Grand Pharmaceutical (0512.HK) Invests €15M in XELTIS for 11% Stake and Secures Exclusive Rights to Innovative Endogenous Tissue Restoration Platform in Greater China

Grand Pharmaceutical (00512) announced on July 18 that the company has reached a strategic cooperation agreement with Xeltis AG for equity investment and product introduction.

Grand Pharmaceutical Group Limited Scores Again in the High-End Medical Device Sector

Grand Pharmaceutical Group Limited will acquire approximately 11% of Xeltis AG's equity for a total of 15 million euros after the relevant conditions are met. The company will also obtain exclusive development, production, and commercialization rights in Greater China (Mainland China, Hong Kong, Macao, and Taiwan) for aXess, a globally innovative endogenous tissue repair product used to create arteriovenous grafts (AVG) for hemodialysis treatment in patients with end-stage renal disease (ESRD), as well as other new products in the hemodialysis field developed under the same technology platform in the future. According to the agreement, Grand Pharmaceutical Group Limited also holds the right of first negotiation for products developed by Xeltis in other indications within Greater China.

Global Innovation Product Layout Benefits Hemodialysis Patients in China

XELTIS AG is a medical device company focused on developing Endogenous Tissue Restoration (ETR) devices based on supramolecular polymers for vascular-related treatments.

XELTIS's ETR technology involves the design and implantation of absorbable biomaterials into the body, where they function as blood vessels or tissues. After the body’s self-healing system uses these materials as a scaffold to grow corresponding tissues with complete functionality, the materials are naturally absorbed or broken down by the body. The aXess product, a globally leading solution for creating AVG access in dialysis patients, is currently undergoing its First-in-Man (FIM) trial overseas, with smooth progress reported.

This strategic cooperation between the two parties will not only deepen Grand Pharmaceutical Group Limited's product layout in the field of peripheral vascular intervention for hemodialysis but also has the potential to benefit numerous hemodialysis patients in China.

Chronic Kidney Disease (CKD) has become one of the significant global public health issues. According to the report from the China Kidney Disease Network (CK-NET), there are approximately 700 million CKD patients globally, with the number of CKD patients in China ranking first at about 130 million, among which approximately 1 million are ESRD patients.

Dialysis is the most common method for treating ESRD. The total number of patients using dialysis in China is approximately 675,000, of which 580,000 are on hemodialysis, and this number is expected to grow at a compound annual growth rate of about 15% over the next five years.

Currently, the main type of vascular access for hemodialysis is the autologous arteriovenous fistula (AVF). However, AVF technology often presents challenges such as fistula creation failure, long maturation times, and complications like fistula stenosis and thrombosis. Statistics show that among dialysis patients with an AVF, over 40% experience arteriovenous fistula stenosis within one year, and this proportion increases further with prolonged use of the access. In this context, there is an urgent clinical need for a type of vascular access that can mature quickly and has fewer complications for use in hemodialysis.

Grand Pharmaceutical Group Limited's recent deployment of the endogenous tissue repair product aXess can provide a foundational structural framework for patients' autologous tissue repair, expedite the establishment of dialysis access, reduce the occurrence of thrombosis and related complications, and is expected to offer dialysis patients a safer and more effective blood access solution.

Grand Pharmaceutical Group Limited Expands Its Innovative Product Pipeline in the Field of Cardiovascular and Cerebrovascular Precision Interventions

The field of precision interventional diagnosis and treatment for cardiovascular and cerebrovascular diseases is one of the core strategic areas of Grand Pharmaceutical Group Limited. The company has made comprehensive arrangements in this field around three directions: pathway management, structural heart disease, electrophysiology, and heart failure. It has built a high-end medical device product cluster driven by technological innovation and continues to promote the comprehensive establishment of an "active + passive" innovative device platform.

It is reported that Grand Pharmaceutical Group Limited currently has two innovative drug-coated balloon products approved for marketing in China within this field: RESTORE DEB® and APERTO® OTW, covering coronary intervention and peripheral vascular intervention respectively. These two drug-coated balloon products utilize the unique SAFEPAX patented technology, ensuring a uniform and stable drug coating with minimal shedding. With strong product competitiveness, they have gained widespread recognition from clinicians and patients and earned a good market reputation after more than two years of clinical use.

Through this strategic layout of XELTIS' globally innovative endogenous tissue restoration product aXess, Grand Pharmaceutical Group Limited will have a total of 11 innovative products in its pipeline within the field of precision interventional diagnosis and treatment for cardiovascular and cerebrovascular diseases. In addition to the two drug-coated balloon products already on the market, five other products are currently in clinical development, one product is in the registration application stage, and research and development work for other projects is also actively progressing. For instance, in the field of coronary intervention diagnostics, Grand Pharmaceutical's globally innovative product NOVASIGHT Hybrid, the first intravascular ultrasound-optical imaging fusion system approved by the U.S. FDA, has already been launched in the United States, Canada, and Japan, and is expected to receive approval for marketing in China in 2022.

Notably, Grand Pharmaceutical Group Limited has established overseas R&D platforms and production bases in both North America and Europe, continuously developing innovative products. It has also set up R&D and production bases for passive devices in Changzhou and for active devices in Wuhan’s Optics Valley, both of which are already operational, further strengthening China's R&D and production capabilities. The company currently has 50 researchers in this field, with nearly 40% holding master’s or doctoral degrees. In 2021, the medical device segment of Grand Pharmaceutical generated revenue of approximately HKD 2.72 billion, marking a significant year-on-year increase of nearly 211%. As the company’s innovative products are gradually launched in the future, they are expected to provide additional revenue streams.

Grand Pharmaceutical Group Limited stated that in the future, the company will continue to adopt the development path of "introducing and localizing" as well as "synchronizing independent domestic R&D," adhering to the strategy of "global operational layout and dual-cycle business development." It will focus on high-quality innovative products both in China and globally, deeply expand existing sectors, and establish a dual system for local + global R&D and production, aiming to build a leading precision interventional diagnosis and treatment platform for cardiovascular and cerebrovascular diseases in China and even globally.