HONG KONG, June 17, 2024 /PRNewswire/ -- Peijia Medical (HKG:9996), a leading Chinese domestic player in the high-growth transcatheter valve therapeutic and neurointerventional procedural medical device markets, announced the publication of its audited financial results for the year ended December 31, 2023 ("the period") on June 16, 2024. Additionally, the Company announced that it would resume trading on the Hong Kong Stock Exchange on June 17, 2024.
"We are pleased to be reporting an exceptional year for Peijia and are eager for our investors to have access to the public markets once again," said Dr. Yi Zhang, Chairman and CEO of Peijia Medical. "The preliminary, unaudited results published on March 28, 2024 remain unchanged following the audit, reiterating revenue growth of 75.9% and significant increases to our operational efficiencies. Our success was driven by market share gains, product portfolio expansion and key strategic partnerships. I'm very proud of our team and all that we were able to accomplish in 2023 and look forward to leveraging that momentum for the remainder of 2024."
On March 28, 2024, Peijia announced a delay in the filing of the Company's 2023 Annual Report as a result of the auditor's work on certain financial assets, specifically related to the valuation of a prior HK$80million investment by the Company. On April 2, 2024, trading in Peijia shares was suspended pending publication of audited results. According to the Company's announcement on June 16, 2024, the audit of the 2023 Annual Results have been completed in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board and the Company's auditor, PricewaterhouseCoopers, have expressed unqualified opinion in the independent auditor's report.
Trading resumed on June 17, 2024.
Financial Highlights
During the period, the Company recorded an operating revenue of RMB441.1 million, representing an increase of 75.9% year-over-year. The increase in revenue was mainly attributable to:
(i) the terminal implantation volume of the Company's TAVR products was 2,484 units, which is more than double the implantation volume in 2022. This has allowed the Company to achieve an over 20% share of the Chinese TAVR market;
(ii) first-and second-generation TAVR products were utilized in approximately 200 new hospitals, bringing total penetration to nearly 500 hospitals;
(iii) sales volume of coil products increased significantly as a result of the implementation of VBPs in the provinces where the Company had won bids, especially the 21-province alliance VBP led by Jilin province;
(iv) sales volume of our existing and newly approved ischemic and vascular access products increased significantly as a result of the professional marketing activities and the quick penetration of neurointerventional procedures following the construction of stroke centers.
During the period, the Company recorded a gross profit of RMB325.4 million, representing an increase of 84.7% over the prior year, driven by continuous cost improvement measures throughout the business. 2023 gross profit margin of 73.8% increased by 350 basis points over the prior year. Expense ratios for selling and distribution, administrative costs, and research and development improved year over year by 22.7%, 17.1% and 82.2%, respectively.
Financial and Business Results by Segment:
Transcatheter Valve Therapeutic ("TVT") Business:
During the period, the TVT Business recorded revenue of RMB185.6 million, representing an increase of 72.9% year-over-year. Gross profit increased 86.0% to RMB159.0 million year-over-year. The segment's gross profit margin was 85.7%, representing an increase of 6.0% year-over-year, driven by supply chain optimization and yield rate improvement. TVT selling and distribution expenses, administrative expenses and research and development expenses ratios decreased by 32.5%, 25.9% and 169.5%, respectively. The segment loss narrowed by 13.5% year-over-year.
With the recovery of procedure volume in the market and the increase in unit production of the sales team, implantation volume of the Company's TAVR products have increased significantly, leading to further gains in market share. During the period, the Company's first-and second-generation TAVR products were utilized in approximately 200 new hospitals, bringing total penetration to nearly 500 hospitals. During the year, the terminal implantation volume of the Company's TAVR products was 2,484 units, which is more than double the implantation volume in 2022. This has allowed us to achieve an over 20% share of the Chinese transfemoral TAVR market.
During the period, the Company made significant progress in the research and development of pipeline products.
In aortic valve product line, the Company expedited the registration clinical trials for TaurusTrio the in-licensed JenaValve Trilogy Transcatheter Heart Valve ("THV") System designed for pure aortic regurgitation (AR), and TaurusNXT, the Company's internally developed third-generation durability-enhanced TAVR product. As of June 16, 2024, patient enrollment has been completed for both trials and patient follow-up is ongoing. Specially, in July 2023, the Company launched the multi-center registration clinical trial for TaurusTrio, enrolling a total of 116 AR patients in six months and finished ahead of enrollment schedule targets. In addition, the Company has successfully completed the technology transfer from JenaValve and established local manufacturing facilities at its new headquarters in Suzhou to produce the product independently.
In the mitral and tricuspid valve product lines, the Company has been steadily advancing the research and development progress of each product. The registration clinical trial for GeminiOne, the Company's internally developed Transcatheter Edge-to-Edge Repair device, was progressing as planned with patient enrollment completed in May 2024. In addition, in October 2023, the early clinical findings of GeminiOne and the novel TTVR product MonarQ were presented at the 2023 Transcatheter Cardiovasvular Therapeutics ("TCT") conference with preparations now being made to conduct early feasibility studies in the United States.
Operationally, in December 2023, TVT production facilities were relocated to new headquarters, increasing the current manufacturing capacity by three times.
Neurointerventional ("NI") Business:
During the period, the NI Business recorded revenue of RMB255.6 million, representing a better-than-expected year-over-year increase of 78.1%. Gross profit for the segment increased 83.4% year-over-year to RMB166.4. Gross profit margin improved to 65.1% for the full year, an increase of 190 basis points over 2022. Hemorrhagic, ischemic and vascular access products accounted for 32.0%, 33.6% and 34.1% of the segment revenue, a much more balanced product sales mix over 2022 with 39.4%, 27.6% and 32.9%, respectively. With the increasing sales of ischemic products, the segment's gross profit margin increased to 67.1%, an increase of 3.5% over the prior year. These gains were driven by coil products winning bids and quick market penetration of new and existing ischemic products.
Selling and distribution expenses, administrative expenses and research and development expenses ratios improved year-over-year by 14.2%, 9.9% and 15.7%, respectively. Also, due to the increase in revenue and gross profit, and the Company's long-term efforts in cost reduction and efficiency improvement, the segment loss significantly narrowed by 98.8% year-over-year, with the expectation of reaching profitability in 2024.
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 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.