China Medical Technologies (CMT), a medical device company that develops, manufactures and markets advanced in- vitro diagnostic products and high intensity focused ultrasound tumor therapy system, has announced its unaudited financial results for the third quarter ended December 31, 2007.
CMT reported net revenues of $36.3 million in 2007 financial year, representing a 64.2 percent increase from the corresponding period of the year 2006.
The revenues are currently generated from three product lines, ECLIA diagnostic systems, FISH diagnostic systems and HIFU tumor therapy systems. ECLIA and FISH system sales include the sales of equipment and reagent kits.
Revenues from ECLIA system sales were $13.3 million, representing a 74.4 percent increase. The strong year-over-year growth in the ECLIA system sales reflected the increasing utilization of ECLIA analyzers by hospitals and the introduction of new reagents, both of which drove increasing demand for reagent kits.
FISH system sales were $7.2 million after the launch of FISH systems in the first quarter of 2007. HIFU tumor therapy system sales were $15.9 million, representing a 9 percent increase. The year-over-year growth in this sector was driven primarily by increases in unit sales.
Gross margin decreased to 63.2 percent for 3Q FY 2007 as compared to 72.6 percent for the corresponding period of FY 2006. The decrease in gross margin was due to the amortization of FISH intangible assets of $2.5 million and FISH equipment sales, which generated lower gross margin. Future FISH reagent sales will generate recurring revenue and higher gross margin for the company. Excluding the impact of FISH amortization, gross margin would have been 70 percent.
Research and development expenses were $1.6 million for 3Q FY2007, representing a 24.9 percent increase. The increase was primarily due to the development of new ECLIA reagents and FISH reagents.