HONG KONG,Aug. 26,2024 -- Peijia Medical (HKG:9996),a leading Chinese domestic player in the high-growth transcatheter valve therapeuticsand neurovascular interventions markets,announced financial results for the six months ended June 30,2024 ("the period") on August 23,2024.
Financial Highlights
During the period,the Company recorded an operating revenue of RMB 301.2 million,representing an increase of 33.9% period-over-period. The increase in revenue was mainly attributable to:
(i) continued commercialization and expanded market share gains among transcatheter aortic valve replacement ("TAVR") products throughout China;
(ii) the surged sales volume of coil products as a direct result of winning bids in volume-based procurements across multiple provinces;
(iii) The rapid market penetration of our ischemic products,characterized by their differentiated design features such as the Syphonet Stent Retriever and Fastunnel Delivery Balloon Catheter; and
(iv) the successful launch of DCwire Micro Guidewire which quickly gained market recognition for its outstanding performance.
During the period,the Company recorded a gross profit of RMB 218.9 million,representing an increase of 26.5% period-over-period. Gross profit margin remained robust at 72.7%. Expense ratios decreased notably company-wide as a result of larger economic scale and improved operational efficiency with selling and distribution,administrative,and R&D expense ratios decreasing by 26.2,7.0,and 42.8 percentage points,respectively.
Loss for the first half of 2024 was RMB 71.3 million,a 66.4% improvement when compared to RMB 212.3 in the prior year period.
"Peijia once again capitalized on its opportunity to generate strong growth through our experienced sales and marketing team and overall commercial execution," said Dr. Yi Zhang,Chairman and CEO of Peijia Medical. "We are currently at or exceeding our guidance for both of our segments and have seen strong results in our efforts to reduce expenses across the business. Our portfolio development initiatives remain robust with product launches and multiple clinical trial enrollments creating positive momentum. We are excited to continue to expand the Company's TAVR market share and maintain profitability within the Neurointerventional business into the second half of the year."
Full Year 2024 Guidance:
The Company is reiterating full year 2024 estimates of reaching 23%-27% share of the domestic China transfemoral TAVR market and of achieving at least 35%-45% year-over-year revenue growth in the Neurointerventional Business.
Financial and Business Results by Segment:
Transcatheter Valve Therapeutic ("TVT") Business:
Market Share Expansion and New Product Development
During the period,the TVT Business recorded revenue of RMB 130.3 million,representing an increase of 21.0% period-over-period. Gross profit in the TVT segment was RMB 106.6 million,an increase of 13.7% period-over-period.
Selling and distribution expense ratio decreased significantly by 34.0 percentage points period-over-period,due to continuous growth in sales scale and a leap in sales team efficiency. Commercial losses thereby,reduced by 92.4% to RMB 2.5 million,with profitability on the horizon.
Furthermore,as the patient enrollment of major pivotal trials was completed and management operations continued to be optimized,the R&D and administrative expense ratios improved period-over-period,decreasing by 80.4 and 7.1 percentage points,respectively.
Segment loss for the first half of 2024 was RMB 124.5million,a 45.5% improvement when compared to a segment loss of RMB 228.3 in the prior year period.
Growth in Peijia's TVT business was driven by another period of share gains in the China TAVR market and increases in terminal implant volumes of the Company's products. During the period,Peijia products were placed in over 100 new hospitals,bringing total penetration to more than 580 facilities. Implant volumes for the period totaled approximately 1,750 units,an increase of 40% period-over-period,and more than double the market growth rate of 20%. Additionally,Peijia estimates that it holds approximately 25% of the transfemoral TAVR market share in China,in line with the Company's guidance to achieve market share between 23-27% for the full year 2024.
During the period,Peijia successfully completed patient enrollment in three pivotal trials for TaurusNXT,TaurusTrio (the in-licensed JenaValve Trilogy Transcatheter Heart Valve System,which was announced to be acquired by Edwards Lifesciences in July 2024) and GeminiOne,each of which demonstrated R&D progress towards durability-enhanced TAVR,aortic regurgitation (AR) treatment,and domestic TEER treatment for mitral regurgitation,respectively. Additionally,the Company made continued upgrades on the existing TAVR product portfolio to create a comprehensive and precise treatment range for patients. Product developments included a small size TAVR specification for smaller anatomy patients and the enhanced TaurusMax TAVR product,an iteration of the TaurusElite,which provides for enhanced visualization in patients with challenging anatomy. Peijia received the NMPA approval for the TaurusMax TAVR system in August 2024.
Neurointerventional ("NI") Business:
Strong Revenue Growth and Profitable First Half
During the period,the NI Business recorded revenue of RMB 170.9 million,representing growth of 45.9% over the prior year period. Revenue was balanced between hemorrhagic,ischemic,and vascular access products,accounting for 32.3%,34.4% and 33.2% of the segment's revenue,respectively. Growth was driven primarily by market penetration and sales volume increase across the entire NI Portfolio. During the period,Peijia also saw benefits from the opening of newly constructed national stroke centers in China,creating widespread awareness and accessibility to neurointerventional procedures in conjunction with Peijia's marketing efforts to increase NI professional education. Additionally,volume-based procurement policy implementation contributed to NI market penetration with Peijia's coil products seeing a notable surge in sales in provinces where bids were won.
The segment's gross profit margin was 65.7%,a decrease of 1.9% period-over-period. Expense ratios for selling and distribution,and R&D decreased by 13.8,4.0,and 4.8 percentage points period-over-period,respectively.
Neurointerventional profit for the first half of 2024 was RMB 28.7million. The Company anticipates the Neurointerventional Business will remain profitable for the remainder of fiscal 2024.
About the Company
Peijia Medical (9996.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 three TAVR systems and sixteen neurointerventional devices commercialized in China and various innovative product candidates at different stage of development. For more information about Peijia visit peijiamedical.com/about.
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