Basecare Announces 2021 Annual Results: Overall Increase in Revenue and Gross Profit
(HongKong, 30March 2022）Suzhou Basecare MedicalCorporation Limited (“Basecare” or the “Company”, together with itssubsidiaries, the “Group”, stock code: 2170), an innovative platform of genetictesting solutions for assisted reproduction inChina, announced its auditedconsolidated results for the year ended 31 December 2021 (the “Year”).
In 2021, the Group’s revenue increased by 32.3%YOY to RMB107 million. Gross profit was RMB51.15 million,representing an increase of 84.6% YOY. The consolidated gross margin increased from 34.2%to 47.7%, mainly due to the increases of the gross profit margin in the PGT-Akits from 46.0% to 70.0%. Basecare, a leading provider of third-generation IVFclinical solutions for assisted reproduction in China, has extended its reachbeyond the pre-implantation stage to the prenatal and postnatal stages, and hasself-developed kits in each stage, making it a company with a genetic test kitpipeline that covers the full reproductive cycle.
A leadingposition in assisted reproductive in China with core technology
Basecare’s PGT-A kit is the firstthird-generation IVF genetic testing kit that has been approved by the NationalMedical Products Administration of China (NMPA), marking the birth of a regulatedthird-generation IVF market in China.At the same time, the Group continuedto increase its investment on R&Dexpenses and increase the barriers toentry in the industry. In 2021, the Company's research and development expenseswere RMB73.71 million, representing an increase of 114% YOY. The Company is developing two otherpre-implantation genetic testing, or PGT, products, namely, PGT-M and PGT-SRkits, which are expected to obtain NMPA registration approval in 2022 and 2024.To date, the Company’s PGT-M kit is the first product of its kind that hascompleted the registration testing in China; PGT-SR kit may become the firststandardized commercial product of its kind in China with potential for massclinical application.Those together with the PGT-A kit will form a completetesting kit lineup to occupy the PGTfield, which will further enhance Basecare’s leading position in China'sthird-generation IVF genetic testing kits market.
Leveraging its core strength in PGT, Basecarehas positioned itself to become an innovative platform in China’s broaderreproductive genetics market. It has extended its reach beyond thepre-implantation stage to the prenatal and postnatal stages, and are developingrelevant kits in each stage, making it a company in China with a genetic testingkit pipeline that covers the full reproductive cycle. Except for testing kits, theGroup has developed a number of innovative devices and instruments that canimprove workflow in molecular genetic laboratories using the kits.
Boosts commercializationprocess and forges sales channel barriers
The Group sold a significant portionof its products directly to hospitals and reproductive clinics. It also sold itsgenetic testing kits to distributors, who in turn sold our productsto hospitals and reproductive clinics.At present, the Group currently has established presence in 55 reproductivecenters nationwide and cultivated business relationship with about 70% of theleading customers. The Group maintains a dedicated in-house sales and marketingteam with a focus on serving keycustomers, such as third-generation IVF licensed hospitalsand reproductive clinics. The Group’sin-housesalesand marketing team is also responsible for the promotion of products tohospitalsandreproductive clinics through academic marketing activities, to interact with KOLsaswell asother industry professionals. In 2021, Basecare held 56 academic exchanges tofacilitate market operation and promotion.
With the first NMPA-approved PGT kitin China, the Group believes that it will enjoy the first-moveradvantages in building and solidifyingsales channels and customer base. It plans tofocus the commercialization strategyon key hospitals and reproductive clinics. The Group willleverage the relationships built withthese hospitals and clinics for PGT-A to extendthe breadth and depth of its coverage.The Group aims to increase the coverage and penetrationof hospitals and reproductive clinicslicensed to conduct PGT, and develop strongerrelationships with them to enhancecustomer stickiness and lay the foundation to offer otherproducts to them in the future. Basecareplans to work toward full coverage of licensed hospitalsand reproductive clinics in China.Moreover, it plans to expand its share of wallet in thesehospitals and clinics by offering comprehensivesolutions, with new products that targetother medical specialties, such as theneonatal and pediatrics units, in these institutions.
Proceedseco-system construction and builds solid portfolio moat
During the Year, the Group settled theconsideration of RMB85 million in relation to the acquisitionof Zhejiang Cellpro BiotechCorporation Limited (“Cellpro Biotech”). CellproBiotech is a company mainly focusingon the research and development, production, sales and technical services ofassisted reproductive technology diagnosis and treatment products. The strongcollaboration with Cellpro Biotech willstrengthen the synergy for Basecare’s business and assist in building itscomplete product and service system, which is the key measure for Basecare tobuild the portfolio moat and consolidate its leading competitive position.
About SuzhouBasecare Medical Corporation Limited
Suzhou Basecare Medical Corporation Limited is athird-generation IVF clinical solution provider in the field of assistedreproduction in China and the first listed IVD company in the field of assistedreproduction (stock code: 2170.HK). It is committed to the product R&D andclinical application of high-throughput sequencing technology in the field of reproductivehealth. Basecare has been adhering to the concept of "compliantproducts", adhering to the industrialization road of R&D, registrationand sales, and has a product pipeline covering embryo testing, andrologytesting and fertility preservation. The PGS (pre-implantation chromosomeaneuploidy testing) kit independently developed by the company has won China'sfirst "special approval for innovative medical devices" greenchannel. It is the first third-generation tube testing product in China toobtain the registration certificate of Class III medical devices, opening the"certificate era" of genetic testing kits in the field of assistedreproduction in China.