Grand Pharmaceutical (00512.HK) Secures Exclusive Rights to CardioFocus's HeartLight X3 Laser Ablation System for Atrial Fibrillation Treatment in Greater China

Grand Pharmaceutical(00512) announced that the Group has entered into a cooperation and exclusive product licensing agreement with U.S.-based CardioFocus, Inc. In exchange for milestone payments of up to USD 20 million and a specified percentage of sales royalties, Grand Pharmaceutical Group Limited will acquire the exclusive commercialization rights and conditional core technology transfer rights for the next-generation HeartLight X3 laser ablation platform product—an innovative medical device for the treatment of atrial fibrillation under CardioFocus’s HeartLight® Endoscopic Ablation System—in Mainland China, the Hong Kong Special Administrative Region, and the Macao Special Administrative Region (collectively, the “Licensed Territory”). Additionally, Grand Pharmaceutical shall enjoy priority cooperation rights for other CardioFocus products within the Licensed Territory.

It is understood that the HeartLight X3 is another globally innovative product by the Group in the field of precision cardiovascular and cerebrovascular intervention, following its vascular intervention drug-coated balloon, neurointervention thrombectomy stent, and vascular and cardiac chamber diagnostic equipment. This product represents a key strategic initiative for the Group in establishing an internationally leading precision diagnosis and treatment platform for cardiovascular and cerebrovascular diseases.

The HeartLight X3 product received U.S. Food and Drug Administration (FDA) approval for market launch in May 2020, making it the world's only device that utilizes laser technology to perform circumferential ablation for the treatment of atrial fibrillation (AF). CardioFocus has dedicated over two decades to this field, and its related technologies maintain a globally leading position in the industry.

The announcement stated that CardioFocus is a medical device company dedicated to developing ablation therapies for cardiac diseases such as atrial fibrillation (AF). Its first-, second-, and third-generation ablation products have received regulatory approval and been launched in the United States and Europe, respectively, with the first-generation product also approved for commercialization in Japan. The company has partnered with over 100 medical institutions, and its products have been utilized in more than 10,000 clinical procedures, demonstrating significant clinical efficacy. The HeartLight X3 laser ablation platform is a third-generation AF ablation technology that leverages its proprietary RAPID mode, direct tissue visualization, adjustable laser energy, and compliant balloon technology to deliver precise and sustained energy. This minimizes the need for manual lesion overlap, thereby facilitating more reliable and complete pulmonary vein isolation (PVI). The HeartLight X3 platform combines the adjustable energy and point-to-point precision of traditional radiofrequency (RF) catheter ablation with the operational simplicity and shorter procedure times characteristic of cryoablation. By significantly reducing operator dependence, it stands as the latest-generation AF ablation technology platform.

Atrial fibrillation, commonly abbreviated as AF, is an arrhythmia caused by dysfunction of the atrial electrophysiological system and represents the most common form of sustained arrhythmia. During AF, the atria lose their contractile function. Mild cases may present with symptoms such as palpitations, chest tightness, shortness of breath, dizziness, and fatigue, while severe cases can lead to angina pectoris, acute left heart failure, or shock. Concurrently, blood stasis within the atria readily promotes thrombus formation. Once dislodged, these thrombi can travel through the bloodstream to various parts of the body, causing arterial embolism in vital organs and resulting in severe complications.

According to data from the *Report on Cardiovascular Diseases in China 2018*, the prevalence of atrial fibrillation (AF) exhibits a clear positive correlation with age. In China, the prevalence of AF among individuals aged over 35 is 0.71%, while it reaches 1.83% among those aged over 60. Given the accelerating aging of China's population, with the number of individuals aged 65 and above reaching 180 million in 2019 and accounting for 12.6% of the total population, the number of patients with arrhythmias and AF is projected to continue growing rapidly in the future. Consequently, the prevention and treatment of AF will increasingly become a significant public health concern.

Atrial fibrillation (AF) is a progressive disease that typically advances from paroxysmal AF to persistent AF. Statistics indicate that 30% of the current patient population has paroxysmal AF. The primary treatment modalities for AF are pharmacological and non-pharmacological therapies. Pharmacological therapy generally only achieves limited rhythm control, requires long-term administration, and is associated with side effects. With the gradual clinical application of non-pharmacological interventions such as catheter ablation in recent years, the clinical advantages of non-pharmacological therapy in AF management have become increasingly evident. According to *Atrial Fibrillation: Current Understanding and Treatment Recommendations (2018)*, results from multicenter randomized clinical trials consistently demonstrate that catheter ablation is significantly superior to antiarrhythmic drugs for paroxysmal AF in maintaining sinus rhythm, reducing AF burden, improving symptoms and exercise tolerance, and enhancing patients' quality of life. Its efficacy in persistent AF has also been well established. Therefore, this guideline also recommends catheter ablation as a first-line treatment.

According to relevant data from the National Health Commission's Arrhythmia Intervention Quality Control Center and research data from Frost & Sullivan, the volume of electrophysiology procedures for arrhythmia patients in China has continued to grow in recent years, increasing from 117,000 cases in 2015 to 180,000 cases in 2019, at a compound annual growth rate (CAGR) of 11.3%. China's electrophysiology device market size grew from RMB 1.48 billion in 2015 to RMB 4.67 billion in 2019, with a CAGR of 33.2%. Driven by factors such as the accelerating population aging, the increasing number of arrhythmia patients, the wider adoption of ablation procedures, and the upgrading of ablation consumables and products, China's electrophysiology device market is projected to reach RMB 18.78 billion by 2024, representing a CAGR of 32.1% from 2019 to 2024. In the future, the electrophysiology field will emerge as a high-growth sub-sector within the medical device industry.

The precise interventional diagnosis and treatment of cardiovascular and cerebrovascular diseases constitutes one of the core strategic sectors of Grand Pharmaceutical Group Limited. This sector features a comprehensive layout across five key directions: vascular intervention, neurointervention, structural heart disease, electrophysiology, and heart failure, establishing a cluster of technologically innovative, high-end medical devices. Following the completion of this transaction, the group will possess seven products covering four of these directions, two of which have already been approved for commercialization in China, with the remaining five expected to secure market approval in China by the end of 2025. In the vascular intervention direction, the two products approved in China are RESTORE DEB, a coronary drug-coated balloon and the sole product with dual indications for de novo coronary lesions and in-stent restenosis, and APERTO OTW, the first drug-coated balloon specifically indicated for arteriovenous fistula stenosis in dialysis patients. The LEGFLOW OTW product for peripheral vascular disease has entered the clinical trial phase and is expected to be approved for marketing in 2024; for coronary diagnosis, the offering is NOVASIGHT Hybrid, a hybrid intravascular ultrasound (IVUS) and optical coherence tomography (OCT) imaging system, which entered the green channel for the special review of innovative medical devices in 2019 and is projected to gain approval in China in 2023; in the structural heart disease direction, the portfolio includes a diagnostic product—FORESIGHT ICE, a 3D intracardiac echocardiography (ICE) imaging system, which has already received market approval in the United States and Canada and is currently actively preparing for clinical registration in China, with future initiatives aimed at further expanding its valve product lineup; in neurointervention, the group is independently developing a next-generation thrombectomy stent, expected to be approved for marketing in 2025. In electrophysiology, the HeartLight X3, developed in collaboration with CardioFocus, is also anticipated to receive market approval in 2025.

This collaboration with CardioFocus fills the gap in the Group's electrophysiology portfolio. Moving forward, the Group will continue to pursue a development path of "technology introduction and localization" alongside "synchronized independent R&D for China-made products," establishing a dual R&D and manufacturing system that integrates domestic and global operations. This strategy will accelerate product commercialization while simultaneously strengthening its in-house R&D capabilities. Through "a decade of dedicated effort," the Group aims to develop this segment into a leading "precision interventional diagnosis and treatment platform for cardiovascular and cerebrovascular diseases" in China and globally.

The Group has consistently prioritized the research and development of innovative products and advanced technologies. Centered on patient needs and driven by scientific and technological innovation, it has increased its investment in global innovative products and cutting-edge technologies to address unmet clinical needs, thereby enriching and optimizing its product pipeline and industrial layout. By implementing a "global operational layout and dual-circulation business development" strategy, the Group has established a new paradigm of integrated and mutually reinforcing dual circulation in China and internationally. Fully leveraging its industrial advantages and R&D capabilities, the Group accelerates the commercialization and market launch of innovative products to provide patients worldwide with more advanced and diverse treatment options.