Basecare Announces 2021’s Annual Results The overall increase in revenue and Gross Profit

Commercialization is driven by Innovative Platform

The commitment to create the Full Reproductive Cycle Products

Suzhou Basecare Medical Corporation Limited (Basecare or the Company along with its subsidiaries and the Group HKG:2170), An innovative platform of genetic testing services to assist reproduction in China and the world, has announced its audited consolidated financial results for the fiscal year ending the 31st of December, 2021 (the year).In 2021 the Group’s revenues increased by 32.3 percent YOY Year to RMB107 million. The gross profits were RMB51.15 million, which is an increase of 84.6 percent YOY. The overall gross margin grew from 34.2 percent to 47.7 percent due mainly to the growth of the gross profit margins of PGT-A kits, which ranged from 46.0 percent to 70.0 percent. Basecare is a significant manufacturer of IVF of the 3rd generation solutions that assist in reproduction. China is expanding its services beyond the preimplantation stage to encompass the postnatal and prenatal phases and has developed its kits for every location, making it a business with an in-house genetic test pipeline of kits that spans the entire reproductive cycle.

An undisputed leader in assisted reproduction in China with the most advanced technology

Basecare’s PGT A kit is the first 3rd-generation IVF Genetic testing kit recognized by the National Medical Products Administration of China (NMPA), which marks the beginning of a controlled third-generation IVF marketplace in China. In the meantime, the Group has continued to increase its investments in R&D expenses and also increased obstacles to entry into the field. In 2021, the company’s R&D expenses totaled RMB73.71 million, which rose 114% over the previous year. The company is currently developing two other preimplantation genetic testings, also known as PGT products, specifically PGT-M and PGT SR kits, both of which are expected to receive NMPA approval for registration between 2022-2024. The company’s PGT-M kit is the only item of its type to have successfully passed registration tests in China. The PGT-SR kit could be the first commercially standardized product that is of this type in China that has the potential to be large-scale clinical use. Together with the PGT-A kit will create a comprehensive testing kit range that will be able to take over the PGT field. This will strengthen Basecare’s dominant position in China’s third-generation IVF market for genetic testing kits.

Utilizing its strengths with PGT, Basecare has positioned itself to be an innovative platform within China’s larger market for reproductive genetics. It has expanded its reach beyond the preimplantation stage to the postnatal and prenatal locations. It is developing appropriate kits for each of the steps, making it the only company operating in China with a genetic test pipeline of kits that spans the entire cycle of reproduction. Apart from kits for testing, The Group has also developed a range of novel devices and tools to improve workflow within molecular genetic laboratories by using kits.

Enhances the commercialization process and breaks down sales channel obstacles

The Group sold a substantial part of its products directly to reproductive clinics and hospitals. It also offered its genetic tests kits to wholesalers, who then supplied our product to hospitals and reproductive clinics. The Group is currently present in over 55 centers for reproductive services across the nation and has developed business relationships with around 70% of the top customers. The company has an internal sales and marketing department that focuses on servicing essential customers, including the third generation of IVF licensed hospitals and clinics for reproductive health. The in-house sales and marketing department is also accountable for marketing the products to reproductive clinics and hospitals by engaging in academic marketing activities for interaction with KOLs and other professionals from the industry. The Year 2021 was the last time Basecare organized 56 educational exchanges to help the operation of markets and promotion.

With the first PGT, an NMPA-approved kit to be made available in China, The Group believes it will benefit from the advantages of being the first to market in building and consolidating sales channels and the customer base. The Group plans to concentrate its commercialization strategy around critical healthcare facilities and clinics for reproductive health. The Group will use the relationships it has built with these clinics and hospitals for PGT-A to expand the range and extent of its reach. The Group aims to improve the number of licensed clinics and hospitals to conduct PGT and build stronger connections with them to improve customer retention and establish the foundations for offering additional products for them in the future. Basecare is working towards complete access to licensed hospitals and fertility clinics across China. In addition, it plans to increase its financial share for these clinics and hospitals by offering a wide range of solutions by introducing new products to target other specialties in medicine like the pediatric and neonatal units within these institutions.

Eco-system construction proceeds and builds a solid portfolio moat.

In the year, the Group paid the consideration of RMB85 million related to Zhejiang Cellpro Biotech Corporation Limited (“Cellpro Biotech”). Cellpro Biotech is a company that focuses on the development of research and development and the sales, production, and technical services for assisted reproduction technology diagnosis treatments and products. The close collaboration between Basecare and Cellpro Biotech will strengthen the synergy between Basecare’s business and aid in building its complete service and production system, which is the primary step to allow Basecare to expand its moat portfolio and strengthen its leadership position in the competitive markets.

Looking ahead Looking forward, Looking ahead, Dr. Liang Bo, Founder of Suzhou Basecare Medical Corporation Limited, Executive Director and General Manager at Suzhou Basecare Medical Corporation Limited and Suzhou Basecare Medical Corporation Limited, stated, “Our objective is to develop and implement revolutionary genetic testing products that are specifically tailored to cater for Chinese population and satisfy the clinical needs that are not being met in China. Our aim is to ensure families with healthy babies. To realize that vision We expand our market reach and continue to establish and strengthen our sales channels and our customer base for PGT-A. In the meantime, we expand our product pipeline and quickly commercialize our product range to cover the entire reproduction cycle. We will also encourage the improvement of the hardware equipment used in centers for reproductive research, focus on the layout of the industrial chain for cryopreservation equipment for embryos, as well as provide automated and intelligent combined solutions to clinical studies in order to increase the competitiveness of the company, to keep an unbeatable position in the field of technology.”

What is Suzhou Basecare Medical Corporation Limited? Suzhou Basecare Medical Corporation Limited

Suzhou Basecare Medical Corporation Limited is a third-generation IVF clinic solution company in assisted reproduction across China in the world’s first publicly traded IVD business in assisted reproduction (stock code: 2170. HK). It is committed to developing products through R&D and clinical use of high-throughput sequencing technology in reproductive health. Basecare adheres to the idea to create “compliant products” that comply with the industrialization route of R&D registration, sales, and R&D and also has a pipeline of products that covers tests for embryos, andrology, and fertility preservation. The PGS (preimplantation testing of chromosomes for aneuploidy) kit developed independently in collaboration with the firm has received the initial “special approval for medical equipment” Green channel. It’s the first third-generation tube test product in China to receive the registration certification of Medical devices of Class III, which will open the “certificate period” for genetic test kits for assisted reproduction in China.

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