Founded in 2013, we are a medical device company in China with a main focus on the field of minimally-invasive interventional cryotherapy. We have two Core Products, the Bladder Cryoablation System (膀胱冷凍消融系統) and the Endoscopic Clip for Anastomosis (內鏡吻合夾). The Bladder Cryoablation System is a cryotherapy device designed for the treatment of bladder cancer approved for commercialization in China. The Endoscopic Clip for Anastomosis is an anastomotic device for closure of soft tissue in digestive tract, which is one of over-the-scope clips (“OTS Clips”) approved for commercialization in China. We have developed a comprehensive product portfolio mainly targeting the treatment of urinary, cardiovascular, respiratory and digestive diseases. Four of our pipeline products, including two Core Products, the Atrial Fibrillation Cryoablation System (心臟冷凍消融系統) (“AF Cryoablation System”) that is in the process of registration application and the Cryofocus Renal Denervation System (Cryofocus 冷凍消融系統) (“Cryo-RDN System”) that is still in the clinical trial stage, were recognized as “innovative medical devices” by the NMPA or its provincial counterparts. As of the Latest Practicable Date, we had three and eight material patents and patent applications directly related to the Bladder Cryoablation System and the Endoscopic Clip for Anastomosis, respectively. All of our products and product candidates are self-developed by us.
THERE IS NO ASSURANCE THAT WE WILL ULTIMATELY BE ABLE TO DEVELOP AND MARKET OUR CORE PRODUCTS SUCCESSFULLY.
Cryotherapy is a treatment method that freezes and destroys abnormal cells or diseased tissue through extreme cold. Interventional cryotherapy includes cryoablation that employs extremely low temperature to freeze tissue for destruction, as well as cryoadhesion that freezes tissue for adhesion. Many recent studies have demonstrated that interventional cryotherapy can destroy diseased tissues and stop the growth or spread of cancerous cells in a minimally invasive manner. As compared to traditional treatment solutions such as open surgeries, interventional cryotherapy is potentially cheaper, safer, associated with fewer side effects and lower chances of post-operative complications, and allows patients a quicker recovery with less scars, although additional risks of bleeding may be posed due to friction between the tissue and instruments used in interventional cryotherapy. The Bladder Cryoablation System is not the only cryoablation medical device that uses liquid nitrogen as its cryogen in China and in the world. For details of other cryoablation medical devices that use liquid nitrogen as cryogen for the treatment of solid tumors, see “Industry Overview—The Bladder Cancer Interventional Cryotherapy Market—Competitive Landscape of Interventional Cryotherapy Devices for Solid Tumor” in this document.
We use liquid nitrogen as the main cryogenic source for cryotherapy systems by leveraging our liquid nitrogen cryoablation technology and advanced flexible catheter technology. Compared to other cryogenic sources like nitrous oxide and carbon dioxide, liquid nitrogen is obtainable and affordable with rapid cooling rate. However, despite its advantages, the clinical application of liquid nitrogen had been limited, primarily because it tends to vaporize and undergo substantial volume expansion when delivering energy to the lesions, causing the catheter to become clogged with gas and unable to deliver liquid nitrogen continuously, and it also has a risk of destroying healthy cells surrounding the tumors. Our liquid nitrogen cryoablation technology platform can resolve the excessive volume change associated with vaporization to lower the device’s working pressure and increase operational safety, while keeping the advantages of ablation efficiency and controllability of liquid nitrogen. In addition, we continue to explore various underlying and supporting technologies based on our core technologies, such as precise temperature gradient control technology and real-time vacuum technology, to improve the efficacy and safety of our products and facilitate the clinical application of our cryotherapy systems.
We have a comprehensive product portfolio that includes two Core Products as well as other products and product candidates mainly targeting two markets, namely NOTES and vascular intervention:
‧ In the area of NOTES, we have developed a series of cryotherapy systems and surgical consumables. Our Core Products, the Bladder Cryoablation System and the Endoscopic Clips for Anastomosis, belong to this category. According to Frost & Sullivan, patients with bladder cancer generally have a high risk of recurrence after undergoing the transurethral resection of bladder tumor (“TURBT”) surgeries, and the overall recurrence rate of non-muscle-invasive bladder cancer (“NMIBC”) post TURBT can reach 60%. According to the Diagnosis and Treatment of Non-Muscle Invasive Bladder Cancer: AUA/SUO Guideline (2020), among patients with NMIBC after TURBT, patients with low-grade Ta lesions generally demonstrate a recurrence rate of about 55%, while those with high-grade T1 lesions generally have a recurrence rate of about 45%. There is a growing demand for an effective treatment to lower the incidence of postoperative tumor residuals. Similar to BCG perfusion or chemotherapy, our self-developed Bladder Cryoablation System is indicated for use in conjunction with TURBT to reduce tumor residuals for patients suffering from NMIBC. The Endoscopic Clip for Anastomosis, is an anastomotic device for closure of soft tissues in digestive tract, treating bleeding, perforation, and tissue defects. This product is one of the OTS Clips approved for commercialization in China. Our other product candidates in this area focus on respiratory and digestive diseases, such as chronic obstructive pulmonary disease, asthma, airway stenosis, gastric cancer and esophageal cancer.
‧ In the area of vascular intervention, we have developed product candidates for the treatment of atrial fibrillation, hypertension and other cardiovascular disease, although they are not our Core Products. Our AF Cryoablation System is a minimally-invasive interventional device that treats atrial fibrillation by freezing and damaging abnormal heart tissues that cause irregular heartbeats.
We have an in-house R&D team, which is led by industry experts with vast industry experience. We have also developed relationships with industry leaders, including scientists, physicians and industry practitioners, giving us a thorough understanding of the clinical needs and demands of patients and physicians. We held 110 registered patents and 44 pending patent applications in China and overseas.
Our two manufacturing facilities located in Shanghai and Ningbo can support the production and commercialization of our various cryotherapy devices and medical consumables. Our manufacturing facilities meet the applicable GMP requirements, and we follow rigorous manufacturing and quality control standards to ensure a high level of product quality and safety. As our pipeline products are gradually commercialized in the near future, we will continue to upgrade our production facilities.
During the Track Record Period, we have launched six minimally-invasive surgical consumables. We have established an extensive distributorship network, and had entered into distribution agreements with 57 distributors in China for the sales of our commercialized products as of August 31, 2022. In 2020, 2021 and the eight months ended August 31, 2022, our revenue amounted to RMB9.1 million, RMB22.4 million and RMB16.4 million, respectively. In October 2022, we also commercialized one of our Core Products, the Endoscopic Clip for Anastomosis. Given that we have only commercialized a small portion of our full product portfolio for now, our commercialization efforts are still at the early stages. However, we believe that our experience gained from commercializing our existing products, our established working relationships with physicians and hospitals, our reputation in the medical device industry in China, and our expanding sales and marketing team and distribution network will benefit our future commercialization of our cryoablation systems and other product candidates upon their approval.
Driven by the accelerated population aging and patient pool expansion, technological innovations and favorable policy support, as well as the advantages associated with the cryotherapy devices, the cryotherapy device market in China has experienced rapid growth. According to Frost & Sullivan, the market size of interventional cryotherapy devices in China has increased from RMB98.0 million in 2016 to RMB390.8 million in 2020 at a CAGR of 41.3%, and is expected to further climb to RMB11,233.9 million in 2030 at a CAGR of 39.9% from 2020 to 2030.
Bladder Cryoablation System—Our Core Product
Our Bladder Cryoablation System is a self-developed cryoablation system for the treatment of bladder tumors. This product candidate employs liquid nitrogen to perform cryoballoon ablation on target tissue, and similar to BCG perfusion or chemotherapy, this product candidate is indicated for use in conjunction with TURBT to reduce tumor residuals for patients suffering from NMIBC.
To evaluate the efficacy and safety of our Bladder Cryoablation System, we initiated a multi-center clinical trial in China for the Bladder Cryoablation System in November 2017. A total of 218 eligible subjects were enrolled in the clinical trial at six hospitals. Our Bladder Cryoablation System demonstrated good safety and efficacy results according to the final clinical trial report issued in May 2021. We submitted the registration application for such product candidate with the NMPA in May 2021, and received the NMPA approval for it in June 2022. We plan to commercialize this product in China in December 2022.
We may not successfully commercialize the Bladder Cryoablation System as there are certain hurdles and risks of the Bladder Cryoablation System in gaining market shares. In particular, (i) there is currently no recommendation from national or international guidelines for the use of cryoablation therapy in in the treatment of NMIBC. It may take time to educate the market, gain acceptance among physicians and patients and achieve sustainable business growth, if successful; (ii) the Bladder Cryoablation System currently is not covered by any government reimbursement program or private health insurance, and reimbursement is not available for treatment options that are not part of the standard of care in Europe, including the cryoablation of bladder cancer; and (iii) given the clinical trial for the Bladder Cryoablation System did not include long-term follow-up visits, there are currently no sufficient long-term clinical data to demonstrate whether this product significantly reduces tumor recurrence at a later stage or to support the use of this product as a standard of care post-TURBT. We plan to initiate post-launch clinical studies and conduct three- to five-year follow-ups for a sizable pool of patients to monitor the real-world clinical data and further evaluate the safety and efficacy profile of the Bladder Cryoablation System.
According to Frost & Sullivan, the incidence of bladder cancer in China increased from 77.1 thousand in 2016 to 85.7 thousand in 2020 at a CAGR of 2.5%, and is expected to further grow to 117.6 thousand in 2030. NMIBC accounts for approximately 75% of newly diagnosed bladder cancer, and patients with NMIBC may experience in situ tumor recurrence following TURBT, the first and standard treatment for NMIBC. Therefore, such patients are in need of treatment that effectively reduces postoperative tumor residuals.
Our Bladder Cryoablation System is a cryotherapy device designed for the treatment of bladder cancer approved for commercialization in China. It is not intended to replace Bacillus Calmette-Guerin (“BCG”) perfusion or chemotherapy. Instead, the Bladder Cryoablation System and BCG or chemotherapy can be synergistic to reduce tumor residuals in patients with bladder cancer following TURBT. In addition, based on publicly available information, there was no head-to-head clinical trial for comparing Bladder Cryoablation System with BCG or other immunotherapies as of the Latest Practicable Date.
For a detailed description of the product structure and operation procedure, as well as clinical trial result, market opportunities and further development plan of our Bladder Cryoablation System, see “Business—Our Products and Product Candidates—Our Core Products—1. Bladder Cryoablation System” in this document. For a detailed description of market opportunities and competitive landscape of our Bladder Cryoablation System, including the basis for the estimated market growth, see “Industry Overview—The NOTES Interventional Cryotherapy Device Market—The Bladder Cancer Interventional Cryotherapy Device Market” in this document. For details of the relevant risks, see “Risk Factors—We may not be able to develop new products that are competitive in the market” in this document.
Endoscopic Clip for Anastomosis—Our Core Product
Our Endoscopic Clip for Anastomosis is a self-developed anastomotic device for closure of soft tissue in digestive tract, treating bleeding, perforation, and tissue defects. It is suitable for treating perforation in gastrointestinal endoscopic surgery as well as endoscopic full-thickness closure following NOTES.
We initiated a multi-center clinical trial to evaluate the safety and efficacy of the Endoscopic Clip for Anastomosis in endoscopic soft tissue closure in October 2019. The trial was led by Zhongshan Hospital, Fudan University (復旦大學附屬中山醫院). A total of 99 subjects were enrolled, and received the closure with this product for their upper gastrointestinal perforation or bleeding. In this clinical trial, a relatively high rate of adverse events was observed, including a rate of treatment emergent adverse events of 54.4% and a rate of device- or procedure-related adverse events of 40%, although most of these adverse events were mild and unrelated to the device. After completing the clinical trial, we submitted the registration application with Zhejiang MPA in November 2021. We received the Zhejiang MPA approval for this product candidate in August 2022, and commercialized it in October 2022.
As of the Latest Practicable Date, there were 32 endoscopic clips commercialized in China, out of which, three products were OTS Clips and the other 29 products were all through-the-scope clips (“TTS Clips”), according to Frost & Sullivan. The OTSC System Set of Ovesco and the Disposable Hemostatic Closure Clip of Micro-Tech and the Company’s Endoscopic Clip for Anastomosis were the commercialized OTS Clip products in China. In addition, based on public information, Ovesco’s registration certificate for the OTSC System Set in China was expired, making Micro-Tech’s OTS Clip the only competitor of our Endoscopic Clip for Anastomosis in China. Key players in the international OTS Clip market are Ovesco and Aponos Medical, which in aggregate had six OTS Clip products approved by the FDA or CE Marked.
According to Frost & Sullivan, the market size of endoscopic clips in China increased rapidly from RMB98.7 million in 2016 to RMB292.5 million in 2020, representing a CAGR of 31.2%; the market size of endoscopic clips in China is predicted to increase to RMB571.1 million in 2025 at a CAGR of 14.3% from 2020 to 2025 and further reach RMB1,124.4 million in 2030 at a CAGR of 14.5% from 2025 to 2030, as endoscopic clips are anticipated to become common in gastrointestinal surgery due to their benefits such as allowing for faster recovery than traditional drug hemostasis, and OTS Clips, which are priced higher than TTS Clips, are expected to increase its market share. The endoscopic clip market in China is highly fragmented and competitive and is currently dominated with the TTS Clips.
As the OTS Clip market is still in an early stage of development, and due to the relatively high prices set by the market players, the current market share of the OTS Clips has been small within the overall endoscopic clip market. According to Frost & Sullivan, among the overall endoscopic clips market in China in 2020, the OTS Clip market occupied approximately 0.4% by value and 0.1% by volume. OTS Clips have advantages over TTS Clips, for example, OTS Clips are able to close larger wounds. In recent years, more guidelines and academic articles recommend OTS Clips. Thus, Frost & Sullivan anticipates that physicians will become increasingly willing to accept OTS Clips and the market share of OTS Clips will increase in the future if the price is reasonable and market promotion is strengthened.
The Endoscopic Clip for Anastomosis has a separable structure that makes its clamp detachable and allows for easier clip removal. Such feature, though without head-to-head study, differentiates the Endoscopic Clip for Anastomosis from competing products. However, there is no assurance that the Endoscopic Clip for Anastomosis will ultimately outcompete other OTS Clips and TTS Clips in the market due to lack of more material competitive advantages.
For a detailed description of the product structure, operation procedure, clinical trial result and market opportunities of our Endoscopic Clip for Anastomosis, see “Business – Our Products and Product Candidates—Our Core Products—2. Endoscopic Clip for Anastomosis” in this document. For a detailed description of the addressable patient population, disease landscape and treatment paradigm, as well as market opportunities and competitive landscape of our Endoscopic Clip for Anastomosis, see “Industry Overview—The Endoscopic Clip Market” in this document.
AF Cryoablation System—Our Major Product
Our AF Cryoablation System is a self-developed cryoablation system indicated for the treatment of paroxysmal atrial fibrillation. The AF Cryoablation System treats atrial fibrillation by freezing and destroying abnormal heart tissues that create irregular heartbeats in a minimally-invasive procedure.
We initiated a multi-center clinical trial in October 2019 to evaluate the effectiveness and safety of the AF Cryoablation System in the treatment of paroxysmal atrial fibrillation. A total of 176 subjects were enrolled and we conducted follow-ups with the subjects up to 12 months after the procedures. The clinical trial involved ten hospitals, led by Zhongshan Hospital, Fudan University (復旦大學附屬中山醫院). The multi-center clinical trial for the AF Cryoablation System has been completed with the final clinical trial report issued in May 2022. We submitted the registration application for the AF Cryoablation System with the NMPA in July 2022, and currently expect to obtain the NMPA approval for this product candidate in China in or around the second quarter of 2023.
According to Frost & Sullivan, the number of atrial fibrillation patients in China has increased from 10.8 million in 2016 to 11.6 million in 2020, which is estimated to further climb to 16.6 million in 2030. The market size of atrial fibrillation cryotherapy catheters in China increased from RMB48.4 million in 2016 to RMB255.0 million in 2020 at a CAGR of 51.5%. Driven by the rising prevalence of atrial fibrillation and increasing penetration of cryoablation treatment, it is estimated that the market size of atrial fibrillation cryotherapy catheters in China is expected to continue to grow to RMB5,103.0 million in 2030.
As of the Latest Practicable Date, there was only one cryoablation device for the treatment of atrial fibrillation approved for commercialization in China, namely the Arctic Front Advance of Medtronic. Based on publicly available information, we were one of the four companies conducting clinical trials in China for cryoablation devices for the treatment of atrial fibrillation, and were the only one which uses low-pressure liquid nitrogen as cryogen.
For a detailed description of the product structure, operation procedure, clinical trial result and market opportunities of our AF Cryoablation System, see “Business—Our Products and Product Candidates—Other Products and Product Candidates — Vascular Interventional Cryotherapy Products—1. AF Cryoablation System” in this document. For a detailed description of market opportunities and competitive landscape of our AF Cryoablation System, see “Industry Overview—The Vascular Interventional Cryotherapy Device Market—Atrial Fibrillation and Treatment” in this document.
Source: Cryofocus-B (06922) Prospectus (IPO Date : 2022/12/16) |