#China #Hangzhou #Global Expansion #Health Innovations #Venus Medtech

Venus Medtech's Remarkable 2024 Performance

Venus Medtech (Hangzhou) Inc., listed on the Hong Kong Stock Exchange under the code 2500.HK, has recently reported its impressive annual results for the fiscal year ending December 31, 2024. As a key player in the realm of structural heart therapies, the company has successfully navigated a challenging market landscape, resulting in significant increases in profitability and operational discipline. The financial highlights from this year demonstrate a strong commitment to cost management and strategic expansion.

Financial Highlights

• - Revenue Growth: Venus Medtech recorded a total revenue of ¥471 million, marking an impressive 13.53% year-over-year growth in international revenue, amounting to ¥82.5 million. This reflects the firm's effective strategies for penetrating new markets and increasing its global footprint.

• - Adjusted EBITDA Loss Reduction: The company's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) loss has decreased significantly, down by 45.56% year-over-year to ¥254 million. This positive outcome is a result of rigorous cost controls and operational efficiencies.

• - Commercial Profit Increase: There was a remarkable 112.60% annual increase in commercial profit, which totaled ¥97.7 million. Additionally, the commercial profit margin rose from 9.35% in 2023 to an impressive 20.74% in 2024, indicating heightened profitability.

• - Staying Strong: The company's gross margin remained robust at 78.11%, underscoring the stability of product pricing despite external market pressures.

Venus Medtech's strategic focus on profitability has effectively positioned it as a leader in the nuanced field of heart valve therapy in China, while also making substantial strides in enhancing operational effectiveness and commercial profit.

Cost Optimization Strategy

In the face of economic challenges, Venus Medtech is emphasizing cost optimization across various segments. Notably:

• - Reduced Sales Expenses: Sales expenses dropped by 18.44% year-over-year to ¥245 million, with the ratio of sales expenses declining from 61.15% in 2023 to 52.05%. This achievement is attributed to improved distributor management and reforms in accounts receivable processes.

• - R&D Budget Cuts: Research and Development (R&D) expenses were curtailed by 35% year-over-year, bringing them down to ¥341 million. This was accomplished by prioritizing high-value projects, hence reducing the R&D spend ratio from 106.83% to 72.46%.

Global Expansion and National Leadership

On the domestic front, Venus Medtech has concentrated efforts on strengthening distribution channels by penetrating secondary and tertiary hospitals, solidifying its position as the foremost Chinese supplier of transcatheter aortic valve implantation (TAVI). More than 650 hospitals nationwide are now utilizing its innovative products.

The company has participated in over 90 third-party conferences and hosted over 100 exclusive events, engaging more than 5,500 medical professionals and reaching over 2 million online participants. On the international stage, revenues from foreign sales constituted 17.52% of the total income, up from 14.79% in 2023, with substantial growth noted in Europe and Latin America.

Venus Medtech has successfully launched its products in 13 new countries, extending its market reach to nearly 70 locations globally. Key developments include:

• - VenusP-Valve launched in 63 markets, with new approvals in Canada, Australia, Singapore, and Mexico.
• - VenusA Series products expanded to 15 countries, gaining new approvals in Russia, Thailand, Mexico, and Kazakhstan.

Commitment to Innovation

Dedicated to fostering innovation, Venus Medtech is advancing its "Four-Valve Strategy" to offer comprehensive solutions for structural heart diseases. In 2024, significant milestones included:

• - Aortic Valve Development: Venus-PowerX has commenced patient recruitment for its global confirmatory trial, with aspirations to complete recruitment in China by 2025.
• - Pulmonary Valve Advancements: The VenusP-Valve is undergoing a pivotal IDE study in the U.S., showcasing successful patient implants initiated in June 2024.
• - Mitral/Tricuspid Valve Research: Cardiovalve's tricuspid regurgitation treatment study has involved nearly 120 patients across several renowned cardiovascular centers in multiple countries.

In terms of intellectual property, the company boasts an impressive portfolio of 886 patents and applications, with a significant number awarded across both domestic and international jurisdictions.

Robust Clinical Evidence

Aligned with evidence-based medicine principles, Venus Medtech has consistently conducted long-term follow-up studies as part of its registered clinical trials. The findings highlight significant clinical advantages for its product lines. Key results this year included:

• - In the pivotal TARGET CE trial for the Cardiovalve, immediate results showed that 93.7% of the first 105 patients experienced a reduction in tricuspid regurgitation to average or below-average levels.
• - Humanitarian usage data among 20 patients with severe tricuspid regurgitation indicated a staggering 90% improvement at the 30-day follow-up.

• - The VenusP-Valve showed zero mortality or reintervention at the five-year mark, alongside confirmed positive remodeling of the right ventricle.

Future Outlook

As Lim Hou-Sen, CEO of Venus Medtech, stated, "2024 has been a transformative year for Venus Medtech. By prioritizing profitability, operational excellence, and global expansion, we have successfully positioned the company on a sustainable growth trajectory. Our commitment to continuous innovation, optimizing our business strategy, and delivering long-term value for patients and shareholders remains steadfast."

About Venus Medtech

Founded in 2009 and headquartered in Hangzhou, China, Venus Medtech specializes in pioneering medical devices tailored to address structural heart diseases. Offering a comprehensive product range covering aortic, pulmonary, mitral, and tricuspid valve pathologies, the company has established R&D centers in China, the United States, and Israel. Venus Medtech is committed to providing effective therapeutic solutions for life-threatening conditions.