LifeTech Scientific Corporation Announced 2023 Annual Results: International Business Achieved a Robust Growth, Innovation at the Core to Drive the Solid Development
SHENZHEN, China, April 2, 2024 /PRNewswire/ -- LifeTech Scientific Corporation (the "Company" or "Lifetech", Stock code: 1302.HK), a company specializing in minimally invasive interventional medical devices for cardio-cerebrovascular and peripheral vascular diseases, together with its subsidiaries (the "Group") announced the audited consolidated results for the year ended 31 December 2023 (the "Reporting Period").
Robust Growth of International Business：The revenue of the Group was approximately RMB1,267.2 million for the year ended 31 December 2023, representing a year-on-year growth of approximately 15.5%. The overseas sales of the Group increased significantly by approximately 36.0%，as compared with the corresponding period of 2022. The sales from the European market of the Group achieved a particularly robust growth during the Reporting Period, increasing by approximately 52.9%.
Steady Performance of Profitability：Gross profit increased by approximately 13.9% year-on-year to approximately RMB995.6 million for the year ended 31 December 2023. The gross profit margin was approximately 78.6%, which performed steadily during the Reporting Period. Excluding certain non-recurring items[1], net profit attributable to owners of the Company was approximately RMB423.3 million, and the net profit margin attributable to owners of the Company was approximately 33.4%.
Strong Cash Flow Position: As at 31 December 2023, the Group's cash and cash equivalents were approximately RMB979.3 million, representing an increase of approximately 17.5%, as compared with the corresponding period of 2022. The increase was mainly due to the increase in cash flow from ordinary operating activities.
[1] Such non-recurring items included (i) since the significant increase in the valuation of the Series B financing of Biotyx Medical (Shenzhen) Co., Ltd. and the corresponding significant increase in the fair value of redeemable shares, the changes in fair value of the financial liabilities at fair value through profit or loss ("FVTPL") were losses of approximately RMB213.8 million in 2023; (ii) the other gains and losses resulting from financial assets at FVTPL were gains of approximately RMB34.0 million in 2023; and (iii) the total share-based payment expenses were approximately RMB112.8 million in 2023.
International Business Achieved Robust Growth, Domestic Business Operated Steadily
Despite multiple challenges in 2023, the Company steadfastly pursued its mission to meet unmet clinical treatment needs worldwide through a strategic lens focused on innovation and global outreach. The approach has paid dividends, enabling the company to broaden its influence across global markets. Throughout the year, the Group has showcased its commitment by rolling out a rich product portfolio of cutting-edge technology and premium academic services, alongside the synergistic amalgamation of its expertise in branding, patents, distribution networks, clinical trials, market registration, and management of global operations, marking its presence in nearly 120 countries and regions worldwide. The overseas sales of the Group increased significantly by approximately 36.0%, as compared with the corresponding period of 2022. Especially, the European market, which is the second biggest overseas market of the Group, achieved a very robust growth, with a year-on-year growth of approximately 52.9%. With the effective implementation of the internationalization development strategies, the Group's international business continued to accelerate, the sales generated from the overseas market accounted for about 21.7% of the Group's total revenue in 2023, of which the sales generated from Asia market (excluding China's mainland) and European market accounted for approximately 9.0% and 8.8%, respectively.
China's mainland remained the foundation and the largest market of the Group. The Group continued to refine its core strategy in the China market, adapting to changes in the domestic healthcare industry with the adoption of more healthy, solid and sustained business development strategies, and continuously facilitating the clinical registration and commercialization of new products. The domestic sales of the Group increased by approximately 10.8% year-on-year, accounting for approximately 78.3% of the total revenue of the Group for the year ended 31 December 2023.The Group's medical device products, including congenital heart disease (CHD) occluders, left atrial appendage (LAA) occluders, aortic stent grafts, and vena cava filters, have been successfully penetrated at different market levels, maintaining a leading position in its home market.
Core Business Achieved Solid Growth
Structure Heart Diseases (SHD) Business
The products offer by the Group in the SHD business mainly include CHD occluders and LAA occluders. The turnover contributed by the SHD business for the year ended 31 December 2023 was approximately RMB495.7 million, representing a year-on-year growth of approximately 25.6%, of which the revenue generated from the sales of LAA occluders increased by approximately 32.0%. This novel product occupies the leading position among Chinese branded LAA occluders in the Global market. The revenue generated from the sales of CHD occluders increased by approximately 23.1%, as compared with the same period of 2022, mainly due to its differentiated marketing strategy to satisfy various patients' needs. The Group has a diversified product portfolio in the treatment of SHD, and continuously catering the increasing needs of markets both domestically and internationally through technology innovation and product upgrades, to further expand the sales layout in the global market.
Peripheral Vascular Diseases (PVD) Business
During the Reporting Period, the turnover contributed by the PVD business was approximately RMB707.1 million, representing a growth of approximately 9.7%, as compared with the same period of 2022. The Group provides patients with technology-leading comprehensive interventional medical devices treatment of PVD, including vena cava filters, thoracic aortic aneurysm stent grafts, abdominal aortic aneurysm stent grafts and iliac artery bifurcation stent grafts. The revenue generated from the sales of stent grafts for the year ended 31 December 2023 increased by approximately 11.2%, while vena cava filters decreased by approximately 1.0%, as compared with the same period of 2022. The market shares of vena cava filters and stent graft systems occupy a leading position in the domestic market.
The current pipeline products of the Group's PVD business undergoing research and development, as well as under the process of clinical trials and market registration is expected to provide patients with unprecedented clinical treatments. These pipeline products will have synergy with the current marketed products, bringing complete device solutions for patients, which is anticipated to sustain and enhance the Group's competitive edge in the treatment of PVD in the global market.
Cardiac Pacing and Electrophysiology (CPE) Business
The Group is the first domestic manufacturer in China which has a complete product portfolio of implantable cardiac pacemakers with international-level technology and functions. During the Reporting Period, the turnover contributed by the CPE business was approximately RMB64.4 million, representing a year-on-year growth of approximately 10.3%. The Group's domestic branded MRI-compatible pacemaker project is progressed smoothly in China, which will enhance the product portfolio of the CPE business of the Group.
Innovation at the Core to Drive the Solid and Sustained Development
Independently developed innovative medical device products could maintain the long-term competitive strengths of the Group. With a robust lineup of products currently ongoing research and development, as well as under clinical trial process, the Group is at the forefront of innovation, boasting products with substantial potential and broad market appeal. The strategic approach makes the Group could able to overcome future challenges head-on in the healthcare industry and to improve disease treatment options for patients around the world. During the Reporting Period, research and development expenses of the Group increased by approximately 42.9% to approximately RMB297.9 million, as compared with the corresponding period of 2022.
Product Commercialization in Progress
AcuMark? Sizing Balloon, Peripheral Thrombus Aspiration Catheter and Epione? Surgical Navigation System obtained the National Medical Products Administration ("NMPA") certification;
Aegisy? Vena Cava Filter, AcuMark? Sizing Balloon, ZoeTrack? Super Stiff Guidewire, SeQure? Snare System and Cera? Vascular Plug System obtained the CE MDR (Medical Device Regulation) certification. Such products have previously obtained the CE MDD (Medical Device Directive) certification;
Ankura? Chimney Aortic Stent Graft System (consists of the AnkuraTM Pro Aortic Stent Graft System and Longuette? Aortic Branch Stent Graft System), Futhrough? Endovascular Needle System, FemFlow? Drug-Eluting Peripheral Balloon Catheter, CeraFlex? ASD Closure System, Distal Access Catheter Kits, Disposable Vacuum Aspiration Pump, Intracranial Aspiration Catheter and DiAcu? Single Use Endoscopic Ultrasound Aspiration Needle are pending registration approval in China;
Ankura? IIc Stent Graft System and Ankura? Chimney Aortic Stent Graft System (consists of the Ankura? Pro Aortic Stent Graft System and Longuette? Aortic Branch Stent Graft System) are pending registration approval of CE certification;
Thoracoabdominal Artery Stent Graft System (consists of the G-Branch? Thoracoabdominal Aortic Stent Graft System, SilverFlow? PV Peripheral Vascular Stent Graft System and Aortic Extension Stent Graft System) and Aortic Arch Stent Graft System (consists of the Ankura? Plus Aortic Arch Stent Graft System and CSkirt? Aortic Arch Branch Stent Graft System) have completed pre-marketing clinical enrollment and are currently under clinical follow-up in China;
Concave Supra-arch branched stent-graft system, X-Clip? Mitral Valve Clip System and X-Clip? Steerable Guide System have fully completed the clinical study on the first in man ("FIM") in China;
Cera? PFO Occluder and Cinenses? Lung Volume Reduction Reverser System are currently at the stage of the pre-registration clinical enrollment in China;
Iron-Based Absorbable Material Technology Platform: Financing Facilitating the Development
In September 2023, Biotyx Medical (Shenzhen) Co., Ltd., ("Biotyx Medical") a subsidiary of the Company, received an over RMB200 million in Series B financing, boosting its post-investment valuation by 173%.
Biotyx Medical specializes in researching, developing, producing, and marketing of bioabsorbable metal materials for medical use. The company has broken new ground with the invention of the first-ever iron-based bioabsorbable material technology. The material could have a wide range of application in the medical field. The first three offerings of the company are aimed at the treatment of coronary artery stenosis, infrapopliteal artery and pulmonary artery stenosis, with significant market potential or with the condition of hugh unmet clinical needs.
The financing effectively facilitated the clinical and commercialization process of the three innovative devices. The clinical data preliminary proofed advantages of the devices.
IBS? Sirolimus-Eluting Iron Bioresorbable Coronary Scaffold System has completed the clinical enrollment in the China Prospective Multicenter Single-arm Target Study (the "Phase III"). Currently, the five-year follow-up of the FIM clinical study has been successfully completed, the Phase II and Phase III are also at the stage of clinical follow-up, and its CE registration application has been submitted. The device has been implanted in a total of more than 1,100 patients in all 3 phases clinical trials in China. The operation success rate is 100%. The Target Lesion Failure (TLF) and stent thrombosis is at a low level, both in line with the expectation.
IBS Titan? Sirolimus-Eluting Iron Bioresorbable Peripheral Scaffold System has successfully completed the first clinical enrollment in Europe, its CE registration application has been submitted. The device was approved by the FDA in the United States for "Compassionate Use", which has been successfully implanted.
IBS Angel? Iron Bioresorbable Scaffold System (the only absorbable stent product suitable for children globally) obtained CE MDR certification. The device has received Malaysia market registration, and the device was also approved by the FDA in the United States for "Compassionate Use", which has been successfully implanted several cases.
Financing from the capital market is expected to significantly speed up the process of bringing the novel iron-based bioabsorbable material medical devices from clinical trials to markets. The move not only promises to introduce the unprecedented, effective, and safe treatments to patients worldwide as early as possible but also facilitates Biotyx Medical to seek further financing in the capital market independently, thus to enhance the overall value of the Group.
Patents
Intellectual property is an important intangible asset of the Group, and is also an internal driving force for improving the core competitiveness in the medical device market. As at 31 December 2023, the Group had filed a total of 2,147 valid patent applications, of which 942 patents were registered and valid.
The Chairman and CEO of Lifetech, Mr. XIE Yuehui said:
Despite encountering numerous challenges throughout 2023, LifeTech has achieved consistent progress in research and development, expansion of global distribution channels, and enhancement of product sales. Anchored by the strategy that emphasizes both innovation and globalization, the Company has extended its sales network to nearly 120 countries and regions worldwide, delivering original research and novel medical products. The effort has solidified the Group's status among domestic peers as a leader in expansion into global markets. LifeTech remains confident that the enduring benefits of innovation will equip it to overcome future challenges, sustain momentum for breakthrough development, and facilitate ongoing expansion in the global market.
Looking ahead, LifeTech is committed to leveraging innovation to invigorate its robust business dynamics and untapped market potential globally. Guided by a pragmatic attitude, rigorous and effective management practices, and a sustained business development strategy, the Company aims to expedite the growth of its existing business within the global marketplace. Simultaneously, LifeTech intends to proactively identify and capture new opportunities for development, integrate and leverage beneficial resources from both inside and outside of the Company, to expedite the attainment of the Group's strategic ambitions in the global healthcare industry.
About LifeTech Scientific Corporation:
Established in 1999, LifeTech Scientific Corporation (Stock Code: 1302.HK) is committed to the R&D, manufacture, and sales of minimally invasive interventional medical devices for cardio-cerebrovascular and peripheral vascular diseases. The company provides patients with innovative solutions in the treatment of structural heart diseases, peripheral vascular diseases, and bradycardia, and the Company also expands its business scope in respiratory interventional business, neuro interventional business and interventional oncology business. As of 31 December 2023, over 2,100 patents have been filed of the Company, and its sales network has penetrated nearly 120 countries and regions around the world.