MicroPort® Announces Interim Results for the Six Months Ended June 30, 2019

Shanghai, China - MicroPort Scientific Corporation (the "Company", or "MicroPort®", Stock code: 00853) is pleased to announce the interim results of the Company and its subsidiaries (collectively, the "Group") for the six months ended June 30, 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 strong 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$392.6 million, representing a year-over-year growth of 26.7% or a year-over-year growth of 33.9% (excluding the foreign exchange impact). The Group's Cardiac Rhythm Management ("CRM") business contributed a revenue of US$106.6 million during the reporting period, representing a year-over-year growth of 162.5% (excluding the foreign exchange impact). Meanwhile, the segments of cardiovascular devices, endovascular and peripheral vascular devices, and neurovascular devices recorded rapid revenue increases of 27.8%, 41.6%, and 57.9% respectively (excluding the foreign exchange impact). Primarily owing to the significant revenue growth from the cardiovascular as well as endovascular and peripheral vascular segments in the PRC market, and one-off gain on disposal of partial equity interests in Shanghai MicroPort EP MedTech Co., Ltd., the Group recorded a profit attributable to equity shareholders of US$65.5 million, with a year-over-year increase of 175.5%.

 

In the first half of 2019, the Group's cardiovascular business maintained rapid growth momentum and recorded revenue of US$129.1 million, representing a year-over-year growth of 27.8% (excluding the impact of foreign exchange). While maintaining its existing market in China, the Group actively explored new markets and launched diverse marketing campaigns to enhance customer loyalty and ensure its leading position in the China market. During the reporting period, the Firehawk™ Coronary Rapamycin Target Eluting Stent ("Firehawk™") achieved a year-over-year global revenue growth of 58.7% (excluding the impact of foreign exchange), and the Firebird2™ Coronary Rapamycin-Eluting CoCr Coronary Stent ("Firebird2™") realized year-over-year global revenue growth of 8.0% (excluding the impact of foreign exchange). Meanwhile, the balloon products business continued robust growth trend, experiencing a year-over-year global sales growth of 66.4% (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. 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. Based on the TARGET AC trial's satisfactory results, the Firehawk™ stent's inclusion in French medical insurance reimbursement lists was approved by the Comité Économique des Produits de Santé (CEPS). The initial implant surgery in France was completed in July. These will further promote the Firehawk™ stent in the French coronary stents market, the leading market in Europe.

 

In the first half of 2019, the Group's China orthopedics business recorded a revenue of US$11.5 million, representing a year-over-year growth of 53.3% (excluding the impact of foreign exchange), mainly due to the rapid sales growth of 55.8% in the imported joint business, which far exceeded the market average. The Company's promotion of Medial-Pivot Knee concept and SuperPATH™ hip replacement surgery resulted in a continuous increase in client acceptance. As hospital coverage has steadily grown with over 150 newly developed hospitals, the number of imported joint surgeries has increased rapidly, exceeding the average level of the industry. Meanwhile, the domestic production of the orthopedics device business received a solid boost with two domestic knee products obtaining certificates for launch, bringing about stronger competitiveness for the China orthopedics business with a rich product portfolio. During the reporting period, the international (non-China) orthopedics business recorded a revenue of US$101.9 million, representing a year-over-year decrease of 8.9% (excluding the impact of foreign exchange). This was mainly due to the influence of the falling prices worldwide and the loss of a major US distributor in 2018. In the first half of 2019, the international (non-China) orthopedics team proactively developed customers to achieve an increased number of distributors and hoped to improve sales in the North American market as soon as possible. Above all, the Group's orthopedics devices business realized revenue of US$113.4 million, representing a year-over-year decrease of 4.8% (excluding the impact of foreign exchange).

 

In the first half of 2019, for the CRM device business, the Group adjusted its marketing strategies and improved the research and development of products with continuous investment to enhance its general competitiveness in overseas markets. Meanwhile, the China market continued to grow rapidly, attributable to the "Rega™", the Group's self-developed domestic pacemaker. During the reporting period, the CRM device business realized revenue of US$106.6 million. During the reporting period, revenue from the international (non-China) CRM device business was US$103.1 million. Meanwhile, MicroPort Sorin CRM (Shanghai) Co., Ltd. ("MSC") realized a revenue of US$3.5 million with a substantial year-over-year increase, mainly driven by the rapid growth of domestic pacemakers. During the reporting period, MSC covered over 250 hospitals, representing a year-over-year increase of 88.6%.

 

In the first half of 2019, the Group's endovascular and peripheral vascular devices business recorded revenue of US$25.6 million, representing a rapid year-over-year growth of 41.6% (excluding the impact of foreign exchange). The Castor™ single-branched thoracic aortic stent ("Castor™") has been applied by over 200 hospitals in China. To date, Castor™ has been implanted in more than 1,000 cases, and it has driven the growth of this segment during the first half of the year. On 22 July 2019, Shanghai MicroPort Endovascular MedTech Co., Ltd. was officially listed on the science and technology innovation board of the Shanghai Stock Exchange (Stock Code: 688016), becoming one of the first group of corporations listed on this board. In addition, the Group's neurovascular devices business achieved a year-over-year revenue growth of 57.9% (excluding the impact of foreign exchange), mainly benefitting from the continuous development of target market and hospitals. The APOLLO™ Intracranial Stent System ("APOLLO™") and the Tubridge™ Vascular Reconstruction Device ("Tubridge™"), which obtained registration certificate in 2018, recorded rapid sales growths in the reporting period. Meanwhile, Tubridge™ contributed 33.7% of the segment's total revenue, increasing from 3.3% for the corresponding period of last year.

 

As of 30 June 2019, seven of the Group's 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, Aspiration™ Medial-Stabilized Total Knee Replacement System and SoSuperior™ Medial-Stabilized Total Knee Replacement System obtained registration certificates during the reporting period, as did the hip implant components of wedge-shape femoral stem and metal femoral head, which further enriched the China orthopedics business's product line. In addition, the Group's self-developed ARBORES™ Kyphoplastic Balloon Catheter and Firehawk Nova™ Coronary Rapamycin Target Eluting Stent ("Firehawk Nova™") with improvements in the delivery system received the NMPA registration certificates, while Minos™ Abdominal Aortic Aneurysm and Delivery System ("Minos™") obtained an NMPA registration certificate via the Special Approval Process for Innovative Medical Devices (the "Green Path"). The new generation Firehawk Liberty™ Coronary Rapamycin Target Eluting Stent ("Firehawk Liberty™") and Firefighter™ NC PTCA Balloon Catheter received CE mark.

 

Regarding the Green Path, the Group's self-developed 3D Electronic Laparoscope was granted to enter the Green Path, becoming the Group's sixteenth product to achieve the entry.

 

Regarding the Group's R&D outside of China, the Evolution™ CS Stemmed Femur - a significant component of the Evolution™ Revision Knee System - has obtained registration certificate and approval for launch in the USA and Canada. The new generation Evolution™ NitrX™ Medial-Pivot Knee ("NitrX™"), which was applicable for patients with allergies to certain metallic ions, obtained US Food and Drug Administration's approval and completed the first implant in Canada in May 2019. The Knee Tensioner Instrument system has also obtained the approval in the US. The first half of 2019 saw the world's smallest 1.5T and 3T magnetic resonance conditional pacemakers - the OTO™, ENO™ and TEO™ series - officially announced in Europe and rapidly gaining wide hospital usage. The new Smart Touch™ tablet program controller ("Smart Touch™") for implantable ECG devices was also launched in Europe.

 

In addition, for heart valve business, the Group's self-developed VitaFlow™ Transcatheter Aortic Valve and Delivery System ("VitaFlow™") obtained NMPA approval and production license in July 2019, becoming the Group's sixth product to successfully obtain NMPA registration certificate after entering the Green Path, and completed its first implantation on 28 August since its launch, followed by another three implantations on the same day. VitaFlow™ already has two-year follow-up results, which shows outstanding quality of this product. VitaFlow™ II Transcatheter Aortic Valve and Retrievable Delivery System (“VitaFlow™ II”) has entered the Green Path and kicked off the clinical trial in China. In the international market, VitaFlow™ II has initiated the pre-marketing clinic research project VITALE trial in Europe, which is the first pre-marketing clinical trial in Europe for made-in-China aortic valve, and has completed first patient enrollment.

 

MicroPort® Chairman and Chief Executive Officer Dr. Zhaohua Chang said: "As a leading innovation-driven high-end medical device group, MicroPort® will strive to implement its globalization and diversification strategies and will continue to innovate and optimize the existing product line. At the same time, MicroPort® will vigorously promote domestic production and introduce more high-end innovative medical solutions to benefit more patients.”