Suzhou Basecare Medical Corporation Limited (“Basecare” or the “Company”, together with its subsidiaries, the “Group”, stock code: 2170), an innovative platform for genetic testing solutions for assisted reproduction in China, announced its audited consolidated results for the year ended December 31, 2021 (the “Year”).
In 2021, Group revenue increased 32.3% year-on-year to RMB 107 million. Gross profit was RMB 51.15 million, an increase of 84.6% year-on-year. The consolidated gross margin increased from 34.2% to 47.7%, mainly due to the increase in the gross profit margin of the PGT-A kits from 46.0% to 70.0%. Basecare, a leading third generation IVF clinical solution provider for assisted reproduction in China, has expanded its reach beyond the pre-implantation stage to the prenatal and postnatal stages, and has self-developed kits at every stage, making it a company with a pipeline of genetic test kits spanning the entire breeding cycle.
A leading position in assisted reproduction in China with core technology
Basecare’s PGT-A kit is the first third-generation IVF genetic test kit that has been approved by the National Medical Products Administration of China (NMPA), marking the birth of a third-generation IVF regulated market. generation in China. At the same time, the Group continued to increase its investments in R&D expenditure and to raise the barriers to entry into the industry. In 2021, the company’s research and development expenditure was RMB 73.71 million, a year-on-year increase of 114%. The Company is developing two other preimplantation genetic testing, or PGT, products, namely the PGT-M and PGT-SR kits, which are expected to gain NMPA registration approval in 2022 and 2024. To date, the PGT-M kit of the Company is the first such product to have completed registration testing in China; The PGT-SR kit could become the first standardized commercial product of its kind in China with potential for mass clinical application. These, together with the PGT-A kit, will form a full range of test kits to occupy the PGT field, which will further strengthen Basecare’s leading position in China’s third-generation IVF genetic test kit market.
Leveraging its core strength in PGT, Basecare has positioned itself to become an innovative platform in the broader reproductive genetics market in China. It has expanded its reach beyond the pre-implantation stage to the prenatal and postnatal stages, and is developing relevant kits at each stage, making it a company in China with a genetic testing kit pipeline that spans the entire reproductive cycle. Except for the test kits, the Group has developed a number of innovative devices and instruments that can improve the workflow in molecular genetics laboratories using the kits.
Stimulates the marketing process and forges barriers to sales channels
The Group sold a significant portion of its products directly to hospitals and reproductive clinics. It also sold its genetic testing kits to distributors, who in turn sold our products to hospitals and reproductive clinics. At present, the group currently has a presence in 55 breeding centers nationwide and has business relationships with approximately 70% of major customers. The group has a dedicated in-house sales and marketing team, which focuses on serving key customers, such as third generation IVF approved hospitals and reproductive clinics. The group’s in-house sales and marketing team is also responsible for promoting products to hospitals and reproductive clinics through academic marketing activities, to interact with KOLs as well as other other industry professionals. In 2021, Basecare organized 56 academic exchanges to facilitate the operation and promotion of the market.
With the first NMPA-approved PGT kit in China, the Group believes it will experience first-mover advantages in building and consolidating sales channels and customer base. He plans to focus the marketing strategy on major hospitals and reproductive clinics. The Group will leverage established relationships with these hospitals and clinics for PGT-A to extend the breadth and depth of its coverage. The Group aims to increase the coverage and penetration of hospitals and reproductive clinics authorized to practice PGT, and to develop stronger relationships with them to improve customer loyalty and lay the foundation for offering them other products to the future. Basecare plans to work towards full coverage of licensed hospitals and reproductive clinics in China. In addition, it intends to expand its portfolio share in these hospitals and clinics by offering global solutions, with new products that target other medical specialties, such as neonatology and pediatric units, in these establishments.
Builds the ecosystem and builds a strong portfolio
During the year, the Group settled the consideration of RMB 85 million relating to the acquisition of Zhejiang Cellpro Biotech Corporation Limited (“Cellpro Biotech”). Cellpro Biotech is a company that mainly focuses on the research and development, production, sales and technical services of diagnostic and treatment products in assisted reproduction. The close collaboration with Cellpro Biotech will strengthen the synergy for Basecare’s business and contribute to building its comprehensive system of products and services, which is the key measure for Basecare to build the portfolio and consolidate its leading competitive position.
Looking ahead, Dr. Liang Bo, Founder, Executive Director and General Manager of Suzhou Basecare Medical Corporation Limited, said, “Our mission is to develop and launch innovative genetic testing solutions specifically designed for the Chinese population that address unmet clinical needs in China. Our vision is to help more families have healthy babies. To accomplish this vision, we are expanding our market coverage and continuing to capture and consolidate the sales channels and customer base for PGT-A. At the same time, we enrich our product pipeline and quickly market the product portfolio to occupy the full cycle of breeding. In addition, we will promote the upgrading of hardware equipment in breeding center laboratories, focus on laying out the industrial chain of embryo cryopreservation equipment and providing intelligent and automated integrated solutions for clinical trials to improve the company’s competitiveness, to maintain a leading position in technology.”
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