Venus Medtech announces 2022 interim results: quality and efficiency improvement, profitability focus, rapid progress in global presence
On August 31, 2022, Venus Medtech (Hangzhou) Inc. (2500.HK, hereinafter referred to as "Venus Medtech"), a leading provider of integrated solutions for transcatheter structural heart valvular therapies in China, announced its interim results for the six months ended June 30, 2022. Under repeated COVID-19 outbreaks, Venus Medtech intensified its focus on overseas markets, making important breakthroughs in registration and commercialization. In the domestic market, Venus Medtech reported solid sales performance as quality and efficiency improvement became an important theme for the core objective of profitability.
According to interim financial statements, Venus Medtech recorded RMB 210 million in sales revenue in H1 2022, representing a 18.9% growth over H2 2021. Gross profit totaled RMB 164 million, a 20.5% growth over H2 2021. In specific, overseas sales recorded RMB 14 million, a year-on-year increase of 150.9%. It is worth noting that VenusP-ValveTM, the first Chinese-made transcatheter pulmonic valve replacement (TPVR) system approved for marketing in Europe, generated RMB 9 million in sales in only two months following its registration earlier this year, reflecting the huge potential of overseas markets.
2022 was a key year for Venus Medtech to deepen its global presence. VenusP-ValveTM, the Company’s in-house developed novel TPVR system, became the first Chinese valve product to be approved in the EU. The product also set a precedent with its approval in China, as the National Medical Products Administration (NMPA) accepted overseas clinical trials data for the first time. It paved the road for our future devices and laid the foundation for global multi-center studies. The EU approval also facilitated the compassionate use of the product in the U.S., making it the first clinically applied Chinese TPVR system in the country. In addition, the Investigator Meeting for VenusP-ValveTM US Clinical Study was held, accelerating multi-center clinical trials in the U.S. and Japan.
Acquisition of Cardiovalve Ltd. in January 2022 optimized our innovative products pipeline of mitral and tricuspid valve interventional treatments, the most promising area for innovation in structural heart therapies. Cardiovalve is also the first privately held company to receive FDA’s early feasibility study (EFS) approval for both TR and MR indications. For the treatment of tricuspid regurgitation, its device received ‘Breakthrough Device Designation’ by the FDA. Following the completion of the acquisition, Cardiovalve enrolled 10+ patients over six months in Europe and the U.S. The procedures were successful, and patients recovered well. Clinical trial for Cardiovalve in China is expected to kick off within the year as part of its global multi-center study, targeting at global product launch and bringing innovative solutions to global patients.
In addition, Venus Medtech has a number of novel products undergoing clinical trials, such as the Liwen RFTM radiofrequency ablation system for the treatment of hypertrophic cardiomyopathy (HCM), new-generation TAVR products Venus-PowerXTM and Venus-VitaeTM for the treatment of aortic stenosis, and renal denervation (RDN) systems for the treatment of resistant hypertension. Venus Medtech looks to advance clinical trials for the above products in developed countries in Europe and America. In particular, the Liwen RFTM system recently entered the NMPA’s Special Review and Approval Procedures for Innovative Medical Devices, which will fast-track its approval.
Domestically, repeated COVID-19 outbreaks had continued negative impact on the market performance of China’s innovative medical devices. In response, Venus Medtech focused on profitability and quality growth, aiming to stabilize sales in middle to high-end centers and maintain its gross profit margin. In H1 2022, domestic sales recorded RMB 196 million, up 14.1% by H2 2021, primarily attributable to VenusA-ValveTM and VenusA-PlusTM, our first and second generation TAVR products approved in China. Specifically, VenusA-PlusTM accounted for approximately 60%.
In the first half of 2022, the VenusA series reported around 1,800 implantations, sustaining the Company’s market dominance with a 63% share. As of the end of H1, the VenusA series accumulated more than 10,000 implantations through an extensive network of 370+ hospitals and clinical centers, making Venus Medtech the only TAVR device maker to hit five digits. As the first-mover in the market, the VenusA series has considerable clinical follow-up data backing up its long-term safety and efficacy. VenusA-ValveTM is the only TAVR system in China with seven-year data corroborating its long-term safety.
Looking ahead to the second half of the year, global growth and profitability will be the overriding goals of Venus Medtech. In overseas markets, the Company will strengthen its commercialization capabilities and continue to increase the percentage of foreign revenue, thereby building brand awareness. On the domestic side, the Company will aim at sales efficiency optimization and higher per hospital output at medium to high-grade hospitals. Profit margin is expected to grow by reducing production costs and expenses.
Eric Zi, Founder, Executive Director, and General Manager of Venus Medtech said “The global business community faces critical challenges in the post-pandemic era. Investors are getting more conservative. Trade tensions are mounting and the east and the west are playing a zero-sum game. In this context, the first thing for businesses is to survive. At Venus Medtech, global growth and profitability are our priorities. Gaining a solid foothold is key to better develop global markets. We need to improve quality and efficiency and be a powerhouse ourselves to avoid unproductive or even counterproductive work and make breakthroughs in global markets. We will survive hard times and garner strength for the future.”