HONG KONG, Dec 13, 2022 – (ACN Newswire) – OrbusNeich Medical Group Holdings Limited ("OrbusNeich" or the "Group"), a major global medical device manufacturer specialized in interventional instruments for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures, has today announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited ("HKEX"). The Group intends to offer an aggregate of 54,633,000 shares, of which 49,169,000 shares will be for the International Offering (subject to reallocation) and 5,464,000 shares will be for the Hong Kong Public Offering (subject to reallocation). The offer price is HK$8.80 per Offer Share. The estimated net proceeds from the Global Offering will amount to approximately HK$366.8 million, after deducting underwriting commissions and other estimated expenses paid and payable by the Group in connection with the Global Offering.
Investment Highlights
— Headquartered in the Hong Kong Science Park, OrbusNeich is a major global medical device manufacturer specialized in interventional instruments for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures, with a sales network covering over 70 countries and regions worldwide
— The only PCI balloon manufacturer headquartered in China ranked among the top 6 players in all major overseas PCI balloon markets, including Japan (Ranked No. 2), Europe (Ranked No. 4), and the U.S. (Ranked No. 6). In 2021, its global sales volume of PCI balloon products reached approximately 866,000 units
— A major PTA balloon developer and manufacturer in the global PTA balloons market, ranked No. 3 in the Japan market and No. 4 in the U.S. market in terms of sales volume of PTA balloons in 2021
— Strong in-house R&D capabilities with over twenty years of product development experience, more than 180 granted patents globally and a robust pipeline consisting of around 40 products under development
— Diversified comprehensive product portfolio covers all major treatment processes in PCI and PTA procedures. All the self-developed products are manufactured in-house at its advanced production facilities in Shenzhen, China and Hoevelaken, the Netherlands
— Clear roadmap to further penetrate and expand product portfolio into complex cardiovascular intervention, structural heart diseases intervention and neuro-intervention fields
— Revenue rose to USD116.5 million and USD68.9 million in 2021 and 1H2022 respectively, while adjusted net profit surged to USD21.4 million and USD 12.3 million respectively. Profit margins remained high with gross margin at 69.3% and adjusted net profit margin at 17.9% in 1H2022
The Hong Kong Public Offer will commence on 13 December 2022 (Tuesday) and will end at noon on 16 December 2022 (Friday). Dealing of the shares is expected to commence on the Main Board of HKEX on 23 December 2022 (Friday) under the stock code 6929. The shares will be traded in board lots of 500 shares each.
China International Capital Corporation Hong Kong Securities Limited and CCB International Capital Limited are the Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers of the listing. BNP Paribas Securities (Asia) Limited is the Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager. CLSA Limited and China Merchants Securities (HK)
Co., Limited are the Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers, while Yue Xiu Securities Company Limited, Futu Securities International (Hong Kong) Limited and ZMF Asset Management Limited are the Joint Bookrunners and Joint Lead Managers of the listing.
Investment Highlights
Major global medical device manufacturer in the fast-growing PCI/PTA balloon markets with proven financial track record
OrbusNeich, headquartered in Hong Kong Science Park, is a major global medical device manufacturer specialized in interventional instruments for PCI and PTA procedures. It is the only PCI balloon manufacturer headquartered in China that ranked among the top 6 players in all major overseas PCI balloon markets including Japan, Europe, and the U.S.. In 2021, the Group's global sales volume of PCI balloon products reached approximately 866,000 units, ranking No. 2 in Japan, No. 4 in Europe, No. 6 in the PRC and No. 6 in the U.S.; while in terms of sales volume of PTA balloons in 2021, the Group ranked No. 3 in Japan and No. 4 in the U.S..
As a key market player, OrbusNeich has been maintaining revenue and profit growth during the Track Record Period. In particular, its adjusted net profit surged over 200% year-on year to approximately USD21.4 million in 2021 and a further 11.8% year-on-year to USD12.3 million in 1H2022 as compared to 1H2021. Profit margins remained high with gross margin at 69.3% and adjusted net profit margin at 17.9% in 1H2022.
The Group strategically focuses on the fast-growing coronary and peripheral vascular intervention markets. According to the CIC Report, the global market sizes of PCI instruments and PTA instruments are expected to grow at a CAGR of 12.1% and 11.1% from 2021 to 2030, respectively. Moreover, China-based endovascular interventional instrument developers and manufacturers have a relatively low penetration rate and market share in these markets, which provides the Group with enormous opportunities.
Diversified product portfolio indicating different endovascular interventional procedures backed by world leading technologies, strong R&D capabilities and advanced production facilities
OrbusNeich's diversified product portfolio covers all major treatment processes in PCI and PTA procedures. As of 30 June 2022, the Group had an aggregate of over 40 approved products, including 25 PMDA approved products, 22 products with CE Mark, 14 FDA cleared or approved products and 15 NMPA approved products, which were widely adopted by hospitals in over 70 countries and regions around the world.
In particular, the Group focuses on developing innovative products with high performances, which enable it to benefit from first-mover advantages. For example, it was the first company globally that developed the 1.75mm scoring balloons; its Sapphire 3 semi-compliant balloon series have an industry-leading 0.85mm outer diameter; and its proprietary "drug plus antibody" COMBO Plus is the first and the only commercialized double-coated stent in the world that promotes effective coronary vessel healing and that has obtained CE Mark and PMDA approvals.
The Group possesses strong in-house R&D capabilities with over twenty years of accumulated product development experience and continued investment in R&D activities. OrbusNeich owns more than 180 granted patents globally across key jurisdictions, including 31 and 56 granted patents in the U.S. and in the PRC respectively, as of 5 December 2022. Leveraging the Group's world leading technologies and proprietary know-how, it had a robust pipeline consisting of around 40 products under development, as of 30 June 2022.
Based on its technology reserve and knowledge in the conventional endovascular intervention area, the Group strategically opts to further penetrate and expand its product portfolio into complex cardiovascular intervention, structural heart disease intervention and neuro-intervention fields with high unmet medical needs, apart from developing coronary and peripheral products.
OrbusNeich has advanced production facilities in Shenzhen, the PRC and Hoevelaken, the Netherlands, which enabled it to manufacture all of its self-developed products in-house. For the six months ended 30 June 2022, the production facilities had an aggregate annualized production capacity of approximately 1,352,000 units of balloon products and approximately 56,400 units of stent products, thereby enabling it to supply large-scale and stable high-quality products to customers around the world. The production facilities have passed the audits and inspections by regulatory bodies like the NMPA, FDA, PMDA and NB. In particular, its production facilities in the PRC have passed onsite inspections by the FDA with Zero Observations in 2020.
Established global sales network and distinctive commercial competency
OrbusNeich has established a global sales network which consists of both distributorship and direct sales models that provide it with more flexible and effective sales strategies in its target markets. As of 30 June 2022, its global distributor network consists of approximately 207 distributors while global sales and marketing team consists of 142 members. In addition, the Group's sales network covered over 70 countries and regions worldwide, among which it built a direct sales force in the Mainland China, Hong Kong, Macau, Japan, Malaysia, Singapore, Germany, France, Switzerland and Spain.
OrbusNeich has built amicable and long-term business relationships with most of its customers, with no less than 50% of its top five customers during the Track Record Period having over 12 years of business relationship. The Group distinctive commercial competency combining its extensive network of physicians and KOLs, hospitals and distributors enables it to gain first-hand knowledge of unmet clinical needs, physicians' preferences and clinical trends, as well as to identify potential pipeline products with high market potential.
Experienced management team supported by energetic and cohesive talent pool
OrubusNeich is led by Mr. David CHIEN, chairman, executive Director, chief executive officer and the controlling shareholder. With over 30 years of experience in the medical device industry, Mr. Chien has been well-respected in the industry for his leadership of the Company. The Group also has industry veterans with an average of over 20 years of experience leading its R&D, sales and marketing, product manufacturing, quality assurance and business development functions, while it has other dedicated senior management members with legal, finance and investment expertise focusing on collaborations and other aspects of the operations, setting the foundation for its long-term success.
Future Strategies
The Group's vision is to become a global leading medical device developer and manufacturer that offers a variety of endovascular and structural heart intervention products to effectively improve patients' quality of life. The Group plans to execute the following strategies to achieve this goal:
Further enhance the market penetration with the well-established brand recognition
The Group plans to leverage the well-established brand recognition of its renowned "OrbusNeich" brand and continue increasing the market share by devoting resources to further solidify its brand awareness and expand the distribution network through setting up additional sales offices and/or collaborating with more distributors, and further strengthening its marketing efforts in relevant markets.
For established markets such as Japan or Europe, the Group plans to leverage its existing brand strength, customer base and distribution channels to open up opportunities for new product distribution as well as further increase market share of other product by broadening its product offerings to existing customers and developing new customers. Moreover, it plans to commercialize matrix drug-eluting coronary and/or peripheral balloons in Japan in 2025.
For high growth markets such as the PRC or the U.S. where the Group intends to expand its presence and enhance the market share, it plans to capitalize on opportunities brought by the ongoing healthcare reforms, as well as to increase market adoption for its existing and pipeline products. In the PRC, OrbusNeich strives to strengthen its sales capabilities and enhance management of its distributors to capture fast-growing market demand; while in the U.S., it plans to continue rolling out new products in its pipeline and increasing the market adoption for relevant products.
Further enrich product offerings both vertically and horizontally
OrbusNeich's success depends on its ability to continuously develop innovative products that address the patients' evolving needs and growing market demand, thus its R&D staff will continue developing and expanding the pipeline products both vertically and horizontally.
Vertically, the Group's product portfolio strategically focuses on "simplifying the complex" where it aims to deepen its diversified product portfolio for PCI/PTA procedures. Horizontally, it intends to cover structural heart disease intervention products and neuro intervention products. It plans to recruit additional talent specialized in R&D to further enrich product offerings.
Work closely with physicians and KOLs to further enhance brand recognition and R&D capabilities
OrbusNeich intends to work closely with physicians and KOLs in different therapeutic areas and participate in major conferences to continuously enhance its brand recognition and R&D capabilities to solidify market position and to maintain long-term growth.
Pursue strategic acquisitions, partnerships and/or collaborations
In addition, the Group intends to explore technology-focused acquisitions opportunities to implement its market-driven R&D capabilities, and plans to focus on acquisitions involving innovative medical device products that have strong growth potential and/or high synergy with its existing and pipeline products to further expand the product portfolio.
Expand production capacity and continuously improve operational efficiencies
OrbusNeich's production volumes have been increasing over the years and the Group expects the demand for its products will continue to grow in the near future. In addition, according to the CIC Report, the CAGR for the global endovascular interventional instrument market is expected to be 12.9% from 2021 to 2030. The Group intends to construct a new manufacturing site to increase its overall production capacity to meet such growing market demand. In addition, it plans to build up manufacturing capabilities for its pipeline products at the manufacturing site, provide training to the production staff as well as recruit additional production staff as needed.
Financial Highlights
For the year ended December 31 For the six months ended June 30
(US$ million) 2020 2021 Change 2021 2022 Change
Revenue 88.5 116.5 +31.6% 57.3 68.9 +20.2%
Gross profit 58.0 81.2 +39.9% 40.5 47.7 +17.7%
Gross profit margin 65.6% 69.7% +4.1 ppt 70.7% 69.3% -1.4 ppt
Adjusted net profit* 7.1 21.4 +201.4% 11.0 12.3 +11.8%
Adjusted net profit margin 8.0% 18.3% +10.3 ppt 19.2% 17.9 % -1.3 ppt
* Note: The adjusted profit excludes the effect of the convertible redeemable preferred shares, derecognition of financial liability, Commodity Linked Fixed Rate Note, listing expense and share-based compensation
Use of Proceeds
Item / Approximate Percentage
Expansion of its production capacities: 54.2%
Development and commercialization of its pipeline products: 30.0%
Potential strategic acquisitions (Expand its product portfolio and strengthen its R&D capabilities): 10.8%
Working capital and other general corporate purposes: 5.0%
About OrbusNeich Medical Group Holdings Limited
OrbusNeich is a major global medical device manufacturer specialized in interventional instruments for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures. Headquartered in Hong Kong, China, OrbusNeich sells products to over 70 countries and regions worldwide, and it is also the only PCI balloon manufacturer headquartered in China that ranked among the top 6 players in all major overseas PCI balloon markets including Japan (Ranked No. 2), Europe (Ranked No. 4), and the U.S. (Ranked No. 6) in terms of sales volume of PCI balloons in 2021 in accordance with the CIC Report. In addition, in terms of sales volume of PTA balloons in 2021, it ranked No. 3 in Japan and No. 4 in the U.S., respectively. It also specializes in coronary stent products and is actively expanding into neuro vascular intervention and structural heart disease areas. OrbusNeich owns more than 180 granted patents globally. Its in-house R&D team has over twenty years of product development experience and has developed proprietary, world leading technologies.
For more details, please visit the Group's official website: https://orbusneich.com/
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