FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 騰盛博藥生物科技有限公司(於開曼群島註冊成立的有限公司) 呈交日期: 2025年8月6日 第 1 頁 共 11 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 02137 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 719,334,991 | | 12,723,500 | | 732,058,491 | | 增加 / 減少 (-) | | | 42,392 | | | | | | 本月底結存 | | | 719,377,383 | | 12,723,500 ...

Investment Rating - The report maintains a "Positive" outlook for the pharmaceutical and biotechnology industry in China [6]. Core Insights - Small nucleic acid drugs are expected to become the third major class of drugs after small molecules and antibodies, with unique advantages such as broad targets, strong specificity, high development efficiency, and long dosing intervals [9][38]. - The commercialization of rare diseases is maturing, and the long-term advantages for chronic diseases are becoming evident, with significant sales growth for products like Spinraza and Leqivo [9][60]. - There is a notable increase in business development (BD) activities, highlighting the potential of early-stage chronic disease pipelines [9]. Summary by Sections 1. Small Nucleic Acids: Potential as a New Drug Class - Small nucleic acid drugs, including ASO, siRNA, and Aptamer, interact with mRNA to regulate gene expression, offering a new technological pathway for drug development [13]. - The global market for small nucleic acid drugs has grown from $1.04 billion in 2017 to $5.09 billion in 2024, with a CAGR of 25.5% [60]. 2. Milestones in Overseas and Domestic Markets - In the overseas market, significant developments are expected in the TTR field and cardiovascular diseases, with drugs like Vutrisiran and Pelacarsen showing promise [9]. - In China, new therapies for chronic hepatitis B and competitive advancements in cardiovascular drugs are emerging, with several companies making progress in their pipelines [9][60]. 3. Investment Recommendations and Targets - The report suggests focusing on high-quality domestic companies involved in the development of small nucleic acid drugs targeting chronic hepatitis B and cardiovascular diseases, such as HengRui Medicine, China National Pharmaceutical Group, and others [9].

Core Viewpoint - The collaboration between Tengsheng Bo Pharmaceutical and Health元 Group focuses on the exclusive licensing and commercialization of BRII-693 in Greater China, addressing the urgent need for new antibiotics in the face of rising antibiotic resistance [1] Company Summary - Tengsheng Bo Pharmaceutical's subsidiary, Brii Biosciences, has signed a technology transfer agreement with Health元 Group for the development and commercialization of BRII-693 in Greater China [1] - Health元 Group will be responsible for the development, regulatory approval, and commercialization of BRII-693 in the specified regions [1] - The agreement includes an upfront payment and additional milestone payments based on the achievement of specific development and commercialization milestones, along with a sales revenue sharing arrangement [1] Industry Summary - The increasing threat of antibiotic resistance in Greater China highlights the urgent need for new hospital antibiotics, making the development of BRII-693 particularly timely [1] - The collaboration is expected to leverage Health元 Group's proven capabilities in the production and commercialization of hospital antibiotics, enhancing the prospects for BRII-693 [1] - The project is anticipated to address significant unmet clinical needs, with potential to become a Best-in-Class drug based on its therapeutic potential and pharmacological characteristics [1]

Core Viewpoint - The Hong Kong pharmaceutical stocks have experienced a decline, with notable drops in several companies' share prices, indicating a bearish trend in the sector [1] Company Performance - Kangfang Biotech (09926.HK) saw a significant drop of 15.07% in its share price [1] - Yiming Oncology-B (01541.HK) decreased by 9.75% [1] - Zai Lab (09688.HK) fell by 6.43% [1] - Akeso-B (01167.HK) experienced a decline of 5.37% [1] - Terns Pharmaceuticals-B (02137.HK) dropped by 5% [1]

Financial Performance - Total revenue for 2023 was RMB 617,000, a significant decrease from RMB 51,626,000 in 2022, indicating a decline of approximately 98.8%[12] - Other income for 2023 was RMB 163,728,000, down from RMB 107,857,000 in 2022, reflecting a decrease of about 51.8%[12] - The net loss for 2024 was RMB 512,381,000, which is an increase of 177.5% from the net loss of RMB 184,370,000 in 2023[12] - Other income decreased from RMB 163.7 million in 2023 to RMB 141.4 million in 2024, primarily due to a decline in bank interest income and government subsidies[43] - Other gains and losses shifted from a gain of RMB 252.4 million in 2023 to a loss of RMB 197.7 million in 2024, mainly due to non-cash losses from the fair value of financial assets and impairment of intangible assets[44] - The adjusted loss for the year was RMB 496.3 million for the year ended December 31, 2024, compared to RMB 120.1 million for the year ended December 31, 2023[50] - The company has faced significant net losses since its establishment and is expected to continue incurring losses in the foreseeable future[110] - The company has a history of significant losses and will require additional financing to fund its operations, which may not be secured under acceptable terms[110] Research and Development - Research and development expenses for 2024 were RMB 249,847,000, a reduction of 37.8% compared to RMB 402,705,000 in 2023[12] - The company is focusing on expanding its early research pipeline in new targets and platform technologies, enhancing its commitment to innovative solutions for global patients[6] - The company is focusing on infectious diseases, particularly its HBV projects and three core assets: BRII-179, elebsiran, and tobevibart, which are showing promising multi-modal approaches for higher functional cure rates in HBV patients[14] - The optimized recombinant vaccine BRII-179 has demonstrated strong HBsAg and broad T-cell responses, indicating its potential in enhancing immune responses against HBV[14] - The company expects to obtain key interim data between 2025 and 2026, which will guide further clinical actions towards achieving the highest functional cure rates for HBV[15] - The company plans to present data from ongoing combination studies involving BRII-179, elebsiran, and PEG-IFNα between 2025 and 2026, focusing on their effectiveness in treating chronic HBV[28] - The company plans to further evaluate its combination therapy programs to enhance functional cure rates for HBV infections, with a focus on initiating confirmatory clinical studies in the Greater China region[39] - The company is advancing multiple clinical trials for HBV treatments, with key data from the ENSURE study showing higher HBsAg seroclearance rates when combining siRNA with PEG-IFNα compared to monotherapy[24] Financial Position - Total assets as of December 31, 2024, were RMB 2,706,625,000, down from RMB 3,198,251,000 in 2023, representing a decrease of approximately 15.4%[12] - The company’s non-current liabilities increased to RMB 23,124,000 in 2024 from zero in 2023, indicating a shift in financial obligations[12] - The total liabilities decreased to RMB 100,545,000 in 2024 from RMB 125,869,000 in 2023, showing a reduction of approximately 20%[12] - Cash and cash equivalents decreased from RMB 2,661.4 million as of December 31, 2023, to RMB 2,413.4 million as of December 31, 2024, primarily due to operating expenses and third-party contract costs[48] - The current ratio increased to 3,118% as of December 31, 2024, from 2,211% as of December 31, 2023, due to the payment of most third-party contract costs and the amortization of deferred revenue[52] Strategic Focus - The company is actively seeking partnerships to further develop its promising projects in the MDR/XDR and HIV fields[25] - The company aims to enhance functional cure rates for a broader patient population through targeted combination therapy designs[18] - The company is seeking collaborations for promising non-HBV projects, including long-acting treatments for HIV and multi-drug resistant Gram-negative infections[16] - The company is strategically increasing investments in its leading HBV candidates as they enter late-stage clinical development[22] - The company aims to expand its pipeline through strategic licensing opportunities and business development, aligning with its long-term vision and priorities[40] Corporate Governance - The company is focused on expanding its board with experienced professionals in finance, auditing, and pharmaceutical sectors to enhance governance and strategic direction[80] - The management team emphasizes the importance of strategic planning and risk management in navigating market challenges and opportunities[80] - The company has adopted a share incentive plan to provide incentives and rewards to its employees[61] - The board of directors includes Zhi Hong as the Chairman and CEO, and Li Ankang as an executive director[126] - The company has no significant transactions or contracts involving directors or related entities during the reporting period[131] Employee and Shareholder Information - The group employed a total of 98 full-time employees as of December 31, 2024, down from 128 in 2023[137] - Total compensation costs for the year ended December 31, 2024, amounted to RMB 194 million, a decrease of 36% from RMB 302 million for the year ended December 31, 2023[62] - Major shareholders include ARCH Venture Fund IX, L.P. with 45,205,210 shares, representing 6.18% of the total shares[145] - The company has established a unified, value-based corporate culture and brand globally, enhancing performance and employee engagement[96] Market and Competitive Landscape - The company has experienced intense competition, which may lead to other companies discovering or commercializing competitive drugs before it does[110] - Approximately 87 million people in China are affected by chronic HBV, making it the country with the highest prevalence of the virus, and the company is focusing on improving functional cure rates for these patients[26] Future Outlook - The company plans to allocate HKD 1,466.6 million (56%) of the net proceeds to the HBV functional cure project, with HKD 681.8 million already utilized[112] - The company expects to fully utilize the revised unutilized net proceeds by the end of 2027[112] - The company has not fully utilized the net proceeds from the global offering, indicating ongoing funding needs for operations[111]

Group 1 - The Hong Kong pharmaceutical stocks showed a strong performance, with notable gains in several companies [1] - Zai Lab (09688.HK) experienced a significant increase of 13.51% [1] - Other companies such as LianKe Pharma-B (02105.HK) and Kintor Pharmaceutical (02137.HK) also saw substantial rises of 10.34% and 6.17% respectively [1][1]

Core Viewpoint - The company reported a net loss of 508 million yuan with no operating revenue, marking a year-on-year increase of 190.66% after the cessation of its COVID-19 neutralizing antibody drug production. The market capitalization has plummeted from over 36 billion HKD to less than 1.8 billion HKD [1]. Financial Performance - The company did not achieve operating revenue in 2024, only generating other income of 141 million yuan. This was impacted by a decrease in bank interest income by 20.8 million yuan due to lower deposit rates and a 13.6% reduction in government subsidy income [2]. - As of the end of 2024, the company's cash and cash equivalents decreased by 9.3% to 2.413 billion yuan due to operational and R&D expenditures [2]. - Administrative expenses were reduced by 22% to 153 million yuan, primarily due to pipeline focus and organizational optimization, resulting in a decrease in employee costs by 39.7 million yuan. The number of employees dropped from 146 in 2022 to 98 in 2024, marking the first time the workforce fell below 100 [2]. R&D Pipeline - R&D expenditures decreased by 38% to 250 million yuan, mainly due to prioritizing the hepatitis B virus (HBV) functional cure project and strategic organizational optimization, which led to a reduction in third-party contract costs by 80 million yuan and employee costs by 68 million yuan [3]. - The company initially established a pipeline of 10 innovative candidate products in 2022 but only reported progress on 7 major candidates in the 2024 annual report. Key products include BRII-179, Elebsiran, and Tobevibart, all currently in Phase II clinical trials [3]. Strategic Focus - The primary focus remains on infectious diseases, particularly the three core candidates in the hepatitis B pipeline. The company aims to enhance the functional cure rate for hepatitis B through combination therapies [4][5]. - The company has strategically acquired rights to BRII-179 to ensure a stable supply for future clinical development after the bankruptcy of VBI Vaccines, which previously held rights to the product [5]. - The company is seeking partners to advance other promising projects, such as long-acting HIV therapies and treatments for multi-drug resistant infections, while emphasizing that commercialization discussions are premature [6].

Core Insights - The company announced the latest data from its ongoing ENSURE Phase 2 study at the 34th Asia-Pacific Association for the Study of the Liver meeting, highlighting the potential of elebsiran in treating chronic hepatitis B virus (HBV) infection [1][2] Group 1: Study Findings - The ENSURE study (NCT05970289) is a multi-center, open-label Phase 2 trial assessing the efficacy of elebsiran, a research small interfering RNA (siRNA), in combination with PEG-IFNα for chronic HBV patients with baseline HBsAg levels between 100-3,000 IU/mL [1] - In cohort 4, participants who previously responded to BRII-179 treatment showed a significantly higher HBsAg seroclearance rate of 55.6% (10/18) compared to 10.0% (1/10) in non-responders at week 24 [2][4] - The overall HBsAg seroclearance rate in cohort 4 was 39.3% (11/28) at week 24, indicating the potential of BRII-179 as a predictive tool for identifying patients likely to respond to curative therapies [2][4] Group 2: Treatment Efficacy - Participants receiving elebsiran in combination with PEG-IFNα had higher HBsAg seroclearance rates and seroconversion rates at the end of treatment (EOT) compared to those receiving PEG-IFNα alone [2][6] - At EOT, the HBsAg seroclearance rates for the elebsiran 200 mg and 100 mg plus PEG-IFNα groups were 26.3% (5/19) and 33.3% (6/18), respectively, significantly higher than the 5.6% in the PEG-IFNα monotherapy group [6] - The average HBsAg decline was greater in the elebsiran plus PEG-IFNα groups, with reductions of -2.47 and -3.01 log10 IU/mL compared to -1.02 log10 IU/mL in the PEG-IFNα group [6][7] Group 3: Expert Commentary - Professor Huang Lihong stated that the positive data from cohort 4 opens new avenues for functional cure in HBV, emphasizing BRII-179's role in identifying patients who can generate necessary HBsAg antibody responses [3] - Dr. David Margolis highlighted the encouraging results supporting the development of strategies to enrich target populations for chronic HBV functional cure, aiming to improve cure rates for the 254 million chronic HBV patients globally [3]

Financial Performance - As of December 31, 2024, the company's cash and cash equivalents amounted to RMB 2,413.4 million, a decrease of RMB 248.0 million or 9.3% compared to RMB 2,661.4 million as of December 31, 2023, primarily due to operational and R&D expenditures[4] - Other income for the year ended December 31, 2024, was RMB 141.4 million, down RMB 22.3 million or 13.6% from RMB 163.7 million for the year ended December 31, 2023, mainly due to a decrease in bank interest income[4] - The company reported a net loss of RMB 512.4 million for the year ended December 31, 2024, an increase of RMB 328.0 million or 177.9% compared to a net loss of RMB 184.4 million for the previous year, primarily due to investment-related losses[4] - The basic and diluted loss per share for the year ended December 31, 2024, was RMB 0.70, compared to RMB 0.24 for the previous year[9] - The company reported a pre-tax loss of RMB 508,162 thousand for 2024, compared to a loss of RMB 174,829 thousand in 2023[28] - The adjusted loss for the year was RMB 496.3 million in 2024 compared to RMB 120.1 million in 2023, indicating a significant increase in losses[68] Research and Development - R&D expenses for the year ended December 31, 2024, were RMB 249.8 million, a reduction of RMB 152.9 million or 38.0% from RMB 402.7 million for the previous year, attributed to pipeline focus and organizational optimization[4] - The company made significant progress in its HBV functional cure project, with ongoing Phase II trials providing valuable data[5] - Elebsiran, tobevivart, and BRII-179 have been granted breakthrough therapy designation by the CDE, recognizing their innovative potential in HBV treatment[7] - The company’s BRII-693 project for MDR/XDR infections received IND approval from the CDE for a Phase I PK bridging study in China[7] - The company plans to release further data sets from ongoing studies in 2025 and 2026, which will guide its later-stage development and registration strategies[6] - The company is focusing on its HBV functional cure program, which is expected to have significant therapeutic impact for patients in China and globally[34] - Key data results from ongoing HBV studies are planned to be announced between 2025 and 2026, guiding the company's late-stage development and registration strategy[35] - The company is advancing multiple combination studies for HBV treatment in China, aiming to improve the functional cure rate for chronic HBV patients, with approximately 87 million affected by the disease in the region[45] - The ENSURE study demonstrated a higher HBsAg clearance rate in patients receiving elebsiran combined with PEG-IFNα compared to those on PEG-IFNα monotherapy, marking a significant advancement in functional cure potential[49] - The company plans to present key data from the ENSURE, ENRICH, and ENHANCE studies between 2025 and 2026, focusing on identifying optimal functional cure methods for HBV[42] Assets and Liabilities - Non-current assets decreased from RMB 415,473,000 in 2023 to RMB 292,503,000 in 2024, a decline of approximately 29.5%[10] - Current assets decreased from RMB 2,782,778,000 in 2023 to RMB 2,414,122,000 in 2024, a decline of about 13.2%[10] - Total liabilities decreased from RMB 3,072,382,000 in 2023 to RMB 2,606,080,000 in 2024, a reduction of about 15.2%[11] - The company's net assets decreased from RMB 3,072,382,000 in 2023 to RMB 2,606,080,000 in 2024, a decline of approximately 15.2%[11] - The company reported a significant reduction in intangible assets from RMB 267,420,000 in 2023 to RMB 179,710,000 in 2024, a decrease of about 32.8%[10] - The company recognized lease liabilities of RMB 10.0 million as of December 31, 2024, under operating lease arrangements[76] Corporate Governance - The company emphasizes high standards of corporate governance to protect shareholder interests[92] - The board consists of two executive directors and five independent non-executive directors, ensuring a high level of independence[93] - The audit and risk committee, composed of three independent non-executive directors, oversees the financial reporting process and risk management[96] - The company will continue to review the effectiveness of its corporate governance structure, including the potential separation of the roles of chairman and CEO[93] - All directors confirmed compliance with the company's securities trading code during the reporting period[94] Strategic Focus and Partnerships - The company has paused low-priority projects to focus on advanced HBV cure initiatives, with MDR/XDR and HIV project developments contingent on external partnerships[49] - The company is actively seeking partnerships to further develop its promising projects in the MDR/XDR and HIV fields[44] - The company plans to seek partnerships for its non-HBV clinical projects and will not allocate further internal resources to these projects[81] Market Presence and Future Plans - The company is listed on the NASDAQ under the ticker symbol VBIV, indicating its presence in the global market[107] - The company is headquartered in Cambridge, USA, positioning it strategically within a major biotech hub[107] - The annual general meeting is scheduled for June 17, 2025, where further strategic directions may be discussed[103] Employee and Compensation - As of December 31, 2024, the total employee count is 98, with 67 in R&D (68%) and 31 in administration (32%)[80] - Total compensation costs for the year ending December 31, 2024, amounted to RMB 194 million, a decrease of 36% from RMB 302 million for the year ending December 31, 2023[81] - The company has adopted a share incentive plan to provide incentives and rewards to employees[81] Financial Management - The company emphasizes capital preservation and liquidity in its treasury policy, primarily investing in low-risk instruments[82] - The company has made sufficient provisions for employee benefits according to applicable regulations[81] - The company has no foreign currency hedging policy currently in place but will consider hedging significant foreign exchange risks as needed[79]

[Company Overview](index=2&type=section&id=Company%20Overview) [Company Profile](index=2&type=section&id=Company%20Profile) Brii Biosciences is a biotechnology company focused on developing functional cures for Hepatitis B (HBV) by combining surface antigen reduction and immunomodulation therapies, while seeking collaborations for non-HBV projects - The company's core mission is to develop functional cures for Hepatitis B (HBV), believing this will have a profound impact on patients in China and globally[3](index=3&type=chunk) - The company's HBV product portfolio includes three differentiated candidates: elebsiran (siRNA), tobevibart (monoclonal antibody), and BRII-179 (therapeutic vaccine), all of which have received Breakthrough Therapy Designation from China's National Medical Products Administration (NMPA) Center for Drug Evaluation (CDE)[3](index=3&type=chunk) - While focusing on HBV projects, the company is actively seeking external collaborations for its HIV, Multi-drug Resistant/Extensively Drug-Resistant (MDR/XDR), and Central Nervous System (CNS) projects[3](index=3&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [Company Information](index=3&type=section&id=Company%20Information) This section provides essential legal and administrative details, including board members, company secretary, legal advisors, auditors, registered office, and stock code - The Chairman and Chief Executive Officer of the company is **Dr. Zhi Hong**[4](index=4&type=chunk) - The company's auditor is **Deloitte Touche Tohmatsu**[5](index=5&type=chunk) - The company was listed on the Hong Kong Stock Exchange on July 13, 2021, with stock code **2137**[5](index=5&type=chunk) [Management Discussion and Analysis (MD&A)](index=5&type=section&id=Management%20Discussion%20and%20Analysis%20%28MD%26A%29) [Business Overview](index=5&type=section&id=Business%20Overview) The company's strategy focuses on developing HBV functional cures, leveraging its US-China presence to advance late-stage combination therapies, with three core candidates receiving CDE breakthrough designations - The company's strategic focus is on the HBV functional cure program, believing it can bring meaningful therapeutic impact to patients in China and globally[6](index=6&type=chunk) - The company's three leading HBV candidates (elebsiran, tobevibart, and BRII-179) have all received Breakthrough Therapy Designation from China's NMPA CDE, which will accelerate their clinical development and regulatory review[6](index=6&type=chunk) - The company presented the first direct evidence that immune responses induced by the HBV therapeutic vaccine (BRII-179) are associated with HBsAg reduction and viral control, providing key support for late-stage combination trials[7](index=7&type=chunk) [Product Pipeline Summary](index=7&type=section&id=Product%20Pipeline%20Summary) The company has a pipeline of 10 innovative candidates primarily for infectious and CNS diseases, with core HBV projects (Elebsiran, Tobevibart, BRII-179) in Phase 2 development Product Pipeline Overview | Indication | Project | Phase | Rights Scope | | :--- | :--- | :--- | :--- | | Hepatitis B (HBV) | Elebsiran (BRII-835) | Phase 2 | Greater China | | Hepatitis B (HBV) | Tobevibart (BRII-877) | Phase 2 | Greater China | | Hepatitis B (HBV) | BRII-179 | Phase 2 | Global | | MDR Infection | Epetraborole (BRII-658) | Phase 2/3 | Greater China | | Postpartum Depression (PPD) | BRII-296 | Phase 2 | Global | | Anxiety/Depression | BRII-297 | Phase 1 | Global | [Business Review](index=8&type=section&id=Business%20Review) During the reporting period, the company strategically increased investment in core HBV assets, advanced clinical trials, presented key data at EASL, and is actively seeking collaborations for non-HBV projects - The company presented key data at the 2024 European Association for the Study of the Liver (EASL) conference, providing the first direct evidence that immune responses induced by the HBV therapeutic vaccine (BRII-179) are associated with HBsAg reduction and viral control[10](index=10&type=chunk) - With increased strategic focus on HBV, the company is actively seeking collaborations for projects in the MDR/XDR, HIV, and CNS fields[10](index=10&type=chunk) [HBV Program Updates](index=8&type=section&id=HBV%20Program%20Updates) The company is advancing multiple HBV combination therapies to increase functional cure rates for approximately 87 million infected individuals in China, with key Phase 2 data expected in Q4 2024 - Elebsiran and Tobevibart received Breakthrough Therapy Designation from China's NMPA CDE in May 2024[11](index=11&type=chunk) - Multiple key clinical study results are expected to be announced in the fourth quarter of 2024, including Part B of the MARCH study, preliminary results from the ENSURE study, and additional data from the SOLSTICE Hepatitis D trial[11](index=11&type=chunk) - In February 2024, the company entered into an agreement with VBI to acquire the intellectual property rights and related manufacturing facilities for BRII-179 to ensure supply for clinical studies[12](index=12&type=chunk) [Other Clinical and Pre-clinical Program Updates](index=10&type=section&id=Other%20Clinical%20and%20Pre-clinical%20Program%20Updates) The company is seeking partnerships for non-core projects, including commercialization of PreHevbriTM in APAC, advancing BRII-693 for MDR/XDR infections, and seeking external collaborations for HIV and CNS programs - For BRII-693, targeting MDR/XDR Gram-negative bacterial infections, an IND application for a Phase 1 PK bridging study has been submitted in China to support global Phase 3 registration trials[13](index=13&type=chunk) - BRII-296, for the treatment of postpartum depression (PPD), has completed a Phase 2 study, and the company is actively seeking partners[17](index=17&type=chunk) - Partner AN2 reported unfavorable Phase 2/3 clinical trial results for Epetraborole (BRII-658) for the treatment of Mycobacterium avium complex (MAC) lung disease and has decided to terminate the trial[17](index=17&type=chunk) [Research and Development](index=11&type=section&id=Research%20and%20Development) R&D is the company's cornerstone, led by experienced professionals with cross-border capabilities to accelerate clinical development in China and participate in global research, with R&D expenses of RMB 126.2 million in H1 2024 H1 2024 R&D Expenses | Project | Amount (RMB) | | :--- | :--- | | H1 2024 R&D Expenses | 126.2 million yuan | - The company's R&D execution team comprises several industry veterans, including CEO **Dr. Zhi Hong** and Chief Medical Officer **Dr. David Margolis**[19](index=19&type=chunk) [Future Outlook and Strategy](index=12&type=section&id=Future%20Outlook%20and%20Strategy) The long-term strategy is to lead in HBV functional cures by improving cure rates with combination therapies and initiating confirmatory studies, while expanding the pipeline through in-licensing and out-licensing opportunities - As a leading company in HBV functional cures, the company will continue to focus on improving functional cure rates through different combination therapies[21](index=21&type=chunk) - The company plans to explore global business development opportunities through in-licensing and out-licensing, and refine its early-stage development strategy to align with long-term pipeline interests[21](index=21&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) For the six months ended June 30, 2024, revenue dropped to zero due to COVID-19 project termination, total loss expanded to RMB 283.2 million primarily from fair value losses on financial assets, while R&D and administrative expenses significantly decreased H1 2024 Key Financial Data (vs. H1 2023) | Indicator (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | 0 | 617 | Termination of COVID-19 project | | Other income | 70,879 | 85,863 | Decrease in government grants | | Other gains and losses | (115,374) | 23,326 | Fair value loss on financial assets | | Research and development expenses | (126,169) | (202,175) | Focus on HBV projects and organizational optimization | | Administrative expenses | (78,629) | (102,823) | Organizational optimization leading to lower employee costs | | Loss for the period | (283,238) | (196,826) | Primarily impacted by fair value loss on financial assets | | Adjusted loss for the period (Non-IFRS) | (280,099) | (163,700) | - | - As of June 30, 2024, total bank and cash balances were **RMB 2.4778 billion**, a decrease from **RMB 2.6614 billion** at the end of 2023, primarily used for daily operations and R&D activities[27](index=27&type=chunk) - The current ratio significantly increased from **2,211%** at the end of 2023 to **3,781%** as of June 30, 2024, mainly due to the payment of most third-party contract costs, leading to a decrease in other payables[31](index=31&type=chunk) [Debt and Liabilities](index=17&type=section&id=Debt%20and%20Liabilities) As of June 30, 2024, the company had no significant bank borrowings or financing, with main liabilities including RMB 17.8 million in bills payable and RMB 1.9 million in lease liabilities, and no contingent liabilities or asset pledges - As of June 30, 2024, the Group had no significant borrowings, pledges, or similar debts, except for **RMB 17.8 million** in bills payable[33](index=33&type=chunk) - The Group has no contingent liabilities or asset pledges[33](index=33&type=chunk)[36](index=36&type=chunk) [Employees and Remuneration](index=18&type=section&id=Employees%20and%20Remuneration) As of June 30, 2024, the company had 95 employees, with 66% (63 people) in R&D, and total remuneration costs for H1 2024 significantly decreased to RMB 96.2 million, reflecting organizational optimization and strategic focus Employee Distribution | Function | Number of Employees | Percentage of Total | | :--- | :--- | :--- | | R&D | 63 | 66% | | Administrative | 32 | 34% | | **Total** | **95** | **100%** | - For the six months ended June 30, 2024, the Group's total remuneration costs amounted to **RMB 96.2 million**, a significant decrease from **RMB 155.0 million** in the same period of 2023[38](index=38&type=chunk) [Corporate Governance and Other Information](index=18&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Use of Proceeds from Global Offering](index=19&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company's 2021 IPO raised approximately HKD 2.614 billion, with HKD 1.422 billion utilized by June 30, 2024, primarily for HBV and CNS projects, and remaining funds expected to be fully used by end of 2027 Use of Proceeds from Global Offering (as of June 30, 2024) | Category of Use | Net Allocated (HKD million) | Amount Utilized (HKD million) | Amount Unutilized (HKD million) | | :--- | :--- | :--- | :--- | | HBV Functional Cure Projects | 994.1 | 589.6 | 404.5 | | HIV Projects | 176.0 | 150.4 | 25.6 | | MDR/XDR Infection Projects | 294.0 | 60.8 | 233.2 | | CNS Projects | 496.3 | 276.9 | 219.4 | | Pipeline Expansion | 392.0 | 83.2 | 308.8 | | Working Capital and General Corporate Purposes | 261.4 | 261.4 | 0 | | **Total** | **2,613.8** | **1,422.3** | **1,191.5** | [Corporate Governance Practices](index=20&type=section&id=Corporate%20Governance%20Practices) The company complied with corporate governance code provisions during the period, except for the combined roles of Chairman and CEO, which the board believes enhances management efficiency and strategic execution - The company deviated from Corporate Governance Code Provision C.2.1, where the roles of Chairman and Chief Executive Officer are held by the same person (**Dr. Zhi Hong**)[44](index=44&type=chunk) - The Board believes this arrangement facilitates management efficiency and strategic execution, and its effectiveness will be continuously reviewed[44](index=44&type=chunk) [Share Schemes](index=25&type=section&id=Share%20Schemes) This section details the company's share incentive plans, including pre- and post-IPO option and award schemes, and the new 2023 plans, outlining their purpose, eligibility, share limits, and changes in outstanding options and restricted share units [Pre-IPO Share Incentive Scheme](index=25&type=section&id=Pre-IPO%20Share%20Incentive%20Scheme) Adopted in October 2018 to attract and incentivize key personnel, this scheme ceased new grants post-IPO, with 19,127,468 outstanding options as of June 30, 2024, representing approximately 2.6% of issued share capital - After listing, the company no longer grants any share options or awards under this scheme[62](index=62&type=chunk) - As of June 30, 2024, there were **19,127,468** outstanding share options under this scheme, involving directors **Dr. Zhi Hong**, **Dr. Ankang Li**, and other employees and consultants[62](index=62&type=chunk) [Post-IPO Share Option Scheme](index=29&type=section&id=Post-IPO%20Share%20Option%20Scheme) Adopted in June 2021 and terminated on September 1, 2023, by the new 2023 scheme, this plan no longer grants new options but has 34,120,333 outstanding options as of June 30, 2024, representing approximately 4.7% of issued share capital - This scheme was terminated on September 1, 2023, and no new share options will be granted, but previously granted options remain valid[64](index=64&type=chunk) - As of June 30, 2024, there were **34,120,333** outstanding share options under this scheme[71](index=71&type=chunk) [Post-IPO Share Award Scheme](index=32&type=section&id=Post-IPO%20Share%20Award%20Scheme) Adopted in June 2021 and terminated on September 1, 2023, by the new 2023 scheme, this plan no longer grants new awards but has 8,048,817 unvested restricted share units as of June 30, 2024, representing approximately 1.1% of issued share capital - This scheme was terminated on September 1, 2023, and no new share awards will be granted[73](index=73&type=chunk) - As of June 30, 2024, there were **8,048,817** unvested restricted share units under this scheme[79](index=79&type=chunk)[80](index=80&type=chunk) [2023 Share Option Scheme](index=37&type=section&id=2023%20Share%20Option%20Scheme) Adopted on September 1, 2023, with a 10-year validity and a shared authorization limit of 72,813,078 shares, the company granted 5,752,500 options on March 28, 2024, with 5,752,500 unexercised options as of June 30, 2024 - On March 28, 2024, the company granted **5,752,500** share options to employees under this scheme, with an exercise price of **HKD 0.964**[92](index=92&type=chunk) - As of June 30, 2024, the total number of share options available for future grant under this scheme was **66,239,078**[91](index=91&type=chunk) [2023 Share Award Scheme](index=39&type=section&id=2023%20Share%20Award%20Scheme) Adopted on September 1, 2023, with a 10-year validity and a shared authorization limit, the company granted 821,500 restricted share units on March 28, 2024, with 821,500 unvested units as of June 30, 2024 - On March 28, 2024, the company granted **821,500** restricted share units to employees under this scheme[102](index=102&type=chunk) - As of June 30, 2024, the total number of share awards available for future grant under this scheme was **66,239,078** (shared with the Share Option Scheme)[100](index=100&type=chunk) [Condensed Consolidated Financial Statements](index=42&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Review Report](index=42&type=section&id=Review%20Report) Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements for the six months ended June 30, 2024, concluding that no matters indicated non-compliance with IAS 34 - Auditor Deloitte issued a review conclusion, not an audit opinion, on the interim financial statements[107](index=107&type=chunk) - The review concluded that no matters indicated non-compliance with International Accounting Standard 34[108](index=108&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=44&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the company reported a loss of RMB 283.2 million, an increase from RMB 196.8 million last year, primarily due to a significant shift in net other gains and losses from gain to loss, while R&D and administrative expenses decreased Profit or Loss Statement Core Data (RMB thousand) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | – | 617 | | Research and development expenses | (126,169) | (202,175) | | Administrative expenses | (78,629) | (102,823) | | Net other gains and losses | (115,374) | 23,326 | | **Loss for the period** | **(283,238)** | **(196,826)** | | **Loss per share (RMB)** | **(0.38)** | **(0.26)** | [Condensed Consolidated Statement of Financial Position](index=45&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets were RMB 2.897 billion and net assets RMB 2.810 billion, both decreased from year-end 2023 mainly due to a reduction in time deposits, while current liabilities significantly decreased, maintaining a robust financial position Balance Sheet Core Data (RMB thousand) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | **337,255** | **415,473** | | **Current assets** | **2,559,350** | **2,782,778** | | *Including: Cash and cash equivalents* | *656,256* | *489,650* | | *Including: Time deposits* | *1,730,517* | *2,171,011* | | **Total assets** | **2,896,605** | **3,198,251** | | **Current liabilities** | **67,695** | **125,869** | | **Non-current liabilities** | **18,617** | **–** | | **Total liabilities** | **86,312** | **125,869** | | **Net assets** | **2,810,293** | **3,072,382** | [Condensed Consolidated Statement of Cash Flows](index=48&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, net cash used in operating activities decreased to RMB 226 million, indicating improved cost control, while investing activities generated a net inflow of RMB 394 million, primarily from withdrawal of time deposits, increasing period-end cash to RMB 656 million Cash Flow Statement Core Data (RMB thousand) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (225,788) | (353,761) | | Net cash from (used in) investing activities | 393,908 | (353,409) | | Net cash used in financing activities | (4,422) | (4,782) | | **Net increase (decrease) in cash and cash equivalents** | **163,698** | **(711,952)** | | **Cash and cash equivalents at end of period** | **656,256** | **487,494** | [Notes to the Condensed Consolidated Financial Statements](index=49&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of financial statement items, including segment reporting, sources of other income and losses, significant transactions with VBI Vaccines and related impairment, and detailed changes in share-based payment schemes [Note 19: Significant Transactions (with VBI Vaccines)](index=64&type=section&id=Note%2019%3A%20Significant%20Transactions%20%28with%20VBI%20Vaccines%29) The company entered into significant transactions with VBI Vaccines Inc. (VBI) to acquire BRII-179 IP and other assets; however, VBI's July 2024 restructuring and delisting raised recoverability concerns, leading to a full impairment provision for the USD 4.6 million prepayment - The company entered into multiple significant transactions with VBI to acquire BRII-179 intellectual property, VBI-1901 license, and related assets[164](index=164&type=chunk)[165](index=165&type=chunk) - VBI initiated restructuring procedures in July 2024 and delisted from Nasdaq in August, introducing significant uncertainty to the transactions[165](index=165&type=chunk) - Due to VBI's financial risks, the company has fully provided for an expected credit loss allowance on the **USD 4.6 million** (approximately **RMB 33 million**) prepayment[165](index=165&type=chunk) [Note 18: Share-based Payment Transactions](index=58&type=section&id=Note%2018%3A%20Share-based%20Payment%20Transactions) This note details changes in the company's equity-settled share option and award schemes, including new grants under the 2023 plans and forfeiture of some milestone-based awards, with total share-based payment expenses of RMB 1.41 million for options and RMB 1.73 million for awards in H1 2024 - In September 2023, the company adopted new "2023 Share Award Scheme" and "2023 Share Option Scheme," replacing previous post-listing schemes[156](index=156&type=chunk) - As of June 30, 2024, the total number of outstanding share options under all schemes was **59,000,301**[159](index=159&type=chunk) - As of June 30, 2024, the total number of unvested restricted share units under all schemes was **8,870,317** (**8,048,817** + **821,500**)[152](index=152&type=chunk)[154](index=154&type=chunk)