Xienova Reports 2021 Revenue of RMB 304 Million, Up 56.6% YoY, with Newly Approved Products Poised to Drive Next Growth Phase

20223Month30On [date], Acotec, a star player in the medical device sector, released2021 Annual Report: This is the company's first annual report since its IPO last August.

Data shows that, as of December 31, 2021, acotec's revenue3.04100 millionyuan, a significant year-on-year increase56.6%; Gross Profit266 millionyuan, a year-on-year increase of62.4%; Gross profit margin87.5%; adjusted net profit is42 millionyuan, a year-on-year increase from 2020141.8%。

(acotec Financial Summary)

Among these, acotec’s drug-coated balloons for above-the-knee arterial diseases, AcoArt Orchid® & Dhalia™, generated RMB 275 million in revenue, while its drug-coated balloons for below-the-knee arterial diseases, AcoArt Tulip™ & Litos™, generated RMB 24.09 million in revenue.

(acotec Revenue Breakdown)

Not only in the domestic market, but Acotec has also achieved breakthroughs in international markets. Its three drug-coated balloons were approved for marketing in Brazil and other regions in 2021. As of the end of December 2021, Acotec had sold its products to 12 countries worldwide.

In addition, acotec disclosed its latest progress in its annual report: During the reporting period, acotec submitted an Investigational Device Exemption (IDE) application for its BTK Drug-Coated Balloon (DCB) to the U.S. FDA; established a R&D center in the United States, with Scott Wilson serving as General Manager, focusing primarily on the development of forward-looking and innovative products (Mr. Wilson has over 25 years of experience in medical device engineering, having previously served as Vice President of R&D at Silk Road Medical, Chief Director and Engineer at Concentric, and Head of R&D at Stryker and Guidant, with a focus on the treatment of vascular diseases); and appointed four globally renowned medical experts to the acotec Scientific Advisory Committee to support clinical research and commercialization of innovative products...

From China to the global market, from arteries to veins, and spanning vascular surgery, cardiology, neurology, nephrology, and andrology, acotec’s platform-based strategy is gradually revealing its true potential, providing global patients withSystemic Vascular Interventional Therapy SolutionsThe strategic goals are gradually becoming clear to the public.

In 2021, it was the sixth year of commercialization for acotec’s AcoArt Orchid® & Dhalia™, and the first year of commercialization for AcoArt Tulip™ & Litos™.

From the data, AcoArt Orchid® & Dhalia™ (above-the-knee DCB) account for a significant share of revenue, as they were approved for market launch in 2016, allowing for a longer period of commercialization and market cultivation. Meanwhile, as China’s first peripheral drug-coated balloon, this product holds a clear first-mover advantage over the second domestically approved counterpart, which received approval in 2020. Leveraging its clinical benefits and first-mover advantage, AcoArt Orchid® & Dhalia™ have captured nearly the entire market share of peripheral drug-coated balloons in China since their launch, maintaining a dominant position.

On the other hand, AcoArt Orchid® & Dhalia™ have significant room for growth. In terms of clinical acceptance, peripheral drug-coated balloons surpassed stents to become the first-line therapy in the United States in 2018, three years after their market launch. From the perspective of patient volume, the number of individuals with lower extremity arterial disease in China reached 39.6 million in 2019, while the penetration rate of peripheral drug-coated balloons in China remains relatively low, indicating substantial potential for future growth.

Regarding AcoArt Tulip™ & Litos™ (below-the-knee DCB), the product was approved in late 2020, becoming the first such device in China and the first clinically validated BTK DCB product internationally. Commercialization commenced in early 2021, generating RMB 24.09 million in revenue within a year, thereby establishing it as another “cash cow” for acotec.

This product has rapidly penetrated the market and achieved scaled revenue. We attribute this success to its status as the world’s first and currently only drug-coated balloon (DCB) specifically indicated for below-the-knee (BTK) arterial disease. Compared with traditional plain old balloon angioplasty (POBA) balloons, this product offers advantages such as inhibition of neointimal hyperplasia in the treatment of BTK arterial lesions. Furthermore, we believe that drug-coated balloons are poised to become the mainstream devices in BTK interventional therapy, leveraging their clinical advantages.

From a market size perspective, the number of drug-coated balloon procedures for treating below-the-knee arterial disease is projected to reach 25,000 cases in 2024 and 154,000 cases by 2030. Therefore, compared with the current penetration rate of below-the-knee interventions, there is significant room for future growth.

For acotec, which secured the first product approval, it is positioned in a vast blue-ocean market and holds a global first-mover advantage. The market potential for AcoArt Tulip™ & Litos™ may have only just scratched the surface of the iceberg.

The annual report reveals that, in addition to its two core peripheral drug-coated balloon products, Acotec has leveraged its drug-coating technology, radiofrequency ablation technology, polymer material technology, and aspiration platform technology to develop a broad portfolio of products targeting five major therapeutic areas: vascular surgery, cardiology, neurology, nephrology, and andrology. These products include radiofrequency ablation systems, peripheral thrombus aspiration systems, atherectomy devices, coronary scoring balloons, intracranial PTA balloons, and lower-extremity sirolimus-eluting drug-coated balloons.

(Acotec's Product Portfolio)

Among them, acotecAll Products of Peripheral Thrombectomy Aspiration SystemsCompleted in 2021All approvals secured, making acotec the first Chinese company in this field to possess proprietary technology, offer comprehensive solutions, and achieve commercialization. According to its financial report, itsThe radiofrequency ablation system is expected to be approved in the second quarter of 2022, and other innovative products under development will also receive approval successively.

Taking peripheral thrombectomy systems and radiofrequency ablation systems as examples, peripheral thrombectomy systems are primarily used to treat conditions such as deep vein thrombosis (DVT), pulmonary embolism, and acute lower limb ischemia. In China, the number of new DVT cases reached 1.5 million in 2019 and is projected to reach 2.2 million in 2024, indicating a steady increase in patient numbers.

Currently, the aspiration systems available on the market are predominantly imported products. However, according to clinical data published by acotec, its peripheral thrombectomy aspiration system demonstrates superior aspiration efficacy with fewer side effects, and it is indicated for the treatment of thromboembolic pulmonary embolism and deep vein thrombosis of the lower extremities.It is foreseeable that with the commercialization of peripheral thrombectomy systems, acotec will gain a new engine for revenue growth.。

Following its peripheral thrombectomy system, acotec’s radiofrequency ablation system is also poised for imminent regulatory approval and market launch. Data indicate that radiofrequency ablation systems are primarily used in the field of vascular intervention to treat varicose veins. In China alone, there are approximately 100 million patients with varicose veins.

Given the large patient base, we believe that as more Chinese manufacturers, such as acotec, launch radiofrequency ablation systems and strengthen market education, this market will continue to experience rapid growth. Furthermore, acotec’s upcoming radiofrequency ablation system is poised to become a new source of profitability for the company.。

From above-the-knee DCB to below-the-knee DCB, and from peripheral thrombectomy systems to radiofrequency ablation systems, acotec’s revenue streams will expand rapidly as more products are commercialized.

Acotec’s platform-based layout, built upon its four major technology platforms, has not only enabled a diverse product portfolio but also facilitated market breakthroughs through a point-to-area strategy.

Specifically, acotec leveraged its first-mover advantage in peripheral drug-coated balloons and superior clinical outcomes to penetrate the market early, capturing a significant share of the market, earning strong reputational capital, and establishing the acotec brand. Building on this solid reputation, brand influence, high-quality products, and close relationships with hospitals, acotec can rapidly facilitate the adoption of new products in healthcare institutions, seize market opportunities, and ultimately create a positive virtuous cycle of “innovative products – strong reputation – powerful brand.” Once brand equity is accumulated, its explosive potential will radiate across and drive the marketing of acotec’s entire product portfolio, thereby directly accelerating its commercialization progress.

On the other hand, Acotec’s platform-based strategic layout offers distinct advantages in market competition, facilitating rapid market penetration and enabling “dimensionality-reduction” competition against single-product companies through comprehensive solutions. Additionally, a platform-based strategy provides resilience against risks associated with centralized volume-based procurement (VBP). After winning a VBP bid for a single product, a company can leverage this entry to introduce other complementary products into hospitals, thereby accelerating market share acquisition. Currently, Acotec’s existing product portfolio remains in a blue-ocean market; however, judging from its pipeline of 36 products across the arterial and venous fields, the company appears to have long been engaged in proactive strategic planning.

Sometimes, choice is more important than effort. If you choose the wrong direction, the harder you work, the further you will go down the wrong path.

Acotec has adopted a platform-based strategy to develop a diverse product portfolio, which affords it a certain degree of fault tolerance; however, missteps in strategic choices could still adversely impact its brand and reputation.So, what is acotec's product selection strategy?

An analysis of acotec’s 36 products in its R&D pipeline reveals that the company’s product selection strategy primarily focuses on two aspects: first, addressing current unmet clinical needs, such as peripheral drug-coated balloons, peripheral thrombectomy systems, and radiofrequency ablation systems; and second, targeting future blue-ocean markets, such as sirolimus-eluting drug-coated balloons, intravascular lithotripsy balloons, and peripheral coils.

From the perspective of current unmet clinical needs, acotec developed the world’s first and currently only peripheral drug-coated balloon for treating infrapopliteal artery disease when dedicated therapeutic devices were lacking; it launched China’s first peripheral thrombectomy system at a time when the market was monopolized by imported products, making them inaccessible to many patients in China; and it developed a radiofrequency ablation system, which is poised for imminent approval, to address the insufficient availability of relevant therapeutic devices for approximately 100 million varicose vein patients in China.

From the perspective of future blue-ocean markets, Acotec has strategically positioned itself with products such as shockwave balloons and atherectomy devices to address the challenge of vascular calcification. The company is proactively developing therapeutic devices for conditions across multiple specialties—including urology/andrology (vasculogenic erectile dysfunction), nephrology (arteriovenous fistula stenosis), neurology (vertebral artery atherosclerosis), and cardiology (coronary chronic total occlusions). Furthermore, Acotec has forward-looking R&D initiatives in peripheral vascular disease, focusing on next-generation technologies such as sirolimus-coated drug-eluting balloons and peripheral embolization coils.

As can be seen, acotec has innovative products that lead the market both at present and over the next five to ten years, with its product development progress ranking among the first tier of all competitors.

In summary, leveraging the efficiency and scalability of its technology platform, Acotec has strategically entered blue-ocean markets such as peripheral drug-coated balloons, radiofrequency ablation systems, and peripheral thrombectomy aspiration systems. By offering comprehensive solutions and a diverse product portfolio, the company competes effectively in the market, capitalizing on its first-mover advantage and high-quality products to secure a strong position globally. This multifaceted strategy has already yielded significant results. Today, Acotec has established itself as a leading Chinese medical device technology platform company with a global presence, and its future performance on the international stage is highly anticipated.