation product terminals were implanted, with an estimated market share of more than 20%.There is a big increase compared with last year. The increasing number of hospitals and market share once again verify the excellent efficiency of the company's products and the effectiveness of the commercialization strategy. In the future, the marketing and sales team of Peijia Medical profession will continue to carry out market education to provide operators with high-quality services in compliance with the regulations, so as to promote the further popularization and sinking of surgical procedures and enhance the benefits of patients.
In terms of pipeline layout, the company is from JenaValve Technology Inc. The company's exclusive license for the introduction of aortic regurgitation ("AR") indication TAVR product Trilogy heart valve system successfully achieved multiple milestones. In May 2023, the company took the lead in completing the first commercial implantation of Trilogy in Hong Kong. at the same time, the company has completed the product technology transfer at the Peijia production facility in mainland China, realizing the self-production of TaurusTrio TAVR system and achieving technical consistency with Trilogy. In July 2023, the company officially launched the product mainland multi-center registration clinic. Up to now, there is no AR indication TAVR product approved by NMPA in China, and a large number of patients with aortic regurgitation have not been effectively treated.
So farThe next generation of core pipelines of the company's transcatheter valvular therapy business have all entered human clinical practice.Among them, the multicenter registration of TaurusNXT "non-aldehyde cross-linked" dry valve TAVR products, TaurusTrio AR indication TAVR products, GeminiOne mitral marginal repair products and HighLife transatrial septal mitral valve replacement products are steadily advancing, leading the industry. As of the date of the interim results announcementThe company's transcatheter valvular therapy business has five commercial products and nine products under research at different stages of research and development; among them, five products have entered the green channel for the special review of NMPA innovative medical devices.
Neural intervention business: higher-than-expected growth in revenue and substantial narrowing of segment losses
During the reporting period, the revenue of neural intervention business was 117.1 million yuan, an increase of 75.6% over the same period last year.Better than expected. Among them, bleeding, ischemia and pathway products accounted for 27.3%, 39.1% and 33.1% of the segment income respectively (same period in 2022: 44.2%, 25.0% and 30.6%). With the gradual release of ischemia products with relatively high gross margins, the adjusted gross profit margin of the division steadily increased to 72.6%, an increase of 2.4 percentage points over the same period last year. Due to the substantial increase in operating income and gross profit and the company's efforts to control various expenses, the segment loss narrowed sharply by 82.0% compared with the same period last year.
In terms of commercialization, as of June 30, 2023Peijia medical dealer network covers about 2100 hospitals in 31 provinces and cities across the country.In addition to relying on a large dealer network, based on the excellent design and performance of the products and unmet clinical needs and pain points, the company and doctors have jointly developed many innovative technologies for neural interventional surgery, such as BASIS technology based on Syphonet thrombectomy stent, zero exchange technology based on Fastunnel delivery balloon dilatation catheter and TRUST technology based on Tethys intermediate guide catheter. The application of innovative technology has greatly improved the operator's operation experience and surgical effect, and brought higher benefits to patients. At the same time, the company actively responds to national and local collection work. The company's spring coil products have won the bid in the belt collection of several provincial and inter-provincial alliances. Among them, the Jasper intracranial electrolytic detachable coil was selected in the Union of 21 provinces of Jilin Province, and the third in Group A will accelerate the admission and release of the product in the Union provinces and cities.
In terms of product portfolio, during the reporting period, the company's new generation of nerve intervention microwire DCwire registration application was approved by NMPA. The product is designed based on the concept of "microstructure". Through the precise manufacturing process of a variety of materials, the product has multi-layer microstructure, which can achieve excellent properties such as precise control, easy overselection and so on. it allows the operator to set up the surgical pathway quickly and easily during the operation. As of the date of the interim results announcement, the company's neural intervention business has 16 approved products and eight products under research at different stages of research and development. it fully covers the interventional treatment of hemorrhagic stroke, acute ischemic stroke and intracranial atherosclerotic disease.
Prospects for the second half of 2023
The volume of surgery in July and August 2023 is stable and in line with management expectations.The company maintains its annual performance guidelines and sales targets unchanged
The first phase of the new headquarters project will be officially put into use.. The transcatheter valvular therapy business will be relocated; the nerve intervention business will be renovated and upgraded in the existing Zhongtian Lane factory, and the production and R & D space will be greatly increased.
The company will further improve sales efficiency, continuously control and optimize costs and expenses, and improve profitability.. At the same time, we will pay close attention to policy opportunities such as health insurance coverage and collection, speed up the sales network layout, enhance market penetration, and provide affordable, safe and effective products for more patients.
The company will steadily and efficiently promote clinical research in China and overseas.Continue to innovate around clinical needs and strive to build innovative medical devices with independent core technology and significant clinical application value.
Dr. Zhang Yi, Chairman and CEO of Peijia Medical, said:"In the first half of this year, with efficient product research and development and strong team execution, the company seized the opportunity to achieve substantial growth in performance. In the future, we will improve the efficiency of the company in all aspects, improve the R & D and production platform, enhance operational capacity, and benefit more patients with more high-quality and affordable products. At the same time, we will continue to develop innovative products with significant clinical value, further enrich the product portfolio, and vigorously promote the process of going abroad with highly competitive products. "
Source: official account of Wechat "Peijia Medical treatment"