We are a major global medical device manufacturer specialized in interventional instruments for percutaneous coronary intervention (PCI) and percutaneous transluminal angioplasty (PTA) procedures. The PCI and PTA markets are niche, small and concentrated markets. According to the CIC Report, we are a major player of PCI/PTA balloon markets in each of the following geographical markets in terms of sales volume in 2021:
PPCI Balloon Market:
‧ Japan – Ranked No. 2 with a 20% market share
‧ Europe – Ranked No. 4 with a 11% market share
‧ PRC – Ranked No. 6 with a 8% market share
‧ U.S. – Ranked No. 6 with a 3% market share
PTA Balloon Market:
‧ Japan – Ranked No. 3 with a 13% market share
‧ U.S. – Ranked No. 4 with a 12% market share
Headquartered in Hong Kong, China, we sell products to over 70 countries and regions worldwide, and we are also the only PCI balloon manufacturer headquartered in China that ranked among the top 6 players in all major overseas PCI balloon markets including Japan, Europe and the U.S. In addition to PCI/PTA balloons, we also specialize in coronary stent products and are actively expanding into neuro vascular intervention and structural heart disease areas.
Medical treatment of coronary artery disease (CAD) and peripheral artery disease (PAD) depends on their symptoms, cardiac function, and presence of other disorders. There are three primary methods of treating CAD/PAD, namely: (i) medical therapy, (ii) interventional treatment, including PCI for CAD and PTA for PAD, and (iii) invasive surgical treatment. Since PCI/PTA procedures carry lower risk and costs, but still enjoy a similar treatment success rate compared to surgical treatment, it is often the preferred form of treating CAD/PAD.
The coronary interventional instruments market in the PRC, the U.S. and Europe is expected to grow from 2021 to 2025 at a CAGR of 14.0%, 13.1% and 10.0%, respectively, while the peripheral interventional instruments market in the PRC, the U.S. and Europe is expected to grow from 2021 to 2025 at a CAGR of 14.6%, 11.9% and 9.2%, respectively. We strategically focus on these fast-growing markets as well as large established markets such as Japan, and the sales volume of our PCI balloon products globally reached approximately 866,000 units in 2021, ranking top six amongst all global cardiovascular interventional instrument developers and manufacturers in Japan, Europe, the U.S. and the PRC. We have also expanded the geographical coverage of our products to over 70 countries and regions in six continents as of June 30, 2022. Our long operating history which traces back to 2000, high quality products and wide geographic reach have formed a well-established reputation and brand recognition of the “OrbusNeich” and “業聚” brands in our target markets globally.
Our diversified product portfolio covers all major treatment processes in PCI and PTA procedures. Our approved and marketed products are indicated for lesion access, lesion preparation, lesion therapy and lesion optimization, encompassing semi-compliant balloons and scoring balloons for pre-dilatation and lesion preparation, coronary stents for implantation, non-compliant balloons for post-dilatation, and specialty catheters. In particular, we focus on developing innovative products with high performances, which enable us to meet the physicians’ and patients’ clinical needs and to benefit from first-mover advantages.
As of the Latest Practicable Date, we own more than 100 granted patents globally across key jurisdictions, including 32 and 45 granted patents in the U.S. and in the PRC, respectively. Our strong in-house R&D capabilities with over twenty years of accumulated product development experience and continued investment in R&D activities empowered us with abundant proprietary knowhow in product design, material treatment, manufacturing processes, and enabled us to successfully develop various proprietary technologies, including our world leading antibody coating technology that features the “pro-healing” function and has been applied to our COMBO and COMBO Plus dual therapy stent products. We are also developing the second generation of such antibody coating technology and intend to apply it in a wider spectrum of medical devices. As of June 30, 2022, we had a robust pipeline consisting around 40 products under development. Leveraging our world leading technologies and strong R&D capabilities, we also intend to expand our product lines into new intervention areas such as neuro-intervention and structural heart disease intervention. With a focus on the entire development lifecycle of our products, we maintain a comprehensive team from research and development to commercialization. In 2019, 2020, 2021 and for the six months ended June 30, 2021 and 2022, our research and development expenses was US$9.6 million, US$12.6 million, US$12.1 million, US$5.8 million and US$6.7 million, respectively, accounting for 10.0%, 14.2%, 10.4%, 10.2% and 9.8% of our total revenue for the same periods. We also collaborate with clinical trial institutions to conduct clinical trials where such institutions will generally assist us in selecting subjects, obtaining informed consent from said subjects, administering the test device, monitoring and reporting all safety findings, collecting and maintaining record of data, and issuing case reports at the end of each clinical trial.
Headquartered in Hong Kong, we maintain an established global sales network which consists of both direct sales and distributorship. As of June 30, 2022, our sales network covered over 70 countries and regions worldwide, among which we also built our direct sales force in the Mainland China, Hong Kong, Macau, Japan, Malaysia, Singapore, Germany, France, Switzerland and Spain. In 2019, 2020, 2021 and for the six months ended June 30, 2022, our direct sales channel covered eight, nine, ten and ten countries and regions, respectively. Our direct sales team works closely with each other to facilitate physician education and product promotions among different jurisdictions. In 2019, 2020, 2021 and for the six months ended June 30, 2021 and 2022, our revenue generated from direct sales was US$50.5 million, US$49.1 million, US$63.9 million, US$31.0 million and US$33.6 million, respectively, representing 52.4%, 55.5%, 54.9%, 54.1% and 48.9% of our total revenue, respectively.
In 2019, 2020, 2021 and for the six months ended June 30, 2022, our distributorship channel covered 61, 59, 65 and 65 countries and regions, respectively. Our global distributor network consists of approximately 207 distributors as of June 30, 2022. In 2019, 2020, 2021 and for the six months ended June 30, 2021 and 2022, our revenue generated from sales to distributors was US$44.8 million, US$38.3 million, US$52.3 million, US$26.3 million and US$35.2 million, respectively, representing 46.5%, 43.3%, 44.9%, 45.8% and 51.1% of our total revenue, respectively. Our experienced and dedicated global sales and marketing team is in charge of managing our distributor network. In addition, our in-house sales and marketing team also leverages our knowledge base and relationship with hospitals and key opinion leaders to promote and sell our products directly to hospital customers.
Our production facilities in Shenzhen, the PRC and Hoevelaken, the Netherlands are equipped with advanced equipment that are either customized based on our design input or purchased from renowned suppliers, which enabled us to manufacture all of our self-developed products in-house. For the six months ended June 30, 2022, our production facilities in the PRC and the Netherlands have an aggregate annualized production capacity of approximately 1,352,000 units of balloon products and approximately 56,400 units of stent products per year, thereby enabling us to supply large-scale and stable high-quality products and providing us with more flexible market access to customers around the world. Leveraging our strict and well-established Quality Management System (QMS), our production facilities have passed the audits and inspections by various regulatory bodies. In particular, our production facilities in the PRC have passed onsite inspections by the FDA with Zero Observations in 2020. In addition, our production facilities in the PRC have passed audits from NB in 2020 and 2021 and audits from NMPA in 2021. Our production facilities in the Netherlands are subject to annual audits from NB and have passed such audits in 2020, 2021 and 2022, and have passed inspection from PMDA in 2019.
Source: OrbusNeich Medical (06929) Prospectus (IPO Date : 2022/12/13) |