On June 16, 2024, Peijia Medical Co., Ltd. (9996.HK) (the Company ) released its audited results for the year ended 2023 (the Reporting Period ).
The 2023 annual results have been audited in accordance with the International Auditing Standards issued by the International Auditing and Assurance Standards Board. The Company s auditor, PricewaterhouseCoopers, has issued an unqualified opinion in the independent audit report. During the reporting period, the Company achieved operating income of RMB 441 million, a year-on-year increase of 75.9%. The revenue growth mainly came from: (i) Transcatheter aortic valve replacement ( TAVR ) products have been commercialized at an accelerated pace, with hospital penetration and terminal implant volume increasing significantly. During the reporting period, the company s first- and second-generation TAVR products were used in approximately 200 new hospitals, covering nearly 500 hospitals in total. Throughout the year, 2,484 TAVR products were implanted in terminals, with a market share of over 20% for the transfemoral approach; (ii) The coil products of the neurointervention business were selected in multiple provincial and inter-provincial alliance procurements, and sales volume increased rapidly; (iii) The penetration rate of existing access and ischemic products in the neurointerventional business increased, and sales volume grew steadily, including Tethys intermediate guide catheters and SacSpeed balloon dilatation catheters and (iv) Newly launched ischemic and access products have gradually completed the admission process, steadily penetrated the market and created incremental revenue, including the Syphonet thrombectomy stent and Fastunnel delivery balloon dilatation catheter.
During the reporting period, the company recorded a gross profit of RMB 325 million, an increase of 84.7% year-on-year. Thanks to the continuous cost optimization measures, the gross profit margin increased by 3.5 percentage points year-on-year to 73.8%. In addition, various expense rates improved significantly. The sales expense rate, management expense rate and R&D expense rate decreased by 22.7%, 17.1% and 82.2% year-on-year respectively.
Transcatheter valve therapy business: implant volume doubled, and key progress was made in the pipeline
During the reporting period, the transcatheter valve therapy business recorded revenue of 186 million yuan, a year-on-year increase of 72.9%. The company s TAVR products were implanted in approximately 200 newly admitted hospitals, covering a total of nearly 500 hospitals. The company s first- and second-generation product terminals were implanted in 2,484 units, more than doubling year-on-year, and the market share exceeded 20%. The segment s gross profit increased by 86.0% year-on-year to 159 million yuan. Thanks to the optimization of the supply chain and the improvement of product yield, the segment s gross profit margin increased by 6.0 percentage points to 85.7%. The scale effect has begun to emerge, and the segment s expense rate has improved significantly. The sales expense rate, management expense rate and R&D expense rate decreased by 32.5%, 25.9% and 169.5% year-on-year respectively. The segment s loss narrowed by 13.5% year-on-year.
During the reporting period, the company s pipeline has made a number of key advances. In the aortic valve product line, the company is advancing the pre-market registration clinical trials of the regurgitation indication product TaurusTrio (in-license American JenaValve s Trilogy THV system) and the third-generation long-acting stem valve TaurusNXT (self-developed) at full speed. As of now, the patient enrollment of the two clinical trials has been completed, and patient follow-up is in progress. Among them, the multi-center registration clinical trial of the regurgitation valve TaurusTrio was officially launched in July 2023. The company exceeded expectations and completed the enrollment of all 116 patients within 6 months, setting a clinical record. In addition, the company has completed the technology transfer of the product and built production facilities at its headquarters in Suzhou to achieve self-production, preparing for commercial mass production. In the mitral and tricuspid valve product lines, the company has steadily advanced the research and development progress of each product. Among them, as of now, the pre-market registration clinical trial of the company s self-developed mitral valve edge-to-edge repair product GeminiOne has completed the enrollment of all patients. The pre-market clinical trial of the in-license transseptal mitral valve replacement product HighLife is also progressing steadily.
In terms of internationalization, in May 2023, the company successfully completed the commercialization of the regurgitant valve Trilogy THV system in the Hong Kong Special Administrative Region. In October 2023, the early clinical research results of the GeminiOne TEER system and the new transcatheter tricuspid valve replacement system MonarQ (the company owns the global IP of this product) were released at the TCT conference in the United States. The company is actively preparing for early feasibility clinical trials of GeminiOne and MonarQ in the United States. As of June 16, 2024, the transcatheter valve therapy business has 6 marketed products and 10 products under development at different stages of research and development.
In terms of production operations, in December 2023, the transcatheter valve therapy business production line completed the relocation and factory certification from its own property at No. 8 Zhongtian Lane, Suzhou Industrial Park to the new global headquarters base at No. 18 Yangjiatian Road, Suzhou Industrial Park. The new factory can increase production capacity to more than three times the original.
Neurointerventional business: Revenue growth exceeded expectations, and the division is about to break even
During the reporting period, the neurointervention business recorded revenue of 256 million yuan, a year-on-year increase of 78.1%, far exceeding the performance guidance of revenue growth of no less than 50%. Among them, the revenue contribution of each business line is balanced, with bleeding, ischemia and access contributing 32.1%, 33.6% and 34.1% of the division revenue respectively (2022: 39.4%, 27.6% and 32.9%). The division gross profit increased by 83.4% year-on-year to 166 million yuan. Thanks to a series of cost-cutting and efficiency-enhancing measures, the division gross profit margin remained stable, increasing by 1.9 percentage points year-on-year to 65.1%. The sales expense ratio, management expense ratio and research and development expense ratio decreased by 14.2%, 9.9% and 15.7% year-on-year respectively. The division loss was only 744,000 yuan, a significant narrowing of 98.8% year-on-year, and the break-even is imminent.
The rapid growth of revenue and gross profit benefited from the industry opportunities of domestic substitution and stroke center construction. The company actively participated in and responded to various centralized procurement activities, and was selected in multiple coil centralized procurements such as the 21-province alliance led by Jilin Province, Jiangsu Province, Anhui Province and Guangdong Province. The implementation of the selected results will help the company further improve the hospital penetration rate of coil products and rapidly increase sales and market share. At the same time, with the construction of stroke centers and the popularization and sinking of neurointerventional surgeries such as emergency thrombectomy, the clinical demand for neurointerventional surgical consumables is growing rapidly.
Faced with fierce industry competition, we continue to deepen medical-industry cooperation and win market recognition through product quality and reputation. Based on the superior design and performance of products such as Tethys intermediate guide catheter, Syphonet thrombectomy stent, Fastunnel delivery balloon dilatation catheter and Jasper series coils, we have cooperated with industry experts to develop nearly 10 innovative procedures that directly address clinical difficulties and pain points, covering a variety of diseases and complex application scenarios such as radial access (such as TRUST technology), emergency thrombectomy (such as BASIS technology), recanalization of slow closure (such as COSIS technology), intracranial stenosis (such as zero exchange technology) and aneurysm combined with stenosis (such as ANSWER technology). While improving the clinical effect of neurointerventional surgery and patient benefits, it has also enhanced brand influence and brought significant revenue growth.
During the reporting period, a total of 2 products of the neurointerventional business were approved for marketing by the National Medical Products Administration, namely the new generation of hot melt release coil NRcoil and the new generation of micro guidewire DCwire. Among them, the DCwire micro guidewire is designed based on Peijia s unique micro-structure concept, has achieved a breakthrough improvement in process accuracy, has superior performance, and has received excellent feedback from surgeons. It is expected to become a hot-selling domestic micro guidewire. As of June 16, 2024, the neurointerventional business has 16 products on the market and 9 products under development at different stages of research and development.
Resume trading
Pursuant to Rule 13.50 of the Listing Rules and at the request of the Company, trading of the Company s shares on the Stock Exchange has been suspended since 9:00 a.m. on April 2, 2024. After the publication of the audited results announcement, the Company has applied to the Stock Exchange for the resumption of trading of its shares from 9:00 a.m. on June 17, 2024.
Dr. Yi Zhang, Chairman and CEO of Peijia Medical: 2023 is a challenging year, and I am deeply pleased that the company has still achieved excellent results in such an environment. During this year, we successfully seized more market share in the two huge markets of TAVR and neurointervention, achieved revenue growth of more than 75%, and continued to accumulate rich clinical evidence for our innovative product portfolio. Entering 2024, Peijia Medical continued to maintain a good development momentum. We saw a new breakthrough in TAVR implantation, and the commissioning of the new plant also further improved operational efficiency. Looking forward to the new year, I am full of confidence in Peijia s future and look forward to our continued success with excellent execution.
Contact:
Tel: (86) 512 81877166
Email: info@peijiamedical.com
PEIJIA MEDICAL LIMITED 
