MicroPort® Announces Annual Results for 2018

Shanghai, China - MicroPort Scientific Corporation (the "Company", or "MicroPort®", Stock code: 00853) is pleased to announce the annual results of the Company and its subsidiaries (collectively, the "Group") for the year ended December 31, 2018 (the "reporting period"). In the year of 2018, which marked the 20th anniversary of MicroPort®, the Group achieved further expansion in business scale and continued growth in innovation capability due to the effective promotion of a globalization and diversification strategy.
During the reporting period, the Group recorded a revenue of US$669.5 million, representing a year-over-year growth of 50.7% or a year-over-year growth of 48.6% (excluding the foreign exchange impact). The Group's Cardiac Rhythm Management ("CRM") business contributed a revenue of US$158.4 million during the reporting period. Meanwhile, the segments of cardiovascular devices, endovascular devices, neurovascular devices and electrophysiology devices recorded rapid revenue increases of 22.0%, 39.6%, 36.5% and 34.5% respectively (excluding the foreign exchange impact). Owing to a significant revenue growth from the major business segments and core products in the PRC market, the Group recorded a profit attributable to equity shareholders of US$23.9 million, with a year-over-year increase of 27.0%.
In view of the above achieved results, the Board of Directors of the Company proposed a final dividend for the year ended 31 December 2018 of HK2.9 cents per ordinary share.
MicroPort® Chairman and Chief Executive Officer Dr. Zhaohua Chang said: "In 2018, the Chinese government introduced a series of reform measures to further improve the national policies with positive significance on encouraging medical device innovation, accelerating the pace of the domestic-manufacturing process of medical devices, and regulating industry order. Benefiting from these policies, all of the Group's domestic business segments maintained strong growths. Outside of China, we have successfully expanded into the overseas CRM business. The newly added business not only contributes to the Group's revenue, but also helps the Group enhance competitiveness and attain sustainable development in the long run. In the future, the Group will relentless innovate in all its business segments to commercialize the best and affordable therapeutic solutions, so as to save and transform or improve patients' lives."
The year of 2018 marked the 20th anniversary of launch of the Medial-Pivot Total Knee Replacement System in orthopedics, the Group actively expanded sales of the orthopedics devices business in the global market and strengthened brand building. The Group accelerated the domestic-manufacturing process and further improved domestic joint product line, to provide more diversified choices for Chinese doctors and patients. During the reporting period, the segment recorded a revenue of US$236.3 million, representing a year-over-year growth of 3.8% (excluding the foreign exchange impact). The international (non-China) orthopedics business recorded positive operating profit for the very first time since its acquisition, and the losses continued to narrow. However, due to the factors that the revenue growth and improvement in gross profit margins were below expectation, as well as fluctuations in the U.S. dollar exchange rate, the Group did not reach the breakeven target of this segment. During the reporting period, the China orthopedics business recorded a revenue of US$17.8 million, representing a year-over-year growth of 32.8% (excluding the foreign exchange impact), which was mainly due to the rapid sales growth of 31.6% of its joint business. In 2018, the implant volume of the Group's joint products exceeded 10,000, and the hospital coverage rate increased steadily. The joint surgery also grew rapidly, surpassing the industry average.
In 2018, on the basis of consolidating the original market, the Group's cardiovascular devices business actively explored new markets to secure a leading position in terms of market share in China. During the reporting period, the segment recorded a revenue of US$202.8 million, representing a year-over-year increase of 22.0% (excluding the foreign exchange impact), among which revenue from Firehawk® Rapamycin Target Eluting Coronary Stent System ("Firehawk® stent") increased by 48.5% year over year (excluding the foreign exchange impact). The revenue from Firebird2® Coronary Rapamycin-Eluting CoCr Coronary Stent increased by 11.7% year over year. Also, the Firehawk® stent continuously explored the international market, with sales in 24 countries or regions as of December 31, 2018, an addition of six countries or regions as compared to 2017, including Hong Kong region, Taiwan region, Spain, Bulgaria, Panama and Peru.
In clinical trial, the world's leading medical journal, The Lancet, published the research results of the large-scale clinical trial (TARGET AC) of the Firehawk® stent independently developed by the Group in Europe in September 2018, marking that the Firehawk® stent has become the leader for the new industry standards of the world's new generation heart stents.
The overseas CRM business officially joined the Group in April 2018, prompting the Group to be ranked as the fifth biggest CRM business entity globally. Meanwhile, it is conducive to the launch of domestic products and enhance competitiveness. During the consolidated period in 2018, the segment recorded a revenue of US$158.4 million. In 2018, international (non-China) CRM business launched several new products including xFine electrode leads to gradually improve the incomplete product portfolio. Also, the world's smallest 1.5T and 3T magnetic resonance conditional pacemakers Eno™ and Teo™ series were launched in early 2019 and completed the first worldwide implant. As the first Chinese domestic pacemaker with world-class quality, the Rega® Family Implantable Pacemakers ("Rega® Pacemakers") began its first implantation in March 2018. Since then, Rega® Pacemakers achieved rapid growth and won widespread recognition, as the product was applied in more than 130 hospitals in 11 provinces in more than 9 months.
The Group's neurovascular devices business continued its rapid growth and its revenue increased by 36.5% year over year (excluding the foreign exchange impact) during the reporting period. The launch of Tubridge® Vascular Reconstruction Device ("Tubridge®") brings new growth momentum to the business segment. The Group's EP devices business benefitted from the high quality of independently developed products and the promotion of 3D surgery throughout China. During the reporting period, the revenue of the segment recorded a year-over-year growth of 34.5% (excluding foreign exchange impact).
In 2018, the Group's R&D projects were carried out in an orderly manner. A total of 10 products gained the approval of National Medical Products Administration ("NMPA") and three products entered the Special Approval Process for Innovative Medical Devices (the "Green Path"). As of December 31, 2018, a total of 15 products of the Group have been granted access to the Green Path as of the end of 2018.
Regarding NMPA approvals, the Aspiration™ Medial-Stabilized Total Knee Replacement System-PS Type Implant received a registration certificate issued by NMPA in January 2019. It is the first approved domestic total knee replacement system for MicroPort® Orthopedics. In November 2018, Beflex™ active fixed spiral electrode leads was officially approved by the NMPA. In 2018, the Group's independently developed second-generation Columbus® 3D EP Navigation System and EasyFinder™ 3D Deflectable Mapping Catheter obtained certifications. In March 2018, the Group's independently developed Tubridge® received registration approval from NMPA, becoming the first flow diverting stent approved in China.
Regarding the Green Path, The Vertebral Artery Rapamycin Target Eluting Stent, which is the world's first drug-eluting stent indicated for the treatment of vertebral artery stenosis, followed suit in March 2018. The Group's independently developed new generation of VitaFlow® II Transcatheter Aortic Valve and its Retrievable Delivery System ("VitaFlow® II System") also made the breakthrough in December 2018.
Regarding the Group's R&D outside of China, the world's smallest 1.5T and 3T magnetic resonance conditional pacemakers Eno™ and Teo™ series were launched in early 2019 and completed the first worldwide implant; The xFine electrode leads was launched in 2018, as was the Evolution™ CCK system in the orthopedics devices business.
Besides, the Group announced two-year follow-up results of the First-In-Man study (the FUTURE-I) of the Group's independently developed Firesorb® Bioresorbable Sirolimus Target Eluting Coronary Scaffold System (the "Firesorb®"), which has further demonstrated the feasibility, preliminary safety and efficacy of Firesorb® in treating patients with single-vessel coronary diseases. VitaFlow® II System successfully enrolled its first patient in the pre-marketing clinic research project VITALE trial in Europe ("VITALE Trial"). VITALE Trial is the first pre-marketing clinical trial in Europe.
MicroPort® Chairman and Chief Executive Officer Dr. Zhaohua Chang said: "We will further develop and improve the performance and manufacturing process of our existing products, and foster firm R&D activities to develop a new generation of products, actively advance the clinic trial and approval of new products and thus diversify our product offering and provide a comprehensive portfolio of medical devices to physicians and patients."