Summary of Key Points from Kogei Pharmaceuticals Conference Call Company Overview - **Company**: Kogei Pharmaceuticals - **Industry**: Biotechnology, specifically focusing on CAR-T cell therapy Core Insights and Arguments 1. **Product Development**: Kogei's CT041 product is expected to be commercialized by 2026, showing significant improvements in median PFS (Progression-Free Survival) and OS (Overall Survival) for gastric cancer patients despite complex baseline conditions [2][3][7][8] 2. **Clinical Trial Results**: The GPRC5D CAR-T (CD071) demonstrated a 100% Overall Response Rate (ORR) and a 70% Complete Response (CR) rate in newly diagnosed multiple myeloma, with good safety profiles [2][10] 3. **Financial Performance**: In the first half of 2025, Kogei reported revenues of approximately 51 million RMB and a gross profit of about 30 million RMB, with low sales expenses [6][15] 4. **Cash Reserves**: The company has cash and bank deposits of around 1.26 billion RMB, expected to last until 2028, with projected losses significantly reduced compared to 2024 [6][16] 5. **Strategic Partnerships**: Kogei is collaborating with Zhuhai Hengqin Softbank to develop universal CAR-T projects, indicating a strategic move towards expanding its product pipeline [2][5] Additional Important Content 1. **Regulatory Milestones**: Kogei's CT041 was included in the breakthrough therapy list by the Chinese FDA, which allows for priority review [3] 2. **Market Potential**: The gastric cancer market in China has approximately 2 million patients, providing a substantial target audience for Kogei's products [17] 3. **Global Expansion Plans**: The company is actively exploring opportunities in overseas markets, including partnerships in regions like Hong Kong, Taiwan, Singapore, South Korea, and Japan, as well as strategies for the U.S. market [17][31] 4. **Technological Innovations**: Kogei's "Thank You" and "Thank You Plus" platforms address challenges in universal CAR-T therapies, such as T cell HVGR issues [4][12] 5. **Clinical Trial Adjustments**: The company is adjusting its clinical trial protocols based on previous experiences, particularly concerning safety and efficacy in different patient populations [19][20] Future Plans 1. **Focus on CAR-T Development**: Kogei plans to continue advancing its universal CAR-T products across various targets and indications, including CD19/20 for B-cell tumors and autoimmune diseases [11][35] 2. **Commercialization Strategy**: The company is working on balancing patient needs with corporate returns, especially in light of new insurance policies that may affect pricing and market access [30][33] 3. **Employee Adjustments**: A reduction in workforce is noted due to strategic realignment and increased production efficiency, with expectations of future hiring as commercialization progresses [37][38] This summary encapsulates the key points from Kogei Pharmaceuticals' conference call, highlighting the company's advancements, financial health, strategic initiatives, and future outlook in the CAR-T therapy landscape.

Core Viewpoint - Kintor Pharmaceutical has shown significant stock performance, with an approximately eightfold increase since its low in September 2024, despite still being in a loss position [1] Financial Performance - For the first half of 2025, Kintor reported revenue of approximately 51 million yuan, a year-on-year increase of about 703.8%, primarily driven by sales of its CAR-T product, SaiKezai [1] - The net loss for the same period was approximately 75.48 million yuan, a reduction of over 78% compared to the previous year [1][2] - Cost control measures, including reduced R&D and administrative expenses, contributed to the narrowing of net losses [2] Product Development and Market Strategy - Kintor's first CAR-T product, SaiKezai, was launched on March 1, 2024, and has secured 111 effective orders from its commercial partner, East China Pharmaceutical [3] - The company is optimistic about the sales growth of SaiKezai due to ongoing marketing efforts and expanded insurance coverage [3] - Kintor is also advancing its CAR-T product, ShuRuiJiAoLunSai, aimed at treating solid tumors, with an NDA submission expected to be approved between Q1 and Q2 of next year [3] Cost and Accessibility Challenges - The high production costs of CAR-T therapies remain a significant barrier to accessibility, with domestic pricing generally around one million yuan [1][4] - Kintor is shifting its strategic focus towards developing universal CAR-T therapies, which are expected to have more significant economies of scale [5] Insurance and Policy Developments - The recent introduction of a dual-track system for insurance coverage, including a commercial insurance innovation drug directory, may improve patient access to CAR-T therapies [6] - SaiKezai is among five CAR-T products included in the initial review list for the commercial insurance innovation drug directory, which could lower patient financial burdens [6] - Kintor is actively collaborating with East China Pharmaceutical to secure policy support related to SaiKezai [6] Industry Context - The establishment of a national commercial insurance directory is expected to address disparities in drug coverage across regions, enhancing the sustainability of insurance support for innovative therapies [7]

Core Viewpoint - Kintor Pharmaceutical's H1 financial results show a significant reduction in net loss, driven by increased product sales, particularly from its CAR-T therapy, with a focus on the upcoming NDA submission for its CT041 product targeting solid tumors [1][2]. Financial Performance - Kintor reported revenues of approximately 51 million yuan in H1 2025, a substantial increase from 6.34 million yuan in the same period of 2024, primarily due to sales growth from its product, Sai Ke Zai [1]. - The gross profit for the period was around 29 million yuan, with a net loss of 75 million yuan, which is a reduction of 277 million yuan compared to the previous year [1]. Product Development and Market Position - The company submitted a New Drug Application (NDA) for CT041, which is the first and only CAR-T cell product submitted for treating solid tumors globally [1]. - CEO Li Zonghai indicated that the review process for CT041 is proceeding normally, with optimistic expectations for approval in Q1 or Q2 of next year [2]. Market Strategy and Opportunities - Kintor is actively exploring commercial opportunities both domestically and internationally, including partnerships with overseas pharmaceutical companies [2]. - The company is focusing on expanding its market presence in the post-operative treatment of gastric cancer, which currently lacks effective therapies beyond chemotherapy [2]. Insurance and Pricing Strategy - Kintor is engaged in discussions regarding the inclusion of its products in the commercial insurance innovation drug directory, which could enhance patient access [3]. - The company is considering the implications of pricing strategies if its products are included in insurance coverage, emphasizing a comprehensive approach beyond simple price reductions [3].

Core Viewpoint - 科济药业-B reported significant growth in its mid-year results for 2025, leading to a stock price increase of over 3% following the announcement [1] Financial Performance - Revenue reached 50.96 million, representing a year-on-year increase of 703.8% [1] - Gross profit amounted to 29.37 million, showing a substantial year-on-year growth of approximately 1,716% [1] - Net loss narrowed to 75.48 million, a reduction of 78.53% compared to the previous year [1] - Earnings per share reported a loss of 0.14 [1] Factors Influencing Performance - The reduction in losses was attributed to decreased research and development expenses, lower administrative costs, an increase in net foreign exchange gains, and higher gross profit [1]

消息面上，8月14日，科济药业-B公布2025年中期业绩，收益为5096.1万元，同比增长703.8%；毛利 2936.9万元，同比增长约17.16倍；净亏损7548.3万元，同比收窄78.53%；每股亏损0.14元。公告称，亏 损减少主要是由于期内的研发开支减少、行政开支减少、外汇收益净额上升及毛利上升。 本文源自智通财经网 智通财经获悉，科济药业-B(02171)绩后涨超3%，截至发稿，涨3.68%，报21.96港元，成交额1640.76万 港元。 ...

Core Viewpoint - Kintor Pharmaceutical Co., Ltd. reported significant growth in its mid-year results for 2025, leading to a stock price increase of over 3% following the announcement [1] Financial Performance - Revenue reached 50.961 million HKD, representing a year-on-year increase of 703.8% [1] - Gross profit amounted to 29.369 million HKD, showing a year-on-year growth of approximately 1,716% [1] - Net loss narrowed to 75.483 million HKD, a reduction of 78.53% compared to the previous year [1] - Earnings per share reported a loss of 0.14 HKD [1] Contributing Factors - The reduction in losses was attributed to decreased research and development expenses, lower administrative costs, an increase in net foreign exchange gains, and higher gross profit [1]

Core Insights - The company reported a revenue of 50.961 million, representing a year-on-year increase of 703.8% [1] - Gross profit reached 29.369 million, showing a significant year-on-year growth of approximately 1716% [1] - The net loss narrowed to 75.483 million, a reduction of 78.53% compared to the previous year [1] - The loss per share was recorded at 0.14 yuan [1] Financial Performance - Revenue: 50.961 million, up 703.8% year-on-year [1] - Gross Profit: 29.369 million, up approximately 1716% year-on-year [1] - Net Loss: 75.483 million, down 78.53% year-on-year [1] - Loss per Share: 0.14 yuan [1] Factors Influencing Performance - The reduction in loss was primarily attributed to decreased R&D expenses, lower administrative costs, an increase in net foreign exchange gains, and higher gross profit [1]

Core Insights - The company reported a significant increase in revenue for the first half of 2025, amounting to 50.96 million yuan, representing a year-on-year growth of 703.8% [1] - Gross profit reached 29.37 million yuan, showing an impressive year-on-year increase of approximately 1,716% [1] - The net loss narrowed to 75.48 million yuan, a reduction of 78.53% compared to the previous year, with a loss per share of 0.14 yuan [1] Financial Performance - Revenue: 50.96 million yuan, up 703.8% year-on-year [1] - Gross Profit: 29.37 million yuan, up approximately 1,716% year-on-year [1] - Net Loss: 75.48 million yuan, down 78.53% year-on-year [1] - Loss per Share: 0.14 yuan [1] Contributing Factors - The reduction in losses was primarily attributed to decreased R&D expenses, lower administrative costs, an increase in net foreign exchange gains, and a rise in gross profit [1]

Performance Highlights [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, the company significantly improved its financial position, with revenue of RMB 51 million, gross profit of RMB 29 million, and a narrowed net loss of RMB 75 million, supported by strong cash reserves Key Financial Indicators for the Six Months Ended June 30, 2025 | Metric | H1 2025 (Million RMB) | H1 2024 (Million RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. 51 | Approx. 6.3 | +704% | | Gross Profit | Approx. 29 | Approx. 1.6 | +1712% | | Net Loss | Approx. 75 | Approx. 352 | Loss narrowed by 78.7% | | Adjusted Net Loss | Approx. 72 | Approx. 342 | Loss narrowed by 79.0% | | Cash and Bank Balances at Period-End | Approx. 1,261 | - | - | - The significant reduction in net loss was primarily due to: (i) increased net other income; (ii) a **RMB 116 million** decrease in R&D expenses; (iii) a **RMB 47 million** decrease in administrative expenses; and (iv) increased gross profit[5](index=5&type=chunk) - As of June 30, 2025, cash and bank balances were approximately **RMB 1.261 billion**, with existing funds projected to support operations until 2028[7](index=7&type=chunk) [Business Highlights](index=3&type=section&id=Business%20Highlights) The company achieved significant business progress, with successful commercialization of core product CT053, NDA acceptance for CT041, and active advancement of differentiated allogeneic CAR-T pipelines using proprietary platforms - Commercialization of **CT053 (Zevor-cel)** in mainland China, in collaboration with Huadong Medicine, progressed smoothly, securing **111 valid orders** in H1 2025[9](index=9&type=chunk) - The New Drug Application (NDA) for **CT041 (Sure-cel)** for advanced gastric cancer was accepted by China's NMPA, granted priority review, and designated as a breakthrough therapy[10](index=10&type=chunk) - The company is advancing multiple allogeneic CAR-T cell products, including CT0596, using its proprietary THANK-uCAR® and upgraded THANK-u Plus™ platforms to overcome limitations of existing therapies[11](index=11&type=chunk) Business Review and Outlook [Company Overview and Strategy](index=4&type=section&id=Company%20Overview%20and%20Strategy) Coherent Biopharma is a biopharmaceutical company focused on innovative CAR-T cell therapies with end-to-end capabilities, strategically optimizing its pipeline for differentiated clinical and commercial value while expanding into the US market - The company is positioned as a biopharmaceutical firm dedicated to developing innovative CAR-T cell therapies addressing unmet clinical needs in hematological malignancies, solid tumors, and autoimmune diseases[12](index=12&type=chunk) - The company's strategy focuses on developing breakthrough CAR-T products, regularly evaluating its pipeline for differentiated projects, and actively integrating resources to advance its US market strategy[13](index=13&type=chunk) [Product Pipeline Review](index=4&type=section&id=Product%20Pipeline%20Review) The company boasts a rich product pipeline, including commercialized CT053, NDA-accepted CT041, and multiple clinical and preclinical candidates targeting novel antigens and allogeneic CAR-T, demonstrating robust R&D innovation Key Product Pipeline Progress | Candidate Product | Target | Primary Indication | Latest Progress | | :--- | :--- | :--- | :--- | | **Zevor-cel (CT053)** | BCMA | Relapsed/Refractory Multiple Myeloma | Commercialized in China | | **Sure-cel (CT041)** | Claudin18.2 | Gastric Cancer/GEJ Adenocarcinoma | NDA accepted in China | | **CT071** | GPRC5D | Relapsed/Refractory Multiple Myeloma | Phase I clinical, ORR data 100% | | **CT011** | GPC3 | Hepatocellular Carcinoma | NMPA IND approved | | **Allogeneic CAR-T** | BCMA, CD19/20, etc. | Multiple Myeloma, B-cell Lymphoma, etc. | Multiple products in IIT stage, CT0596 showing positive preliminary efficacy | [Zevor-cel (CT053) - BCMA CAR-T](index=5&type=section&id=Zevor-cel%20(CT053)%20-%20BCMA%20CAR-T) Zevor-cel (CT053), an NMPA-approved all-human BCMA CAR-T product, is commercializing well in China with 111 orders in H1 2025 and showed a 92.2% ORR in LUMMICAR-1, though its US/Canada LUMMICAR-2 study priority has been strategically reduced - In collaboration with Huadong Medicine for commercialization in mainland China, Coherent Biopharma is eligible for up to **RMB 1.025 billion** in regulatory and sales milestone payments, having secured **111 valid orders** in H1 2025[17](index=17&type=chunk) - LUMMICAR-1 study data showed an **Overall Response Rate (ORR) of 92.2%** and a **stringent Complete Response (sCR)/Complete Response (CR) rate of 71.6%** in 102 patients[20](index=20&type=chunk) - As part of a strategic adjustment, the company decided to de-prioritize the LUMMICAR-2 study for Zevor-cel in the US and Canada[21](index=21&type=chunk) [Sure-cel (CT041) - Claudin18.2 CAR-T](index=6&type=section&id=Sure-cel%20(CT041)%20-%20Claudin18.2%20CAR-T) Sure-cel (CT041), a potential global first-in-class Claudin18.2 CAR-T, received NMPA NDA acceptance, priority review, and breakthrough therapy designation in June 2025 for advanced gastric/GEJ adenocarcinoma, demonstrating significant PFS/OS improvement and manageable safety in a confirmatory Phase II trial - In June 2025, the NDA for Sure-cel was accepted by China's NMPA for Claudin18.2-positive advanced gastric/gastroesophageal junction adenocarcinoma patients who failed at least two prior lines of therapy[23](index=23&type=chunk) - Confirmatory Phase II clinical trial (CT041-ST-01) data showed a **median Overall Survival (mOS) of 9.17 months** for Sure-cel-treated patients, compared to only **3.98 months** for the control group[24](index=24&type=chunk) - The company is actively exploring the product's application in earlier cancer treatment and perioperative settings, including adjuvant therapy for pancreatic cancer and post-gastrectomy consolidation therapy for gastric cancer[25](index=25&type=chunk) [CT011 - GPC3 CAR-T](index=8&type=section&id=CT011%20-%20GPC3%20CAR-T) CT011, an autologous GPC3-targeted CAR-T product for hepatocellular carcinoma (HCC), received NMPA IND approval in January 2024 for adjuvant therapy in GPC3-positive Stage IIIa HCC patients at risk of recurrence post-surgery, building on the founder's pioneering work - CT011 is an autologous GPC3-targeted CAR-T product for the treatment of hepatocellular carcinoma (HCC)[30](index=30&type=chunk) - In January 2024, CT011 received NMPA IND approval for adjuvant therapy in GPC3-positive Stage IIIa HCC patients at risk of recurrence after surgical resection[30](index=30&type=chunk) [CT071 - GPRC5D CAR-T](index=9&type=section&id=CT071%20-%20GPRC5D%20CAR-T) CT071, an autologous GPRC5D-targeted CAR-T developed with the CARcelerate® platform to reduce manufacturing time to 30 hours, demonstrated a **100% ORR** and **70% sCR** in a Phase I investigator-initiated trial for newly diagnosed multiple myeloma, highlighting its significant therapeutic potential - CT071, developed using the proprietary CARcelerate® platform, reduces manufacturing time to approximately **30 hours**, yielding younger and more potent CAR-T cells[32](index=32&type=chunk) - In a Phase I study for high-risk newly diagnosed multiple myeloma, CT071 achieved a **100% Overall Response Rate (ORR)**, with **70% of patients achieving stringent Complete Response (sCR)**[32](index=32&type=chunk) [Allogeneic CAR-T Cell Products](index=9&type=section&id=Allogeneic%20CAR-T%20Cell%20Products) Leveraging its proprietary THANK-uCAR® and upgraded THANK-u Plus™ platforms, the company is aggressively advancing its allogeneic CAR-T pipeline, with BCMA-targeted CT0596 showing encouraging efficacy and safety in R/R MM, and a dedicated subsidiary, Youkai-cel, established for R&D and commercialization of multiple allogeneic products - The company developed the THANK-u Plus™ platform as an upgrade to THANK-uCAR® technology, aiming to overcome the potential impact of NKG2A expression levels on allogeneic CAR-T efficacy[34](index=34&type=chunk) - In a preliminary clinical study of allogeneic product CT0596 for R/R MM, **3 out of 5 (60%)** patients who completed initial efficacy assessment achieved sCR/CR, **4 (80%)** achieved MRD negativity, with good safety[36](index=36&type=chunk) - The company established Youkai-cel, a subsidiary, and secured **RMB 80 million** in external investment, focusing on the R&D, manufacturing, and commercialization of allogeneic CAR-T cell therapies in China[38](index=38&type=chunk) [Technology Platforms and Innovation](index=11&type=section&id=Technology%20Platforms%20and%20Innovation) The company addresses CAR-T challenges through innovative platforms: THANK-uCAR®/THANK-u Plus™ for effective allogeneic CAR-T, CARcelerate® for 30-hour manufacturing, and CycloCAR®/LADAR™ for enhanced solid tumor efficacy and improved target availability/safety, holding over 300 patents Core Technology Platforms | Technology Platform | Goals and Advantages | | :--- | :--- | | **THANK-uCAR® / THANK-u Plus™** | Develop allogeneic CAR-T, improve patient accessibility, enhance cell expansion and persistence | | **CARcelerate®** | Reduce CAR-T cell manufacturing time to approximately 30 hours, improving production efficiency and cell potency | | **CycloCAR®** | Co-express IL-7 and CCL21, enhance efficacy against solid tumors, reduce lymphodepletion requirements | | **LADAR™** | Precisely control CAR-T cell activation through dual-antigen recognition, enhance safety, and address target availability challenges | - As of June 30, 2025, the company holds over **300 patents**, including **140 globally authorized patents**, demonstrating a robust intellectual property portfolio[44](index=44&type=chunk) [Manufacturing Capabilities](index=14&type=section&id=Manufacturing%20Capabilities) The company has established vertically integrated GMP manufacturing capabilities for plasmids, lentiviral vectors, and CAR-T cell products, supporting clinical trials and commercialization, with its Shanghai Jinshan plant serving China and the US RTP facility cleared by FDA for overseas clinical trials - The company has established vertically integrated CAR-T manufacturing capabilities, encompassing plasmids, lentiviral vectors, and CAR-T cell products, enhancing efficiency, control, and cost reduction[46](index=46&type=chunk) - The Shanghai Jinshan facility supports the commercial production of Zevor-cel and prepares for the commercialization of Sure-cel[46](index=46&type=chunk) - The RTP manufacturing facility in North Carolina, USA, passed an FDA re-inspection with zero deficiencies in September 2024, leading to the lifting of clinical hold on three trials by the FDA in October of the same year[47](index=47&type=chunk) [Market Outlook and Future Prospects](index=15&type=section&id=Market%20Outlook%20and%20Future%20Prospects) The global CAR-T market shows strong growth, with significant unmet needs in solid tumors; the company aims to advance core products into earlier treatment, develop innovative technologies, expand manufacturing, and seek collaborations to maximize value - The global CAR-T market is experiencing strong growth, yet significant unmet needs persist in solid tumor treatment, presenting development opportunities for the company[48](index=48&type=chunk) - The company's future focus includes: 1) advancing core products into earlier treatment; 2) developing other clinical and preclinical products; 3) continuously innovating CAR-T technologies; 4) expanding US and China manufacturing capabilities; and 5) establishing more external collaborations[49](index=49&type=chunk) Financial Review [Operating Performance Analysis](index=16&type=section&id=Operating%20Performance%20Analysis) During the reporting period, the company's operating loss significantly narrowed from RMB 362 million to RMB 77 million, with net loss decreasing by RMB 277 million to RMB 75 million, primarily due to controlled expenses, increased foreign exchange gains, and higher gross profit Operating Loss and Net Loss | Metric | H1 2025 (Million RMB) | H1 2024 (Million RMB) | | :--- | :--- | :--- | | Operating Loss | 77 | 362 | | Net Loss | 75 | 352 | - The reduction in loss was primarily attributed to decreased R&D expenses, reduced administrative expenses, increased net foreign exchange gains, and higher gross profit[51](index=51&type=chunk) [Non-IFRS Measures](index=16&type=section&id=Non-IFRS%20Measures) To better assess core business performance, the company reported Non-IFRS measures, with adjusted net loss for the six months ended June 30, 2025, significantly narrowing to RMB 71.8 million from RMB 342 million after excluding non-cash items like share-based compensation Reconciliation of Net Loss to Adjusted Net Loss (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the period | (75,483) | (351,558) | | Add: Share-based payment expenses | 3,684 | 9,190 | | **Adjusted Net Loss** | **(71,799)** | **(342,368)** | [Analysis of Key Financial Items](index=17&type=section&id=Analysis%20of%20Key%20Financial%20Items) During the period, the company effectively controlled expenses, with revenue growing over 7-fold to RMB 50.96 million, R&D expenses decreasing by **47%** to RMB 130 million, and administrative expenses by **54%** to RMB 39 million, primarily due to lower staff costs, professional fees, and depreciation - R&D expenses decreased by **47%** from **RMB 246 million** to **RMB 130 million**, primarily due to reduced employee benefit expenses, testing and clinical expenses, and depreciation of property, plant, and equipment[58](index=58&type=chunk) - Administrative expenses decreased by **54%** from **RMB 86 million** to **RMB 39 million**, mainly due to reduced employee benefit expenses, professional service fees, and depreciation of property, plant, and equipment[59](index=59&type=chunk)[60](index=60&type=chunk) - Total employee benefit expenses decreased from **RMB 154 million** to **RMB 89.79 million**, primarily due to a reduction in headcount and lower remuneration[60](index=60&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held RMB 1.261 billion in cash and bank balances, with improved net cash outflow from operating activities of RMB 196 million and a net outflow of RMB 30 million from financing activities, resulting in zero total borrowings and a reduced liability ratio of **7.2%**, indicating a more robust financial structure Condensed Cash Flow Statement (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (196,308) | (255,947) | | Net cash generated from investing activities | 1,715 | 6,584 | | Net cash (used in)/generated from financing activities | (29,635) | 24,688 | | **Cash and cash equivalents at period-end** | **1,260,793** | **1,652,569** | - As of June 30, 2025, the Group's total borrowings decreased to **zero**, and the liability ratio (sum of borrowings and lease liabilities/total equity) decreased from **15.75%** at the end of 2024 to **7.2%**[69](index=69&type=chunk) - As of June 30, 2025, the company's total headcount was **371**, a reduction from **468** at the end of 2024[78](index=78&type=chunk) Supplemental Announcement Regarding 2024 Annual Report [Impairment Background and Reasons](index=24&type=section&id=Impairment%20Background%20and%20Reasons) This supplemental announcement clarifies asset impairments in the 2024 annual report, stemming from a strategic shift to allogeneic CAR-T pipelines due to strong data and competitive changes, reallocating resources from certain autologous pipelines lacking clear commercialization plans - For the year ended December 31, 2024, the company recorded an impairment of **RMB 162.3 million** for property, plant, and equipment, **RMB 26.5 million** for right-of-use assets, and **RMB 0.3 million** for intangible assets[81](index=81&type=chunk) - The primary reason for impairment was a strategic shift: due to excellent allogeneic CAR-T data, the company decided to reallocate resources from certain autologous CAR-T pipelines to allogeneic pipelines[82](index=82&type=chunk)[83](index=83&type=chunk) [Key Assumptions and Impairment Testing](index=24&type=section&id=Key%20Assumptions%20and%20Impairment%20Testing) The company conducted impairment tests on long-term assets based on strategic adjustments, using the Value in Use (VIU) method for autologous pipeline assets without clear commercialization plans, and fully impairing assets solely dedicated to these pipelines due to zero expected future cash inflows - Key impairment testing assumptions included reduced resource allocation to autologous pipelines without clear commercialization plans, and no definite commercialization plans for other autologous pipelines beyond those already marketed or in NDA stage[83](index=83&type=chunk) - The company used the Value in Use (VIU) method for impairment testing, with assets solely dedicated to de-prioritized autologous pipelines assigned a **zero VIU**, leading to a full impairment provision[84](index=84&type=chunk)[85](index=85&type=chunk) Condensed Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported a gross profit of RMB 29.37 million, a significantly narrowed operating loss of RMB 76.70 million from RMB 362 million, and a net loss of RMB 75.48 million, representing a **78.5%** year-over-year reduction, with basic loss per share at **RMB 0.14** Condensed Interim Consolidated Statement of Profit or Loss Summary (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 50,961 | 6,340 | | Gross Profit | 29,369 | 1,617 | | Operating Loss | (76,704) | (361,540) | | Loss before income tax | (75,483) | (351,558) | | **Loss for the period attributable to owners of the parent** | **(75,483)** | **(351,558)** | | Basic and diluted loss per share (RMB) | (0.14) | (0.63) | [Consolidated Statement of Financial Position](index=27&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company reported total assets of RMB 1.513 billion, total liabilities of RMB 551 million, and net assets of RMB 962 million, with strong liquidity from RMB 1.380 billion in current assets, including RMB 1.261 billion in cash and bank balances, and an optimized balance sheet with zero interest-bearing bank borrowings Condensed Interim Consolidated Statement of Financial Position Summary (RMB Thousand) | Item | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 133,498 | 142,759 | | Total current assets | 1,379,893 | 1,530,275 | | **Total Assets** | **1,513,391** | **1,673,034** | | Total current liabilities | 213,799 | 254,007 | | Total non-current liabilities | 337,459 | 362,320 | | **Total Liabilities** | **551,258** | **616,327** | | **Net Assets** | **962,133** | **1,056,707** | | Total Equity | 962,133 | 1,056,707 | Corporate Governance and Other Information [Dividends and Securities Transactions](index=36&type=section&id=Dividends%20and%20Securities%20Transactions) The Board recommends no interim dividend for the six months ended June 30, 2025, with no purchases, sales, or redemptions of listed securities by the company or its subsidiaries during the period, and all directors confirmed compliance with the adopted standard code - The Board recommends no interim dividend for the reporting period[116](index=116&type=chunk) - During the reporting period, neither the company nor its subsidiaries acquired, disposed of, or redeemed any of the company's listed securities[117](index=117&type=chunk) [Use of Proceeds from Global Offering](index=37&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company, listed in June 2021, utilized approximately RMB 2.497 billion of its HKD 3.008 billion net global offering proceeds by June 30, 2025, primarily for CT053 development, pipeline R&D, and manufacturing, with the remaining balance expected to be fully used by 2026 Use of Proceeds from Global Offering (As of June 30, 2025) | Use of Proceeds | Planned Allocation (Million RMB) | Amount Utilized (Million RMB) | Balance (Million RMB) | | :--- | :--- | :--- | :--- | | Development of core product BCMA CAR-T (CT053) | 851.7 | 851.7 | 0 | | R&D for other pipelines | 849.9 | 759.6 | 90.3 | | Manufacturing and commercialization capabilities | 548.3 | 415.2 | 133.1 | | Technology upgrades and early-stage R&D | 274.1 | 214.7 | 59.4 | | Working capital and others | 255.5 | 255.5 | 0 | | **Total** | **2,779.5** | **2,496.7** | **282.8** | - The unutilized portion of the net proceeds is expected to be fully used for its intended purposes by 2026[124](index=124&type=chunk)

Core Viewpoint - The investment bank maintains a cautiously optimistic outlook on the Chinese pharmaceutical industry, noting a significant average increase of 137% in Hong Kong biotech stocks since early 2025, driven by cash returns from innovative drug licensing deals and unaffected by upcoming U.S. tariffs [1] Group 1: Market Performance - The biotech sector has recently experienced some pullback due to disappointing sales figures from major companies in the first half of 2025, including Hutchison China MediTech [1] - Concerns have arisen regarding Trump's phased implementation of drug tariffs, which could escalate to 150% within a year and ultimately reach 250% [1] Group 2: Company Recommendations - The bank's top pick is BeiGene (06160), with a target price set at HKD 230 and a rating of "Outperform," citing strong performance in the first half of 2025 and an improved gross margin guidance despite U.S. tariff impacts [1] - CanSino Biologics (09926) is expected to report adjusted earnings of RMB 23 million for the first half of 2025, benefiting from revenue growth from its drugs AK104 and AK112, also rated "Outperform" [1] - The target price for Innovent Biologics (01801) has been raised by 10% from HKD 100 to HKD 110, with a rating of "Outperform," reflecting confidence in the company's projected 37% year-on-year revenue growth [1] Group 3: Focus on Innovative Drugs - The bank continues to pay attention to licensing deals for Chinese innovative drugs, with expectations of increased subsidies for high-priced innovative drugs, which may drive sales growth for companies such as Kintor Pharmaceutical (02171), Fosun Pharma (02196), WuXi AppTec (02126), and Kelun-Biotech (06990) [2]