HONG KONG, Aug 17, 2023 – (ACN Newswire) – OrbusNeich Medical Group Holdings Limited ("OrbusNeich" or the "Group"; stock code: 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 interim results for the six months ended 30 June 2023, reporting growth in both revenue and net profit.
Results Highlights:
— Revenue grew 18.2% to US$81.4 million, while revenue (excluding FX impact) growth rate reached 23.5%
— Net profit rose 213.3% year-on-year to US$25.2 million with net profit margin of 30.9%; while adjusted profit (non-HKFRS measure) (1) increased by 105.6% to approximately US$25.4 million
— Total sales volume increased by 20.8% to approximately 725,000 units
— The Group had over 210 granted patents and published patent applications worldwide
— The Group obtained CE Marks for the Scoreflex TRIO Balloon Dilatation Catheter and EZ Guide Guiding Extension Catheter and renewed the CE Mark for the Sapphire PTCA Family under the MDR
— Expansion of the Group's Shenzhen production base will bring the total annual production capacity to 1.8 million units of balloons and 60,000 units of stent products
— The Group's Hangzhou Fuchun Bay New Town production base is expected to commence construction by the end of 2023, increasing the annual production capacity by an additional 2.4 million product units upon commencement of operation
— The Group will consider distribution of a final dividend to share the fruits of success with shareholders
For the six months ended 30 June 2023 (the "Reporting Period"), the Group experienced revenue growth of 18.2% to US$81.4 million. Total sales volume also increased to approximately 725,000 units, representing a 20.8% increase over the previous year. Gross profit rose by 22.1% to approximately US$58.3 million, with a gross profit margin of 71.6%. As a result, profit attributable to the owners of the Company reached US$25.2 million, an increase of 213.3%, with a net profit margin of 30.9%. Adjusted profit (non-HKFRS measure) (1) increased by 105.6% year-on-year to approximately US$25.4 million. Basic earnings per share amounted to US3.04 cents (2022 1H: US1.39 cents), while the diluted earnings per share was US3.03 cents (2022 1H: US1.20 cents). As at 30 June 2023, the Group was in a strong financial position with cash and bank balances of approximately US$239.0 million. (December 31 2022: US$229.1 million)
Mr. David Chien, Chairman, Executive Director and Chief Executive Officer of OrbusNeich, said, "Despite the global economic performance being dragged down by the continued tightening of monetary policies by the US and European central banks due to persistently high inflation, we are pleased that OrbusNeich has been able to maintain its growth momentum and achieve excellent results, thanks to our top-tier talents who are relentless in their pursuit of innovation and share our core values of 'Integrity, Passion, Innovation, and Performance'. As we progress, we are committed to broadening our distribution network, enhancing our R&D capabilities, diversifying our product lines, and expanding our production capacity. We are confident that these efforts will not only enrich our product portfolio and drive our business performance, but also benefit patients worldwide."
Demand from Key Markets Remains Strong
During the Reporting Period, the US market experienced remarkable growth of 61.6% year-on-year in revenue. In particular, sales of scoring balloons doubled in the US. Other markets, including Japan, APAC, EMEA, and the PRC, achieved year-on-year revenue (excluding foreign exchange impact) growth of 27.0%, 23.9%, 14.2%, and 8.2%, respectively, driven by the introduction of new generation products, and an increase in demand for related treatments. The growth was also due in part to an expansive sales network covering more than 70 countries and regions worldwide, a dedicated team of 147 sales and marketing personnel in 10 countries or regions and 217 distributors, as well as sales and marketing efforts. For example, the Group hosted three physical physician exchange programs to bring skilled physicians from Japan, Singapore and Australia to Vietnam and Malaysia to enhance the PCI/PTA skills and experience of local physicians, and organised or participated in around 30 seminars, workshops, conferences and discussion panels globally. All these initiatives increased the Group's exposure in its target markets.
Global Recognition for Outstanding R&D Capabilities and Product Excellence
As at 30 June 2023, OrbusNeich had an impressive portfolio of over 210 granted patents and published patent applications in key jurisdictions around the world, including over 30 and 55 granted patents in the US and the PRC, respectively, demonstrating its commitment to innovation. During the Reporting Period, the Group's new generation products not only saw significant growth in market share, but also received certifications and recognition in more key jurisdictions. As Europe transitioned from the Medical Device Directive (MDD) to the more stringent Medical Device Regulation (MDR) regime, the Group achieved its first MDR certification for the Scoreflex TRIO Balloon Dilatation Catheter. In addition, the Group successfully completed the renewal of CE certification for the Sapphire PTCA Family under MDR. It also obtained CE Mark for the EZ Guide Guiding Extension Catheter, NMPA approval for Sapphire Neuro balloon and PMDA approval for Teleport XT microcatheter. Meanwhile, progress was made on the Group's pipeline products, with the Scoreflex TRIO clinical trial commencing in the PRC in April 2023. The Group also submitted the Teleport XT microcatheter for FDA approval.
The Group continues to make breakthroughs in the use of new materials. For example, two upcoming coronary products, Sapphire Ultra and Sapphire Ultra NC, will apply the latest raw material technologies to reduce costs while maintaining excellent product performance. Both products are expected to receive FDA approval by the end of 2023. The economical balloon series will enable the Group to reach more developing countries with lower prices, making this life-saving technology more accessible to patients in developing countries and regions.
"Our joint venture, ON P&F, continued to redefine the structural heart product landscape through relentless innovation. From the active promotion of our first commercialized product, TricValve, to the submission of a clinical trial study protocol of TricValve to the NMPA, together with the comprehensive pipeline of interventional structural heart devices, we are confident of solidifying our market leadership position and building a healthier future for all," added Mr. Chien.
Expanding Production Infrastructure to Support Growing Demand
OrbusNeich owns production bases in the PRC and the Netherlands, as well as R&D centers in the PRC and the US. In order to meet the rapidly increasing demand for the Group's products, the Group has been working diligently to expand its production capacity. During the Reporting Period, new production machinery was installed at its Shenzhen facility and certain production processes were transferred to its newly leased premises in Fuyong Shenzhen. This new manufacturing site has passed ISO and NMPA inspections and has has been included in the ISO 13485 certification and China manufacturing permit. This facility is expected to bring the Group's total annual production capacity to 1.8 million balloon units and 60,000 stent product units, respectively.
In terms of medium to long-term production capacity planning, the Group has entered into a commercial agreement with the Hangzhou Fuchun Bay New Town Management Committee to establish an R&D and production base dedicated to vascular interventional medical devices. Subsequently, in June 2023, the Group successfully acquired a land parcel of close to 20,000 sq.m in Fuyang, Hangzhou for approximately RMB10.5 million. The Group intends to use this land to construct a state-of-the-art R&D and manufacturing facility covering an area of approximately 60,000 sq.m, which is expected to commence construction by the end of 2023 after obtaining the necessary construction permits. Upon completion, this facility is expected to increase the Group's production capacity by an additional 2.4 million units of products per year.
Looking ahead to the second half of 2023, OrbusNeich is fully confident of maintaining steady growth in both revenue and net profit through market penetration, expansion, and efficiency enhancement. The US market is expected to play a crucial role in the Group's growth strategy, as it expects to further expand its hospital coverage in this vast market as its US distributor has been recently acquired by Abbott. In the PRC market, the Group plans to diversify its product mix by promoting more new products. In addition to coronary balloons, this diversification will include a focus on microcatheters and peripheral products.
Mr. Chien concluded, "We are actively seeking merger and acquisition targets with innovative and high-caliber endovascular intervention products that can create synergies with our extensive distribution network. We are also exploring opportunities to expand our direct sales network with the aim of boosting the Group's revenue and profitability. As we strive to realize our vision of becoming a world-leading medical device developer and manufacturer, providing innovative and comprehensive endovascular and structural heart interventional solutions that effectively improve the quality of life for patients, we also place high value on providing returns to our shareholders and will consider distributing a final dividend to share our fruits of success."
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 June 30 2023, OrbusNeich has more than 210 granted patents and published patent applications 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 certain non-cash and one-off items, including listing expenses, unwinding of interests on convertible redeemable preferred shares and share-based compensation expenses.
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