Financial Highlights
During the period, the Company recorded an operating revenue of RMB224.9 million, representing an increase of 89.3% period-over-period. The increase in revenue was mainly attributable to:
(i) The accelerated commercialization of transcatheter aortic valve replacement (“TAVR”) products (including the first-generation product TaurusOne and second-generation retrievable product TaurusElite) and expanded market share gains;
(ii) The increased sales volume of existing neurointerventional products (including Tethys Intermediate Catheter, SacSpeed Balloon Dilatation Catheter, Jasper Detachable Coil and Syphonet Stent Retriever, etc.); and
(iii) The initial commercialization of new ischemic products, including the Fastunnel Delivery Balloon Dilatation Catheter.
During the period, the Company recorded an adjustedgross profit of RMB178.8 million, representing an increase of 104.2% period-over-period. Adjusted gross profit margin improved to 79.5%, an increase of 5.8% period-over-period, driven by continued cost optimization and the launch of higher-margin ischemic products [1][2].
“In the first half of the year, the Company seized the opportunity to achieve significant growth through efficient product research and development and strong team execution,” said Dr. Yi Zhang, Chairman and CEO of Peijia Medical. “We were pleased to see a significant increase in Peijia’s TAVR market share and a steady growth in sales volume in the Neurointerventional Business.”
Full Year 2023 Guidance:
The Company reiterates its full year 2023 estimates of reaching 22-25% share of the domestic Chinese TAVR market and of achieving at least 50% year-over-year revenue growth in the Neurointerventional Business.
Financial and Business Results by Segment:
Transcatheter Valve Therapeutic (“TVT”) Business:
Rapid Increase in Market Share and Steady Clinical Progress
During the period, the TVT Business recorded revenue of RMB107.7 million, representing an increase of 106.8% period-over-period. Gross profit in the TVT segment was RMB93.8 million. Through effective cost optimization measures, TVT gross profit margin significantly increased to 87.1%, representing an increase of 8.9% period-over-period. TVT selling and distribution expenses and administrative expense ratios decreased by 11.4% and 35.5%, respectively, period-over-period.
Gains in China’s TAVR market share were driven by the recovery of procedure volumes in the market, an increase in unit sales by the commercial team, and an increase in the terminal implant volume of the Company’s TAVR products. During the period, Peijia’s products were utilized in over 120 new hospitals, bringing total penetration to more than 410 hospitals, a figure comparable to peers. In the first half of the year, the terminal implant volume of the Company’s TAVR products was approximately 1,250 units, with an estimated market share of over 20%. The increasing number of hospitals covered indicates strong performance of the Company’s products and the effectiveness of the commercialization strategy. Peijia’s professional marketing and sales team will continue to educate the market and provide compliant and high-quality services to physicians to further promote the utilization and application of the therapy and further improve the benefit to patients.
Within the product pipeline, Peijia successfully reached several milestone events for the TrilogyTM Heart Valve System, an aortic regurgitation (“AR”) indication TAVR product by obtaining the exclusive license from JenaValve Technology Inc. in the United States. In May 2023, the Company completed the first commercial implantation of TrilogyTM in Hong Kong. Additionally, Peijia completed the technology transfer of the product to its local manufacturing site in Mainland China, allowing for in house production of TaurusTrioTM TAVR system. In July 2023, the Company officially launched the multi-center registration clinical trial of TaurusTrioTM in Mainland China; to date, no transfemoral AR indication TAVR product has been approved for marketing by the National Medical Products Administration of the PRC (“NMPA”) in Mainland China.
Neurointerventional (“NI”) Business:
Revenue exceeded expectations and segment loss narrowed significantly
During the period, the NI Business recorded revenue of RMB117.1 million, representing a better-than-expected period-over-period increase of 75.6%. Among these, hemorrhagic, ischemic, and vascular access products accounted for 27.3%, 39.1% and 33.1% (44.2%, 25.0% and 30.6% in 1H22) of the segment revenue, respectively. With the increasing sales of ischemic products, the segment’s adjusted gross profit margin increased to 72.6%, a period-over-period increase of 2.4%[3]. Due to the significant increase in revenue and gross profit, and the Company’s long-term efforts in cost reduction and efficiency improvement, segment losses significantly narrowed by 82.0% period-over-period. This was driven by growth in Peijia’s distribution network, increased volume across China, and the development of an exceptional reputation among physicians. Additionally, multiple products within the detachable coils portfolio won bids, accelerating hospital admissions and bolstering the product group.
During the period, the registration application for the Company’s next generation neurointerventional Micro Guidewire DCwireTM was approved by the NMPA. Using various materials through a precise multi-layer microstructure manufacturing process, the product allows for better control and easier selection of vessels, enabling physicians to quickly and conveniently establish vascular access. As of the date of publication, the Company’s NI Business has sixteen approved products and eight products in research and development, covering the treatment of hemorrhagic stroke, acute ischemic stroke and intracranial atherosclerotic disease.
As of June 30, 2023, Peijia’s distributor network covered approximately 2,100 hospitals in 31 provinces and municipalities in China.
About the Company
Peijia Medical (09996.HK) was established in 2012 and is headquartered in Suzhou, China. Peijia Medical focuses on the high-growth interventional procedural medical device market in China and aims to become a world-renowned medical device platform that provides comprehensive treatment solutions for structural heart and neurovascular diseases. The Company now has two generations of TAVR systems and fifteen neurointerventional devices commercialized in China and various innovative product candidates at different stage of development. For more information about Peijia visit peijiamedical.com/about.
Note:
[1] Adjusted gross profit margin and gross profit within this press release refer to the gross profit margin and gross profit calculated after adding back the Purchase Price Allocation (“PPA”), unless otherwise stated. PPA is a non-cash item, arising from the acquisition of Achieva Medical in 2019, which means the allocation of the cost of a business combination under non-same control among the identifiable assets, liabilities and contingent liabilities, unless otherwise stated.
[2] Without the adjustment, the Group recorded a gross profit of RMB173.0 million in the period, representing an increase of 107.9% period-over-period; gross profit margin was 76.9%, up by 6.9% period-over-period.
[3] Without the adjustment, NI Business recorded a gross profit of RMB79.2 million in the period, representing an increase of 86.4%; NI Business gross profit margin was 67.6%, up by 3.9% period-over-period.
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