Cost Control and Efficiency Boost: Rising Neurovascular Star Narrows Losses

Apr 20, 2024 11:51 CST Updated 11:51

HeartCare

Neurointerventional Medical Device Developer

Source: HeartCare; Editor: Qi Yuan

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HeartCare Future

Recently,Shanghai HeartCareHeartCareMedical Technology Co., Ltd.(Abbreviation: "HeartCare”，06609.HK) ReleasedAnnual Report 2023：2023 CompanyAchieved operating revenue of 232.3 million yuan, representing a year-on-year increase of 26.9%;The company's net loss was RMB 94.0 million, a year-on-year decrease of 53.1%.The effectiveness of cost-control and efficiency-enhancement measures is gradually becoming apparent.

# Cost Control and Efficiency Enhancement Show Results

From the performance of HeartCare in the first half of the year,Continuously growing commercialization revenue and progressively narrowing losses, demonstrating that the company is steadily on track for commercial success. According to the financial report, HeartCare achieved revenue of approximately 232 million yuan in 2023, representing a year-on-year increase of 26.9%.

HeartCare's performance has achieved steady growth,One important reason lies in cost control.，The company aims to reduce operation and management costs and improve profitability by decreasing marketing activities and controlling costs.。

In 2023,Corporate Marketing and Management Expenses(Including administrative expenses, sales and distribution expenses) was approximately 154 million yuan, maintaining a continuous downward trend.At the same time, the companyProfitability is also being continuously released.，WithThe expansion of business scale and the effectiveness of cost control and efficiency enhancement measuresIn 2023, the company's gross profit margin increased by 2.6 percentage points to 70.5%, and the proportion of sales and distribution expenses and administrative expenses decreased to 66.2% (2022: 91.8%).

On the other hand, the reason lies in synergistic effects.`, HeartCare`Continuously increase the commercial sales of listed products, expand sales channels, and rapidly enhance the market share of products.。

As of now,The company has received NMPA approval for a total of 28 medical device products., widely covering the treatment of acute ischemic stroke and neurovascular stenosis, prevention of ischemic stroke, treatment of hemorrhagic stroke, as well as interventional access, isThe First in ChinaAn interventional medical device company providing one-stop solutions for stroke treatment and prevention。

In the first half of the year, driven by policies such as volume-based procurement and DRG/DIP reforms, the volume of neurointerventional surgeries in China began to recover, and the pace of import substitution for medical devices continued to accelerate. Relying on its self-established sales channels, HeartCare has made progress in all provinces of China except Hong Kong, Macao, and Taiwan.Increase Hospital Penetration and Physician Product Acceptance, continuously strengthening the company's competitiveness and market position in China's neurointervention market.

Relying onSteady Expansion of Sales ChannelsHeartCare's management stated at the earnings meeting that the sales of key product pipelines, such as devices for acute ischemic stroke (AIS) thrombectomy, intracranial artery stenosis treatment devices, and innovative access devices, continued to grow in the first half of the year, generating revenue of 96.682 million yuan, a year-on-year increase of 33.1%.

In addition, HeartCare is also setting its sights on the global market to capture more international market share. CurrentlyThe company has 3 medical device products approved by the FDA for marketing in overseas markets.，A Product Obtains the CE Mark, continuously unlocking more growth points in performance.

# Products and Pipeline

As of the report date,The Group has 28 device products approved by NMPA, 3 device products approved by FDA, and 1 product with a CE mark.。

The figure below outlines the development status of the company's neurointerventional pipeline as of the date of this report, including approved products and a wide-ranging product pipeline in the later stages of development, covering treatments for acute ischemic stroke and neurovascular stenosis, hemorrhagic stroke treatment, ischemic stroke prevention, and interventional access:

▲Source: Company Annual Report

Main Neurointerventional Products and Products Under Development

(1) Ischemic Stroke Thrombectomy Devices

Core Product — Captor® Thrombectomy Device("Captor") isThe First in ChinaMulti-point Imaging Thrombectomy Stent with NMPA Approval，Began sales in China in December 2020.As of the date of this report, the Group has upgraded Captor by adding more product models of stents with different lengths and diameters. Based on the diameter of the occluded blood vessel and the size of the thrombus,Doctors can choose a thrombectomy stent of appropriate length and size from nine product models.The company is evaluating the opportunity to upgrade Captor to expand its range of indications. In addition, the company is assessing the opportunity to market Captor overseas and may apply for registration in the United States based on the evaluation results.The product obtained the CE mark during the reporting period.。

The company may not necessarily be able toCaptor Successfully develop new indications and specifications, and expand overseas markets.

Intracranial Thrombus Aspiration CatheterThrombectomy Procedure for Acute Ischemic Stroke with Large Vessel Occlusion ("AIS-LVO"), to remove the thrombus and restore blood flow in the occluded cerebral blood vessels. The aspiration thrombectomy can be performed alone or combined with stent thrombectomy based on the patient's symptoms.Intracranial Thrombus Aspiration Catheter Receives NMPA Approval and Begins Sales in 2022。

Except for Captor and intracranial thrombus aspiration catheters,For the treatment of ischemic strokeAspiration PumpApproved by NMPAAt the same time, the company has a product portfolio covering stent and aspiration thrombectomy procedures for the emergency treatment of different subtypes of acute ischemic stroke.

(II) Intracranial Artery Stenosis Treatment Devices

Intracranial Drug-Eluting Balloon Catheter("Intracranial DEB") is used to deliver antiproliferative drugs to the lesion site to prevent fibrosis and vascular occlusion. The registration clinical trial for intracranial DEB began in May 2020. As of the date of this report,Intracranial DEB has completed clinical trials and is in the NMPA registration phase. The product has obtained the NMPA review fast-track qualification.。

Embolic Protection SystemUsed in peripheral, coronary, and carotid interventional procedures to capture and remove debris dislodged during the surgery. It helps prevent debris from blocking smaller blood vessels, which could lead to surgical complications.The company's embolic protection system has received NMPA approval.。

(III) Hemorrhagic Stroke Treatment Devices

Coil Embolization Assisted StentAneurysm Coiling Embolization for Aneurysm Patients. Coil embolization-assisted stent bridging connects the aneurysm neck to support the coils placed within the aneurysm. As of the date of this report,The clinical trial of the coil embolization-assisted stent has been completed, and the NMPA registration application has been submitted. The product has obtained the NMPA review fast-track qualification.。

Flow DiverterNeurovascular stents placed within aneurysmal vessels can redirect blood flow away from the aneurysm. Over time, the blood flow into the aneurysm decreases, leading to aneurysm shrinkage and thus achieving the therapeutic purpose. As of the date of this report,Patient Recruitment Completed for Flow Diverter Clinical Trial。

(IV) Ischemic Stroke Prevention Devices

Core Product — Left Atrial Appendage OccluderA permanent implant for stroke prevention placed at the opening of the left atrial appendage in patients with non-valvular atrial fibrillation (AF)., to prevent the separation of thrombi in the left atrial appendage, which may cause embolism. The left atrial appendage closure procedure is a single, definitive surgical treatment, especially suitable for patients who are not suited for long-term oral anticoagulation therapy and are at high risk of hemorrhagic complications. CompanyThe left atrial appendage occluder has obtained NMPA approval and began sales in 2022.。

(5) Vascular Access Devices

The Company is also developing a variety of vascular access devices for interventional procedures. As of the date of this report, the Company hasDistal access catheter, microcatheter, occlusion balloon catheter, occlusion hemostasis device, support catheter, neuro microcatheter, micro guidewire, coil microcatheter, flow diverter microcatheter, and navigation sheath.Obtained NMPA Approval。

In addition, the company has several other products in the design phase, further enhancing its comprehensive product portfolio for the treatment and prevention of stroke.

# From Establishment to IPO in Just Five Years

The road to domestic substitution has always been arduous.

On this road, ahead was Sany Heavy Industry's "Sany Red sweeping the world," ultimately driving Doosan, Hitachi, and other Japanese and Korean competitors out of the market; behind was Mindray Medical's "encircling the cities from the countryside," tearing a gap in the "GPS medical device iron curtain" formed by GE, Philips, and Siemens.

Now, another path of domestic substitution is presented before China's manufacturing industry: neurointerventional medical devices. In this track full of infinite challenges and imagination, the profile of the winner in the domestic substitution race is becoming increasingly clear.In just five years, it has transitioned from its founding to an IPO, making it a pioneer in the wave of China-produced alternatives.。

This typical representative is preciselyHeartCare, a company focused on new minimally invasive interventional technologies for stroke prevention and treatment.The development and industrialization of medical device enterprises.

In 2004,Wang Guohui, a graduate student, joined HeartCare., which took a full eight years. During these eight years, HeartCare entered a phase of rapid development, successfully placing itself among the leading companies in China's domestically produced medical device industry. Meanwhile, Wang Guohui also experienced significant personal growth during this period. While serving at HeartCare, he represented the company on the National Technical Committee for Surgical Implant Standardization, where he led the revision of dozens of industry standards. This played a substantial role in advancing the industry’s development at that time.

But Wang Guohui was not satisfied with this; his passion for entrepreneurship continued to burn fiercely.In 2012, Wang Guohui left MicroPort，Established the first company in China to produce renal artery ablation products for the treatment of resistant hypertension.——Antong Medical。

Through founding Antong Medical, Wang Guohui has fully utilized the professional knowledge he accumulated at MicroPort, and his management and operational capabilities have also been honed. In this process,Antong Medical develops rapidly, obtaining the first European marketing authorization for an Asian product within a year., and then strategically cooperated with Terumo, the largest medical device company in Asia, to begin clinical trials in China.

The success of Antong Medical did not stop Wang Guohui from moving forward. After this,Wang Guohui also founded another company focused on the coronary field,Bioheart Biotech, this company dedicated to absorbable coronary drug-eluting stents, has now developed into the third-ranked company in China's degradable stent sector, with its products also entering the final clinical stage.

As Antong Medical and Baixin'an Bio gradually got on track, Wang Guohui felt that the company affairs no longer required him to expend so much energy. As an entrepreneur, his restless heart was stirred once again. In early 2016, an occasional neurointervention forum made Wang Guohui realize that the domestic market for neurointerventional products was almost monopolized by imports. The products were expensive and in short supply, and many diseases lacked dedicated interventional products.

"The market for high-value consumables in the cardiac field has already seen the emergence of multiple listed companies, while the share of domestically produced neurointerventional products remains relatively low. I believe that what can be achieved in the coronary intervention field with domestic production should also be possible in the neurointervention field. We, as professionals in the vascular field, should do something to support the domestic production of neurointerventional products." With this original intention,In 2016, Wang Guohui founded HeartCare, focusing on products for the combined treatment of heart and brain to address stroke.。

This decision quickly garnered significant attention from the capital market. Less than a year after its establishment, HeartCare secured an angel round of financing worth tens of millions of yuan. Following this, the company continued to be highly favored by the capital market, completing five rounds of financing between 2018 and 2020. Notably,Before its listing in 2020, HeartCare completed three rounds of financing within a year, with a total financing amount reaching up to 1 billion yuan., which has, to a certain extent, accelerated the listing process of HeartCare.

# About HeartCare

Shanghai HeartCare Medical Technology Co., Ltd. (Stock Code: 06609.HK) was founded in 2016. The company is committed to improving the accessibility of innovative medical technologies, and in six years,Pioneering a one-stop solution for stroke treatment and prevention in the field of neurointervention., with a full product pipeline covering the treatment of acute ischemic stroke and neurovascular stenosis, ischemic stroke prevention, hemorrhagic stroke treatment, and interventional access devices.With over 300 patent applications, the sales channels cover all provinces in China except Hong Kong, Macao, and Taiwan.。

Based on its existing leading advantage, HeartCare will continue to focus on popularizing emerging medical procedures, addressing the unmet needs of clinicians and patients in China.Operations include several emerging business segments such as neurointervention, full-heart treatment, pulmonary intervention, and computer-assisted technology., continuously launching innovative interventional devices that define emerging procedures, reducing mortality rates of major diseases and improving patient outcomes.

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