MicroPort Scientific : MPSC Announces 2016 Interim Results

Shanghai, China - MicroPort Scientific Corporation (HK: 853) ('MPSC' or the 'Company'), a leading medical technology company focusing on innovation, manufacturing and marketing high-end medical devices globally, announced on August 29 the unaudited interim results of the Company and its subsidiaries ('Group') for the six months ended 30 June 2016 ('reporting period').

During the reporting period, the Group successfully achieved a revenue of approximately US$198.6 million, representing a growth of 6.9% excluding the foreign exchange impact and a growth of 3.8% in US$ compared to the corresponding period of 2015. Meanwhile, the Group successfully turned around to a profit of US$5.5 million (profit attributable to equity shareholders: US$4.7 million) for the six months ended 30 June 2016, as compared with a net loss of US$2.6 million for the six months ended 30 June 2015, mainly attributable to an increase of gross profit driven by rapid revenue growth of key business segments and increase of foreign exchange gain.

During the reporting period, Chinese government has continuously introduced various policies and initiatives that are directly aimed at the healthy and fast improvement of medical devices industry, which provides the Company with many opportunities for development. The 13th 'Five-year' plan for Economics and Social Development of the People's Republic of China has further elevated the importance of medical device industry in China and positioned the high-end medical device industry as the key national project among its development. One of the most prominent policies is to encourage the substitution of imported products with domestic-innovated ones. In addition, government agencies such as China Food and Drug Administration ('CFDA') provide fast track review channel to accelerate the review and approval process of innovative products, with the intention to streamline the procedure and improve the efficiency, which will benefit the innovative products of innovative enterprises. Meanwhile, the ever-increasing stringent oversight on the medical industry improved the effectiveness and safety of the products which eventually leads to better regulated industry and health growth of sizeable, high-quality oriented corporations. However, the ever-competitive market landscape and change of relevant governmental bidding policies and model will continue to bring huge challenges to the industry.

'In face of the challenges of more fierce world-wide competition of the rapidly growing medical device industry at home and abroad, the Company managed to capture the upside potentials brought by the government policy and mechanism reform, and achieved a remarkable success with revenue increase in most business segments through optimizing sales channels, capturing opportunities in new markets, as well as advancing research and development ('R&D') projects, integrating resources, and improving operating efficiencies,' said Dr. Zhaohua Chang, MPSC Chairman and Chief Executive Officer. 'This is attributed to our outstanding product portfolio, diversification and globalization strategies, as well as hard work of our personnel. In 2016, we continued to take solid steps on the path towards becoming a global leading medical device company.'

The Group's outstanding performance was primarily driven by strong sales performance of key business segments. During the six months ended 30 June 2016, cardiovascular segment performed strongly with US$70.1 million of revenue, up 12.4% (excluding the foreign exchange impact) compared to the corresponding period of 2015. The increase was driven by outstanding performance of Firehawk Rapamycin Target Eluting Coronary Stent System ('Firehawk') and continued organic growth in Firebird2 Rapamycin-Eluting Coronary CoCr Stent. Other China business also grew vigorously and recorded revenue growth of 40.2%, 26.8% and 9.2% (excluding the foreign exchange impact) from respectively our Endovascular business, Neurovascular business and Electrophysiology business. Orthopedics devices segment remained stable and recorded 1.2% growth (excluding the foreign exchange impact) in revenue, with international (Non-China) orthopedic business further narrowed its net loss with a drop of 27% (excluding the foreign exchange impact) and expected to realize self-funding of cash flow by the end of 2016 as planned, and the China business achieved a growth of 14% (excluding the foreign exchange impact) by continually launching into more hospitals across provinces, attracting more distributors and gaining greater recognition from Chinese surgeons. In particular, the sales revenue of our joint products in China achieved growth of 34% (excluding the foreign exchange impact) year-on-year, much higher than market average growth rate.

Meanwhile, the Group gained substantial advancements of key pipeline products in registration and clinical development. For instance, Firehawk gained approval for market launch in Brazil, India, Argentina and Vietnam. Evolution™ Knee revision system received FDA approval. Columbus 3D EP Navigation System and FireMagic Irrigated Ablation Catheter for EP business gained approval for market launch from the CFDA, with which the Group provides physicians with a comprehensive solution for the diagnosis and treatment of complex arrhythmias. Four major pipeline products, including Vitaflow™ Transcatheter Aortic Valve ('Vitaflow™'), Firesorb™ Bioresorbable Rapamycin Target Eluting Coronary Scaffold System ('Firesorb™'), Reewarm™ PTX drug coated Balloon PTA Catheter, and Tubridge™ Vascular Reconstruction Device, were granted by the CFDA the Green-Path, a special fast-track procedure for innovative medical devices to gain CFDA approval. Five clinical trials for key products are being carried out, such as Vitaflow™, Firesorb™, 'Made in China' BonaFire Pacing lead, Minos™ Ultra Low Profile Abdominal Aortic Aneurysm Stent-Graft and Firehawk European TARGET All Comer. Meanwhile, Evolution™ Revision Tibial System was submitted to Food and Drug Administration of U.S. for approval in July and R&D process of joint prosthesis in China was at the stage of clinical trials. The Group also achieved great breakthroughs in key technologies for our surgical robot project.

'In the near future, the MPSC Management team will focus on further diversifying our product pipeline, smoothing integration of the Company, enhancing operational efficiency and delivering greater fiscal prudence,' said Dr. Zhaohua Chang. 'Looking forward, we are striving to deliver high-quality and affordable medical devices to more patients and build our brand, so that it becomes synonymous for quality, innovation and above all integrity worldwide. There is no doubt that there are many challenges ahead of us, but as a strong team of dedicated people, I believe MPSC can achieve all of our goals, and take the Company into a new era of growth and success.'

About MicroPort

MicroPort Scientific Corporation (the 'Group') is a leading medical device company with business focusing on innovating, manufacturing, and marketing high-quality and high-end medical devices globally. With a diverse portfolio of products now being used at an average rate of one for every 15 seconds in thousands of major hospitals around the world, the Group maintains world-wide operations in a broad range of business segments including Cardiovascular, Orthopedic, Electrophysiological, Endovascular, Neurovascular, Surgical, Diabetes Care and Endocrinal Management, and others. MicroPort is dedicated to becoming a patient oriented global enterprise improve and reshape patient lives through application of innovative science and technology.

For more information, please refer to: www.microport.com

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