SUZHOU, China , July 15, 2024 /PRNewswire/ -- Basecare Medical (2170. HK) released an unaudited interim performance forecast on July 12th, stating that the company's revenue for the first half of the year was approximately RMB 127 million to RMB 138 million, an increase of approximately 49% to 62% compared to the same period last year. Does the rare impressive performance in the "cold winter period" of biomedicine mean that the pharmaceutical equipment sector is gradually recovering? Let's delve into the situation of this company in the reproductive field together.
On June 1, 2024, Shanghai included 12 assisted reproductive medical service projects in its medical insurance. On the same day, outpatient clinics were fully booked
Basecare Medical's five laboratory scenarios provide one-stop medical solutions for institutions and doctors
Resource：Basecare 2023 Annual Results
Basecare Medical Embryo Laboratory Products
Resource：Basecare 2023 Annual Results
Basecare has products and pipeline layouts similar to VitroLife
Resource: Roadshow Materials for Basecare Medical's 2023 Annual Report
Firstly, from a macro perspective, several provinces and cities in China are including assisted reproductive projects in the scope of medical insurance payments. In 2023, four provinces and cities including Beijing, Guangxi, Gansu, and Inner Mongolia took the lead in implementing this measure. In 2024, 11 provinces including Shanghai, Zhejiang, Jiangxi, Shandong, Qinghai, Xinjiang Uygur Autonomous Region, and Xinjiang also joined in. After the National Healthcare Security Administration standardizes the "Guidelines for the Establishment of Price Projects for Assisted Reproductive Medical Services" in 2023, the government will subsidize every infertile patient through hospital subsidies based on the unit price of services and projects, in accordance with medical insurance funding. This policy has not changed the original bidding mode of existing assisted reproductive hospitals. At present, there has been a surge in the number of assisted reproductive clinic personnel in many hospitals, and it is expected that the number of patients seeking treatment this year will increase by 20% compared to the same period last year. From the perspective of market demand, the assisted reproductive industry has truly ushered in an unprecedented "recovery".
Choice is more important than effort. The national policy on childbirth continues to put more resources in the assisted reproductive industry
According to the publicly available financial reports and official website information after the company's listing, as the first domestic IVD company in the field of assisted reproductive, Basecare Medical's industrial structure fully complies with the national policy of "having children". In the context of an aging population and a continuous decline in birth rates, more fertility policies will be introduced in the future to continue supporting this industry. The company's development strategy is also very clear, which is to make every effort to build the full industrialization capability of reproduction. Basecare focuses on reproductive scenarios such as genetics, andrology, embryos, and cryostorage to strengthen and extend the supply chain. After integrating the industrial chain, products have been continuously commercialized in recent years, gradually transforming from a single product R&D enterprise to an integrated supplier with large-scale industrial capabilities.
The ugly duckling turns into a white swan? Can Basecare become a high-performance stock by relying on its full industry chain layout?
According to the latest Frost Sullivan report, 70% of the devices in the assisted reproductive industry are mainly imported. According to the latest list of medical institutions approved to carry out human assisted reproductive technology released by the Health Commission, China has more than 621 licensed centers for assisted reproductive technology by 2023, and 104 third-generation centers. According to the compound growth rate of 10%, by 2025, China will have more than 700 reproductive centers, making it the country with the largest number of cycles and market size in the world. Faced with the growing market demand, assisted reproductive clinical practice faces two challenges: 1. Chinese assisted reproductive hospitals were established earlier and have a higher degree of manual labor and craftsmanship. How to renovate and upgrade existing hospital facilities, and enhance the level of hardware intelligence and digitization in hospitals, is an urgent need for many hospitals at present; 2. China's assisted reproductive equipment mainly comes from imports. Only by building a large-scale and domestically produced product production and supply system can we fundamentally reduce the terminal costs of hospitals and patients.
Let's take a look at the highlights of Basecare pipelines.
From the perspective of the company's main business, Basecare started with third-generation in vitro genetic products. As early as February 2020, the company obtained the registration certificate for the first third-generation IVF embryo detection PGT-A kit in China, and also the first innovative Class III device registration certificate in China, filling the clinical gap of third-generation IVF kits in China. This is also an authoritative product that supports the listing and leading industry position of Basecare. According to the company's 2023 annual report, the clinical trial of the PGT-M kit is about to be completed, which will become the first kit in China to block the Mediterranean anemia gene. There are tens of millions of carriers of Mediterranean anemia in the Guangdong and Guangxi regions of China, and this product has significant population implications for the prevention and control of regional genetic diseases. In addition, the company's PGT-SR kit is also a domestically produced product that is a key focus of research and development during the 14th Five Year Plan period. It has jointly published a high-level paper with CITIC Xiangya in Human Reproduction, which can effectively detect genetic diseases that were previously undetectable, allowing families with genetic diseases to have healthy children. Last year's financial report showed that the core PGT business growth rate reached 35%, indicating that the company's technology has been leading the development of the industry and playing an important role in improving the quality of the Chinese population.
In addition, through last year's acquisition, the company has acquired a Time-Lapse incubator and culture medium with over 30 years of historical reputation. The GERI Time-Lapse incubator has obtained NMPA certification and is the only humidifiable Time-Lapse incubator in the world, representing the highest level of incubators worldwide. It is equipped with the world's only FDA approved AI embryo analysis software, with over 100000 embryo data models that can accurately evaluate the developmental status and implantation timing of embryos. Compared to traditional incubators, it significantly helps embryologists improve embryo sac formation and survival rates. In addition, according to the annual report, the company has also initiated the localization process of its GEMS culture medium, and will achieve the localization replacement of all strains of culture medium in the future, providing industrial support for national assisted reproductive fluids. These achievements and layouts not only demonstrate the industry leading height of Basecare, but also feel the expectation of a large-scale industry for "cow type" products.
Besides genetic and embryonic products, what other highlights are worth looking forward to in the future?
The company not only focuses on the difficulties of female fertility, but also on male reproductive health issues. According to the latest Frost Sullivan report, 40% of infertility is caused by men, and the quality of male sperm has decreased by 75% in the past 40 years. Traditional male sperm testing requires complex staining operations and manual microscopic interpretation. In terms of male health integration, Basecare's self-developed intelligent sperm analyzer combines 500000 artificial intelligence big data models of sperm morphology, achieving real-time and fully automatic detection of live sperm concentration, vitality, and morphology for the first time. It is expected to be certified and sold in the second half of 2024. Official information shows that another household sperm testing device will also obtain a registration certificate next year. Through the official website, it can be seen that this product is an extension of the C-end family fertility assessment market, providing a variety of convenient testing options for healthy and prospective pregnant individuals. Is there more room for imagination in the future pregnancy testing market? We'll wait and see.
It is worth mentioning that the company has independently developed an intelligent liquid nitrogen tank, which has obtained the first Class II medical device registration certificate in China. According to the "Management Measures for Human Assisted Reproduction", frozen embryos are required to be stored for at least 5 years. It is estimated that there will be 10 million new embryos that need to be frozen each year in China. Currently, the preservation of embryos and embryos in reproductive centers is mainly done through manual tube selection and manual recording. cryostorage is an important part of the remaining industry chain, and the company expects to launch the BSG800 ultra-low temperature storage fertility system solution in the second half of the year. In the future, these technologies will help more hospitals achieve intelligent transformation of their cryostorage laboratories and lay out the human fertility preservation market in China and even globally. At this point, the company has formed a comprehensive closed loop in the reproductive cycle industry chain, which has dealt a blow to its competitors in the same industry by reducing maintenance.
The flowing water is not competitive, the competition is endless. Can Basecare Medical become the Chinese version of VitroLife?
From the development process of Basecare, it can be seen that the company has transformed from a technology company to a hardware integration enterprise, and will continue to expand and upgrade its industrial chain on the road of assisted reproductive artificial intelligence applications in the future.
Compared with Vitolife's comprehensive pipeline, Basecare has not only achieved technological benchmarking, but also made significant achievements in the internationalization capability of the industrial chain. As the second company in the world to have full industry chain capabilities in this field, Basecare has launched innovative products in every industry sector, which not only reflects its technological strength but also demonstrates its market competitiveness.
In the industry, Basecare has integrated multiple high-quality product lines through merger and acquisition strategies, effectively expanding its market size and commercialization capabilities. Last year, the company's revenue increased by 48% year-on-year to 208 million yuan, achieving significant growth. This performance not only proves the market competitiveness of Basecare, but also demonstrates its strong potential in the field of assisted reproduction.
From the completion of mergers and acquisitions to the current increase in sales performance, it can be seen that the growth trajectory of Basecare is remarkably similar to that of Vitrolife, and its growth model can be regarded as a typical case of a medical device enterprise. The company is leading the rapid development of the assisted reproductive industry through continuous technological innovation. And currently, this industry has also received strong support from the government and is in a stage of rapid growth. With its leading market position, Basecare is also expected to lead the wave of localization in the assisted reproductive industry in the future, opening up greater development opportunities.
Based on the 20 billion dollar market value of Vitrolife, Basecare is continuously expanding its strategy and striving to occupy a leading position in the global assisted reproductive industry. In the future, it is worth looking forward to whether Basecare can surpass Vitrolife and become a leader in the global "childbirth" industry.
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