New Horizon Health (HKG : 6606), China’s leading biotechnology company for early cancer screening, announced its half-year results for the year ended June 30, 2022 today.
Based on the financial information before the audit as of June 30, 2022, New Horizon Health achieved total revenue of RMB226 million in the first half of 2022, an increase of 414% over the same period in 2021; achieved a gross profit of RMB185 million, an increase of 650% over the same period in 2021; gross profit margin climbed to 82.0% from 56.2% in the first half of 2021. The Company’s adjusted net loss for the half-year was RMB106 million and the adjusted net loss rate(1) narrowed significantly from 221% to 47%; the ratio of expenses to sales(1) dropped significantly from 161% to 86%, and the ratio of management expense to sales(1) dropped significantly from 80% to 23%. The Company’s total cash, including time deposits, cash, and cash equivalents, amounted to RMB1.65 billion.
The Company announced its cervical cancer screening product, CerviClear(TM), which had been launched in a large-scale prospective multi-center registered clinical trial in June 2022. CerviClear(TM) is the world’s first HPV cervical cancer screening product that provides painless and non-invasive urine self-sampling at home, covering a comprehensive range of 14 high-risk HPV viruses. The clinical trial for LiverClear(TM) is progressing well and is expected to be launched in the fourth quarter of 2022 or the first quarter of 2023. As of June 30, 2022, the Company’s R&D expenses(1) were RMB39.4 million, an increase of 111% over the same period in 2021.
“The results of the interim report were not easy to get. New Horizon Health’s team is faithful to its promise that it is able to do what it says and do what it does. The Company’s revenue in the first half of the year has exceeded last year’s full-year revenue. The performance growth is mainly attributed to the increase in revenue and gross profit of ColoClear and Pupu Tube, as well as the listing of UU Tube. The underlying logic of the high growth and high gross profit of the three products is that more and more people with high risk are accelerating the change of concept, attaching importance to the risk prevention and control of high incidence cancer in personal and family health management, recognizing the important value of cancer early screening product compliance and willing to pay for it”, the Chairman and CEO of New Horizon Health, YeQing ZHU, said, “Cancer early screening products are both serious medical and consumer products, and the huge market opportunity is backed by the high barrier of research and development and compliance as well as the high investment in market education. The necessary condition for the approval of cancer early screening products under New Horizon Health is solid prospective large-scale multi-center registration clinical validation, which is the strong barrier of our diversified business strategy and the foundation of user trust.”
Normalization of COVID-19 epidemic accelerates the market education process for early screening at home: ColoClear and Pupu Tube continue to see 3-digit revenue growth
ColoClear achieved revenue of RMB73.6 million in the first half of 2022, representing an increase of 419% over the same period in 2021. The shipment volume in the first half of the year was approximately 294,600 kits, representing an increase of 143% over the same period in 2021. The increase in revenue of ColoClear was mainly due to the increase in volume sold and recognized as revenue and the increase in average recognition unit price.
China’s first at-home self-testing FIT test product, Pupu Tube, achieved revenue of RMB68.5 million in the first half of 2022, an increase of 132% over the same period in 2021; and achieved shipment of 2,929,700 units, an increase of 54% over the same period in 2021. The increase in revenue recognized by Pupu Tube was mainly due to the increase in sales volume and the increase in the average unit price (including the increase in the unit price of direct-to-consumer pipeline and the increase in the unit price of health check centers).
Other than New Horizon Health, no domestic player has yet announced the launch of a large-scale prospective multi-center registration clinical trial for colorectal cancer screening. ColoClear is the only product approved by the National Medical Products Administration of China for screening cancer. Pupu Tube is the only approved product for at-home self-testing of FIT in China. In February 2022, ColoClear’s multi-target stool FIT-DNA technology was recommended by the latest version of the Cancer Foundation of China’s “China Integrated Cancer Treatment Guidelines”, making it the only molecular early screening technology in China to be included in all national guidelines for colorectal cancer prevention and treatment.
In the first half of 2022, the policy of early screening of cancer at home was intensively favorable. The “14th Five-Year Medical Equipment Industry Development Plan “, the “14th Five-Year National Health Plan ” and the “14th Five-Year Bio-economic Development Plan ” all focus on “early screening and health management of key diseases” such as cancer and in vitro diagnosis in home scenes. The normalization of the detection of COVID-19 epidemic has accelerated the public’s awareness of home screening and healthy “symptom-free” people.
The only consumer self-test for H. pylori testing: $83.5 million in half-year sales revenue for UU Tube
As of June 30, 2022, the sales revenue of UU Tube since its listing on January 18, 2022, was RMB83.5 million.
On December 31, 2021, UU Tube was approved for registration as a Class III medical device by the National Medical Products Administration of China and is the only product in China that is suitable for “consumer self-testing” for H. pylori detection, for which we have the exclusive patented design of the “pregnancy test stick” which is an integrated design for sampling and testing.
Data show that more than half of the users of UU Tube are women, nearly 50% are aged 31-40, and people aged 24-30 and 40-50 are also the main users. Jiangsu, Guangdong and Zhejiang have ranked the top three provinces in terms of the number of UU Tube users, and household users are more concerned about the detection and prevention of H. pylori.
The prevention and control of H. pylori is a major focus of the science of gastric cancer prevention and has been receiving widespread attention from the media and the public. Data show that in the first half of 2022, the epidemic prevention and control led to a significant decline in the measurement of H. pylori breath tests in hospitals and health checkups, while the number of online and offline gastroenterology consultations continued to rise during the same period, effectively boosting consumer demand for home testing of H. pylori and strongly supporting the rapid promotion of H. pylori.
Diversification of 2C quality pipes in tandem: ColoClear, Pupu Tube and UU Tube have excellent profitability performance
In the first half of 2022, all the three marketed products demonstrated excellent profitability, with the gross margins of ColoClear and Pupu Tube continuing to increase significantly compared to the same period in 2021. As of June 30, 2022, the gross margin of ColoClear reached 75.7%, the gross margin of Pupu Tube reached 80.0% and the gross margin of UU Tube reached 90.0%. Compared to the same period in 2021, the gross margins of ColoClear and Pupu Tube were 56.6% and 59.0%, respectively.
The Company’s sales volume of the core pipeline increased steadily in the first half of 2022, and the new pipeline continued to make efforts to take advantage of the favorable macro and micro home inspection policies in the first half of the year with “Resilient” marketing and firmly implementation. The high gross margin of the three products benefited from the Company’s continuous and in-depth diversified business strategy, which optimized the pipeline mix for product sales, increased the revenue of single test for direct-to-consumer pipelines and brought about scale production through operational leverage benefits, which further reduced the operating cost of a single test.
In the first half of the year, the Company has been making progress online and offline, both inside and outside the hospital. As of June 30, 2022, the Company has completed access and sales to over 800 hospitals in the first half of the year. During the “618” period, New Horizon Health continued to be the champion in sales of JD in three categories: medical devices, consumer medical and genetic testing. UU Tube won the top selling category of Tmall test paper. The Company’s total sales in JD and Tmall exceeded RMB40 million, representing a 400% increase in total sales compared to the same period in 2021, and a 300% increase in sales of ColoClear YoY.
Based on the mainland market, start international marketing: ColoClear debuted in Hong Kong and will advance to Southeast Asia in phases
2022 is a milestone year for the internationalization of New Horizon Health. On May 23rd, the Company and Prenetics (Nasdaq: PRE) made a joint announcement that the two parties have launched in-depth cooperation to fully integrate the quality resources in market and pipeline development and product and service operation, and jointly promote the market coverage of ColoClear in Hong Kong, Macau and Taiwan, China, and explore the market opportunities in countries or regions in Southeast Asian at the same time. On June 8, ColoClear by Circle was officially launched in Hong Kong with an official price of HK$3,000. During the cooperation period, ColoClear is the colorectal cancer early screening product that Prenetics has exclusively partnered with.
At the same time as ColoClear’s debut in the Hong Kong market, New Horizon Health announced the establishment of the Company’s first international R&D center in the Hong Kong Science and Technology Parks to attract global talent and focus on multi-omics cancer screening technology innovation and product development, including NGS, and to drive overseas commercialization and synchronized global clinical trials.
About New Horizon Health
Founded in 2015, New Horizon Health is a pioneer and leader in China’s cancer screening market, focusing on early home screening of high-incidence cancers, aiming to promote innovation in cancer screening technology and accelerate the popularity of cancer screening technology in China. On February 18, 2021, New Horizon Health was successfully listed on the SEHK with stock code 6606.HK, which became “the first listed Chinese cancer early screening company”.
New Horizon Health has three marketed products. ColoClear, Pupu Tube and UU Tube have all been approved by the National Medical Products Administration of China and are officially commercialized. ColoClear is the only cancer screening product approved by the National Medical Products Administration of China for people aged 40-74 who are at high risk of colorectal cancer. UU Tube is the only consumer self-test product for Helicobacter pylori approved by the National Medical Products Administration of China. Pupu Tube is the first FIT at-home self-test device approved in China. In addition, the Company has three pipelines of products in development for liver cancer (LiverClear), cervical cancer (CerviClear ) and nasopharyngeal cancer screening. The Company has global rights to all of its marketed and pipeline products. New Horizon Health works extensively with hundreds of hospitals, health check-ups, insurance companies, pharmacies and online channels. The Company has a class 100,000 clean production workshop that meets ISO13485 and ISO9001 international certification standards. The third parties medical testing laboratories in Beijing, Hangzhou and Guangzhou have been certified by international quality standards and the local health care commission and issued licenses to practice, with an annual testing capacity of 2 million people.
(1) Excluding equity incentive-related expenses