Industry Overview - Vaccines are essential biological products for preventing and controlling infectious diseases, representing a core defense in public health systems [1][5] - The Chinese vaccine industry is experiencing rapid growth, with the market size projected to increase from 306.22 billion yuan in 2015 to 1,762.19 billion yuan in 2024, and expected to exceed 300 billion yuan by 2031 [1][5] Industry Chain - The upstream of the vaccine industry includes raw material supply, such as microcarriers, human serum albumin, and packaging materials [3] - The midstream involves vaccine research and production, with key players including Sinopharm, Sinovac, CanSino, Zhifei, and Watson [3] - The downstream consists of vaccine distribution and consumption, reaching end consumers through health service centers and medical institutions [3] Current Industry Status - As of December 31, 2024, 47 companies in China have received vaccine batch approvals, totaling 543 million doses, with a decrease of 5.6% compared to 2023 [7] - The most approved vaccines in 2024 were influenza and rabies vaccines, each exceeding 80 million doses, accounting for 30% of total approvals [9] Market Competition - The Chinese vaccine market is characterized by a diverse competitive landscape, with local companies like Sinopharm and Zhifei rising against foreign giants like Merck and Pfizer [11] - Zhifei has achieved significant growth in international markets, with a 300% increase in exports of its WHO-precertified 23-valent pneumococcal polysaccharide vaccine [11] - Innovative companies like CanSino and Watson are making breakthroughs in mRNA and recombinant protein vaccines, enhancing their market presence [11][12] Future Trends - Technological innovation is driving the vaccine industry forward, with new platforms like mRNA and gene-engineered vaccines emerging [17] - The adult vaccine market is growing, with a 45% increase in HPV vaccine uptake in 2024, indicating a shift in public health awareness [18] - Chinese vaccine companies are expanding internationally, with over 2.5 billion doses of COVID-19 vaccines supplied abroad, focusing on markets in Africa and Southeast Asia [19]

Core Viewpoint - Company announces the completion of the first cohort enrollment for Phase I clinical trials of SCB-1022 (RSV+hMPV) and SCB-1033 (RSV+hMPV+PIV3) respiratory combination vaccine candidates [1][2] Group 1: Clinical Trial Details - The ongoing Phase I clinical trial for the combination vaccine candidates will enroll up to 192 elderly participants (aged 60-85), who will be randomly assigned to receive either SCB-1022 (RSV+hMPV), SCB-1033 (RSV+hMPV+PIV3), or the control group SCB-1019 (RSV) [2] - The clinical study aims to evaluate safety, reactogenicity, and immunogenicity of the vaccine candidates [2] Group 2: Previous Clinical Trial Results - In October 2024, the company will announce results from a Phase I clinical trial of its adjuvant-free RSV PreF vaccine candidate (SCB-1019) conducted on 70 elderly participants (aged 60-85), which showed potential best-in-class immunogenicity and tolerability characteristics when compared head-to-head with GSK's RSV vaccine AREXVY using AS01E adjuvant [1] - The clinical results support the further development and evaluation of SCB-1019 in combination with hMPV and PIV3 fusion pre-F trimer antigen, also developed using the protein trimerization platform [1]

Group 1 - The Hang Seng Medical Index ETF has shown significant liquidity with a turnover of 1% and a transaction volume of 2.6148 million yuan, with an average daily transaction volume of 27.4616 million yuan over the past month [2] - The ETF's scale has increased by 28.6087 million yuan in the past month, ranking first among comparable funds, with a share increase of 12 million units in the last two weeks, also the highest among peers [2] - In terms of capital inflow, the ETF has seen net inflows on 5 out of the last 8 trading days, totaling 14.5271 million yuan [2] - The current price-to-earnings ratio (PE-TTM) of the Hang Seng Medical Healthcare Index is 23.4, which is in the 4.36% percentile over the past year, indicating a valuation lower than 95.64% of the time in the past year, suggesting historical low valuations [2] - The top ten weighted stocks in the Hang Seng Medical Healthcare Index account for 57.09% of the index, including companies like WuXi Biologics and BeiGene [2] Group 2 - Since the reform of new drug research and development policies in 2015, China's innovative drug industry has developed a strong ecosystem, integrating excellent resources in preclinical and clinical stages, which has gained recognition from multinational corporations (MNCs) [3] - The pharmaceutical and biotechnology sector's Q1 2025 financial reports show stable revenue and profit performance, with notable improvements in certain sub-industries, indicating a return of market enthusiasm for the sector [3] - There is a recommendation to focus on international biotech companies, revaluation of innovative pipelines in generic companies, and companies in the CXO industry with significant order and operational improvements [3] - Investors without stock accounts can access investment opportunities in the Hong Kong medical sector through the Hang Seng Medical Index ETF linked fund (018433) [3]

Core Insights - The trend of license-out transactions involving Chinese pharmaceutical companies continues into 2025, with over 20 deals reported in Q1 alone, including significant agreements worth over $1 billion [2] - However, there is a concerning "return rate" of 40% for completed license-out transactions from 2020, indicating a growing trend of terminated collaborations [5] - The industry is experiencing a "clearing" phase after a surge in business development (BD) activities, with many companies facing challenges in maintaining partnerships [5][6] Group 1: Business Development Trends - In Q1 2025, notable transactions included Roche's $1 billion deal with Innovent Biologics and Lepu Biopharma's $1.2 billion collaboration with ArriVent [2] - Companies like InnoCare and Baillie Gifford have successfully capitalized on BD opportunities, with InnoCare's license-out deals exceeding $6 billion, contributing to its successful IPO [2] - The overall BD transaction volume is expected to reach new highs in 2025, driven by increased interest from global pharmaceutical companies in Chinese innovative drugs [2] Group 2: Challenges and Terminations - As of April 2025, 25 out of 62 completed license-out transactions from 2020 have been terminated, reflecting a 40% return rate [5] - Recent high-profile disputes include Novo Nordisk's $800 million claim against Henlius for alleged fraud and GAVI's termination of a pre-purchase agreement with Clover Biopharmaceuticals [6] - The primary reasons for these terminations include disappointing clinical data and strategic shifts by the buying companies, leading to increased competition and pressure on Chinese biotech firms [6][8] Group 3: Financial Implications - The milestone achievement rate for Chinese innovative drugs is only 22%, indicating that most companies only receive the initial payment, which typically constitutes 2%-5% of the total deal value [9][11] - The financial impact of terminated collaborations is significant, as companies lose potential milestone payments and face challenges in maintaining market confidence [9][12] - The NewCo model is emerging as a more favorable alternative, allowing for shared risk and deeper collaboration between Chinese firms and multinational corporations [13][14] Group 4: Future Outlook - The BD landscape is expected to see an increase in "return" events, as the market matures and companies face heightened scrutiny [15] - Successful future collaborations will require Chinese companies to demonstrate superior clinical data and competitive advantages in the global market [18][19] - The industry must balance the urgency of BD with long-term strategic planning to avoid reliance on potentially volatile partnerships [17][18]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 38.4 million, slightly down from RMB 39.3 million in 2023[10]. - Other income and gains decreased significantly from RMB 2,571.4 million in 2023 to RMB 97.2 million in 2024, primarily due to the recognition of most funds received from CEPI in 2023[12]. - The net loss for the year increased from RMB 138.5 million in 2023 to RMB 903.4 million in 2024, primarily due to non-recurring impacts from previously recognized income and inventory impairment provisions[14]. - Adjusted net loss, excluding share-based compensation expenses, was RMB 887.2 million for 2024 compared to RMB 85.0 million in 2023[10]. - The adjusted net loss for the year ended December 31, 2024, was RMB 887,150 thousand, compared to RMB 85,024 thousand in 2023, indicating a significant increase in losses[16]. - The company recorded a pre-tax loss of RMB 903.43 million for 2024, compared to a loss of RMB 138.54 million in 2023, indicating a substantial increase in losses[43]. - The adjusted loss for the year was RMB 887.15 million in 2024, compared to RMB 85.02 million in 2023, indicating a significant deterioration in financial performance[43]. Cash and Assets - Total cash and bank balances decreased from RMB 1,095.5 million as of December 31, 2023, to RMB 556.5 million as of December 31, 2024, mainly due to loan repayments and ongoing R&D investments[11]. - Total current assets decreased from RMB 1,899.5 million as of December 31, 2023, to RMB 663.2 million as of December 31, 2024[57]. - Cash and bank balances decreased from RMB 1,095.5 million as of December 31, 2023, to RMB 556.5 million as of December 31, 2024, primarily due to loan repayments and ongoing R&D activities[58]. - The company's capital commitments decreased from RMB 16.1 million as of December 31, 2023, to RMB 13.1 million as of December 31, 2024[64]. Research and Development - Research and development expenses were reduced by approximately 72% from RMB 649.9 million in 2023 to RMB 183.4 million in 2024, reflecting the completion of certain clinical activities[13]. - The company continues to prioritize respiratory vaccine products in its strategic R&D focus[13]. - The company achieved major progress in expanding its product portfolio and optimizing business operations, particularly with the RSV vaccine SCB-1019 entering clinical trials[17]. - SCB-1019 has shown promising immunogenicity and safety data in Phase I clinical trials, with results indicating potential best-in-class efficacy and safety among RSV vaccines[20]. - The company received IND approval from the FDA to initiate a repeat dosing clinical trial for SCB-1019, targeting 160 elderly participants aged 60 to 85[20]. - The company plans to initiate clinical trials in 2025 to evaluate SCB-1019 for RSV vaccine booster shots and combined respiratory vaccines[31]. Vaccine Development and Market Strategy - The company has two authorized vaccines: a COVID-19 booster vaccine and a quadrivalent seasonal influenza vaccine, with ongoing clinical trials for an RSV candidate vaccine[4]. - The quadrivalent influenza vaccine AdimFlu-S generated approximately RMB 46.8 million in revenue for the flu season, despite a sales return of RMB 11.6 million[11]. - The company successfully obtained approval for the AdimFlu-S quadrivalent seasonal influenza vaccine, enabling faster market access and distribution in China before the autumn-winter vaccination season[20]. - The company signed an exclusive agreement with a local biotech firm to distribute the AdimFlu-S vaccine in China, further expanding its market presence[24]. - The company is focused on establishing a leading respiratory vaccine portfolio to address unmet needs in preventing severe respiratory infectious diseases[27]. Operational Efficiency - Administrative expenses decreased by about 62% from RMB 198.8 million in 2023 to RMB 75.2 million in 2024, due to cost-saving measures and improved operational efficiency[13]. - Sales and distribution expenses decreased from RMB 548.66 million in 2023 to RMB 197.05 million in 2024, attributed to a more mature and efficient commercialization system[47]. - The company aims to enhance operational efficiency and maintain a strong cash position to support sustainable financial development[42]. Employee and Management - The group has a total of 300 employees as of December 31, 2024, with a total salary cost of RMB 162.9 million for the year[67]. - Employee distribution by function: R&D 115 (38.3%), Manufacturing and CMC 100 (33.3%), General and Administration 51 (17.0%), Sales and Marketing 34 (11.4%)[67]. - The company has a strong board with members possessing extensive experience in vaccine development, strategic management, and financial oversight[85][94]. - The management team is committed to ensuring high-quality pharmaceutical and vaccine access for patients in China and beyond[86]. Governance and Compliance - The company has complied with all relevant laws and regulations without any serious violations as of the reporting date[111]. - The company has no significant environmental incidents or complaints affecting its business during the reporting period[110]. - The report emphasizes compliance with regulations regarding director transactions[200]. Shareholder Information - As of December 31, 2024, Dr. Liang holds 209,871,665 shares, representing 16.18% of the company's equity[145]. - Major shareholder JNRY owns 91,217,442 shares, accounting for 7.03% of the company's equity[147]. - Major shareholder AUT-XXI holds 66,375,987 shares, which is 5.12% of the company's equity[147]. - Major shareholder Shanghai Tianhe possesses 69,999,500 shares, equating to 5.40% of the company's equity[147]. Future Outlook - The company is focused on developing innovative vaccines to address unmet needs, particularly in the pediatric vaccine market[102]. - The company is actively involved in shaping healthcare policies to improve patient access to quality medicines and vaccines in the Chinese market[87]. - The company is in the commercialization phase and is working on developing vaccine production and distribution capabilities[104].

Financial Performance - The company's total revenue for the year ended December 31, 2024, was RMB 38.4 million, a slight decrease from RMB 39.3 million for the year ended December 31, 2023[3]. - Other income and gains decreased significantly from RMB 2,571.4 million in 2023 to RMB 97.2 million in 2024, primarily due to the recognition of most funds received from CEPI in 2023[5]. - The company reported a net loss of RMB 903.4 million for the year ended December 31, 2024, an increase of RMB 764.9 million compared to a net loss of RMB 138.5 million in 2023[7]. - Adjusted net loss, excluding the impact of share-based compensation, was RMB 887.2 million for 2024, compared to RMB 85.0 million in 2023[8]. - Cash and bank balances decreased from RMB 1,095.5 million as of December 31, 2023, to RMB 556.5 million as of December 31, 2024, mainly due to loan repayments and ongoing R&D investments[4]. - The cost of sales increased to RMB 16.8 million in 2024 from RMB 15.0 million in 2023, resulting in a gross profit of RMB 21.6 million, down from RMB 24.2 million, indicating a gross margin contraction[39]. - The adjusted loss for the year was RMB 887.2 million in 2024, compared to RMB 85.0 million in 2023, indicating a significant deterioration in financial performance[40]. - The group reported a pre-tax loss of RMB 903,428 thousand for the year 2024, compared to a loss of RMB 138,539 thousand in 2023[71]. - The total expenses for 2024 were RMB 738,201,000, down from RMB 1,811,944,000 in 2023, showing a decrease of about 59.3%[90]. Research and Development - Research and development expenses were reduced by approximately 72% from RMB 649.9 million in 2023 to RMB 183.4 million in 2024, reflecting the completion of certain clinical and regulatory activities[6]. - The company has made significant progress in expanding its product portfolio, including the RSV vaccine (SCB-1019), which has entered clinical trials and demonstrated positive immunogenicity and safety data[9]. - The company is prioritizing resources to advance the clinical development of SCB-1019, aiming to establish its potential as a globally best and highly differentiated product in the RSV vaccine market[16]. - The company initiated an additional Phase I clinical trial for SCB-1019 in elderly participants in mid-June 2024, comparing it head-to-head with GSK's RSV vaccine Arexvy[21]. - The company plans to launch the SCB-219M candidate, a fusion protein for treating chemotherapy-induced thrombocytopenia (CIT), with Phase Ib clinical trials starting in November 2024[15]. - The company continues to focus on technological innovation and expanding its product pipeline to ensure long-term sustainable development[33]. Product Development and Market Strategy - The company has established a leading respiratory vaccine product portfolio to meet unmet needs in preventing severe respiratory infections[19]. - The company is focused on capturing significant cross-promotion, combination therapy, and long-term lifecycle management opportunities in the respiratory vaccine market[19]. - The company received approval for the importation of the only quadrivalent seasonal influenza vaccine AdimFlu-S for individuals aged three and above in mainland China, facilitating faster market entry and distribution before the autumn-winter vaccination season[15]. - The company aims to strengthen its domestic commercialization capabilities through optimized team construction and smooth execution, following the approval of the quadrivalent influenza vaccine[16]. - The company plans to initiate clinical trials for SCB-1019 in 2025 to evaluate its application in RSV vaccine booster shots and respiratory combined vaccines[25]. Operational Efficiency and Cost Management - Administrative expenses decreased by approximately 62% from RMB 198.8 million in 2023 to RMB 75.2 million in 2024, reflecting cost-saving measures and improved operational efficiency[6]. - Sales and distribution expenses decreased from RMB 54.8 million in 2023 to RMB 19.7 million in 2024, a decline of approximately 64% due to a more mature commercialization system[46]. - The company has successfully implemented various strategies for cost control and capital raising, which are crucial for future operations[81]. Regulatory and Compliance - The company continues to hold an emergency use authorization (EUA) for its COVID-19 vaccine obtained in December 2022[12]. - The company has not declared a final dividend for the year ended December 31, 2024[113]. - The company continues to adhere to high standards of corporate governance and has implemented relevant policies to ensure compliance[114]. Risks and Challenges - The company faces significant risks including the inability to successfully complete clinical development and obtain regulatory approvals for candidate products, which could severely impact business operations[128]. - The regulatory approval process for vaccines is highly dynamic and may lead to unforeseen delays or challenges[128]. - The company acknowledges that it cannot guarantee the successful development and commercialization of its candidate drugs and vaccines[131]. Legal and Disputes - The company is currently in a dispute with GAVI regarding contract liabilities amounting to USD 224 million (approximately RMB 1,612,450,000)[76]. - GAVI has claimed a total of USD 224 million in prepayments, which the company disputes as unfounded[110]. - The company received a notice from GAVI on March 21, 2025, unilaterally terminating the pre-purchase agreement and demanding immediate repayment of USD 224 million[111].

[Company and Financial Overview](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Corporate Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Provides basic corporate information, including board composition, registered offices, auditors, and listing details - The company is incorporated in the Cayman Islands, headquartered in Shanghai, with its principal place of business in Hong Kong[2](index=2&type=chunk) - The company's stock code is 2197, listed on the Hong Kong Stock Exchange on November 5, 2021, with Ernst & Young as the auditor[3](index=3&type=chunk) [Financial Highlights](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company shifted from a profit to a loss, primarily due to the absence of significant one-off income and reduced expenses across all categories Key Financial Data for H1 2024 (vs. H1 2023) | Metric | Six Months Ended June 30, 2024 (RMB'000) | Six Months Ended June 30, 2023 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Revenue | (10,100) | 257 | Turned to negative revenue | | Other Income and Gains | 67,148 | 2,510,809 | -97.3% | | R&D Expenses | (98,297) | (385,603) | -74.5% | | Administrative Expenses | (42,075) | (109,468) | -61.6% | | Period (Loss)/Profit | (95,123) | 650,624 | Shifted from profit to loss | | Adjusted Period (Loss)/Profit | (87,259) | 674,468 | Shifted from profit to loss | - Cash and bank balances **decreased from RMB 1.096 billion** at the end of 2023 to **RMB 830 million** at the end of the reporting period, mainly due to daily operations and repayment of bank loans[4](index=4&type=chunk)[5](index=5&type=chunk) - R&D expenses **decreased significantly by 75%** (approximately RMB 287 million) year-over-year, as R&D activities for the COVID-19 vaccine SCB-2019 were completed and operations were streamlined[6](index=6&type=chunk) - Other expenses **decreased by 99.8%** year-over-year, primarily because a **RMB 1.237 billion** inventory provision for the COVID-19 vaccine was recorded in the prior-year period, with no such expense this period[6](index=6&type=chunk)[29](index=29&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Summary and Outlook](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) The company is focusing on its respiratory vaccine portfolio, prioritizing the development of its RSV candidate while ensuring financial sustainability through operational efficiency - The company's core strategy is to build a leading global respiratory vaccine portfolio using its validated Trimer-Tag technology platform[21](index=21&type=chunk) - The company will prioritize resources for the development of its proprietary bivalent PreF RSV vaccine candidate, SCB-1019, with full Phase I results expected by the end of 2024[21](index=21&type=chunk) - The company will continue measures to ensure financial sustainability, including improving operational efficiency and maintaining robust cash flow management[21](index=21&type=chunk) [Product Pipeline and Business Review](index=9&type=section&id=%E7%94%A2%E5%93%81%E7%AE%A1%E7%B7%9A%E8%88%87%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Details the progress of the product pipeline, highlighting positive RSV candidate data, commercial readiness of the influenza vaccine, and exploration of other opportunities [RSV Vaccine Candidate (SCB-1019)](index=10&type=section&id=RSV%E5%80%99%E9%81%B8%E7%96%AB%E8%8B%97%20(SCB-1019)) The bivalent RSV candidate SCB-1019 demonstrated encouraging immunogenicity and safety in its Phase I trial, showing competitive potential - SCB-1019 is a bivalent RSV vaccine candidate developed using the Trimer-Tag platform, with its Phase I clinical trial initiated in Australia[14](index=14&type=chunk) Preliminary Immunogenicity Data for SCB-1019 in Older Adults (28 Days Post-Vaccination) | Antibody Type | SCB-1019 Group GMT (IU/mL) | Placebo Group GMT (IU/mL) | | :--- | :--- | :--- | | RSV-A Neutralizing Antibody | Up to 7,906 | 1,078 | | RSV-B Neutralizing Antibody | Up to 46,674 | 12,185 | - SCB-1019 was **well-tolerated**, with adverse events generally mild and comparable to the placebo group, indicating a potential safety differentiation advantage[16](index=16&type=chunk) [AdimFlu-S (Quadrivalent Influenza Vaccine)](index=11&type=section&id=AdimFlu-S%20(%E5%9B%9B%E5%83%B9%E6%B5%81%E6%84%9F%E7%96%AB%E8%8B%97)) The company holds exclusive distribution rights for AdimFlu-S in mainland China and completed batch release ahead of the flu season - The company completed the batch release for AdimFlu-S at the end of July 2024, **significantly earlier than the mid-September 2023 release**, helping to capture sales opportunities for the autumn/winter season[11](index=11&type=chunk)[16](index=16&type=chunk) [SCB-219M (CIT Treatment)](index=11&type=section&id=SCB-219M%20(CIT%E6%B2%BB%E7%99%82)) The company is actively exploring business development opportunities for SCB-219M, a treatment for chemotherapy-induced thrombocytopenia, following positive Phase I data - The company is actively seeking business development opportunities for SCB-219M and may initiate a Phase Ib clinical trial before the end of 2024[17](index=17&type=chunk) [COVID-19 Vaccine](index=12&type=section&id=%E6%96%B0%E5%86%A0%E7%96%AB%E8%8B%97) The company is prudently assessing market opportunities for its COVID-19 vaccine after the market in mainland China transitioned to a private-pay model - The COVID-19 vaccine market in mainland China transitioned to a private-pay model on July 15, 2024, and the company is evaluating its impact on future commercialization[18](index=18&type=chunk) [R&D, Manufacturing, and Other Developments](index=12&type=section&id=%E7%A0%94%E7%99%BC%E3%80%81%E7%94%9F%E7%94%A2%E5%8F%8A%E5%85%B6%E4%BB%96%E7%99%BC%E5%B1%95) The company maintains an internal R&D team and a GMP-compliant manufacturing facility, while continuing to streamline operations for efficiency - As of June 30, 2024, the company's internal R&D team consisted of 124 employees[18](index=18&type=chunk) - The company's proprietary manufacturing facility in Changxing, Zhejiang has obtained a Drug Manufacturing License (DML) for vaccines, supporting future product development including the RSV candidate[19](index=19&type=chunk) - The company continues to streamline its organization and scrutinize expenditures to address macroeconomic challenges and improve operational efficiency[20](index=20&type=chunk) [Financial Review](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Provides an in-depth analysis of financial performance, including negative revenue from sales returns, a sharp drop in other income, and significantly lower operating expenses [Revenue Analysis](index=15&type=section&id=%E6%94%B6%E5%85%A5) The company recorded negative revenue of approximately RMB 10.1 million due to higher-than-expected sales returns for its influenza vaccine, AdimFlu-S - The company recorded **negative revenue of RMB 10.1 million** during the period due to sales returns of the quadrivalent influenza vaccine AdimFlu-S[23](index=23&type=chunk) - Sales returns were higher than anticipated because an expected influenza outbreak in spring 2024 did not materialize, leading to lower-than-expected market demand[23](index=23&type=chunk)[124](index=124&type=chunk) [Expense Analysis](index=16&type=section&id=%E9%96%8B%E6%94%AF%E5%88%86%E6%9E%90) All major expense categories decreased significantly year-over-year, reflecting cost control measures such as team optimization and strategic R&D prioritization Year-over-Year Change in Expenses | Expense Item | H1 2024 (RMB'000) | H1 2023 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 6,684 | 22,511 | -70.3% | | Administrative Expenses | 42,075 | 109,468 | -61.6% | | R&D Expenses | 98,297 | 385,603 | -74.5% | | Other Expenses | 2,540 | 1,330,909 | -99.8% | - The decrease in administrative expenses was mainly attributable to lower salaries and benefits from organizational streamlining, as well as reduced consulting and depreciation fees[26](index=26&type=chunk) - The reduction in R&D expenses was primarily due to the completion of activities related to the COVID-19 vaccine SCB-2019 and the company's strategic focus on its respiratory vaccine portfolio[27](index=27&type=chunk) [Liquidity and Capital Management](index=19&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) The company maintains a net cash position with sufficient liquidity to sustain operations, despite a decrease in cash reserves and net current liabilities - As of June 30, 2024, the Group's cash and bank balances stood at **RMB 829.8 million**[35](index=35&type=chunk) - As of June 30, 2024, the Group was in a **net cash position**, making the gearing ratio not applicable[36](index=36&type=chunk) - As of June 30, 2024, the Group had **RMB 347.2 million** in time deposits pledged for bank credit facilities[36](index=36&type=chunk) [Other Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Shareholding Structure and Directors' Interests](index=22&type=section&id=%E8%82%A1%E6%AC%8A%E7%B5%90%E6%A7%8B%E8%88%87%E8%91%A3%E4%BA%8B%E6%AC%8A%E7%9B%8A) Discloses the shareholdings of directors, chief executives, and substantial shareholders, with executive directors Dr. Peng Liang and Mr. Guo Liang as controlling shareholders - Executive directors Dr. Peng Liang and Mr. Guo Liang are deemed to have a joint interest in each other's shares due to a concert party deed[40](index=40&type=chunk)[41](index=41&type=chunk) - Substantial shareholders (holding over 5%) include **JNRY (7.03%)**, **AUT-XXI (5.12%)**, **Shanghai Tianhe (5.40%)**, and Ms. Shibi Wang (indirectly holding 6.98% through controlled corporations)[42](index=42&type=chunk)[43](index=43&type=chunk) [Share Incentive Schemes](index=27&type=section&id=%E8%82%A1%E4%BB%BD%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83) The company operates Pre-IPO, RSU, and Post-IPO share incentive schemes to reward directors, employees, and consultants for their contributions - As of June 30, 2024, **1,852,817 share options** under the Pre-IPO Share Option Scheme remained outstanding[60](index=60&type=chunk) - As of June 30, 2024, **15,557,014 unvested Restricted Share Units** (RSUs) were outstanding under the RSU Scheme[72](index=72&type=chunk)[74](index=74&type=chunk) - As of June 30, 2024, **35,401,791 share options** under the Post-IPO Share Option Scheme remained outstanding[90](index=90&type=chunk)[91](index=91&type=chunk) [Use of Proceeds](index=40&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Details the utilization of net proceeds from the Global Offering and Placing, with funds primarily allocated to R&D and commercialization of the respiratory vaccine portfolio Use of Net Proceeds from the Global Offering (as of June 30, 2024) | Use of Proceeds (Post-reallocation) | Re-allocated Amount (RMB million) | Utilized Amount (RMB million) | Unutilized Amount (RMB million) | Expected Full Utilization Date | | :--- | :--- | :--- | :--- | :--- | | Development of RSV candidate SCB-1019 | 228.4 | 130.1 | 98.3 | Before June 2025 | | R&D for other pipeline candidates | 93.4 | 40.9 | 52.5 | Before June 2025 | | R&D for COVID-19 vaccine | 51.9 | 51.9 | 0 | Completed | | Working capital and other | 41.5 | 41.5 | 0 | Completed | - Net proceeds from the Placing amounted to approximately RMB 449 million, of which **RMB 416.6 million (92.8%)** had been used as of June 30, 2024, with the remainder expected to be used by December 2024[101](index=101&type=chunk)[102](index=102&type=chunk) [Interim Condensed Consolidated Financial Statements and Notes](index=43&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Key Financial Statements](index=43&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) Presents the unaudited interim consolidated statements, showing a net loss for the period and a net liability position on the balance sheet Core Financial Statement Data (as of June 30, 2024) | Statement Item | Amount (RMB'000) | | :--- | :--- | | **Income Statement (H1 2024)** | | | Loss for the period | (95,123) | | Basic loss per share | (0.08) yuan | | **Statement of Financial Position (Period-end)** | | | Total Assets | 1,797,271 | | Total Liabilities | 2,630,046 | | Total Equity (Deficit) | (832,775) | | Cash and cash equivalents | 458,774 | | **Cash Flow Statement (H1 2024)** | | | Net cash flow from operating activities | (157,926) | | Net cash flow from investing activities | (9,011) | | Net cash flow from financing activities | (111,887) | [Summary of Notes to Financial Statements](index=51&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) Provides detailed explanations for key financial data, including the basis of preparation, contract liabilities, and related party transactions - Despite recording **net liabilities of RMB 833 million** as of June 30, 2024, the directors believe the company can operate as a going concern, considering non-cash-flow-generating contract liabilities and available financing[118](index=118&type=chunk) - **Contract liabilities of RMB 1.589 billion** primarily consist of an advance payment from GAVI for the SCB-2019 vaccine, for which GAVI has not yet exercised its purchase option[152](index=152&type=chunk) - The non-current portion of trade payables, approximately **RMB 508 million**, is owed to Dynavax for the purchase of CpG 1018 adjuvant, with a settlement period exceeding 12 months[151](index=151&type=chunk) - During the period, the company incurred office rental and utility expenses of **RMB 2.847 million** with related party Chengdu Tianhe[170](index=170&type=chunk)

Financial Performance - The company reported a revenue of RMB 829.8 million for the six months ended June 30, 2024, a significant decrease of approximately 96.7% compared to RMB 2,510.8 million for the same period in 2023[1]. - The company's total income decreased from RMB 2,510.8 million for the six months ended June 30, 2023, to RMB 67.1 million for the same period in 2024, a reduction of RMB 2,443.7 million[24]. - For the six months ended June 30, 2024, the company reported a revenue of negative RMB 10.1 million, primarily due to sales returns of the quadrivalent influenza vaccine AdimFlu-S[23]. - The group reported a loss attributable to equity holders of the parent company of RMB (95,123,000) for the six months ended June 30, 2024, compared to a profit of RMB 650,624,000 for the same period in 2023[66]. - The total comprehensive loss for the period was RMB 107,811,000, a stark contrast to the total comprehensive income of RMB 671,837,000 in the previous year[45]. Expenses and Cost Management - The cash and bank balances decreased from RMB 1,095.5 million as of December 31, 2023, to RMB 829.8 million as of June 30, 2024, primarily due to cash outflows from operations and loan repayments[2]. - Research and development expenses decreased by approximately 75% from RMB 385.6 million for the six months ended June 30, 2023, to RMB 98.3 million for the same period in 2024, as related activities for SCB2019 were completed[3]. - Administrative expenses were reduced by about 62% from RMB 109.5 million for the six months ended June 30, 2023, to RMB 42.1 million for the same period in 2024, due to staff reductions and other cost-saving measures[2]. - Sales and distribution expenses decreased from RMB 22.5 million to RMB 6.7 million, a reduction of RMB 15.8 million, mainly due to optimized staffing to improve efficiency[25]. - Employee compensation and benefits decreased from RMB 152.8 million for the six months ended June 30, 2023, to RMB 56.5 million for the six months ended June 30, 2024[29]. Clinical Development and Research - The company is the first in China to independently develop a PreF bivalent RSV candidate vaccine, which has entered clinical trial stages[4]. - The company announced the completion of the first cohort enrollment in the Phase I clinical trial for its RSV candidate vaccine (SCB-1019) in December 2023[5]. - Initial results from Phase I trials for young adults and elderly groups showed positive immunogenicity and safety data in April and June 2024[5]. - The company aims to advance its proprietary bivalent PreF RSV candidate vaccine development, expecting to obtain comprehensive Phase I clinical trial results by the end of 2024[21]. - SCB-1019 demonstrated good overall tolerability, with mild local and systemic adverse events comparable to the placebo group, and no serious adverse events were observed[14]. Product Development and Market Strategy - The company has established an exclusive distribution agreement for AdimFlu-S with a local partner, enabling faster market access and distribution in mainland China[6]. - The company completed the batch approval for AdimFlu-S by the Chinese National Medical Products Administration, facilitating quicker market entry before the autumn-winter vaccination season[6]. - SCB-219M is a bispecific Fc fusion protein for treating chemotherapy-induced thrombocytopenia (CIT), with plans to initiate Phase Ib clinical trials by the end of 2024[7]. - The company is focused on building a leading respiratory vaccine product portfolio based on its validated Trimer-Tag platform[21]. - The company is committed to developing a leading respiratory vaccine product portfolio to meet the unmet needs in preventing severe respiratory infections[12]. Financial Position and Liabilities - Total assets decreased from RMB 2,101.4 million as of December 31, 2023, to RMB 1,797.3 million as of June 30, 2024[34]. - Total liabilities decreased from RMB 2,834.3 million as of December 31, 2023, to RMB 2,630.0 million as of June 30, 2024[34]. - The group reported a net liability of RMB 832,775,000 as of June 30, 2024, compared to RMB 732,833,000 at the end of 2023[46]. - The company anticipates no cash outflow related to contract liabilities of RMB 1,589,092,000 in the next twelve months, indicating a potential for improved cash flow management[48]. - The company has sufficient cash and cash equivalents to meet operational needs, supported by available bank financing[49]. Government Grants and Other Income - Other income and gains for the six months ended June 30, 2024, amounted to RMB 67.148 million, compared to RMB 2.511 million for the same period in 2023, indicating a substantial increase[55]. - Government grants received for supporting R&D activities and the purchase of property, plant, and equipment amounted to RMB 33.952 million for the six months ended June 30, 2024[55]. - The government grant recognized in profit or loss for the year decreased from RMB 1,000,000 in 2023 to RMB (1,851,000) in 2024[76]. Corporate Governance and Compliance - The company has adopted the corporate governance code and has complied with its principles and provisions during the reporting period[79]. - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2024[80].

Pipeline Development and Commercialization - Clover Biopharmaceuticals has achieved significant progress in its pipeline development and has entered its commercialization phase in 2023, focusing on innovative vaccines to improve global health[9]. - The company has two authorized vaccines: a COVID-19 booster vaccine and a quadrivalent seasonal influenza vaccine, with sales expected to reach approximately $2.5 billion in the second half of 2023 in the US and European markets[9]. - The RSV vaccine, utilizing proprietary mutation technology and the Trimer-Tag platform, has the potential to become one of the best RSV vaccines globally, with a market potential exceeding $10 billion[9]. - Clover Biopharmaceuticals has completed the BLA submission for the quadrivalent influenza vaccine in Brazil, marking a strategic step towards commercial opportunities in the Southern Hemisphere respiratory vaccine market[10]. - The company is actively seeking domestic and international partnerships for mid-to-late stage respiratory and pediatric vaccine products to enrich its product portfolio[13]. - The company aims to maximize its commercial potential in the respiratory vaccine market, including the RSV vaccine, through strategic resource allocation and operational optimization[12]. - The company announced the successful enrollment of the first subjects in the Phase I clinical trial for the RSV candidate vaccine SCB-1019, developed using the Trimer-Tag technology platform[26]. - The quadrivalent seasonal flu vaccine AdimFlu-S (QIS) was launched in 28 provinces in China, with an exclusive distribution agreement established with National Biotechnology Co., Ltd.[26]. - The company submitted a Biologics License Application for the seasonal flu vaccine in Brazil, aiming for commercialization upon approval[26]. - The company announced an exclusive agreement with National Biotechnology in February 2023 to distribute the quadrivalent influenza vaccine AdimFlu-S in mainland China[30]. - The company plans to leverage its Trimer-Tag platform for the commercial production of SCB-1019 at its Changxing facility, which has received GMP certification[34]. - The company aims to achieve a year-round sales cycle for its seasonal influenza vaccine by expanding into the Southern Hemisphere market with the approval of AdimFlu-S in Brazil[37]. Financial Performance - Revenue for the year ended December 31, 2023, was RMB 39.3 million, attributed to the commercial launch of SCB-2019 and the quadrivalent seasonal flu vaccine in China[16]. - Other income and gains increased significantly to RMB 2,571.4 million from RMB 23.2 million in the previous year, mainly due to the recognition of RMB 2,540.5 million from CEPI funding[16]. - The net loss for the year narrowed to RMB 138.5 million from RMB 2,451.9 million, driven by increased other income and reduced R&D and administrative expenses[19]. - The adjusted net loss, excluding share-based compensation, was RMB 85.0 million compared to RMB 2,356.9 million in the previous year[21]. - The company achieved a gross profit of RMB 24.2 million, with a sales cost of RMB 15.0 million[47]. - Administrative expenses were reduced by approximately 52% to RMB 198.8 million from RMB 410.2 million, due to workforce reductions and cost-saving measures[17]. - R&D expenses decreased by about 56% to RMB 649.9 million from RMB 1,465.3 million, as related activities for SCB-2019 were largely completed[19]. - Other expenses increased from RMB 593.7 million in 2022 to RMB 1,811.9 million in 2023, primarily due to inventory provisions of RMB 1,697.4 million[57]. - Financial costs rose from RMB 5.9 million in 2022 to RMB 18.7 million in 2023, an increase of 216.9%[58]. - Total current assets decreased from RMB 4,389.9 million in 2022 to RMB 1,899.5 million in 2023[63]. - Total liabilities decreased from RMB 5,362.8 million in 2022 to RMB 2,834.3 million in 2023[63]. - Cash and bank balances decreased from RMB 1,856.5 million in 2022 to RMB 1,095.5 million in 2023, a reduction of 41%[64]. - As of December 31, 2023, the company's reserves available for distribution from the share premium account, after deducting accumulated losses, amount to approximately RMB 1,579.7 million, down from RMB 4,183.4 million in 2022[153]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2023[149]. Operational Efficiency and Cost Management - Operational efficiency has improved, with operating expenses reduced by over 50% year-on-year, and the full-time employee count decreased to 387 while retaining core talent[12]. - Administrative expenses decreased by approximately 52% from RMB 410.2 million in 2022 to RMB 198.8 million in 2023, mainly due to reductions in employee salaries and benefits[51]. - Research and development expenses were reduced from RMB 1,465.3 million in 2022 to RMB 649.9 million in 2023, reflecting a strategic focus on efficiency[47]. - Employee salaries and benefits dropped from RMB 386.6 million in 2022 to RMB 236.3 million in 2023, a decrease of 38.8%[56]. - Clinical trial expenses fell from RMB 413.0 million in 2022 to RMB 196.5 million in 2023, a decline of 52.5%[56]. Leadership and Governance - The company has a strong leadership team with extensive experience in the pharmaceutical and biotechnology sectors[104]. - The management team includes Dr. Liang Peng, who has over 25 years of experience in the pharmaceutical industry and has been with the group since its inception[76]. - The management team includes individuals with extensive backgrounds in the pharmaceutical and biotechnology sectors, enhancing strategic decision-making[88]. - The board includes independent directors with diverse backgrounds, ensuring robust governance and oversight[95]. - The board of directors includes two executive directors, three non-executive directors, and four independent non-executive directors, ensuring a diverse governance structure[115]. - The company has a strong board with members possessing extensive experience in vaccine development and pharmaceutical management, enhancing its strategic direction[93]. Research and Development - Positive clinical trial data for targeted therapy for chemotherapy-induced thrombocytopenia (CIT) has been announced, showcasing the company's strong and diverse R&D capabilities[13]. - SCB-219M, a new drug candidate for treating chemotherapy-induced thrombocytopenia, has shown positive preliminary safety and efficacy data in its Phase I clinical trial[36]. - The company plans to initiate Phase Ib clinical trials for SCB-219M in 2024, targeting patients with chemotherapy-induced thrombocytopenia[41]. - The company has completed five Phase I clinical trials in China and Australia for its oncology candidate products, but further development is currently on hold pending strategic evaluation[30]. Market Presence and Strategic Initiatives - The company is focused on expanding its market presence and enhancing its product pipeline through strategic leadership and innovation[93]. - The company is actively expanding its market presence and product offerings through strategic initiatives and potential acquisitions[88]. - The company has established partnerships and may seek strategic alliances or licensing arrangements in the future, although the realization of such benefits is uncertain[126]. - The company has established a strong customer relationship to achieve immediate and long-term goals, emphasizing customer satisfaction and quality control measures[138]. Risks and Compliance - The company faced significant risks related to clinical development, regulatory approvals, and commercialization of candidate products, which could severely impact business operations[123]. - The dynamic regulatory pathway for COVID-19 vaccines presents ongoing challenges that could lead to unforeseen delays[123]. - The company is committed to complying with environmental regulations and has not faced any significant adverse impacts from complaints or incidents during the reporting period[124]. - The company relies on third-party CROs for clinical trials, and any failure on their part could severely hinder regulatory approval and commercialization efforts[126]. Share Capital and Equity Plans - The total number of issued shares as of December 31, 2023, is 1,296,289,733[171]. - The maximum number of shares available for the pre-IPO share option plan is 25,947,096 shares[179]. - The pre-IPO share option plan is effective from the date of adoption until the day before the listing date[182]. - The exercise price for each share option will not be less than the par value of one share[181]. - The total number of stock options granted under the pre-IPO stock option plan is 1,929,317, representing 0.15% of the total shares issued[186]. - The restricted share unit plan allows for a total of 77,350,000 shares to be granted, which is approximately 5.96% of the total issued share capital[192]. - The company aims to incentivize qualified participants through the restricted share unit plan for their contributions to the group[189].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 39.3 million, generated from the commercial launch of SCB-2019 and the quadrivalent seasonal influenza vaccine in China[125]. - The group reported a revenue of RMB 39,255 thousand for 2023, with a gross profit of RMB 24,241 thousand[101]. - The total comprehensive loss for the year was RMB 138.5 million, a significant improvement from RMB 2.45 billion in the previous year[170]. - The net loss for the year decreased from RMB 2,451.9 million to RMB 138.5 million, attributed to the recognition of CEPI funding and a reduction in R&D and administrative expenses[128]. - The adjusted net loss, excluding share-based compensation, was RMB 85.0 million for the year ended December 31, 2023, compared to RMB 2,356.9 million in 2022[130]. - The group incurred a loss before tax of RMB 138,539 thousand in 2023, significantly improved from a loss of RMB 2,451,903 thousand in 2022[101]. - The company's administrative expenses decreased by RMB 211.4 million or approximately 52% to RMB 198.8 million for the fiscal year ending December 31, 2023, mainly due to reductions in employee salaries and benefits[175]. - Research and development expenses for 2023 amounted to RMB 649,885 thousand, a decrease from RMB 1,465,324 thousand in 2022[101]. Cash Flow and Financial Position - As of December 31, 2023, the group recorded a net liability of RMB 732,833,000 and a cumulative loss of RMB 9,640,268,000[79]. - The group's cash and cash equivalents amounted to RMB 735,864,000, indicating sufficient operational funds for the next twelve months[79]. - The group's cash and bank balances decreased from RMB 1,856.5 million as of December 31, 2022, to RMB 1,095.5 million as of December 31, 2023, primarily due to ongoing R&D investments and operating expenses[191]. - Total current assets as of December 31, 2023, amounted to RMB 1,899.5 million, including cash and cash equivalents of RMB 1,095.5 million[191]. - Total current liabilities as of December 31, 2023, were RMB 2,277.0 million, including contract liabilities of RMB 1,577.8 million[192]. - The group is in a net cash position as of December 31, 2023, making the debt-to-equity ratio not applicable[88]. - The group has pledged fixed deposits totaling RMB 343.4 million to secure bank loans[90]. Trade and Deferred Income - Trade payables totaled RMB 752,876,000 as of year-end 2023, a decrease from RMB 856,964,000 in 2022, reflecting a reduction of approximately 12.1%[2]. - Deferred income from CEPI amounted to RMB 44,364,000 in 2023, down from RMB 2,496,900,000 in 2022, indicating a significant decrease of approximately 98.2%[5]. - The company confirmed recognition of deferred income of RMB 2,540,497,000 (equivalent to USD 389,865,000) in 2023, as all conditions related to CEPI funding were met[11]. - As of December 31, 2023, the deferred revenue balance was RMB 17,414,000, which includes cash grants of RMB 11,733,000 from CEPI for several work packages pending CEPI approval, and the value of certain donated vials from previous years amounting to RMB 5,681,000[13]. - The company decided to abandon remaining vials related to the CEPI donation agreement, resulting in a write-off of RMB 58,787,000 in deferred income[12]. Corporate Governance and Compliance - The company has adopted the principles and provisions of the corporate governance code, ensuring high standards of corporate governance to protect shareholder interests and enhance company value[17]. - The audit committee, consisting of three independent non-executive directors, is responsible for overseeing the financial reporting process and internal control systems[22]. - The company has confirmed that there were no violations of the standard code by employees during the reporting period[19]. - The company has not purchased, sold, or redeemed any of its shares during the reporting period[20]. Research and Development - The company announced significant progress in product development, including the initiation of Phase I clinical trials for the RSV candidate vaccine SCB-1019[131]. - The company has developed a diverse pipeline of candidate vaccines aimed at preventing various diseases, leveraging its strong R&D and commercialization capabilities[137]. - The RSV candidate vaccine SCB-1019 has successfully completed the enrollment of the first batch of participants in its Phase I clinical trial in Australia[143]. - The company plans to continue prioritizing resources to accelerate the development of the RSV candidate vaccine to capture high-growth market opportunities[167]. - The company aims to address unmet medical needs in the treatment of malignant ascites and pleural effusion through its TRAIL-trimer candidate product SCB-313[141]. Market and Commercialization - The company has established an exclusive agreement for the distribution of the quadrivalent influenza vaccine AdimFlu-S in mainland China, showcasing its commercial capabilities[139]. - The AdimFlu-S (QIS) vaccine was launched in 28 provinces in China as of September 2023, following an exclusive distribution agreement with a local partner[132]. - The commercialization of seasonal influenza vaccines will expand to Brazil once approved, targeting the Southern Hemisphere's influenza season, which is the second largest seasonal influenza vaccine market globally[155]. - The company plans to commercialize SCB-1019 using the same Trimer-Tag platform as its COVID-19 vaccine, with production set to occur at its Changxing facility, which has passed multiple GMP inspections[152]. Future Outlook - The expected timeline for the use of the remaining proceeds includes a focus on expanding commercialization capabilities for respiratory vaccine products, including seasonal flu and COVID-19 vaccines, by June 2024[60]. - The company emphasizes that the expected timeline for the use of proceeds is based on the best estimates of future R&D progress and market conditions, which may change[31]. - The company plans to allocate 65.0% of the net proceeds for the R&D, production, and commercialization of core products and related products[27].