Venus Medtech announces interim results in 2021: Rapid increase in sales and imminent breakthroughs in R&D

On August 31, Venus Medtech (2500.HK), a leading provider of integrated solutions for structural heart disease in China, announced its 2021 interim results. According to the interim financial statements, for the six months ended June 30, 2021, Venus Medtech achieved a sales revenue of RMB239 million, representing a year-on-year increase of 134%, and a gross profit of RMB188 million, representing a year-on-year increase of 121%.

Sales revenue in the Chinese market recorded RMB234 million, representing a year-on-year increase of 130%. The growth was primarily attributable to an increase in sales revenue from TAVR products, VenusA-Valve and VenusA-Plus. For the six months ended June 30, 2021, the total number of implants of VenusA-Valve and VenusA-Plus in hospitals reached approximately 1,900, representing a year-on-year increase of nearly 170%. VenusA-Plus accounted for more than 20%, showing a rapid upward trend. Overseas sales recorded RMB5.58 million, a 12-fold increase despite the gloomy market, which is primarily attributable to cerebral embolic protection device TriGUARD3 and VenusA-Valve.

As the first TAVR product marketed in China, VenusA-Valve has been marketed in China for five years, with more than 6,000 implantations successfully performed. For the six months ended June 30, 2021, VenusA-Valve continued to lead the industry with a market share of more than 75%. VenusA-Valve is also the only TAVR product with long-term safety verification for more than five years in China. The six-year follow-up results of VenusA-Valve released in May 2021 showed that the all-cause mortality of patients was 36.4%, cardiac mortality was only 11.4%, and reoperation rate was only 0.99%, demonstrating long-term safety and efficacy.

The one-year clinical follow-up data of VenusA-Plus released in July 2021 showed that compared with the previous 30-day clinical data, there was only one more all-cause death case, and no cardiac death case. In addition, patients with either tricuspid aortic valve or bicuspid aortic valve did not experience aortic regurgitation or experienced trace regurgitation one year after the operation, which accentuated the safety and efficacy of the product.

The interim results also showed that due to continuous improvement in operational efficiency, the company's proportion of selling and distribution expenses to sales decreased from 46.2% to 41.4%, and the proportion of administrative expenses recorded a sharp fall from 38.3% to 18.7%. R&D costs maintained a steady upward trend and reached RMB104 million with a year-on-year increase of 54.3%. Venus Medtech’s profit from commercial activities in China turned positive for the first time after deducting investment in overseas subsidiaries and R&D, amounting to about RMB25 million.

As of the end of June 2011, Venus Medtech has formed a professional academic promotion team comprising over 180 employees, which covered more than 300 hospitals. Systematic marketing training enabled the team to better inform and assist doctors and patients on the clinical use of the products, ensuring strong support and considerate services. In addition, Venus Medtech established exclusive strategic cooperation with FEops, and introduced FEops HEARTguide, its cloud-based platform that combines the advantages of digital twins with cutting-edge AI technology for planning structural heart interventions. The platform was used in more than 1,500 cases in the past 12 months, enjoying wide popularity among doctors by effectively reducing the difficulty of operation.

In terms of R&D layout, in addition to deepening its valve product pipelines, Venus Medtech built four technology platforms to expand its therapeutic portfolio to hypertrophic cardiomyopathy, interventional treatment of hypertension, and even heart failure. The company is committed to building an integrated solution for structural heart disease.

Dry-tissue aortic valve products based on novel biomaterials will soon be applied in clinical practice, including Venus Vitae, an internationally patented wire-controlled balloon-expandable dry-tissue valve product, Venus PowerX, the world's first 100% retrievable self-expanding product, and surgical dry-tissue valve products. In terms of pulmonic valve, VenusP-Valve, the first self-expanding valve expected to be approved for marketing in China and Europe, passed on-site EU inspection after obtaining special use authorization in the UK in March. R&D breakthroughs on a global scale are gaining steam.

In addition to harnessing independent R&D, the company is making a rapid transition to a comprehensive platform for innovative structural heart devices. In May, Venus Medtech invested in Valgen Holding Corporation to introduce the mitral valve and tricuspid valve repair systems with the most advanced clinical progress to China. In June, the company established a joint venture, Renaly Ltd., with Israeli high-tech company Healium Medical Ltd. to introduce its next-generation innovative renal denervation (RDN) device to treat resistant hypertension from the etiology of heart valve disease. In August, the company announced its intention to acquire Nuocheng Medical, an innovative device company incubated by Dinova Medical, to enter the vast blue ocean market of hypertrophic cardiomyopathy and start asset integration with Dinova Medical.

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