Oculus Medical Announces Surge in Sales and $420 Million Investment to Build Largest R&D and Manufacturing Base in Fuchun Bay New City

Since its listing on December 23, 2022, the share price of OrbusNeich (stock code: 6929) has surged by more than 40% in just three months, closing at HK$12.7 on March 28.

The stock price has surged significantly, partly because OrbusNeich, as a global leader in interventional devices for PCI and PTA procedures, is experiencing rapid growth alongside the industry, supported by favorable policies, market dynamics, product offerings, technological advancements, and innovation.

On the other hand, OrbusNeich’s profitability has continued to grow, and its development achievements and strong performance have bolstered investor confidence, attracting more investors to back and view the company favorably.

Furthermore, OrbusNeich has been highly active recently, continuously surpassing the highest expectations of investors, the market, and clinical experts.

For example, on March 28,OrbusNeich Signs Commercial Contract with Fuchun Bay New City Management Committee of Hangzhou, to Invest RMB 300 Million in Building Its Largest R&D and Production Facility in Fuchun Bay New City。

In early March, OrbusNeich released its first full-year financial results since going public: despite the global economic downturn in 2022, both revenue and net profit achieved significant growth. Revenue hit a record high of $137 million, while adjusted net profit surged by 25% to approximately $26.7 million.

Why is OrbusNeich investing in new R&D and production facilities? Why did it choose to establish them in the Fuchun Bay New City of Hangzhou? How will the company develop in the future, and can it sustain its current high growth rate? In response to these questions, this article provides an in-depth analysis of OrbusNeich’s latest strategic initiatives and explores its future prospects.

OrbusNeich’s latest announcement reveals that its wholly-owned subsidiary has entered into a commercial agreement with the Administrative Committee of Hangzhou Fuchunwan New City to construct facilities in Fuchunwan New CityVascular Interventional Medical Device R&D and Production Base, with fixed asset investment in the project reaching RMB 300 million.

(From left to right) Mr. Qian Yongxun, Chairman, Executive Director and Chief Executive Officer of OrbusNeich; and Mr. Yu Naiqun, Member of the Standing Committee of the District Committee and Member of the Party Leadership Group of the Fuyang District People's Government

It is reported that the project covers an area of approximately 20,000 square meters, with a construction area of about 50,000 square meters. It will be primarily used for the research and development and production of medical devices, including PCI and PTA interventional products and structural heart devices. Upon completion and commissioning, the new production base is expected to have an annual capacity of approximately 2.4 million units, becoming OrbusNeich’s largest R&D and manufacturing facility.

OrbusNeich operates manufacturing facilities in Shenzhen, China, and the Netherlands, with a combined annual production capacity of approximately 1.4 million balloons and 56,000 stents. However, sustained growth in product demand has pushed current capacity toward saturation. To ensure reliable product supply to its global customers, OrbusNeich leased a 1,900-square-meter production facility in Shenzhen in 2022 to expand capacity and meet mid-term production needs.

Nevertheless, OrbusNeich has decided to construct its largest R&D and production base.. This is not blind investment, but a scientific strategic decision made by OrbusNeich after careful consideration.

First, OrbusNeich’s innovatively developed products demonstrate significant advantages, strong market competitiveness, and sustained sales growth.. Currently, OrbusNeich has developed and launched several world-first products. For instance, the Scoreflex NC, introduced in the U.S. market in 2022, is the world’s smallest scoring balloon catheter. This product has gained significant recognition and achieved strong sales in the United States, driving a 122.6% surge in OrbusNeich’s overall revenue in the U.S. market.

Second, OrbusNeich holds a competitive position in major global PCI/PTA interventional markets, leveraging its product advantages and commercialization capabilities, and is poised to further increase its market penetration and expand its market share.According to a Frost & Sullivan report, based on 2021 PCI balloon sales volume, OrbusNeich ranked second in the Japanese market, fourth in the European market, and sixth in both the U.S. and Chinese markets. In the PTA balloon market, OrbusNeich also holds leading positions in major global markets, with its product sales ranking third in Japan and fourth in the United States. Leveraging its current market position and a pipeline of continuously iterated, innovative products, OrbusNeich is well-positioned to further expand its global market share.

Meanwhile,The rapid overall growth of the global PCI and PTA intervention markets will also accelerate the development of OrbusNeich.According to a Frost & Sullivan report, the global market size for PCI devices and PTA devices is projected to grow at compound annual growth rates (CAGRs) of 12.1% and 11.1%, respectively, from 2021 to 2030. As a global leader in the field of PCI/PTA interventional devices, OrbusNeich will leverage its comprehensive advantages in products, team, technology, innovation, and commercialization to lead development during the industry's rapid growth phase, establishing itself as a benchmark and reference company for innovative enterprises in the global PCI/PTA sector.

Third, OrbusNeich’s innovative products, which are proactively positioned for future growth, will receive regulatory approval for market launch, necessitating the addition of new production lines to meet customer demand.. For example, in February 2023, OrbusNeich’s first neurointerventional product, the Sapphire Neuro Balloon, received market approval and is poised to commence commercialization.

As of the end of 2022, leveraging a team with over 20 years of R&D experience, OrbusNeich held more than 180 authorized patents worldwide and had 40 products at various stages of development. Among these, innovative products under development included upgraded iterations of existing products, new product series, and offerings in new fields such as neurointervention and structural heart disease. It is expected that OrbusNeich will have more innovative products approved for market launch and sold globally in the future.

Therefore, OrbusNeich anticipates that its existing production capacity will reach saturation in the future, necessitating the construction of new manufacturing facilities to meet medium- to long-term market demand and optimize capacity allocation.

As a leading global enterprise in the field of interventional devices for PCI and PTA procedures, its decision to establish operations in Fuchunwan New City is likely the result of comprehensive consideration.

It is reported that Fuchun Bay New City in Fuyang District, Hangzhou, is located at the intersection of the southern wing of the Yangtze River Delta economic circle and the Shanghai-Hangzhou-Ningbo “Golden Triangle.” With its economic development potential, economic vitality, transportation hub status, and talent advantages all ranking among the leading levels nationwide, the area boasts significant locational advantages.

Meanwhile, in recent years, Fuchun Bay New City has been strengthening its efforts to create a high-quality business environment, with a focus on promoting the development of strategic emerging industries such as information technology, artificial intelligence, biotechnology, and high-end equipment. Preferential policies regarding land use, talent acquisition, and research and development are being offered to enterprises in these sectors to facilitate their growth.

Mr. Qian Yongxun, Chairman, Executive Director, and Chief Executive Officer of OrbusNeich, stated, “This newly constructed R&D and production base will become the company’s primary hub in the Yangtze River Delta. Leveraging the region’s advantages as a transportation hub and its concentration of talent, OrbusNeich will not only expand production capacity and enhance overall operational capabilities but also serve and cover the Chinese market more closely.”

“Furthermore, as a major global medical device manufacturer, OrbusNeich’s establishment in Fuchun Bay New City will introduce high-tech capabilities to the area, support its industrial upgrading, and ultimately achieve a win-win outcome for both the company and Fuchun Bay New City.”

On March 8, OrbusNeich released its first annual results announcement since its listing on December 23, 2022. The annual report showed that in 2022, OrbusNeich’s revenue reached a record high of $137 million, a year-on-year increase of 17.5%; gross profit was approximately $92.46 million, up 13.9% year on year, with a gross profit margin of 67.6%. Adjusted net profit amounted to $26.66 million, a year-on-year increase of 24.9%; profit attributable to shareholders was $18.491 million, marking a turnaround from loss to profit compared to the previous year.

In addition to the aforementioned achievements, OrbusNeich attained other milestones in 2022: its sales network expanded to cover more than 70 countries and regions worldwide, with product sales continuing to grow; it successfully completed an initial public offering (IPO), raising HK$480 million; it leased a production base in Shenzhen, increasing its total annualized production capacity to approximately 1.4 million balloon products and 56,000 stent products; and its Sapphire 3 coronary dilation catheter received approval from the National Medical Products Administration (NMPA).

As of December 31, 2022, OrbusNeich held more than 180 granted patents globally and had over 40 products approved or licensed by Japan’s PMDA, the U.S. FDA, China’s NMPA, or the EU CE marking, with more than 40 innovative products in development.

Mr. Qian Yongxun stated, “In 2022, despite significant challenges in the business environment that tested our capabilities in production, logistics, sales, and finance, OrbusNeich achieved growth in both mature and high-growth markets, driven by our three core competencies in R&D, operations, and commercialization. This resulted in record-high revenue and a substantial increase in net profit.”

Specifically, in the mature Japanese market, OrbusNeich’s Scoreflex Trio series has gained strong recognition, with its market share continuing to grow. This drove a $2.633 million increase in revenue for OrbusNeich in this market, representing an 8.8% year-over-year growth compared to 2021.

In the Chinese market, OrbusNeich has continued to expand its hospital coverage, with its distribution network reaching 30 provinces and municipalities and over 2,000 hospitals by the end of 2022. Meanwhile, leveraging the clinical advantages and market recognition of products such as Scoreflex, OrbusNeich rapidly increased its sales volume and market share, ultimately driving a 38.1% year-on-year growth in its sales revenue in the Chinese market to US$23.585 million.

In the U.S. market, sales of OrbusNeich’s Scoreflex NC series, launched in 2022, surged significantly, driving a 122.6% year-over-year increase in the company’s overall revenue in the region. Additionally, OrbusNeich has expanded its product portfolio and enhanced brand awareness in the U.S. market, laying the foundation for future growth.

Overall, the 2022 performance reflects OrbusNeich’s distinct advantages in product quality, uniqueness, and commercialization capabilities. The establishment of new R&D and production bases has further consolidated its core operational competitiveness, laying a solid foundation for future rapid growth. Supported by its three core competencies in R&D, operations, and commercialization, OrbusNeich is expected to accelerate its steady progress in 2023.