- Accelerates R&D and Commercialization of Pipeline Products and Expansion of Production Capacity to Capture Tremendous Opportunities
OrbusNeich Medical Group Holdings Limited (OrbusNeich or the Group; HKG: 6929), a major global medical device manufacturer specializing in interventional devices for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures, today announced its first annual results after its listing on the Main Board of The Stock Exchange of Hong Kong Limited (HKEX) on 23 December 2022, reporting growth in both revenue and net profit amidst a weak global economy.
Results Highlights:
- Revenue hit a record high of US$136.8 million, up 17.5% year-on-year
- Gross profit increased 13.9% year-on-year to US$92.5 million, with a gross margin of 67.6%
- Adjusted net profit rose 24.9% year-on-year to US$26.7 million with adjusted net profit margin of 19.5%
- Sales in Japan, the PRC and the U.S. achieved year-on-year growth of 8.8%, 38.1% and 122.6%, respectively
- The Group holds more than 180 granted patents worldwide, with more than 40 approved products and a robust pipeline of around 40 products in development
- Sapphire 3 Coronary Dilatation Catheter obtained official registration approval from China’s National Medical Products Administration (NMPA), and the Sapphire Neuro balloon was approved in February 2023 by NMPA
- The aggregate annual production capacity increased to approximately 1.4 million balloon products and 56,000 stent products
For the year ended 31 December 2022 (“FY2022”), the Group continued to achieve sales volume growth, driving revenue to a record high of US$136.8 million, up 17.5% year-on-year, leveraging its established reputation as a leading medical device manufacturer with a sales network spanning more than 70 countries and regions across the globe. As a result, gross profit and adjusted net profit(1) both recorded an increase, by 13.9% to US$92.5 million and by 24.9% to US$26.7 million, respectively, while the gross margin remained at a healthy level of 67.6%. Basic earnings per share were US3.17 cents.
The Group has further strengthened its financial position by raising approximately HK$480.8 million through its listing on HKEX. With cash and bank balances totaling US$229.1 million as of 31 December 2022, the Group has abundant internal resources to fuel its R&D and commercialization progress of its pipeline products as well as to expand its production capacity.
Mr. David Chien, Chairman, Executive Director and Chief Executive Officer of OrbusNeich said, “The year 2022 marked an important milestone in OrbusNeich’s history. As the first and only medical device company headquartered in the Hong Kong Science Park listed on the HKEX Main Board, we have now established a clear competitive advantage to capture business opportunities and recruit top-tier talent. In 2022, despite that various challenges in the business environment tested our production, logistics, sales and finance capabilities, we weathered the storm and delivered satisfactory results with our three core capabilities of R&D, operations and commercialization. Ultimately, we achieved growth in both established and high-growth markets, as well as record-high revenue and a significant improvement in net profit.”
Leveraging established global sales networks to boost revenue
For established markets, the Group continued to broaden its product portfolio to facilitate further market penetration. Back in September 2021, the Group launched Scoreflex Trio in Japan, which has continued to gain market share since its debut.
For the high growth markets, the Group launched Scoreflex NC, the world’s smallest profile scoring balloon product, in the PRC market and US market in 2022. In the PRC in particular, the Group continued to expand its presence through the direct sales force established in 2021. Revenue from the PRC market increased significantly by 38.1% to US$23.6 million. As of 31 December 2022, its distribution network in the PRC market covered over 2,000 hospitals in 30 provinces and municipalities.
Since entering the U.S. market in 2017, the Group has been committed to launching innovative products into the market. Adding to the Jade, Sapphire and Teleport products introduced in previous years, the launch of Scoreflex NC in 2022 was well received by the market, enriching the Group’s product portfolio in the U.S. market. This not only led to a 122.6% year-on-year increase in revenues from the U.S. market to $16.6 million for FY2022, but also helped to enhance OrbusNeich’s brand recognition in this sophisticated market, consolidating its foundation for future growth there.
Continuous investment in R&D to accelerate the diversification of the product portfolio
For more than two decades, the Group has been empowered by its strong in-house R&D capabilities and accumulated experience in product development. Continuous investment in relevant activities has resulted in a wealth of know-how in product design, material treatment and handling, and manufacturing processes. In FY2022, the Sapphire 3 Coronary Dilatation Catheter obtained official registration approval from the NMPA. In addition, the Sapphire Neuro balloon, the first commercialized product in the Group’s neuro-interventional device pipeline, obtained NMPA approval in February 2023. As at 31 December 2022, the Group had more than 180 granted patents in major jurisdictions worldwide, and a total of more than 40 products approved or cleared by the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan, the Food and Drug Administration (FDA) in the U.S., the NMPA or the CE Mark. Leveraging the Group’s world-leading technology and proprietary know-how, it also had a robust pipeline of around 40 products in development.
“In addition to our existing PCI and PTA devices, we are adding to our portfolio a range of structural heart interventional products, which are being developed by our joint venture OrbusNeich P+F Company Limited (“ON P&F”), as well as a series of neurovascular interventional products. During 2022, ON PJ&F established an R&D and manufacturing site in Shenzhen, the PRC. The new facility serves as a base for ON P+F to advance its R&D efforts for products in its pipeline, including the Vienna Mitral Valve and the Vienna Pulmonary Valve, as well as to introduce world-class technologies such as TricValve – the CE-approved bicaval transcatheter tricuspid valve implantation system, to the PRC and Asia Pacific region,” added Mr Chien.
Expanding production base to satisfy growing demand
In order to provide large-scale and consistently high-quality products to customers around the world, the Group continued to expand its production capacity by optimizing production processes at its production bases in Shenzhen, the PRC and Hoevelaken, the Netherlands. In FY2022, the Group entered into a lease agreement for a manufacturing site in Shenzhen, the PRC with a gross floor area of approximately 1,900 m2. With the relocation of certain production processes to the new manufacturing site, the total annual production capacity has been increased to approximately 1.4 million balloon products and 56,000 stent products.
Seizing opportunities by enhancing core competitiveness
Despite looming geopolitical and economic uncertainties, the demand for medical devices in the global market is steadily growing, given the expanding aging world population, rising living standards and economic growth in developing countries. According to a CIC report, the global market size for PCI devices and PTA devices is expected to grow at a CAGR of 12.1% and 11.1%, respectively, while the global market size for PCI balloons, catheters and accessories is expected to grow at a CAGR of 17.2% from 2021 to 2030.
Mr. Chien concluded, “Looking ahead, we are confident that we can fully capture emerging opportunities from the growing market, despite the complex and volatile macro environment. We will adhere to our development strategy of broadening our product lines, enhancing our R&D capabilities, expanding our distribution network, and striving to realize our vision of becoming a world-leading medical device developer and manufacturer that provides innovative and comprehensive endovascular and structural heart interventional solutions that effectively improve patients’ quality of life, while also aiming to generate substantial returns for shareholders.”
About OrbusNeich Medical Group Holdings Limited
OrbusNeich is a major global medical device manufacturer specializing in interventional devices for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures. Headquartered in Hong Kong, China, OrbusNeich sells its products in more than 70 countries and regions worldwide. It is also the only PCI balloon manufacturer headquartered in China that ranked among the top six players in all major overseas PCI balloon markets including Japan (No. 2), Europe (No. 4), and the U.S. (No. 6) in terms of PCI balloon sales volume in 2021, according to a CIC report. In addition, it ranked No. 3 in Japan and No. 4 in the U.S. in terms of PTA balloon sales volume in 2021. It also specializes in coronary stent products and is actively expanding into neuro vascular intervention and structural heart disease. As of December 2022, OrbusNeich has more than 180 granted patents worldwide. Its in-house R&D team has more than two decades of product development experience and has developed world-leading proprietary technologies.
For more information, please visit the Group’s official website: https://orbusneich.com/
(1). Excluding non-cash and one-off items including unwinding of interests on convertible redeemable preferred shares, share-based compensation expenses, fair value losses of convertible redeemable preferred shares, loss on derecognition of financial liability in relation to convertible redeemable preferred shares and listing expenses.