Financial Performance - Total revenue for 2023 reached RMB 225 million, with a significant reduction in losses[6] - Net loss for 2023 was approximately RMB 30 million, a reduction of about 96% compared to the previous year[7] - Adjusted net loss, excluding the impact of other gains, was around RMB 250 million[7] - Total revenue for the year ended December 31, 2023, was RMB 225.4 million, primarily from licensing business and commercialization of the product Puyuheng® (Putilizumab Injection) which generated sales revenue of RMB 101.4 million[16] - The company reported a significant reduction in losses by approximately 95.7% compared to the year ended December 31, 2022[16] - The net loss for the company decreased significantly from RMB 699.4 million in 2022 to RMB 30.3 million in 2023[44] - The adjusted net loss (non-IFRS measure) for the year was RMB 250.6 million, compared to RMB 699.4 million in the previous year, indicating a reduction in losses[47] - Cash used in operating activities for the year was RMB 250.8 million, a decrease of RMB 230.1 million from RMB 480.9 million in the previous year, attributed to increased commercialization revenue from products[48] - As of December 31, 2023, cash and cash equivalents were RMB 426.0 million, down from RMB 669.4 million as of December 31, 2022, primarily due to ongoing R&D activities[48] Revenue Sources - Revenue from CMG901 BD amounted to RMB 124 million, following a licensing agreement with AstraZeneca[6] - Sales revenue from Puyuheng® (Putilizumab injection) was RMB 101 million, marking the first full accounting year of sales[6] - Licensing income from the agreement with AstraZeneca regarding CMG901 amounted to approximately RMB 109.5 million, contributing to a total of RMB 124.0 million in licensing business revenue[16] - Other gains from investment activities totaled approximately RMB 220 million, including RMB 104 million from the partial sale of investment in Haoyang Bio[7] Research and Development - The company is focused on developing innovative antibody-drug conjugates (ADCs) to address unmet clinical needs in cancer treatment[5] - The ADC technology platform is being advanced to develop superior and innovative drugs[5] - MRG003 is currently undergoing a pivotal Phase IIb clinical study for NPC, with promising data showing an overall response rate (ORR) of 47.4% and disease control rate (DCR) of 79.0% in previous studies[18] - MRG002 is in a pivotal Phase II clinical trial for HER2-positive breast cancer liver metastasis, with patient enrollment completed and data indicating good results[19] - The company has initiated multiple clinical trials, with five in the registration phase in China and one ongoing in the US[13] - The company continues to focus on the development of its candidate drugs while assessing market demand and competitive landscape in oncology[17] Product Development and Clinical Trials - The ADC product MRG003 is expected to be commercially available in 2024, with promising clinical data for NPC and HNSCC, and has received FDA's IND and Fast Track Designation[8] - MRG002 has achieved primary endpoints in its Phase II clinical trial for HER2-positive advanced breast cancer, and is currently preparing for NDA submission[8] - MRG004A has shown positive efficacy signals in pancreatic cancer and has received FDA orphan drug designation, with ongoing I/II clinical trials in the US and China[8] - The combination therapy of MRG003 and PDR001 has completed Phase I trials, showing good preliminary data, with further results expected at the 2024 ASCO meeting[10] - The Hi-TOPi ADC platform has developed candidate drug MRG006A, which is entering the IND application stage, expected in Q2 2024[11] - The company aims to accelerate the development of MRG003 and MRG002, with NDA submissions anticipated in 2024[12] Market Expansion and Commercialization - The company aims to strengthen its production capacity and expand its market presence both domestically and internationally[5] - The company is expanding its commercialization efforts in the Chinese market, enhancing brand image and product market influence[12] - The company has completed bidding procedures on procurement platforms in 21 provinces and has expanded its sales network to cover approximately 76 cities[30] - The company is actively seeking global business development opportunities for its ADC technology platform[12] Corporate Governance and Management - The company has adopted a corporate governance code since its H-share listing on February 23, 2022, and has complied with all applicable governance code provisions during the reporting period[123] - The board consists of six male members and three female members, achieving a one-third representation of women[131] - The company has set measurable goals for board diversity, aiming for at least one-third female representation[131] - The company has implemented mechanisms to ensure independent viewpoints are available to the board, including regular meetings with independent non-executive directors[129] - The company has established an Audit Committee, Remuneration and Assessment Committee, Nomination Committee, and Strategic Committee to enhance corporate governance[146][148][150][151] Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes the importance of ESG management and continuously optimizes its ESG strategies to enhance governance and operational quality[182] - The company is committed to reducing the negative environmental impact of its operations and addressing potential risks related to climate change[183] - The company has established an environmental management system to minimize its operational environmental footprint and fulfill its ecological responsibilities[192] - The company has implemented various energy-saving measures, including variable frequency control for production equipment, multi-effect distillation machines, and active power filters to reduce energy consumption[197] Risks and Challenges - The company faces significant risks related to the development, production, and commercialization of its candidate drugs, including potential delays and cost overruns[74] - Regulatory approval processes for drugs are lengthy and unpredictable, which could adversely affect the company's business and financial performance[76] - The company may rely on third-party manufacturers for clinical development and commercialization, posing risks if these parties fail to deliver adequate quality or quantity[75] Shareholder Information - The total number of shares issued as of December 31, 2023, was 1,659,444,838, including 1,605,176,474 H shares and 54,268,364 domestic shares[90] - The company has a diverse shareholder base, including various investment partnerships and funds[96] - The percentage of shares held by major shareholders is significant, with some holding over 5% of the total shares[93] Charitable Contributions - The company made charitable donations of approximately RMB 3,405,906 during the reporting period, compared to RMB 1,392,540 in 2022, representing a significant increase of 144%[111]

Investment Rating - The report assigns a "Strong Buy" rating to the company with a target price of HKD 6.6 [2][3]. Core Insights - The company focuses on innovative biopharmaceuticals for cancer treatment, particularly in targeted therapy and immunotherapy, with a rich pipeline of Antibody-Drug Conjugates (ADCs) [2][15]. - The lead product, MRG003, is the fastest progressing EGFR ADC in China, showing promising efficacy in nasopharyngeal carcinoma and head and neck squamous cell carcinoma [2][20]. - The company has a strategic advantage in combining its PD-1 monoclonal antibody, Prutilizumab, with ADCs, which is expected to enhance pipeline value in the emerging IO+ADC treatment landscape [2][11]. Financial Projections - Expected revenues for 2024, 2025, and 2026 are HKD 339 million, HKD 589 million, and HKD 1.106 billion, representing year-on-year growth rates of 45.8%, 73.5%, and 87.9% respectively [3][12]. - The company is projected to achieve a net profit of HKD 1.77 billion by 2026, following losses in the earlier years [3][12]. Pipeline Overview - MRG003 has completed patient enrollment for its pivotal IIb clinical trial for nasopharyngeal carcinoma and is expected to apply for market approval in 2024 [20][27]. - MRG004A, the first TF ADC in China, is in early clinical trials for pancreatic cancer and has shown initial positive efficacy signals [32][34]. - The company is also developing CMG901, which has been licensed to AstraZeneca and is currently in global Phase III trials [2][18]. Clinical Development - The report highlights the potential of combining ADCs with immunotherapy, noting that nearly half of existing immunotherapy treatments could transition to IO+ADC combinations, potentially expanding the market by 100-200% [2][11]. - Initial clinical data for MRG003 in head and neck squamous cell carcinoma shows an overall response rate (ORR) of 43% in patients who have progressed after standard treatments [29][30]. Market Position - The company is positioned as a leading biotech in the IO+ADC space, with a diverse and differentiated pipeline that includes multiple ADC candidates and a PD-1 monoclonal antibody already on the market [2][15].

Revenue and Financial Performance - Revenue increased by approximately 1,347.2% from RMB 15.6 million in 2022 to RMB 225.4 million in 2023[2] - Total revenue of RMB 225.4 million was achieved, with significant progress in product pipeline and business operations[3] - Total revenue for 2023 reached RMB 225.4 million, primarily from licensing business and commercialization of Puheng® (Puliximab Injection)[9] - Revenue for the year ended December 31, 2023, reached RMB 225.4 million, a 1,347.2% increase compared to RMB 15.6 million in 2022[29] - Revenue for 2023 increased significantly to RMB 225.352 million from RMB 15.572 million in 2022, with gross profit rising to RMB 197.075 million from RMB 13.567 million[50] - Revenue from pharmaceutical product sales and licensing income for the year ended December 31, 2023, was RMB 225.352 million, compared to RMB 15.572 million in 2022[60] - Licensing income from KYM Biosciences Inc. accounted for RMB 109.52 million, representing 48.60% of the company's total revenue in 2023[61] - The company's revenue from licensing agreements with AstraZeneca for CMG901 was approximately RMB 123.967 million in 2023[63] R&D Expenses and Clinical Trials - R&D expenses decreased by 12.6% from RMB 524.3 million in 2022 to RMB 458.1 million in 2023[2] - R&D expenses decreased to RMB 458.1 million in 2023 from RMB 524.3 million in 2022, with clinical research-related expenses decreasing by RMB 31.6 million[32][33][34] - R&D expenses for 2023 decreased to RMB 458.073 million from RMB 524.285 million in 2022[50] - Clinical research expenses decreased to RMB 173,425 thousand in 2023 from RMB 204,991 thousand in 2022, a decline of 15.4%[66] - Preclinical research costs decreased significantly to RMB 34,463 thousand in 2023 from RMB 71,211 thousand in 2022, a drop of 51.6%[66] - MRG003 completed patient enrollment for NPC IIb phase registration clinical study, with NDA expected to be filed in 2024[3] - MRG002 completed patient enrollment for HER2 high-expression BC liver metastasis II phase key clinical trial in China, with good data observed[3] - CG0070 completed patient enrollment for phase III clinical trial in the US and received FDA FTD and BTD in December 2023[4] - MRG004A received FDA ODD for the treatment of PC in December 2023[4] - MRG004A received FDA FTD for the treatment of relapsed or refractory pancreatic cancer in March 2024[4] - MRG003, an EGFR-targeted ADC, has shown high affinity and tumor cell-killing efficacy in clinical trials[10] - MRG002, a HER2-targeted ADC, is in clinical development for multiple indications, including NPC and HNSCC[7] - MRG004A, a TF-targeted ADC, has received FDA ODD and FTD for treating PC and is in clinical trials in the US[6] - MRG003 achieved an ORR of 47.4% and DCR of 79.0% in NPC patients previously treated with PD-1 (L1) and platinum-based chemotherapy as of March 15, 2023[11] - MRG003 received FDA IND approval and FTD for R/M NPC treatment in October and November 2023, respectively[11] - MRG003's 2.0mg/kg dose group showed an ORR of 39.3% and DCR of 71.4%, with mPFS of 7.3 months in NPC patients[11] - MRG003's 2.3mg/kg dose group demonstrated an ORR of 55.2% and DCR of 86.2% in NPC patients, with mPFS not yet mature[11] - MRG002 showed promising data in HER2-high BC liver metastasis, with patient enrollment completed for the Phase II trial in China[12] - MRG001 achieved a CR rate of 17.6% and ORR of 38.2% in CD20-positive DLBCL patients who failed second-line or above treatment as of July 28, 2023[15] - CMG901 demonstrated a confirmed ORR of 33% and DCR of 70% in CLDN18.2-positive GC/GEJ patients across three dose groups as of July 24, 2023[16] - CMG901's 2.2mg/kg dose group showed a confirmed ORR of 42% and mPFS of 4.8 months in CLDN18.2-positive GC/GEJ patients[16] - MRG004A received FDA ODD for PC treatment in December 2023, with Phase I data to be presented at the 2024 ASCO annual meeting[14] - CG0070 demonstrated a 75.7% overall CR rate in NMIBC patients who failed BCG treatment, with 68.2% and 63.6% CR rates at 3 and 6 months, respectively[19] - MRG003 combined with Puyouheng® showed promising preliminary data in solid tumors, with Phase II trials ongoing and data expected to be presented at ASCO 2024[21] - MRG002 combined with Puyouheng® demonstrated positive preliminary data in HER2-expressing solid tumors, with Phase II trials ongoing and data expected at ESMO 2024[21] - CG0070 combined with Puyouheng® received IND approval for Phase I/II trials in BCG-unresponsive NMIBC patients[21] - The company's Hi-TOPi platform for ADCs has advanced MRG006A to IND-enabling studies, with IND submission expected in Q2 2024[22] - The TOPAbody T-cell engager platform has progressed CTM012 to IND-enabling studies, with IND submission planned for 2024[23] - The company's clinical trials include Phase I, Phase II, and Phase III studies to evaluate safety, efficacy, and dosage[88] - The company's clinical trials aim to provide evidence for drug approval through registration trials[88] Net Loss and Financial Metrics - Net loss attributable to the company's owners decreased significantly by 96.8% from RMB 689.1 million in 2022 to RMB 22.1 million in 2023[2] - Adjusted net loss (non-IFRS) decreased from RMB 699.4 million in 2022 to RMB 250.6 million in 2023[2] - Net loss decreased significantly by approximately 95.7% compared to 2022[9] - The company's loss decreased from RMB 699.4 million in 2022 to RMB 30.3 million in 2023[37] - Adjusted net loss (non-IFRS measure) was approximately RMB 250.6 million for the year ended December 31, 2023, compared to RMB 699.4 million in 2022[37] - Net loss for 2023 was RMB 30.301 million, a substantial reduction from the net loss of RMB 699.441 million in 2022[50] - Net loss for the year ended December 31, 2023, was approximately RMB 30.3 million, with net cash used in operating activities of approximately RMB 250.8 million[56] - Fair value gains on financial liabilities measured at fair value through profit or loss were RMB 174,976 thousand in 2023, compared to a loss of RMB 62,816 thousand in 2022[67] - Dilution gain from an associate company amounted to RMB 116,388 thousand in 2023, with no comparable figure in 2022[68] - Gain from the sale of an investment in an associate company was RMB 103,874 thousand in 2023, with no comparable figure in 2022[68] Product Sales and Licensing - Sales revenue from Puheng® (Puliximab Injection) reached RMB 101.4 million in 2023[9] - Licensing revenue from KYM's agreement with AstraZeneca for CMG901 development and commercialization amounted to RMB 109.5 million[9] - Sales revenue from pharmaceutical products in 2023 was RMB 101.4 million, a 551.1% increase from 2022[29] - Puyouheng® (Pudilizumab Injection) achieved sales revenue exceeding RMB 100 million in 2023[25] - The company's licensing business generated total revenue of approximately RMB 124.0 million in 2023, including RMB 109.5 million received from KYM[25] - KYM Biosciences Inc. received a $63.0 million upfront payment and is eligible for up to $1,125.0 million in additional payments upon achieving development, regulatory, and commercial milestones[63] - KYM Biosciences Inc. entered into a global exclusive licensing agreement with AstraZeneca on February 23, 2023[86] Operational and Administrative Expenses - The company's sales and marketing expenses for 2023 were RMB 43.3 million, up significantly from RMB 1.7 million in 2022[30] - Administrative expenses decreased to RMB 86.7 million in 2023 from RMB 138.8 million in 2022, primarily due to reduced listing expenses[31] - Employee benefit expenses increased to RMB 198,906 thousand in 2023 from RMB 188,344 thousand in 2022, a rise of 5.6%[66] - Depreciation and amortization expenses rose to RMB 102,572 thousand in 2023 from RMB 95,446 thousand in 2022, an increase of 7.5%[66] - Total number of employees as of December 31, 2023, is 429, with total salary costs increasing to RMB 198.9 million from RMB 188.3 million in 2022 due to the expansion of the sales team following product commercialization[45] Financial Position and Liabilities - Cash and cash equivalents decreased from RMB 669.4 million in 2022 to RMB 426.0 million in 2023, mainly due to ongoing R&D activities[40] - Bank borrowings increased to RMB 694.3 million in 2023 from RMB 650.0 million in 2022, with unsecured loans totaling RMB 394.0 million[40] - The company's asset-liability ratio decreased to 62.73% in 2023 from 64.39% in 2022[41] - Capital commitments for property, plant, and equipment were RMB 456.6 million as of December 31, 2023, compared to RMB 482.0 million in 2022[42] - The company sold a 15% stake in Haoyang Biotech for RMB 125 million, reducing its ownership to 5.68%[41] - Total assets as of December 31, 2023, were RMB 2.384 billion, a slight decrease from RMB 2.529 billion in 2022[52] - Total liabilities as of December 31, 2023, were RMB 1.496 billion, down from RMB 1.628 billion in 2022[53] - Cash and cash equivalents as of December 31, 2023, were approximately RMB 426.0 million, with net current liabilities of approximately RMB 222.4 million[56] - Trade receivables stood at RMB 38,014 thousand as of December 31, 2023, with a provision for impairment of RMB 212 thousand[74] - Trade payables as of December 31, 2023, amounted to RMB 207,611 thousand, with RMB 196,909 thousand due within one year and RMB 10,702 thousand due within one to two years[81] - The fair value of the variable consideration payable as of December 31, 2023, includes 4.375% of the actual net sales of the PD-1 product in 2023 (approximately RMB 4,436,000) and 4.375% of the estimated net sales of the PD-1 product in 2024 (approximately RMB 6,015,000)[79] - The fair value of financial liabilities measured at fair value through profit or loss as of December 31, 2023, was RMB 272,625 thousand, compared to RMB 448,282 thousand as of December 31, 2022[80] Corporate Governance and Share Structure - The company has adopted and complied with the Corporate Governance Code and the Standard Code for Securities Transactions[45][46] - The company did not recommend the payment of a final dividend for the year ended December 31, 2023[47] - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2023[47] - The company's shares include domestic shares, unlisted foreign shares, and H shares, each with a par value of RMB 1.00[89] - The company's board includes executive directors Dr. Zhongjie Pu (Chairman) and Dr. Ziye Sui (General Manager), non-executive directors Ms. Jue Pu and Mr. Hongbing Yang, and independent non-executive directors Mr. Demin Zhou, Mr. Haifeng Yang, and Mr. Fengmao Hua[90] - The company's H-shares were listed on the Main Board of the Hong Kong Stock Exchange on February 23, 2022[86] - The company issued 126,876,000 H shares at a price of HKD 7.13 per share during the global offering in 2022[76] - The company issued an additional 899,000 H shares at HKD 7.13 per share as part of the over-allotment option exercise in 2022[77] Product Approvals and Market Penetration - Puheng® (Puliximab Injection) received conditional approval in China for MSI-H/dMMR and unresectable or metastatic melanoma[8] - The company's product Putrelimab (Puyouheng®) was included in the 2023 CSCO and CSGO guidelines for treating melanoma and MSI-H/dMMR solid tumors[26] - The company has completed bidding procedures on procurement platforms in 21 provinces and covers approximately 76 cities as of December 31, 2023[26] - The company plans to accelerate the NDA application for MRG003 and expects to submit the NDA in 2024[28] - The company aims to expand its commercialization team and deepen market penetration for Puyouheng® in 2024[29] Research and Development Platforms - The company is involved in the development of ADC (Antibody-Drug Conjugate) technology, specifically using valine-citrulline linkers that are stable in blood circulation and effectively cleaved by lysosomal cathepsins after ADC internalization[90] - The company's research includes the development of monoclonal antibodies and PD-1/PD-L1 inhibitors[87] - The company's products target diseases such as HNSCC, NHL, NMIBC, and NPC[87] - The company focuses on the discovery and development of innovative biologics in the fields of autoimmune and oncology therapies[86] - KYM Biosciences Inc. is a joint venture established in the United States by the company and AstraZeneca[86] Financial Income and Costs - Financial income decreased from RMB 45.9 million in 2022 to RMB 8.3 million in 2023, primarily due to reduced exchange gains[36] - Financial costs increased from RMB 8.6 million in 2022 to RMB 16.0 million in 2023, mainly due to higher interest on borrowings[36]

Financial Performance - Revenue for the first half of 2023 was RMB 153,553 thousand, with a gross profit of RMB 147,798 thousand[8]. - Operating loss for the first half of 2023 was RMB 117,995 thousand, significantly improved from a loss of RMB 370,695 thousand in the same period of 2022[8]. - The company's net loss for the six months ended June 30, 2023, was RMB 141.9 million, down from RMB 348.4 million in the same period of 2022[36]. - For the six months ended June 30, 2023, the company recorded revenue of RMB 153.6 million, compared to zero for the same period in 2022[28]. - The company reported a significant increase in revenue, achieving a total of RMB 1.2 billion for the first half of 2023, representing a year-on-year growth of 25%[136]. - The company reported a significant increase in revenue for the first half of 2023, reaching RMB 1.5 billion, representing a year-on-year growth of 25%[145]. - The gross margin for the first half of 2023 was reported at 65%, reflecting an improvement from 60% in the same period last year[145]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 2,399,766 thousand, a decrease from RMB 2,529,172 thousand as of December 31, 2022[8]. - Total liabilities as of June 30, 2023, were RMB 1,637,534 thousand, slightly increased from RMB 1,628,410 thousand as of December 31, 2022[8]. - Equity as of June 30, 2023, was RMB 762,232 thousand, down from RMB 900,762 thousand at the end of 2022[8]. - The company's debt-to-asset ratio increased to 68.24% as of June 30, 2023, compared to 64.39% as of December 31, 2022[39]. - The company reported a significant increase in bank borrowings, with current borrowings rising to RMB 469,365 thousand from RMB 359,988 thousand, an increase of about 30.5%[71]. - The company’s total liabilities increased to RMB 749,365,000 as of June 30, 2023, compared to RMB 650,045,000 as of December 31, 2022, marking a rise of 15.3%[115]. Research and Development - Research and development expenses for the first half of 2023 were RMB 231,872 thousand, slightly increased from RMB 230,706 thousand in the previous year[8]. - The company is focusing on developing innovative ADCs and has established a professional sales and marketing team for commercialization[9]. - The company is actively exploring the potential efficacy of MRG003 in other common cancers with EGFR overexpression[14]. - The company aims to accelerate the development of two main ADC products, MRG003 and MRG002, targeting the NDA stage and registration clinical studies respectively[27]. - Research and development efforts have led to the advancement of two new monoclonal antibodies, expected to enter clinical trials by Q4 2023[139]. - The company has invested RMB 200 million in new technology for ADC development, aiming to improve therapeutic efficacy[145]. Clinical Trials and Product Development - The company has multiple oncology product pipelines, including one drug in the commercial stage and six candidates in clinical stages[9]. - Five clinical trials are currently ongoing in China, with one trial in the United States[9]. - MRG003 has received FDA's NPC ODD and CDE's BTD, while MRG002 has received FDA's GC/GEJ ODD[9]. - The company is conducting a Phase II clinical trial for MRG003 targeting multiple EGFR-expressing cancers, with promising data observed in NPC and HNSCC studies[14]. - MRG002, an innovative HER2-targeted ADC, is in a Phase III clinical trial for HER2-positive breast cancer, with patient enrollment completed[15]. - The company has initiated a Phase I trial for the combination of MRG003 and Puyuheng® in solid tumors, with positive preliminary data expected to be presented at the 2023 CSCO annual meeting[17]. - The company has initiated registration clinical trials for multiple ADC candidates, including MRG003 in NPC and MRG002 in UC, indicating significant progress in their clinical pipeline[21]. Licensing and Partnerships - The company received approximately RMB 109.5 million from KYM as part of a licensing agreement with AstraZeneca for the development and commercialization of CMG901, with potential total payments up to USD 1.188 billion[12]. - A global exclusive licensing agreement with AstraZeneca for CMG901 includes an upfront payment of $63 million and potential additional payments of up to $1.125 billion upon achieving certain milestones[22]. - The company is actively seeking potential business development cooperation opportunities with overseas companies to expand its ADC product pipeline globally[27]. Market Expansion and Strategic Outlook - The company is planning to expand its market presence in Southeast Asia, targeting a 15% market share within the next two years[140]. - The company has provided a positive outlook for the second half of 2023, projecting a revenue growth of 20% to 25% driven by new product launches and market expansion efforts[138]. - The company is exploring potential acquisitions to bolster its product pipeline and enhance competitive positioning in the oncology market[138]. - The company is considering strategic acquisitions to enhance its product portfolio, with a target of completing at least one acquisition by Q4 2023[144]. Shareholder Information - As of June 30, 2023, the board members held significant shares, with Dr. Pu Zhongjie owning 41.03% of the H shares[50]. - The company has a total of 1,659,444,838 shares issued, including 1,605,176,474 H shares and 54,268,364 domestic shares[50]. - The company maintains a diverse shareholder base with various entities holding significant stakes in both H shares and domestic shares[55]. Corporate Governance - The company has adopted and complied with the principles and code provisions of the Corporate Governance Code during the reporting period[61]. - There were no significant changes in the directors, supervisors, and senior management of the company during the reporting period[61]. - The independent auditor has reviewed the interim financial information in accordance with the International Standard on Review Engagements[62].

Financial Performance - Total revenue for the six months ended June 30, 2023, was approximately RMB 153.6 million, compared to zero for the same period in 2022[3]. - Loss attributable to shareholders for the six months ended June 30, 2023, decreased by approximately RMB 202.4 million to about RMB 141.9 million, a reduction of approximately 58.8% compared to the same period in 2022[3]. - The group reported a net loss of RMB 141.9 million for the six months ended June 30, 2023, compared to a net loss of RMB 348.4 million for the same period in 2022[37]. - The group recorded a fair value gain of RMB 17,737,000 on financial liabilities measured at fair value through profit or loss for the six months ended June 30, 2023, compared to a loss of RMB 60,776,000 in the prior year[54]. - Basic loss per share for the six months ended June 30, 2023, was RMB (0.09), an improvement from RMB (0.21) in the same period of 2022[57]. - Total expenses for the six months ended June 30, 2023, amounted to RMB 290,558,000, a decrease from RMB 315,635,000 in the same period of 2022[53]. Revenue Sources - The company received approximately RMB 109.5 million in licensing income from KYM as part of a global exclusive licensing agreement with AstraZeneca, with potential additional payments of up to USD 1.125 billion[2]. - Sales revenue for the product 普佑恆® (Putilimumab Injection) during the reporting period was RMB 44.0 million[2]. - The group reported revenue of RMB 109,520,000 from licensing income, accounting for 71.32% of total revenue for the six months ended June 30, 2023[51]. - Sales of pharmaceutical products generated RMB 44,033,000 during the same period, contributing to total revenue of RMB 153,553,000[50]. Clinical Development - The company is advancing multiple clinical trials, including MRG003 for NPC and HNSCC, with encouraging data expected to be presented at the 2023 ESMO conference[3]. - MRG002 has completed patient enrollment for its registration clinical trial in China and is progressing towards NDA stage[3]. - MRG004A is undergoing I/II phase clinical studies in the US and China, with preliminary data to be presented at the 2023 CSCO conference[3]. - The company is conducting a Phase II clinical trial for MRG003 targeting multiple EGFR-expressing cancers, with promising data observed in HNSCC and NPC[8]. - The registration clinical trial for MRG002 in HER2-positive breast cancer has completed patient enrollment and is advancing towards NDA stage[9]. - The company is conducting a Phase III clinical trial for MSI-H/dMMR metastatic colorectal cancer as a confirmatory study for conditional marketing approval[10]. - MRG003 and Putilizumab combination therapy has shown encouraging preliminary data in a Phase I trial, with further results to be presented at the 2023 CSCO annual meeting[11]. - The company has initiated a Phase I/II clinical study for MRG004A, an innovative ADC drug, in the US and China, with preliminary data expected to be presented at the 2023 CSCO annual meeting[11]. - The company is exploring the potential efficacy of MRG002 in combination with Putilizumab for HER2-expressing solid tumors in an ongoing Phase I trial[11]. - The company has received IND approval from the National Medical Products Administration for a Phase I trial of CG0070 in combination with Putilizumab for BCG-unresponsive NMIBC patients[11]. - As of June 30, 2023, the company is actively enrolling patients in various clinical trials across multiple indications, reflecting a robust pipeline of candidate drugs[7]. Strategic Initiatives - The company has established a strategic layout of multiple oncology product pipelines, including one commercialized drug and six clinical stage candidates[4]. - The company is building a professional sales and marketing team to enhance commercialization efforts both domestically and internationally[4]. - The company aims to expand its market presence and product awareness in China by recruiting talent with commercialization skills and leveraging its commercialization team's expertise[20]. - The company anticipates greater business development opportunities for its ADC products due to recognition from multinational companies[20]. - The company is focused on obtaining orphan drug designation (ODD) for its key products[67]. - The company aims to expand its market presence and enhance its product pipeline through strategic partnerships[67]. Financial Position - Cash and cash equivalents as of June 30, 2023, amounted to RMB 581.5 million, with net current liabilities of approximately RMB 155.3 million[46]. - The total salary cost for the group was RMB 89.2 million for the six months ended June 30, 2023, compared to RMB 85.6 million for the same period in 2022, mainly due to an increase in the number of sales and marketing personnel[34]. - The group had capital commitments of RMB 466.2 million for property, plant, and equipment as of June 30, 2023, down from RMB 482.0 million as of December 31, 2022[31]. - The asset-liability ratio increased to 68.24% as of June 30, 2023, compared to 64.39% as of December 31, 2022[30]. - The company’s total equity decreased from RMB 900.8 million at the end of 2022 to RMB 762.2 million by June 30, 2023[42]. - The company’s intangible assets decreased from RMB 450.81 million to RMB 439.99 million[42]. Corporate Governance - The board of directors includes Dr. Pu Zhongjie as chairman and executive director, Dr. Sui Ziyeno as general manager, and Dr. Hu Zhaohong as co-general manager[70]. - The board meeting was held in Shanghai, China on August 25, 2023[70]. Market and Industry - The group primarily operates in China, with all major revenue sources derived from this market[49]. - The company focuses on innovative biotherapies for autoimmune and tumor treatments, established in September 2016[66]. - The company is involved in the research of tissue factor (TF) protein, which is expressed at high levels in many cancer cells[70]. - The company is exploring treatments for triple-negative breast cancer (TNBC) and urothelial carcinoma (UC)[70].

Product Development and Clinical Trials - The company achieved significant progress with its first approved product, Putili Monoclonal Antibody, for MSI-H/dMMR solid tumors and melanoma, which were approved for market in July and September 2022 respectively[7]. - CMG901, a targeted ADC, secured an exclusive licensing agreement with AstraZeneca, resulting in an upfront payment of $63 million and potential additional payments of up to $1.125 billion based on development and regulatory milestones[7]. - The company’s ADC pipeline is entering a harvest phase, with MRG003 for advanced nasopharyngeal carcinoma (NPC) and head and neck squamous cell carcinoma (HNSCC) progressing to registration clinical trials, having received orphan drug designation from the FDA[8]. - MRG002, targeting HER2-positive advanced breast cancer, has completed enrollment for its registration phase II clinical trial, with NDA submission expected in 2023[8]. - Several innovative ADC products are in phase I clinical trials, with early clinical data showing promising efficacy signals, including MRG004A for pancreatic cancer and triple-negative breast cancer[8]. - CG0070, an oncolytic adenovirus for bladder cancer, is currently in a Phase III clinical trial in the US, with a Phase I trial initiated in Greater China[9]. - The company has received IND approval for a clinical trial combining CG0070 with PDR001 for NMIBC patients who failed BCG treatment[9]. - MRG003 achieved an overall response rate (ORR) of 47.4% and a disease control rate (DCR) of 79.0% in the NPC clinical trial, with a median progression-free survival (PFS) of 6.3 months[18]. - MRG002 demonstrated an ORR of 56.1% and a DCR of 87.8% in the UC clinical trial, with a median PFS of 6.4 months as of October 12, 2022[20]. - MRG003 received breakthrough therapy designation for NPC and orphan drug designation from the FDA in September 2022[18]. - MRG002 has been granted orphan drug designation by the FDA for the treatment of GC/GEJ cancer as of August 2022[20]. - The company is conducting multiple ongoing clinical trials for HX008, MRG003, and MRG002 across various indications, including NSCLC and HNSCC[19]. - MRG003 has received FDA orphan drug designation and CDE breakthrough therapy designation, while MRG002 has also received FDA orphan drug designation[14]. - The ADC innovation linker-payload platform has shown potential, with candidate MRG006A entering IND-enabling research[10]. - LP002 has shown good safety and efficacy in clinical trials, with a Phase II study for ES-SCLC completed in July 2022, leading to approval for a Phase III trial based on positive data[22]. - MRG001 is currently undergoing an Ib phase dose expansion study in China, targeting B-cell NHL patients with primary or acquired resistance to rituximab[23]. - CMG901, a CLDN 18.2 targeted ADC, has completed its Phase I dose escalation trial with promising initial data and received FDA fast track and orphan drug designations[24]. Financial Performance and Market Position - The company completed its IPO on February 23, 2022, and was included in the Hang Seng Index series in September 2022, marking a significant recognition in the capital market[6]. - The company recorded revenue of RMB 15.6 million in 2022 due to the successful commercialization of HX008, compared to zero in 2021[34]. - Other income increased from RMB 10.6 million in 2021 to RMB 11.3 million in 2022, primarily due to increased government subsidies[35]. - Sales and marketing expenses were RMB 1.7 million in 2022, reflecting the commercialization efforts for HX008, compared to zero in 2021[36]. - Administrative expenses decreased from RMB 156.2 million in 2021 to RMB 138.8 million in 2022, mainly due to a reduction in share-based payment expenses[37]. - Research and development expenses decreased from RMB 791.2 million in 2021 to RMB 524.3 million in 2022, with significant reductions in clinical trial costs and employee benefits[38]. - The company’s loss decreased from RMB 1,028.9 million in 2021 to RMB 699.4 million in 2022[44]. - Financial income increased significantly from RMB 4.1 million in 2021 to RMB 45.9 million in 2022, mainly due to foreign exchange gains from global fundraising[43]. - The company has a remaining unutilized amount of RMB 509.68 million as of December 31, 2022[55]. - The company plans to enhance commercialization and marketing efforts for its first marketed product, PDR001, to increase market share and sales in China[12]. - The company is focused on expanding its candidate drug pipeline and fulfilling ongoing payment obligations related to the acquisition of HX008[55]. - The company plans to expand its market presence in China and internationally, leveraging its ADC platform recognized by multinational companies[33]. Research and Development Strategy - The company has established a robust ADC technology research and development platform to address unmet clinical needs in cancer treatment[6]. - The company is focused on building its commercialization capabilities to enhance the translation of core technologies into marketable products[6]. - The company emphasizes the uncertainty of successfully developing and commercializing its products, advising caution to shareholders and potential investors[18]. - The company is actively involved in clinical trials and research for its drug candidates, indicating a strong commitment to innovation and market expansion[55]. - The company has a strong commitment to maintaining effective communication with shareholders and investors[181]. - The company has established an advanced systematic ADC technology research and development platform to develop innovative drugs[72]. - The company emphasizes continuous R&D innovation, focusing on differentiated biopharmaceuticals for cancer treatment and adhering to strict regulatory compliance in drug development[198][199]. Corporate Governance and Compliance - The company has a commitment to compliance and governance, with board members holding various legal and regulatory qualifications[64]. - The company has established a risk management and internal control system that is considered to be relatively sound[123]. - The company has implemented environmental, health, and safety policies to ensure compliance with applicable laws and regulations[117]. - The board has adopted corporate governance practices in accordance with the listing rules since the company's H-shares were listed on February 23, 2022[125]. - The company has adopted anti-corruption policies and systems as part of its corporate governance framework[125]. - The company has implemented multiple confidentiality measures for the medical records and personal data of clinical trial participants, including encryption and internal rules for employee confidentiality[164]. - The company has established a comprehensive internal control policy covering procurement, supplier management, R&D, clinical trial registration, and other business processes[168]. - The company has a total of 7 senior management personnel, with 3 earning between RMB 4,000,001 and RMB 5,000,000, and 1 earning over RMB 5,000,001[146]. - The company has established four committees, including the audit committee, remuneration and assessment committee, nomination committee, and strategic committee, to oversee specific areas of governance[149]. - The audit committee is tasked with reviewing the company's financial controls, internal controls, and risk management systems[150]. - The company has a three-member Supervisory Board, including a staff representative, to oversee the board and senior management[158]. - The company has a strong emphasis on clinical research and development, with key personnel having extensive experience in clinical registration and quality management[64]. Shareholder and Market Engagement - The company is preparing for a listing on the Sci-Tech Innovation Board, indicating plans for further market expansion[6]. - The company has made amendments to its articles of association in preparation for the issuance of A-shares and listing on the Shanghai Stock Exchange[182]. - The company will hold its annual general meeting on June 15, 2023, with a suspension of shareholder registration from May 16 to June 15, 2023[120]. - Shareholders holding 10% or more of the company's shares can request a special general meeting within 10 days of their written request[175]. - Shareholders holding 3% or more of the company's shares can propose agenda items for the general meeting 10 days prior to the meeting[176]. - The company has a strong management team with over 20 years of experience in biopharmaceutical research and development, particularly in the field of recombinant proteins and monoclonal antibodies[67]. - The company has a diverse board composition, including independent directors with backgrounds in academia and investment banking, which supports robust governance[62]. ESG and Sustainability Initiatives - The company integrates ESG management principles into daily operations, focusing on stakeholder demands while ensuring shareholder and investor interests are protected[189]. - The company actively responds to national dual carbon strategies, optimizing energy structure to reduce negative environmental impacts and address climate change risks[189]. - The board of directors is responsible for overseeing ESG strategies and performance, with regular evaluations of ESG issues' significance conducted[190]. - The company has identified 14 key ESG issues relevant to its operations, prioritizing them based on their importance to business development and stakeholders[194].

Financial Performance - For the year ended December 31, 2022, the company recorded revenue of approximately RMB 156 million and a gross profit of approximately RMB 136 million[3]. - The loss attributable to owners of the company decreased by approximately 31.8%, from about RMB 1,011 million for the year ended December 31, 2021, to approximately RMB 689.1 million for the year ended December 31, 2022[3]. - The company reported a total comprehensive loss of RMB 699,332 thousand for the year, compared to RMB 1,028,842 thousand in the previous year[39]. - The company's net loss decreased from RMB 1,028.9 million in 2021 to RMB 699.4 million in 2022[29]. - The company reported a basic loss per share of RMB 0.42 for the year ended December 31, 2022, compared to RMB 0.66 for the previous year, indicating a reduction in losses[55]. - The company generated sales revenue of RMB 15.6 million from the product 普佑恆TM (Putili monoclonal antibody injection) by December 31, 2022[15]. - The company recorded revenue of RMB 15.6 million for the year ended December 31, 2022, due to the successful commercialization of HX008, compared to zero in 2021[22]. Research and Development - Research and development expenses decreased by approximately 33.7%, from about RMB 791.2 million for the year ended December 31, 2021, to approximately RMB 524.3 million for the year ended December 31, 2022[3]. - The company is actively developing a differentiated pipeline through internal R&D and strategic collaborations, enhancing its production capabilities[4]. - MRG003 received FDA orphan drug designation and breakthrough therapy designation, with ongoing clinical trials showing promising data[2]. - MRG002 is in the registration study phase for HER2-overexpressing breast cancer, with NDA submission expected in 2023[3]. - The company is conducting a Phase III clinical trial for HX008 in combination with irinotecan for GC/GEJ second-line treatment, currently enrolling patients[7]. - MRG003 has been granted breakthrough therapy designation by CDE for NPC treatment, and has also received orphan drug status from the FDA[9]. - The company is focusing on clinical research for MRG003 in HNSCC, with Phase III clinical trial approval obtained in October 2022[8]. - The company is advancing multiple Phase II clinical trials for HX008 in NSCLC, TNBC, and HCC[7]. - MRG002 has received orphan drug designation from the FDA for the treatment of GC/GEJ cancer, with ongoing Phase II clinical trials for HER2-overexpressing breast cancer[10]. - The company has initiated a Phase II clinical trial for LP002 in combination with carboplatin and etoposide for ES-SCLC, with good preliminary data observed[12]. Strategic Partnerships and Collaborations - The company has established a global exclusive licensing agreement with AstraZeneca for CMG901, enhancing its strategic partnerships[6]. - A global exclusive licensing agreement was signed with AstraZeneca for CMG901, with an upfront payment of USD 63 million and potential additional payments of up to USD 1.125 billion[18]. - The company is actively pursuing the development of ADCs targeting various cancers, with several candidates in different clinical stages[5]. - The company is exploring potential acquisitions to enhance its product pipeline, with a budget of up to RMB 1 billion allocated for this purpose[68]. Market Presence and Future Outlook - The company plans to expand its market presence in Southeast Asia, targeting a revenue contribution of 10% from this region by 2025[67]. - The company anticipates a 30% increase in market share for its core products in the next fiscal year, driven by new product launches and expanded distribution channels[68]. - The company has set a performance guidance of 20% revenue growth for the next fiscal year, supported by ongoing clinical trials and product approvals[71]. - The company is expanding its market presence in China and plans to enhance its commercialization team to improve product awareness[21]. Operational Efficiency - Administrative expenses decreased by approximately 11.1%, from about RMB 156.2 million for the year ended December 31, 2021, to approximately RMB 138.8 million for the year ended December 31, 2022[3]. - Clinical trial and pharmaceutical research expenses decreased by RMB 134.5 million, primarily due to resource prioritization on the most promising drug candidates and indications[27]. - Employee benefits expenses decreased by RMB 41.2 million, mainly due to a reduction in share-based payment expenses[27]. - Preclinical research costs decreased by RMB 65.6 million, as some drug candidates entered clinical research stages[27]. - The total expenses for sales cost, sales and marketing, administrative, and research and development amounted to RMB 667,598 thousand in 2022, down from RMB 948,521 thousand in 2021, reflecting a reduction of 29.5%[50]. Financial Position - Cash and cash equivalents increased to RMB 669.4 million as of December 31, 2022, up RMB 514.2 million from RMB 155.2 million as of December 31, 2021[29]. - The debt-to-asset ratio increased to 64.39% as of December 31, 2022, compared to 59.32% as of December 31, 2021[31]. - The company raised approximately HKD 882.5 million from the global offering, net of listing expenses[30]. - As of December 31, 2022, the company had bank borrowings totaling RMB 650.0 million, with RMB 329.6 million being unsecured loans[30]. - The company has cash and cash equivalents of approximately RMB 669.4 million as of December 31, 2022, indicating sufficient liquidity for at least the next twelve months[44]. Corporate Governance - The company is a non-wholly owned subsidiary established on November 25, 2016, in China[72]. - The board of directors includes Dr. Pu Zhongjie as Chairman and Executive Director, and Dr. Sui Ziyeno as General Manager[72]. - The board includes both executive and non-executive directors, ensuring diverse governance[72].