Steadily Advances Innovation and R&D
Revenue Climbs to RMB15.28 Billion
Adjusted Non-HKFRS Profit Attributable to the Owners of the Parent up 1.2%
Strong Recovery in Q2 Revenue up 30.0%
Adjusted Non-HKFRS Profit Attributable to the Owners of the Parent up 20.7%
Sino Biopharmaceutical Limited (Sino Biopharmaceutical or the Company, together with its subsidiaries, the Group) (HKG: 1177), a leading innovation-driven pharmaceutical conglomerate in the PRC, has announced its unaudited interim results for the six months ended 30 June 2023 (the Period).
Development Highlights
- In the second quarter, the Group capitalized on the post-COVID recovery, vigorously developed its four therapeutic areas, namely oncology, liver disease, respiratory system and surgery/analgesia, and accelerated the launch of innovative products. During the period, the revenue of the Group in Q2 was up 30.0% and the adjusted non-HKFRS profit attributable to the owners of the parent saw an increase of approximately 20.7% over the same period last year.
- The Group launched a number of new products and achieved considerable sales growth from products in the fields of liver disease and respiratory system. In the first half of 2023, two innovative products were launched to market and two biosimilar drugs received marketing approval. Revenue from liver disease drugs increased by approximately 14.0% and revenue from respiratory system drugs increased by approximately 11.2% compared to the same period last year
- As of 30 June 2023, the Group had a total of 46 innovative drug candidates in the field of oncology, 8 innovative drug candidates related to the respiratory system, 7 innovative drug candidates related to liver disease, and 4 innovative drug candidates in the field of surgery/analgesia in the process of clinical trial application or above. Of these, 3 innovative oncology drug candidates and 1 innovative respiratory system drug candidate are in the marketing application stage, and 4 innovative oncology drug candidates, 1 innovative liver disease drug candidate, and 2 innovative surgery/analgesia drug candidates are in Phase III clinical trials. In addition, the Group had a total of 14 biosimilar or generic drug oncology candidates, 3 additional biosimilar or generic liver disease drug candidates, 13 biosimilar or generic respiratory system drug candidates, and 13 biosimilar or generic surgical/analgesic drug candidates in the clinical trial application or above.
- A marketing application has been submitted to the Center for Drug Evaluation (“CDE”) of NMPA for Focus V (Anlotinib hydrochloride capsules) in combination with TQB2450 (Anti PD-L1) for treating first-line small cell lung cancer in January 2023. In addition, 12 new indications for Anlotinib have entered Phase III clinical trials with marketing applications expected to be submitted within the next one to two years.
- Annike (Penpulimab monoclonal antibody) injection was approved in January 2023 for treating, in combination with chemotherapy, first-line locally advanced or metastatic squamous non-small cell lung cancer. In addition, it has another indication (third-line nasopharyngeal carcinoma) going through marketing review.
- Yilishu (Efbemalenograstim alpha) injection was approved in May 2023 for the prevention and treatment of neutropenia in cancer patients taking chemotherapy drugs. The efficacy and safety of Yilishu, as well as its innovative mechanism, were verified in three pivotal, multi-center, randomized and controlled Phase III studies conducted worldwide, which compared the efficacy and safety of Yilishu with those of drugs commonly used in clinical practice.
- Kailitong (Limaprost) tablets was approved for marketing in February 2023. It is the first drug in China to address the pathological mechanism of lumbar spinal stenosis and has the dual effect of improving neurological microcirculation and neurological functions. And it is the only small-molecule drug specifying in its package insert that it is for the treatment indication of lumbar spinal stenosis. With the launch of Kailitong, a brand-new solution is available to more than 30 million lumbar spinal stenosis patients in China, helping address a huge yet unmet clinical need.
- The clinical trial application of Lanifibranor was submitted to and accepted by CDE in March 2023. In July, Lanifibranor was included on the “Breakthrough Therapy Designation” list by CDE. The product is currently undergoing Phase III clinical trials globally, and is the first oral drug for NASH to enter Phase III clinical trials in China. It is expected to address unmet needs in the China NASH market.
- TDI01(a highly selective inhibitor of ROCK2) is currently in a Phase II clinical development trial. In April 2023, a Phase II clinical trial of TDI01 for the treatment of idiopathic pulmonary fibrosis was initiated in China. Seeing the potential of TDI01 to become a major drug, the Group will vigorously pursue its clinical development.
- All of the Group’s generic drugs with annual revenue of more than RMB500 million (excluding exclusive products) entered the centralized procurement list, thus are cleared of further centralized procurement risks.
During the Period, the Group recorded revenue of approximately RMB15.28 billion, a year-on-year increase of approximately 0.5%. Revenue for the second quarter amounted to approximately RMB8.63 billion, representing a YOY increase of approximately 30.0%. Profit attributable to owners of the parent company was approximately RMB1.26 billion. Earnings per share attributable to owners of the parent company were approximately RMB6.78 cents. Adjusted non-HKFRS profit attributable to the owners of the parent was approximately RMB1.48 billion, a YOY increase of approximately 1.2%. Adjusted non-HKFRS profit attributable to the owners of the parent for the second quarter was approximately RMB964 million, representing a YOY increase of approximately 20.7%. The Group’s liquidity remains strong, with cash and bank balances classified as current assets of approximately RMB11.58 billion, bank deposits classified as non-current assets of approximately RMB4.23 billion, and wealth management products of approximately RMB3.81 billion in total, and total fund reserves amounting to approximately RMB19.61 billion at the end of the Period.
The Board of Directors has recommended an interim dividend payment of HK2 cents per share (1H2022: HK6 cents).
Sales: The continuous manifestation of R&D achievements has led to outstanding performance in specialty therapeutic products
The Group has benefited from years of in-depth research and development and continues to focus on the development of related products in specialty therapeutic areas with the aim of building its specialty brand.
During the Period, sales of oncology drugs amounted to approximately RMB4.49 billion, accounting for approximately 29.4% of the Group’s revenue. Sales of liver disease drugs increased by approximately 14.0% year-on-year to approximately RMB2.29 billion, accounting for approximately 15.0% of the Group’s revenue. Sales of surgical/analgesic medications amounted to approximately RMB2.33 billion, accounting for approximately 15.3% of the Group’s revenue. In addition, the sales contributions of products in various areas such as respiratory system, cardio-cerebral vascular medicines and others increased simultaneously, accounting for approximately 11.0%, 10.5%, and 18.8% of the Group’s total revenue, respectively.
In the field of liver disease, the Group endeavored to strengthen academic promotion of the drugs’ efficacy and safety advantages to doctors for the treatment of chronic viral hepatitis, acute drug-related liver injury and liver function abnormalities. Academic conferences at various levels helped to expand the doctor audience and increase the drugs’ among experts. Through these activities, the Group was able to actively target new patients and new markets, further driving the rapid sales growth of Tianqing Ganmei.
In the field of surgery/analgesia, the Group focused on hospital access and development in high-potential areas to expand market coverage and hospital channels, strengthening downstream development and improving the development and coverage of secondary hospitals and community healthcare facilities, which has driven the sales of Zepolas (Flurbiprofen) cataplasms to continue to grow with momentum in recent years.
R&D: Strong in-house research and development capabilities, continued focus on R&D of innovative medicines
The Group has continued to focus its R&D efforts on new medicines in four therapeutic areas, namely oncology, liver disease, respiratory system and the surgical/analgesic system. As at the end of the Period, the Group had a total of 127 products under development, including 60 oncology products, 10 liver disease products, 21 respiratory system products, 17 surgical/analgesic products, and 19 products in other categories, of which 69 were Category I innovative products.
The Group will continue to boast strong in-house research and development capabilities and has continued to invest in business development, driving innovation and transformation with its dual-engine approach. During the Period, the Group’s R&D expenditure amounted to approximately RMB2.6 billion, accounted for approximately 17.1% of the Group’s revenue. Nearly 10 innovative drugs will be launched to market in the next three years, and more than 40 innovative drugs in research and development are expected to be launched by 2030, further strengthening the Group’s dominance in its four therapeutic areas and providing strong impetus for long-term sustainable growth.
Prospects: Driven by internationalization strategy, aiming to become a world-class innovative pharmaceutical group with revenue of HK$100 billion by 2030
As the pharmaceutical industry is expected to fully recover within the year, the Group will continue to closely monitor market trends and actively optimize its development strategies, making timely adjustments along the entire industrial chain, including procurement, production and marketing, to mitigate the impact of the pandemic. At the same time, it will continue to focus on innovation and development in the four major therapeutic areas of oncology, liver disease, respiratory system, and surgery/ analgesia, and accelerate its international deployment to build a healthier, more diversified, and sustainable revenue system.
Looking ahead, the Group will continue to adhere to its dual-pronged approach of globalization, i.e. bringing global pharmaceutical innovations to China for the benefit of Chinese patients and going global to open up new markets to accelerate the resolution of global unmet clinical needs. The Group aims to generate revenue of up to HK$100 billion by 2030 and become a world-class innovative pharmaceutical group.