OrbusNeich Medical, Pioneer in Domestic Cardiovascular Interventions, Submits IPO Application with Over 80% of Revenue from Overseas Markets

November23On [Day], OrbusNeich, a leading enterprise in vascular interventionOrbusNeich Holdings Limited (hereinafter referred to as “OrbusNeich”) submitted to The Stock Exchange of Hong Kong LimitedMarketing Application, and plans to list on the Main Board of the Hong Kong Stock Exchange.

According to available data, OrbusNeich is a global leader in the development and manufacturing of PCI/PTA balloons. The company primarily manufactures interventional devices for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures, with its PCI/PTA balloon products widely used in more than 70 countries and regions worldwide.

Based on the sales volume of PCI balloons in 2021, OrbusNeich holds a leading position in major global markets, ranking second in Japan, fourth in Europe, and sixth in both the United States and China, alsoIt is the only company headquartered in China that ranks among the top six in market share in major overseas PCI markets, including Europe, the United States, and Japan.In the PTA balloon market, OrbusNeich also holds a competitive advantage, with its product sales ranking third in Japan and fourth in the United States.

As of June 30, 2022, OrbusNeich had more than 40 approved products, including 25 products approved by Japan’s PMDA, 22 products with EU CE marking, 14 products approved by the U.S. FDA, and 15 products approved by the National Medical Products Administration (NMPA).

OrbusNeich’s product portfolio primarily includes semi-compliant balloons, dedicated catheters, scoring balloons, and non-compliant balloons, covering all major therapeutic stages of PCI and PTA procedures, including lesion access, lesion preparation, lesion treatment, and lesion optimization.

In addition to the two key segments of PCI and PTA balloons, OrbusNeich is actively expanding its business in neurovascular intervention and structural heart disease. For instance, OrbusNeich is developing innovative products such as valvuloplasty balloon catheters, balloon-expandable heart valves, next-generation heart valves, neuro balloons, neuro microcatheters, and neuro occlusion balloons.

Leveraging its leading position in the global PCI/PTA device market, OrbusNeich currently boasts impressive financial performance; meanwhile, driven by its forward-looking strategic layout in neurointervention and structural heart disease, the company’s future revenue is projected to achieve rapid growth.。

According to the prospectus, OrbusNeich’s revenue reached US$96.34 million, US$88.47 million, and US$116 million in 2019, 2020, and 2021, respectively. In the first half of 2021 and the first half of 2022, its revenue was approximately US$57.34 million and US$68.85 million, respectively.

(OrbusNeich Financial Data)

OrbusNeich’s revenue declined in 2020 due to a pandemic-induced reduction in the global volume of PCI procedures. However,As the pandemic situation stabilized, OrbusNeich’s revenue in 2021 increased by 31.6% year-on-year, and its revenue in the first half of 2022 also maintained a growth rate of 20.1% compared to the same period.。

Furthermore, compared with other unprofitable listed medical device companies, OrbusNeich demonstrates strong profitability. According to the prospectus,Its adjusted annual profit for 2021 reached approximately US$21.4 million, representing a year-on-year increase of up to 201.4% compared with 2020.; In the first half of 2022, despite a high base, adjusted profit maintained a year-on-year growth of 23.6%, reaching US$13.6 million,.

OrbusNeich’s impressive financial performance is attributable to its three core competitive advantages.

First, OrbusNeich possesses strong innovation and R&D capabilities, with significant product advantages.In terms of R&D, OrbusNeich has pioneered a range of proprietary technologies, including its world-leading antibody coating technology with “healing-promoting” functionality. Driven by technological innovation, OrbusNeich has secured more than 100 granted patents across major global jurisdictions, including 32 in the United States and 45 in China.

In terms of product advantages, OrbusNeich has innovatively developed multiple world-first products. For instance, its COMBO Plus Dual Therapy Stent is the world’s first and only commercially available “drug-plus-antibody” dual-coating stent that effectively promotes coronary vascular healing; the Scoreflex NC is the non-compliant scoring balloon with the smallest outer diameter; the Sapphire II Pro is the first 1.0 mm diameter balloon to receive FDA clearance; and the JADE non-compliant peripheral balloon is the first and only non-compliant over-the-wire PTA balloon approved by the U.S. FDA that is compatible with all guidewire systems...

Driven by multifaceted innovations, OrbusNeich’s products have garnered widespread recognition from clinical experts worldwide. Revenue data show that OrbusNeich’s overseas revenue accounted for 80%–95% of its total income from 2019 to the first half of 2022.In the first half of 2022, revenue from Japan and from Europe, the Middle East and Africa (EMEA) accounted for approximately 25% and 24% of total revenue, respectively, while the revenue contribution from the U.S. market, which the company only entered in 2017, rose significantly from 4.5% in 2019 to approximately 10.2% in the first half of 2022.Thus, it is evident that OrbusNeich’s products and brand are highly recognized in developed-country markets.。

Second, OrbusNeich possesses strong global commercialization capabilities.To date, OrbusNeich has established a robust global sales network combining direct sales and distribution, enabling its products to reach more than 70 countries and regions worldwide. Leveraging efficient management of both its direct sales and distribution teams, OrbusNeich’s PCI balloon products ranked second in Japan and fourth in Europe by sales volume in 2021, while its PTA balloon products ranked third in Japan and fourth in the United States.

Notably, the PCI and PTA balloon markets are highly concentrated. For instance, four companies command 88% of the Japanese PCI balloon market, while six companies hold 97% of the European PCI balloon market; similarly, five companies account for 97% of the European PTA balloon market. Among these, those that have risen to the industry’s forefront stand shoulder to shoulder with major medical device giants.This reflects OrbusNeich's strong global capabilities.

Third, OrbusNeich possesses high-standard, large-scale production capabilities.On one hand, OrbusNeich’s manufacturing facilities in China and the Netherlands maintain a rigorous and comprehensive quality management system, and have successfully passed audits and inspections by multiple regulatory authorities, including China’s National Medical Products Administration (NMPA), the U.S. Food and Drug Administration (FDA), Japan’s Pharmaceuticals and Medical Devices Agency (PMDA), and EU Notified Bodies. For instance, in late December 2020, its facilities underwent an FDA pre-PMA inspection, resulting in a classification of NAI (No Action Indicated).

On the other hand, the plant has an annualized total production capacity of approximately 1.35 million balloon products and 56,000 stent products, enabling it to provide global customers with a stable and high-quality supply while leveraging the advantages of economies of scale.

Based on the above three points, OrbusNeich currently holds a dominant position in the global PCI/PTA balloon market and has achieved substantial revenue and profits. AndIn the long term, the global PCI and PTA balloon markets are expected to grow steadily, with OrbusNeich’s PCI and PTA balloon business possessing significant room for expansion.。

Currently, China has approximately 330 million patients with cardiovascular diseases, with a continuously rising prevalence and growing treatment demand. Compared with traditional open-heart surgery, PCI/PTA procedures are increasingly favored by both physicians and patients due to their advantages of being minimally invasive, safe, and effective. Meanwhile, as physicians’ understanding of transcatheter procedures continues to improve, an increasing number of hospitals will adopt PCI and PTA procedures. Therefore, the market for PCI/PTA devices is expected to continue growing in the future.

According to the prospectus data, from 2021 to 2025, the PCI interventional device markets in China, the United States, and Europe are projected to grow at compound annual growth rates (CAGRs) of 14.0%, 13.1%, and 10.0%, respectively; meanwhile, the PTA interventional device markets in these regions are expected to expand at CAGRs of 14.6%, 11.9%, and 9.2%, respectively.

Alongside the steadily growing market for PCI/PTA interventional devices, OrbusNeich will leverage its strong market position and product leadership to increase its market share and steadily grow revenue, while itsPCI and PTA interventional device business lines will also become two major “cash cows,” serving as the most solid foundation for OrbusNeich’s innovation and expansion.。

Compared to its robust global commercialization capabilities, OrbusNeich’s R&D strength is equally impressive.

On one hand, OrbusNeich’s R&D team, with 20 years of development experience, is based in Florida, USA, and Shenzhen, China, bringing not only extensive expertise but also an international perspective. On the other hand, OrbusNeich places significant emphasis on technological innovation, allocating more than 10% of its total annual revenue to research and development. For instance, from 2019 to 2021, the company’s R&D expenditures accounted for 10.0%, 14.2%, and 10.4% of its total revenue during the respective periods.

As of now, OrbusNeich has approximately 40 products in its pipeline and, through horizontal and vertical innovation, is simultaneously deploying its portfolio across PCI/PTA devices and other therapeutic areas.

From a longitudinal perspective,OrbusNeich continues to expand its diverse product lines and upgrade its existing portfolio through the philosophy of “simplifying complexity,” building a diversified PCI/PTA procedural product portfolio.

Specifically, OrbusNeich continues toUpgrade Existing Products, such as its development of the fourth-generation Sapphire balloon series, the next-generation Jade II series PTA balloons, and the Teleport II microcatheter, while also customizing the ScoreFlex II series scoring balloons for the Japanese market.

OrbusNeich alsoExpand Different Product Series, having already developed an ECMO left ventricular assist device that is currently in the preclinical stage; it is developing a next-generation sirolimus-coated drug-eluting balloon product capable of accurately delivering sufficient doses of active pharmaceutical ingredients to lesion sites, thereby reducing thrombosis risk, promoting lesion repair, and enhancing procedural safety and efficacy. Furthermore, OrbusNeich is also developing a CTO toolkit comprising products such as microcatheters, microcatheters with controllable tip shapes, guide extension catheters, and dual-lumen microcatheters, which help simplify complex interventional procedures.

From a cross-sectional perspective,OrbusNeich leverages its sales network and R&D strengths in the PCI/PTA device sector to expand into structural heart intervention and neurointerventional products. For instance, since physicians performing structural heart procedures are often the same as those conducting coronary interventions, OrbusNeich can tap into the potential of its existing sales network. Furthermore, given the similarities in product principles between neurointerventional devices and those used in coronary and peripheral interventions, OrbusNeich can effectively transfer its technological and commercialization advantages to the structural heart and neurointerventional fields.

In the Field of Interventional Structural Heart DiseaseIn 2020, OrbusNeich established a joint venture with its partners to develop, manufacture, and market heart valve products. The joint venture’s first commercialized product, TricValve, is the world’s first pre-loaded bicaval stent valve system designed for the treatment of severe tricuspid regurgitation. The company also boasts a comprehensive product pipeline, including aortic valve replacement, mitral valve replacement, and pulmonary valve replacement devices. In addition to the pipeline products under development by the joint venture, OrbusNeich is collaborating with its partners to co-develop balloon-expandable heart valves and next-generation heart valve technologies.

In the Field of NeurointerventionOrbusNeich’s neuro balloon catheters, neuro microcatheters, neuro occlusion balloons, and neuro drug-coated balloons have entered various stages of research and development or regulatory registration, with the neuro balloon catheter expected to receive approval around the end of the year. Meanwhile, OrbusNeich is also advancing the R&D of multiple innovative products, including neuro aspiration catheters, neuro infarction balloon catheters, neuro thrombectomy devices, and flow diverters. Leveraging its platform-based strategy, OrbusNeich is poised to enter the neurointerventional market more rapidly.

Currently, both the interventional structural heart disease and neurointerventional sectors are experiencing rapid growth, with each market exceeding $10 billion in size. According to a report by Frost & Sullivan, the penetration rate of interventional procedures for structural heart disease remains low but is entering a phase of explosive growth. The market size for interventional devices for structural heart disease in the Asia-Pacific region, including Japan and China, was approximately $1.1 billion in 2021 and is projected to reach approximately $13.45 billion by 2030, representing a compound annual growth rate (CAGR) of 32% from 2021 to 2030.

According to the Frost & Sullivan report, the global market size of neurointerventional devices reached $2.64 billion in 2021 and is expected to reach $4.43 billion by 2025.

With the rapid expansion of the market size, companies in the industry will accelerate their growth. Among them, OrbusNeich is expected to quickly enter the global interventional market for structural heart disease and neurointerventional procedures, leveraging the clinical advantages of its next-generation products and strong global commercialization capabilities, thereby achieving substantial revenue.

Based on this, we believe:With the launch of OrbusNeich’s innovative products in the fields of interventional structural heart disease and neurointervention, the company will gain two powerful engines to rapidly expand its business scale.。

Overall, OrbusNeich currently has two major “cash cows” in its PCI/PTA interventional device businesses. In the future, its structural heart disease intervention and neurointervention businesses will become new revenue growth drivers, and together with the PCI/PTA interventional device businesses, form four core cash-generating pillars, driving OrbusNeich’s stable and rapid development.

(Note: Adjusted profit refers to profit after deducting non-recurring expenses, which include changes in the fair value of preferred shares during the company’s normal IPO process, IPO-related expenses, share-based compensation expenses, and the impact of commodity-linked fixed-rate notes. These items do not affect the company’s normal operations.)