HONG KONG, Mar 7, 2024 - (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 annual results for the year ended December 31, 2023, reporting record high revenue and net profit despite facing global economic headwinds.

Results Highlights:

-- Revenue hit record high at US$153.9 million, up 12.5% year-on-year

-- Revenue from PCI balloons and PTA balloons grew by 12.1% and 29.0% year-on-year, respectively.

-- Gross profit increased by 15.2% year-on-year to US$106.5 million, with gross margin reaching 69.2%

-- Record-high profit for the year attributable to owners of the Company reached US$45.1 million, up 143.8%

-- The Board has proposed a final dividend of HK10 cents per share

-- The Group added 4 CE-Marked products including coronary and peripheral paclitaxel-coated drug-eluting balloons, a coronary drug eluting stent and a peripheral self-expandable stent following the acquisition of eucatech AG

-- The Group strengthened its global sales network through acquisition of South Korean and Indonesian distributors and extended the US exclusive distribution agreement with an Abbott Laboratories' subsidiary

-- The Group has a portfolio of over 240 granted patents and published patent applications worldwide, along with more than 40 approved products, including its first CE Marked product under the new MDR regime, Scoreflex TRIO

-- Acquired a land parcel in Hangzhou to build the Group's largest R&D and production base which will bring an additional annual production capacity of 2.4 million units of products when operational

-- Established a newly leased manufacturing site in Shenzhen, which helped raise aggregate annual production capacity to approximately 1.9 million balloon products and 60,000 stent products

For the year ended December 31, 2023 (the "Year"), the Group continued to achieve sales volume growth, driving revenue to a record high of US$153.9 million, up 12.5% year-on-year. In particular, revenue from PCI balloons and PTA balloons grew by 12.1% and 29.0% year-on-year to US$115.4 million and US$14.7 million, respectively. Coupled with increase in sales volume of products which have higher average selling prices, its gross profit rose by 15.2% to US$106.5 million, with gross profit margin up 1.6 percentage points to 69.2%. Accordingly, profit for the year attributable to owners of the Company recorded an increase of 143.8%, reaching record high at US$45.1 million, with net profit margin up by 15.8 percentage points to 29.3%. Basic earnings per share were US5.45 cents (2022: US3.17 cents).

As at December 31, 2023, the Group was in a strong financial position with cash and bank balances amounting to US$255.8 million (2022: US$229.1 million). Having considered future capital requirements, the Board has proposed a final dividend of HK10 cents per share in cash, as a token of appreciation for the continuous support of shareholders.

Mr. David Chien, Chairman, Executive Director and Chief Executive Officer of OrbusNeich, said, "I am proud of our unwaveringly dedicated team which has helped the Group navigate the challenging market environment and achieve exceptional financial performance and operational excellence. During the Year, not only did we make significant progress in enhancing research and development ("R&D"), sales and marketing and our production capacity, but also completed three merger and acquisition ("M&A") transactions to strengthen market penetration, expand product sales channels, and diversify our product portfolio. As we continue to pursue our growth objectives and invest in strategic initiatives, we remain committed to generating returns for our valued shareholders and making a positive impact on the quality of life for patients worldwide."

Employing multiple approaches to consolidate leading market position

The Group achieved satisfactory results across all its key geographical markets in 2023. The US continued to be the fastest-growing market, showing a robust growth of 27.9%. Other markets, including Japan, APAC, and EMEA also achieved year-on-year revenue growth despite the foreign exchange impact. These positive results were driven by the continuous increase in sales and adoption of new generation products. Sales in local currency were maintained in the PRC market despite the temporary fluctuation in the operating environment of the industry.

For markets with high demand for medical products and services, the Group made strategic moves through M&A initiatives to enhance its presence in markets with strong potential. For example, in the Asia-Pacific region ("APAC") it acquired 100% equity stake in the South Korean distributor SJ Medicare Co. Ltd., a move expected to significantly contribute to local revenue growth, as well as allow the Group to strengthen sales channel management, diversify product offerings and enhance physician education. Additionally, the Group acquired an 84% equity stake in the Indonesian distributor PT Revass Utama Medika that holds a sizable market share in the world's fourth most populous country, where the number of cardiac catheterization laboratories is steadily increasing. For the established US market, the Group extended its exclusive distribution agreement with Cardiovascular Systems, Inc., a subsidiary of Abbott Laboratories, to accelerate growth in the market. Moreover, to foster brand awareness, the Group invited renowned physicians to share their expertise and knowledge in 11 physical physician exchange programs, as well as actively participated in industry exchanges at 73 seminars.

Harnessing synergies from strategic M&A and in-house R&D to enrich product portfolio

Through the strategic acquisition of the German company eucatech AG, that possesses CE Marked products, including a sirolimus-eluting coronary stent, a peripheral self-expandable stent and paclitaxel-coated PTCA and PTA balloons, the Group has not only enriched its portfolio with complementary products, but can also effectively address the growing trend of "leave nothing behind" in PCI and PTA procedures, bolstering its ability to treat lesions in PCI and PTA procedures.

During the Year, the Group's innovation also kept transforming into marketable production, with Scoreflex TRIO, the three-wire scoring balloon well received by Japanese physicians, becoming its first CE Marked product in the new Medical Device Regulation ("MDR") regime. The product was launched in early 2024 in the Group's key direct sales markets across APAC and EMEA regions, and its clinical trial patient enrolment in China is expected to be completed in the first quarter of 2024 with the NMPA registration application to be submitted in the second half year. Additionally, registration applications for Sapphire Ultra and Sapphire NC Ultra coronary balloons with good product cost control and promising product quality, have been submitted to the FDA. Approval is expected in the first quarter of 2024, further enhancing the competitiveness of the Group's products in certain price-sensitive markets. As at December 31, 2023, the Group owned more than 240 granted patents and published patent applications globally across key jurisdictions, as well as more than 40 approved products, including 27 PMDA-approved, 26 CE Marked, 14 FDA-cleared, and 20 NMPA-approved.

In addition to the Group's PCI and PTA product offerings, the joint venture ON P&F, which has enabled the Group to expand into the structural heart field, also made significant progress in both commercialization and product development in 2023. Its first TricValve case was successfully performed in both Australia and Taiwan, with satisfactory clinical outcomes, and a TricValve study protocol has been submitted to the NMPA, with patient enrollment for the clinical trial in the PRC expected at the beginning of the second quarter of 2024.

Bolstering production infrastructure to keep pace with rising demand

The Group has been consistently expanding its production capacity to meet growing demand. By raising the annual production capacity of balloon products by 550,000 units, it achieved a total annual production capacity of approximately 1.9 million units of balloons and 60,000 units of stents as at December 31, 2023. The capacity increase was made possible through establishing a newly leased manufacturing site in Fuyong, Shenzhen, adding production machinery and relocating certain production procedures. To address future production needs, the Group has acquired an approximately 20,000-square-meter land parcel in Fuyang, Hangzhou for building its largest R&D and manufacturing base with a gross floor area spanning approximately 60,000 square meters. With construction officially commenced in December 2023, the new R&D and manufacturing base is expected to be operational by 2027, adding an annual production capacity of 2.4 million units of products upon commencement of production.

Mr. Chien concluded, "Looking ahead, we expect the growth momentum of our businesses to prevail, fueled by our continuing relentless pursuit of market expansion and product enrichment. Armed with abundant financial resources, we remain committed to identifying M&A opportunities that align with our corporate strategies. By continuously strengthening our commercialization capabilities and complementing our existing product portfolios and technology platforms, we aim to create value for shareholders and the global healthcare market as a whole."

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 actively expanding into neuro vascular intervention and structural heart disease. As at December 31, 2023, OrbusNeich has more than 240 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/

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