2024-03-26

Acotec reports 2023 annual results: full-year revenue of $474 million, up 20% year-over-year, as second growth curve matures

On March 25, we reported our results for the year ended December 31, 2023.For the full year of 2023, our total operating revenue amounted to RMB474 million, an increase of 20% year-on-year from 2022, and our gross profit was RMB377 million, an increase of 12.2% year-on-year from 2022. Adjusted net profit for the year amounted to RMB42.435 million, an increase of 22.1% year-over-year.

The most significant change came from the revenue of our intravenous intervention and access products and others, which amounted to RMB150 million in 2023. in 2021, the first product of our intravenous pipeline was approved for marketing, and in the same year, the revenue of our intravenous intervention and access products accounted for a mere 1.5% of our total revenue, and in 2023, the revenue of our intravenous intervention and access products and others increased to 31.7% of total revenue, a short period of time after the approval of our first product. In 2023, the proportion of revenue from intravenous intervention, access products and other products to total revenue will increase to 31.7%, becoming the second core growth point of the Company as it matures in just two years.

Layout of systemic vascular products is coming to fruition, and we have made significant breakthroughs in our core products

Since the beginning of 2022, our coronary and intracranial pipeline products were launched, and our product pipeline has formally expanded from the peripheral vascular field to the systemic vascular disease treatment field. 2023, our product pipeline in the systemic vascular layout continued to accumulate fruitful results, including RT-Zero® coronary balloon dilatation catheter, AcoStream® second generation peripheral thrombus aspiration system, ACOART®, AVENS® paclitaxel-coated vasculature, and ACOART® peripheral thrombus aspiration system, as well as ACOART® and AVENS® peripheral vascular system. AVENS® Paclitaxel-coated Arteriovenous Fistula High Pressure Balloon Dilatation Catheter, and Vericor-14® Coronary Artery CTO Shunting Microcatheter have been approved for marketing, bringing vascular disease treatment solutions to cardiology, vascular surgery and nephrology.

In addition, four of our DCBs, namely intracranial drug-coated balloon, coronary rapamycin drug-coated balloon, coronary paclitaxel drug-coated balloon, and vertebral artery drug-coated balloon, have submitted applications for NMPA registration.

Among them, the progress of two drug-coated balloons is particularly noteworthy.

One is the breakthrough progress of the domestic marketed product Below-the-Knee DCB (AcoArt Litos®) in advancing to the U.S. market. The below-the-knee DCB was approved as a "breakthrough medical device" by the U.S. FDA in 2019 and will be approved for marketing in China in 2020. To date, it remains the world's first and only clinically validated below-the-knee DCB. At the same time, we have been working on the marketing of this product in the U.S. In 2023, we achieved a breakthrough in the marketing of the below-the-knee DCB in the U.S! In November last year, Below-the-knee DCB was approved by the U.S. FDA for its Investigational Device Exemption (IDE) application, which means that the clinical study of AcoArt Litos® in the U.S. will start in the next few days, and it is also a major qualitative change in the way we practice our internationalization strategy.

Secondly, we have achieved excellent results in the clinical advancement of our unlisted intracranial DCB (AcoArt Daisy®). Last year, we released the Clinical Study of Intracranial Drug-Coated Balloon Dilation Catheter for Symptomatic Atherosclerotic Stenosis of Intracranial Arteries. The trial data showed that the incidence of target lesion restenosis at 6 months after surgery was 6.85% for AcoArt Daisy® compared to 32.89% for the control group, and that our product was more effective in maintaining lumen patency at 6 months after surgery. The results of this clinical trial confirm the significant clinical efficacy and favorable safety profile of the AcoArt Daisy® intracranial drug-eluting balloon dilatation catheter in the treatment of ICAS. The product will continue to be approved and marketed in the future.

Sinking Market Penetration Continues to Advance Domestic Commercialization Progresses Steadily

As of the end of 2023, we have made steady progress in the hospitalization process for all of our marketed products. Among them, the above-the-knee drug-coated balloon has entered a total of 1,600 hospitals; the below-the-knee drug-coated balloon has entered a total of 770 hospitals, and we are currently continuing to carry out market education on the product side to enhance the diagnostic and treatment concepts and treatment techniques of doctors and continue to enhance the penetration rate of our products; in the face of the thrombosis disease treatment market, which is highly demanded by the downstream market, we have achieved rapid coverage of our peripheral thrombus suction system within the two years since the listing of the system, and the penetration rate of our products has increased steadily. rapid coverage of terminals, with the number of hospital admissions reaching 1,300. The radiofrequency ablation system is currently in the product introduction stage, and product penetration is gradually increasing, with the number of hospital admissions currently reaching 350. In addition, the hospitalization of other products is also on schedule.

In addition to the rapid entry of products into hospitals, with the normalization of procurement, we have achieved rapid market access for a number of products and rapid increase in terminal implantation volume by virtue of our high quality and unique product pipeline as well as our efficient team execution. Among them, our peripheral thrombus aspiration system, radiofrequency ablation system and peripheral balloon dilatation catheter AcoArt Iris® have successfully won the bidding in Henan Province, while our above-the-knee drug-coated balloon has successfully won the bidding in the Hebei+Sanming alliance. In the face of many successful bids in procurement, which highlights the market maturity of our products and our strong commercial operation ability, we will continue to give full play to the advantages of our products and the strong operation ability of our team, to bring more high-quality products to the terminal.

Collaboration with International Giants and Globalization Strategies

Since we and Boston Scientific jointly announced the partial offer, the cooperation between the two parties has become increasingly close. on July 20, 2023, we both formally signed a cooperation framework agreement and a service framework agreement, which mainly agreed on the implementation plan and scale of the cooperation between the two parties in the next three years in the three areas of global commercialization of products, product manufacturing services, and product research and development. In the past year, the two parties are making every effort to promote the implementation of the framework agreement.

In the overseas market, the two parties have signed a distribution agreement for the sales of above-the-knee DCB and below-the-knee DCB in the European Union market and have begun to implement the agreement, and we have already shipped our products to Boston Scientific's overseas warehouses, and Boston Scientific has already begun to sell our products in Europe.

In the Chinese market, we have signed distribution agreements for 6 products (YAN, RT-Zero®, Vericor-14®, AcoArt Orchid®, AcoArt Iris®, ACOART AVENS®) including coronary lines and AVF lines.

In addition to this, in the future, as more of our products are approved, more products will be included in the scope of cooperation between the two sides, expanding the breadth of radiation of our products for the benefit of doctors and patients around the world.

This year, up to now, the two sides have determined the amount of cooperation amounted to 40 million yuan, other projects are accelerating the implementation of the landing, and will regularly announce the progress of cooperation.

Hardware and software facilities to follow up synergistically fused high-quality development base

Behind all this, the company's talent support and the release of high-quality production capacity are indispensable to the company's product innovation, the rapid admission of terminals, and the company's high-speed operation.

As of December 31, 2023, we have set up four R&D teams in Beijing, Shenzhen and the United States, with more than 120 R&D personnel. In addition to the growth in the number of R&D teams, we have injected fresh blood into the R&D, medical and registration departments respectively.

In terms of production capacity, last year, our company's new headquarter building was put into use, and our production area was expanded to further increase our production capacity. Last year, our production area was 44,100 square meters (35,000 square meters in Beijing and 9,100 square meters in Shenzhen), with an annual production capacity of 760,000 strips in a single shift, an annual output of about 300,000 strips in a single shift, and a single-shift capacity utilization rate of 40.4%, which provides sufficient guarantee of product circulation for the end market.

Keep your feet on the ground and your heart in the distance. We are committed to fighting vascular disease and improving the treatment of vascular disease.

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Acotec reports 2023 annual results: full-year revenue of $474 million, up 20% year-over-year, as second growth curve matures