MicroPort® Announces Annual Results for 2019

Shanghai, China - MicroPort Scientific Corporation (the "Company", or "MicroPort®", Stock code: 00853) is pleased to announce the annual results of the Company and its subsidiaries (collectively, the "Group") for the year ended December 31, 2019 (the "reporting period"). Benefitting from the further effective implementation of a globalization and diversification strategy, the Group achieved continuous and stable expansion in business scale and rapid growths in key business segments and core products, with the Group's innovation capability continuing to build a solid foundation for sustainable development.

 

During the reporting period, the Group recorded a revenue of US$793.5 million, representing a year-over-year growth of 18.5% or a year-over-year growth of 22.0% (excluding the foreign exchange impact). The Group's Cardiac Rhythm Management ("CRM") business contributed a revenue of US$209.0 million during the reporting period, representing a year-over-year growth of 36.9% (excluding the foreign exchange impact). Meanwhile, the segments of cardiovascular devices, endovascular and peripheral vascular devices, and neurovascular devices recorded rapid year-over-year revenue increases of 35.5%, 44.5%, and 55.6% respectively (excluding the foreign exchange impact). Primarily owing to the significant revenue growth from the cardiovascular, endovascular and peripheral vascular, heart valve as well as orthopedics segments in the PRC market, and investment gain of US$55.8 million (net of tax) on disposal of partial equity interests in Shanghai MicroPort EP MedTech Co., Ltd., the Group recorded a profit attributable to equity shareholders of US$46.3 million, with a year-over-year increase of 93.5%.

 

In view of the above achieved results, the Board of Directors of the Company proposed a final dividend for the year ended 31 December, 2019 of HK5.3 cents per ordinary share, and the offer to the shareholders the right to select as an alternative, to receive such final dividend wholly by allotment of new shares credited as fully paid in lieu of cash, subject to the approval of the shareholders on the payment of final dividend at the annual general meeting and the granting by the Stock Exchange of the listing of, and permission to deal in, the shares to be issued pursuant thereto.

 

In 2019, the Group's cardiovascular business maintained rapid growth momentum and recorded revenue of US$264.6 million, representing a year-over-year growth of 35.5% (excluding the impact of foreign exchange). In PRC, the Group benefitted from the rapid growth of the domestic market and the market recognition of the world-class Firehawk™ Coronary Rapamycin Target Eluting Stent ("Firehawk™") and the cost-effective Firebird2™ Coronary Rapamycin-Eluting CoCr Coronary Stent ("Firebird2™") .The centralized bidding also promoted sales growth. During the reporting period, the Firehawk™ achieved a year-over-year domestic revenue growth of 51.6% (excluding the impact of foreign exchange), and the Firebird2™ realized year-over-year domestic revenue growth of 22.9% (excluding the impact of foreign exchange). In the overseas markets, revenue for drug-eluting stent in 2019 amounted to US$16.6 million, representing a year-over-year increase of 72.4% (excluding the foreign exchange impact) and setting a record high. In which, overseas sales revenue of Firebird2™ increased by 186.9% (excluding the foreign exchange impact) year over year while that of Firehawk™ increased by 54.6% (excluding the foreign exchange impact) year over year. Firehawk™ was included in lists of the national medical insurance reimbursement in France and Belgium, as Firehawk™ has been sold in various major European countries. Moreover, the Group has submitted registration application for Firehawk™ to Pharmaceuticals and Medical Devices Agency of Japan. Meanwhile, the balloon products business continued high growth rate, experiencing a year-over-year global sales growth of 54.5% (excluding the impact of foreign exchange).

 

With respect to clinical developments, in March 2019, at the China Interventional Therapeutics (CIT) conference, the Group released the three-year follow-up results of the FUTURE-I research on Firesorb™ Bioresorbable Rapamycin Target Eluting Coronary Scaffold System (“Firesorb™”) for the treatment of coronary artery disease. For the FUTURE II pivotal study, over 50% of the subject have completed one-year angiography primary endpoint follow-up. The Group has also completed the preparation including IRB approval for starting subject enrollment for the prospective, multi-center and single-arm objective performance criteria (OPC) large scale study (FUTURE-III). In May 2019, at the EuroPCR 2019 conference, the Company initially released two-year follow-up data of TARGET All-Comers (“TARGET AC”) trial. The data was simultaneously published online by the Journal of the American College of Cardiology, a well-known international medical journal. At the TCT 2019 conference in the USA in September 2019, the Group released its two-year follow-up analysis of TARGET AC trials on low and high-risk groups.

 

In 2019, the Group’s China orthopedics business recorded a revenue of US$26.5 million, representing a year-over-year growth of 57.1% (excluding the impact of foreign exchange), mainly due to the rapid sales growth of 37.8% in the imported joint business, which far exceeded the market average. Meanwhile, with two domestic total knee replacement systems having successively obtained approvals for launch in 2019, a diversified product portfolio enhanced comprehensive competitiveness and became a new momentum for segment growth. During the reporting period, the international (non-China) orthopedics business recorded a revenue of US$206.0 million, representing a year-over-year decrease of 4.7% (excluding the impact of foreign exchange). This was mainly due to the prolonged impact of the global falling prices and the loss of a major US distributor in 2018. The revenue from the US in the second half of 2019 was basically flat year over year and recorded an increase of 5.4% compared to the first half of 2019, as sales team initiated cooperation with new distributors and actively expanded customers. Above all, the Group’s orthopedics devices business realized revenue of US$232.4 million, basically flat year-over-year (excluding the impact of foreign exchange).

 

2019 is the first full financial year after the Group’s acquisition of the CRM business. In 2019, the Group adjusted its overseas marketing strategies, improved the global market planning and cooperated with domestic and overseas R&D teams to advance product development. In the domestic market, the Group’s self-developed pacemaker continued to drive business development. During the reporting period, the CRM device business realized revenue of US$209.0 million. During the reporting period, revenue from the international (non-China) CRM device business was US$201.1 million. Meanwhile, MicroPort Sorin CRM (Shanghai) Co., Ltd. (“MSC”) realized a revenue of US$8.0 million with a fast year-over-year increase, mainly driven by the higher-than-expected growth of domestic pacemakers.

 

In 2019, the Group’s endovascular and peripheral vascular devices business recorded revenue of US$48.5 million, representing a rapid year-over-year growth of 44.5% (excluding the impact of foreign exchange). The Castor™ Branched Aortic Stent-Graft System (“Castor™”) has been applied by over 300 hospitals in China. The Group has also gradually explored overseas markets. During the reporting period, the Minos™ Abdominal Aortic Aneurysm and Delivery System (“Minos™”) obtained European Union CE Mark and commenced its international business product line. In addition, the Group’s neurovascular devices business achieved revenue of US$27.6 million, representing a year-over-year growth of 55.6% (excluding the impact of foreign exchange), The APOLLO™ Intracranial Stent System (“APOLLO™”) recorded a year-over-year revenue increase of 31.7% (excluding the foreign exchange impact), mainly due to the expansion of surgical applications and increased hospital coverage. Regarding the Group’s heart valve business, the VitaFlow™ Transcatheter Aortic Valve and Delivery System (“VitaFlow™ Valve System”) was launched during the reporting period and the business segment recorded revenue of US$3.1 million in the four months after the launch. The Group implemented targeted pricing and sales strategies, focused on core hospitals and large and medium-sized hospitals, and carried out promotion in the academic circle and doctors training, which ramped up sales in the heart valve business.

 

As of 31 December 2019, a total of 18 of the Group’s Class III medical device products had gained approvals from National Medical Products Administration (“NMPA”). In addition, the Group has multiple products that have obtained certificate in the international market.

 

Regarding NMPA approvals, the FireCondor™ Coronary Rapamycin Target Eluting Coronary Stent System (renamed as FireCondor™ from Firehawk Nova™) with improved delivery system, the Firefighter™ NC Balloon Catheter and Waltz Coronary Cobalt-Based Alloy Stent System obtained registration certificates from NMPA. The guidewire and guiding catheter products also obtained approvals for launch. Meanwhile, Aspiration™ Medial-Stabilized Total Knee Replacement System and SoSuperior™ Medial-Stabilized Total Knee Replacement System obtained registration certificates during the reporting period, as did several other orthopedics products including hip implant components of wedge-shape femoral stem and metal femoral head, the ARBORES™ Kyphoplastic Balloon Catheter, lockable intramedullary nails and accessories, acetabular screws, and a spinal posterior fixation system. Minos™, Fastrack™ microcatheter system and VitaFlow™ Valve System also received the NMPA registration certificates respectively.

 

Regarding the special approval procedure for innovative medical devices (“Green Path”), a total of three of the Group’s products had been granted entry into the fast track, including DFVision™ 3D electronic laparoscope and Toumai™ laparoscopic robot, in addition to BonaFire™ passive pacing lead, which is China’s first full-body magnetic resonance imaging (MRI) conditional lead. Among them, DFVision™ 3D electronic laparoscope completed the first domestic 3D electronic laparoscopic surgery, which marked the official start of domestic clinical trial. Toumai™ laparoscopic robot completed the first clinical study of radical prostatectomy with the aid of robot during the reporting period, becoming the first domestic laparoscopic robot to complete a difficult urological surgery. Meanwhile, the first-in-man (“FIM”) clinical trial was officially launched. VitaFlow™ II Transcatheter Aortic Valve and Retrievable Delivery System (“VitaFlow™ II”), which entered the Green Path in 2018, planned to submit registration application to NMPA. The pre-marketing clinical research project trial of VitaFlow™ II in Europe commenced in an orderly manner as well. Moreover, the Group also launched a clinical study of the domestic MRI pacing system and expects to launch the first Chinese-made MRI conditional pacemaker in the foreseeable future.

 

Regarding the markets outside of China, existing products in the cardiovascular business segment have obtained 46 initial registration approvals in 17 countries or regions. Among them, the new generation Firehawk Liberty™ Coronary Rapamycin Target Eluting Coronary Stent System and the Firefighter™ NC PTCA Balloon Catheter obtained CE Mark. In the other business segments, Minos™ was also granted the CE Mark during the reporting period. The Evolution™ CS Stemmed Femur - a significant component of the Evolution™ Revision Knee System - and Evolution™ NitrX™ Medial-Pivot Knee obtained registration certificates and approval for launch in the USA and Canada. The Evolution™ Revision Knee System, extension parts of the femoral head, and the Knee Tensioner Instrument System have also obtained approval in the US, while the Prime Acetabular system and Slo-Con Total Knee instruments have gained approval in Japan, and also the BIOLOX™ Delta™ Options system in Europe. The year of 2019 saw the new-generation transvenous cardiac pacing systems of 1.5T and 3T MRI conditional pacemakers - the ENO™ series - was officially launched in Japan. In Europe, the Group committed to the developing of new Bluetooth-enabled pacemaker platform and made significant progress. Additionally, clinical studies to verify the safety and effectiveness of the NAVIGO™ quadrupole left ventricular pacing lead were completed, further improving and upgrading the CRM product portfolio.

 

In addition, Goral™ Total Hip Replacement System obtained NMPA registration certificates in February 2020 and was the first batch of the Group’s Chinese-made total hip replacement systems to obtaining such certificates. Since then, the Group has completed the basic planning for launching these Chinese-made joint products and fully commenced the era of domestic manufacture.

 

MicroPort® Chairman and Chief Executive Officer Dr. Zhaohua Chang said: "As a leading innovation-driven high-end medical device group, the Group will strive to achieve product diversification by innovation and deepen a global brand and operational strategy based on localization. The Group will also implement an operational model of global strategy, localized execution, diversified planning, and unified positioning. At the same time, the Group will effectively integrate resources with markets in the world to complete its global planning and benefit patients.”