Neurointervention Leader HeartCare Medical Sells Wholly-Owned Subsidiary S3 Medical

Dec 17, 2023 19:04 CST Updated 19:04

HeartCare

Neurointerventional Medical Device Developer

Value Magnet

Investment Holding Company

Instrument Family

Medical Device Media Reporting Pioneer

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Recently, HeartCare announced that, after the trading hours on December 11, 2023,The Company entered into an equity transfer agreement with the buyers Xing Tingyu, Li Meng, Shenji Employee Shareholding Platform, and Value Magnet Limited.Accordingly, the Company has conditionally agreed to sell all of its equity interests in Shanghai Shenji Medical Technology Co., Ltd. ("Shenji Medical") to the Buyer for a total consideration of RMB 9 million.

Data shows that HeartCare is an innovative enterprise focusing on neurointerventional devices. Shanghai Shenji Medical Technology Co., Ltd., a wholly-owned subsidiary of HeartCare, has begun researching and developing potential robotic medical devices.

Breakthrough Industry Difficulties

According to the announcement released by HeartCare,Upon completion of this transaction, HeartCare will no longer hold any equity interest in Shanghai Shenji Medical Technology Co., Ltd., and the latter will cease to be an affiliate of HeartCare.It is reported that Shenji Medical was founded by HeartCare in 2021 as its wholly-owned subsidiary, led by Li Meng and Xing Tingyu (each as a buyer).

Screenshot from HeartCare announcement

In 2022, in the Artificial Intelligence and Medical Robotics category of the 5th China Medical Device Innovation and Entrepreneurship Competition, Shenji Medical won the third prize in the final of Artificial Intelligence and Medical Robotics. At that time,HeartCare stated that in the future, Shenji Medical will continue to focus on the independent research and development of surgical robots and related digital medical technologies, continuously optimize products, and develop more high-end medical products.

The announcement released by HeartCare this time stated that since its establishment, Shenji Medical has begun to research and develop potential robotic medical devices. As of the date of this announcement,Generally, there are no medical devices currently in the research and development phase that have entered the later stages due to various unforeseen or unexpected difficulties encountered during the development process. The Group must invest substantial resources to commercialize these medical devices, and there is no guarantee that these products will be successfully developed and commercialized.Shenji Medical and its continued investment in research and development will further divert resources from the group's core business (i.e., neuro-intervention and medical devices).

Therefore, the Board considers it appropriate to sell Shanghai Shenji Medical Technology Co., Ltd. through a management buyout by existing employees, with the support of experienced investors in the biotech field.After the delivery, it is expected that Shanghai Shenji Medical Technology Co., Ltd. will not compete with the group. Shanghai Shenji Medical Technology Co., Ltd. will engage in the research and development of intelligent surgical equipment, while the group will not and currently has no plans to develop medical devices in the same or similar fields.

Upon completion of the sale,HeartCare plans to allocate internal resources to the group's core business, focusing on the research and development and commercialization of medical devices in the field of neurointervention.The Group will continue to develop the pipeline products disclosed in the interim report published by the Company on September 21, 2023, and expects that the sale will not have a material adverse effect on the Group's business operations and financial condition.

Founded only 7 years ago

More Than 20 Products Have Been Launched

Public information shows that HeartCare was established in 2016. The company is committed to improving the accessibility of innovative medical technologies. After seven years of development,HeartCare has pioneered a one-stop solution for stroke treatment and prevention in the field of neurointervention in China.With a full product pipeline covering the treatment of acute ischemic stroke and neurovascular stenosis, prevention of ischemic stroke, treatment of hemorrhagic stroke, and interventional access devices, over 300 patents have been applied for.

It is reported that,Currently, HeartCare has more than 20 products on the market, covering various procedural products such as acute ischemic thrombectomy, cerebral vascular stenosis, and intracerebral hemorrhage treatment.Covering 31 provinces, municipalities, and autonomous regions in China, some products have started overseas sales. Its representative products include:

Captor™ Thrombectomy Device

This product is the first domestically produced multi-point imaging thrombectomy stent to receive NMPA approval, and it began sales in China in December 2020.Afterwards, the Captor was upgraded, adding more product models of stents with different lengths and diameters. Based on the diameter of the occluded vessel and the size of the thrombus, doctors can choose a thrombectomy stent of appropriate length and size from nine product models.

It is reported that Captor consists of a stent body and a push rod surrounded by an introducer sheath. The stent body is a self-expanding stent with an overlapping structure, which is placed within the target blood vessel and expands to collect outgoing thrombi. Therefore,The stent body can be easily compressed within the introducer sheath, maintaining strength, flexibility, and durability, while expanding outward to penetrate and collect escaping thrombi.

The proximal, distal, and middle sections of the stent body are equipped with multiple radiopaque markers, providing fluoroscopic imaging to assist doctors in accurately positioning the thrombectomy stent and collecting thrombi.

Intracranial Balloon Dilation Catheter and Carotid Artery Balloon Dilation Catheter

The original design intention of the intracranial balloon dilation catheter and carotid artery balloon dilation catheter is for use in balloon angioplasty for patients with intracranial artery stenosis, with the former used for intracranial vessels and the latter for the carotid artery.

Balloon dilation catheters are designed to pass through narrowed arteries, pushing plaque to the sides of the arteries, thereby improving blood flow in patients.Received the NMPA approvals for the intracranial balloon dilation catheter and carotid artery balloon dilation catheter in April and June 2021, respectively.

The two products are similar in design but vary in length.The balloon is folded and placed within a protective sheath when not in use, with two radiopaque markers located at both the proximal and distal ends to ensure clear visibility under X-ray.The proximal end of the catheter is equipped with an inflation tube. When the balloon is positioned at the narrowed segment of the artery, it can be inflated to a fixed shape using liquid. During balloon angioplasty, the doctor typically keeps the balloon inflated for 30 seconds, allowing it to expand and push the plaque against the walls of the blood vessel.

Left Atrial Appendage Occluder

This product is a stroke prevention device permanently implanted at the opening of the left atrial appendage (LAA) in patients with non-valvular atrial fibrillation (AF), especially suitable for patients who are not suited for long-term oral anticoagulation therapy and are at higher risk of hemorrhagic complications, to prevent thrombus detachment from the LAA, which may cause embolism.

HeartCare's left atrial appendage occluder consists of an occluder and a delivery system.The superelastic nitinol occluder has an umbrella-like structure, which can adapt to different shapes of the patient's left atrial appendage and allows for retrieval and repositioning.

The occluder tip has 8 circular hooks that can attract tissue, ensuring the stability of the left atrial appendage occluder while minimizing damage to the left atrial appendage tissue.The polyester film on the occluder helps block blood flow and promote endothelialization of the device; the delivery system is used to access the left atrial appendage, serving as a guiding catheter to deliver the occluder to the target position.

After Product Commercialization

Revenue Growth Soars

According to the official website,HeartCare's product line layout involves neurointervention, full cardiac treatment, and pulmonary intervention. In 2020, the company began commercializing its products.

In terms of financial performance, from 2020 to the whole year of 2022,HeartCare's operating revenue was 14.562 million yuan, 90.089 million yuan, and 183 million yuan, respectively.Gross profit soared from RMB 7.087 million in 2020 to RMB 124 million in 2022.

Among them,HeartCare's 2022 annual report shows that the company achieved operating revenue of 183 million yuan in 2022, a year-on-year increase of 103.17%.Net loss attributable to parent company was 200 million yuan, with a year-on-year increase of 3.17% in losses. Basic earnings per share were -5.24 yuan. R&D costs were approximately 154 million yuan, representing a year-on-year increase of 101.4%.

At that time, the announcement stated,The increase in company revenue is mainly attributed to the continued growth in sales of ischemic stroke thrombectomy devices and intracranial artery stenosis treatment devices, as well as the additional revenue generated from the market launch of hemorrhagic stroke treatment, prevention, and access devices newly introduced in 2022.Including vascular closure hemostasis systems, embolic coils, and left atrial appendage closure devices. Meanwhile, the gross margin increased to 67.9% in 2022, due to the growing cost advantages of ischemic stroke thrombectomy devices and intracranial artery stenosis treatment devices.

It can be seen that,Since the commercialization of its products in 2020, the company has experienced rapid growth in revenue and gross profit.In the first half of 2023, HeartCare achieved a revenue of 110 million yuan during the reporting period, representing a year-on-year increase of 43%.In the first half of 2023, its R&D expenses reached 69.85 million yuan. Its key R&D pipelines involve products such as intracranial drug balloons, carotid artery stents, coil embolization assist stents, pulmonary artery thrombectomy stents, and cryoablation.

HeartCare Key R&D Pipeline

It is worth mentioning that,On December 8, the HeartCare·Light Swallow Low-Pressure Intracranial Balloon Dilation Catheter, independently developed by HeartCare, was approved for marketing by the National Medical Products Administration.The approval of this intracranial balloon dilation catheter has also enabled HeartCare to further improve its treatment solutions for neurovascular stenosis.

High Investment in Robotic Medical Devices

Sale SubsidiaryOr the optimal solution

It can be seen that HeartCare currently mainly focuses on the field of neurointervention.Shanghai Shenji Medical Technology Co., Ltd., which focuses on robotic medical devices, is the subject of this sale announcement.

At present, medical robots are mainly divided into surgical robots, rehabilitation robots, auxiliary robots, and medical service robots. Their technologies are applied in various medical fields such as diagnosis, treatment, surgery, rehabilitation, and nursing.

With the development of digital healthcare, the global medical robotics industry is growing rapidly, and the market size is expanding quickly.According to relevant data, in 2021, the global medical robotics market size reached 10.9 billion US dollars.From 2017 to 2021, the market size growth rate of medical robots in China was over 20%, with the industry experiencing rapid development. In 2021, the market size of medical robots in China reached 7.93 billion yuan, a year-on-year increase of 34.01%.

However, a closer look at the specific development of medical robots in China reveals...The industry still focuses on the research, development, and manufacturing of low- to mid-range medical devices, with high-end products mainly relying on imports from Europe and the United States.Moreover, intelligent devices and big data are becoming the mainstream direction for the future development of medical devices, and there is an urgent need in China to strengthen attention and research on high-end medical devices.

It should be noted that, taking surgical robots as an example,As a multi-disciplinary knowledge- and technology-intensive product, its core technology has a long R&D cycle, with high requirements for equipment performance, technical parameters, and safety.Take orthopedic surgical robots in surgical robots as another example. Their key technologies span the fields of mechanics, electronics, optics, and testing. Among these, the most critical aspect is the integration of various systems and the implementation of all algorithms on computers, robotic arms, and end-effectors, which requires interdisciplinary talent for the R&D of orthopedic surgical robots.

Therefore,For enterprises, the requirements for deploying robotic equipment in terms of talent, capital, etc., are all very high.Currently, HeartCare, based on its existing leading advantages in the赛道,Focus on launching innovative interventional devices that define emerging procedures.Therefore, selling Shenji Medical might also be the best solution for HeartCare.

So, focusing on the unmet needs of clinicians and patients in China, what kind of development will HeartCare welcome in multiple emerging business sectors such as neurointervention, full-heart treatment, and peripheral intervention in the future? The industry will continue to pay attention.

END

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