Broncus Medical (02216.HK) Announces Annual Results for 2021: Operating revenue for 2021 increased 234.2% year-on-year, while product development and commercialization are steadily advancing.

HANGZHOU, China, March 30, 2022 /PRNewswire/ -- On March 29, 2022, Broncus Medical (02216.HK), the leader in precision interventional treatment for lung diseases in China, announced its annual results announcement for the year ended December 31, 2021. During the period, the Group earned revenue of US$10.89 million, an increase of 234.2% compared to the same period in 2020. Of which, total revenue from Mainland China was US$6.02 million, a significant increase of 375% compared to the same period in 2020. 2021 overseas revenue was US$4.87 million, representing 45%, an increase of 144% compared to the same period in 2020. Gross profit was $8.72 million, a significant increase of 248.8% compared to the same period in 2020, while gross margin increased to 80.27%. $16.76 million was spent on Broncus Medical R&D in fiscal 2021, an increase of over 78.7% compared to $9.35 million in the same period in 2020.

Core products are progressing smoothly

InterVapor ^® was approved in China in March 2022 and was approved in India in March 2021. InterVapor ^® is the world's first and only minimally invasive interventional lung volume reduction product that can achieve sequential staged treatment targeting the lung segment level.

RF-II, the only radiofrequency ablation system that specifically targets lung cancer. Broncus Medical completed enrollment for registered clinical trial for RF-II in China and released the phased data of the clinical study of the RF-II radiofrequency ablation system for the treatment of lung cancer through the bronchus at APSR 2021, which initially demonstrated its clinical efficacy.

Product R & D advance at an equal pace with clinical trials

As of December 31, 2021, the company had 17 products and major product candidates under various development stages.

• In September 2021, the company completed the first clinical application of its Targeted Lung Denervation (TLD) radiofrequency ablation system in West China Hospital of Sichuan University. TLD products have completed enrollment of six clinical cases as of the date of this announcement.
• Launched the real-world study project "Evaluation of the Safety and Efficacy of Bronchoscopic Transparenchymal Nodule Access (BTPNA) in the Sampling Diagnosis of Peripheral Pulmonary Lesions.
• As of March 17, the result of a feasibility study on the use of InterVapor ^® in the treatment of lung cancer was published in Respiration,  showing that bronchoscopic thermal vapourablation (BTVA®)  is feasible and tolerated in the treatment of lung tumours. The ablation results observed show its great potential for the ablation of lung cancer.

Comprehensive layout of intellectual property rights

As of December 31, 2021, the company obtained 658 patents and patent applications which consisted of 186 issued patents (including pending announcements) and 322 patent applications in China and 99 issued patents and 51 patent applications overseas including key markets such as the U.S. and the EU. Among the patents obtained, 71 and 23 of them are related to InterVapor ^® and RF-II, respectively.

Strategic cooperation to achieve a new win-win situation for both sides

Broncus Medical reached a strategic cooperation agreement with United Family Healthcare Group, a leading high-end private medical institution in China under New Frontier Health Corporation, in December 2021. This cooperation aims in exploring a new diagnosis and treatment service model with interventional pulmonology and penetrating into the middle-to-high end private healthcare markets. In the future, both sides will jointly establish a lung specialist medical center.

Broncus Medical entered into a strategic cooperation agreement with Healium Medical Ltd. ("Healium"), an Israeli company focusing on the R&D of ultrasound energy therapy and image monitoring, in February 2022. The cooperation integrates energy ablation and ultrasound technology, improving the safety and efficacy of the operation and promoting the popularization of interventional technology in the treatment of pulmonological diseases.

Navigation accelerates the process of localization, and the manufacturing of therapeutic products has entered the era of localization

Broncus Medical has completed localization R&D verification and product trial installation of LungPoint in China and expects to submit the registration application with NMPA after Broncus Medical obtains the model inspection report by the end of 2021 to further complete the localization of the manufacturing process. The company expects the registration to be completed in the second quarter of 2023. The localization of the Archimedes System manufacturing started in April 2022 with design verification in progress. The model inspection is expected to be initiated in April 2022.

Starting from June 2021, Broncus Medical has begun to manufacture its H-Marker in its Hangzhou facility. The company has commenced the manufacturing of other therapeutic products in the Hangzhou facility in 2021, including the InterVapor ^® products, and expects to completely move the manufacturing process to China after obtaining the regulatory approval in the end of 2022.

Strengthen commercial and international layout

Broncus Medical's products were sold to 33 countries and regions all over the world, including the United States, the United Kingdom, Germany, France, Japan, etc. The company has expanded its sales team to 98 people, including 80 full-time employees focusing on sales in the Asia Pacific market and 18 full-time employees focusing on sales in Europe and the United States.

By leveraging its more established experience in sales and marketing of LungPoint and the Archimedes System, Broncus Medical plans to expand its sales of LungPoint Plus and other medical consumables worldwide.

At the same time, the company is actively promoting the use of the procedure through doctor training and marketing activities:

• in June and December 2021, Broncus Medical established a "Broncus pulmonary disease interventional technology training base" respectively with Shandong Public Health Clinical Center and Xi'an International Medical Center Hospital.
• In 2021, Broncus Medical successfully organized the Broncus Campus College of Mid-Career Physicians Case Competition in spring, summer and winter.
• Broncus Medical hosted or participated in a number of academic conferences, including APSP2021, 1st SILK ROADS PROGRAMME - the first pulmonary intervention precision forum, etc.