Recently, Shanghai Jianceng Pharmaceutical Technology Co. As the world's leading medical device products and services manufacturer in the field of organ transplantation,If the IPO is successful, it will become the domestic "organ transplantation first stock".
According to the prospectus, Jiankeng Medicine was founded in 2003, the initial main business for the agency transplantation field instruments and reagents products, until 2016 through the acquisition of foreign subsidiary LSI to obtain organ preservation and repair product line, the latter's core product LifePort renal perfusion running box is the most widely used in the clinic of the low-temperature mechanical perfusion of the products, by nearly 40 countries and regions, and the most widely used in the field of medical equipment and services. It is used by hundreds of OPOs or transplant centers in nearly 40 countries and regions.
This acquisition marks a milestone in the history of KPMC.
_From Distributor to Parent Company
Organ transplantation can be divided into three stages: preoperative matching, perioperative preservation and repair, and postoperative immunosuppressants and regular follow-up. Each stage requires the use of corresponding medical device products, such as preoperative and postoperative testing IVD products, organ storage/transportation instrumentation products, etc.
Kenkom's product line includes devices for organ preservation, transportation, evaluation and repair during transplantation, medical consumables for transplantation, and in vitro diagnostic reagents, which cover the whole stage of preoperative evaluation, perioperative treatment, and postoperative long-term management of organ transplantation.
From the perspective of the development history of JKP, from 2003 to 2010, the company mainly operated the agent sales business of medical devices and immunosuppressants in the field of organ transplantation, and in 2005, it became the exclusive agent of LSI, a famous company in the field of organ transplantation in the U.S., in China, and assisted LSI in completing the registration of the series of products for the LifePort renal perfusion products and the marketing and promotion of the products in China.
In 2005, LSI became the exclusive agent in China for LSI, a well-known company in the field of organ transplantation.
But just relying on the agency of IVD reagents and immunosuppressive drugs in the field of transplantation, the market layout of Jianjeng Pharmaceutical has not been too good. Until 2016, Kencom Pharmaceuticals made a big move to acquire LSI Corp. for $87 million in cash, acquiring the organ preservation and repair product line, and opening up all aspects of organ transplantation surgery.
After changing from a distributor to a parent company, Kencom Pharmaceuticals, with LSI's LifePort transporter system in hand, has seen a year-on-year trend in revenue and net profit. Financial data show that in March 2019-2022, the company's revenue was 397 million yuan, 421 million yuan, 480 million yuan and 114 million yuan respectively; the corresponding net profit of the mother of the same period was 97.1484 million yuan, 50.0992 million yuan, 49.963 million yuan and 12.1969 million yuan respectively.
Seeing the revenue structure specifically, Kenkong Medicine's main revenue comes from organ preservation and repair products (i.e., LSI's products), which accounted for more than 89% of the total revenue for three consecutive years; the revenue from agency products fluctuates in the range of 8-10% of the total revenue.
_Organ transplant market pain points are many proposed to raise 1 billion yuan to expand the business
In recent years, the volume of organ transplantation surgery in general has been a rapid growth trend. Before the spread of the global new crown epidemic, the global organ transplantation volume grew from 127,400 cases in 2015 to 166,400 cases in 2019. Domestically, according to data from the China Transplant Development Report (2019), China's organ donation volume and transplant surgery volume in 2019 were 5,818 cases and 26,121 cases, respectively, ranking second globally; the compound average annual growth rate of organ donation volume and transplant surgery volume from 2015-2019 was 20.43% and 19.53%, respectively, far exceeding the global growth level.
But the new crown epidemic has had a greater impact on the global healthcare system, and the number of living organ donations has dropped significantly. In China, where the healthcare system was largely back to normal after the first quarter of 2020, the total number of transplants for the year still fell by 7.77%.
In addition to the impact of the epidemic, the shortage of organ donors has also been a pain point in the industry, the International Organ Donation and Transplantation Registry data show that at the end of 2020 there are still more than 345,400 patients waiting for organ transplants, and there are at least 23,103 patients on the kidney transplant waiting list in 2020 who died because they hadn't waited for an organ transplant. There are more than 2.66 million end-stage renal disease (ESRD) patients on dialysis worldwide, and only 5.65% of ESRD patients currently have access to organ transplants, despite the fact that kidney transplantation is the most desirable form of treatment.
As a result, the growth space of the Kencon Pharmaceuticals market has been widely questioned. From the use of the fund-raising in the prospectus, Kencom Pharmaceuticals is planning both vertical and horizontal expansion.
Jianceng Pharmaceuticals intends to raise 1.023 billion yuan, is expected to be used for organ transplantation innovation R & D platform research and development, renal transplantation equipment localization and upgrading, liver transplantation equipment and in vitro diagnostic reagents in the field of transplantation product registration and promotion. Vertical, cut into the midstream development of transplantation field in vitro diagnostic reagents; Horizontal, to the liver transplantation field to launch.
Another noteworthy point is that Jengeng Pharmaceutical intends to invest 200 million yuan for the localization of kidney transplantation equipment project. It is described in the project information: through the acquisition of LSI after years of integration, the company's domestic technical team has absorbed the integration of perfusion pressure and flow regulation technology, large particulate matter and bubble isolation technology, cryogenic maintenance technology and other core technologies. July 2022, the company has completed the development of localized research function machine, in the perfusion safety, continuity and effectiveness of the continuation of the advantages of the original imported machine, at the same time in the low-temperature maintenance technology, peristaltic pump stabilization control technology and other aspects of the enhancement.