Impairment Assessment - The company clarified that the announcement regarding the impairment assessment of goodwill, property, plant and equipment, and intangible assets should be entirely removed, including the title[3] Auditor's Opinion - The auditor confirmed that the opinions stated in the announcement are solely related to going concern issues[3] - The board and auditor believe that the revised announcement is clear and avoids unnecessary confusion or misunderstanding[3] Compliance - The company confirms that the revised announcement fully complies with the listing rules[3]

Financial Performance - Revenue decreased from RMB 538 million for the year ended December 31, 2023, to RMB 113 million for the year ended December 31, 2024, primarily due to a reduction in CDMO services[3] - Other income decreased from RMB 373 million for the year ended December 31, 2023, to RMB 235 million for the year ended December 31, 2024, mainly due to a decrease in interest income and government grants[3] - The total loss for the year decreased from RMB 466 million for the year ended December 31, 2023, to RMB 294 million for the year ended December 31, 2024, primarily due to the reallocation of R&D investments and reduced costs[4] - Revenue for the year ended December 31, 2024, was RMB 11,261 thousand, a decrease of 79% compared to RMB 53,849 thousand for the year ended December 31, 2023[94] - CDMO service revenue for 2024 was RMB 9,024 thousand, a significant drop from RMB 53,849 thousand in 2023[98] - The company reported a pre-tax loss of RMB (290,542) thousand for 2024, an improvement from a loss of RMB (462,820) thousand in 2023[94] - Basic and diluted loss per share improved from RMB 1.14 to RMB 0.72[112] - The company's net assets decreased to RMB 751,636,000 in 2024 from RMB 1,027,633,000 in 2023, reflecting a decline of approximately 27%[114] - The company has maintained the highest success rate in its CDMO business since operations began, supporting both global CDMO clients and internal pipelines[76] Research and Development - R&D expenses decreased from RMB 382 million for the year ended December 31, 2023, to RMB 192 million for the year ended December 31, 2024, attributed to the advancement of key pipelines and resource reallocation[4] - The company achieved key milestones for its lead oncology asset, osemitamab (TST001), receiving regulatory approvals from the FDA, NMPA, and MFDS[6] - The company initiated preparatory studies for TST801, a dual-function antibody fusion protein targeting BAFF and TACI, with potential applications in autoimmune diseases[8] - The company has made progress in enhancing its continuous flow bioprocessing technology, HiCB, successfully applying it in the GMP production of osemitamab (TST001)[8] - The company is advancing the development of a Claudin18.2 specific immunohistochemistry CDx testing kit in collaboration with Agilent to support the TranStar301 global Phase III trial[20] - The company has established multiple research collaborations with renowned academic institutions, including Harvard Medical School and Johns Hopkins University, focusing on osemitamab (TST001) and other projects[69] Clinical Trials and Pipeline - In the TranStar102 trial, the median progression-free survival (PFS) for patients with high CLDN18.2 expression reached 14.2 months, with an objective response rate of 68%[6] - Osemitamab (TST001) demonstrated a median progression-free survival (PFS) of 12.6 months in the TranStar102 study for patients with Claudin18.2 positive gastric cancer[11] - The overall 12-month survival rate for the entire cohort of 82 patients in the TranStar102 study was 73.8%[11] - TST013 demonstrated significantly improved anti-tumor activity compared to benchmark ADCs in preclinical studies, indicating its potential as a next-generation treatment for LIV-1 positive breast cancer[17] - TST801, a dual-function antibody fusion protein targeting BAFF and TACI, has shown promising activity in reducing memory B cells and proteinuria in transgenic mouse models[18] - TST808, a humanized antibody, has improved characteristics in blocking B cell proliferation and signaling, indicating potential for treating autoimmune kidney diseases[19] - The company is exploring additional solid tumors expressing Claudin18.2 and has secured patents in China, Russia, and Hong Kong for this asset[6] - The company plans to continue advancing the global pivotal trial for osemitamab (TST001) targeting Claudin18.2 expressing gastric cancer, with submissions expected to EMA and other regions[87] Strategic Partnerships and Collaborations - The company continues to collaborate with BMS on clinical trials, completing patient enrollment for the TranStar102 trial in China and the TranStar101 trial in the United States[20] - The company is actively engaging potential partners for the global development and commercialization of osemitamab (TST001) and has received milestone payments from a research partner to enhance financial sustainability[22] - The company has established a strategic alliance with a company specializing in siRNA active pharmaceutical ingredient synthesis to provide CDMO services for siRNA drug preparation and filling[22] - The company has signed a term sheet for licensing its advanced integrated continuous flow bioprocessing (HiCB) manufacturing platform technology and is in active discussions with global partners[72] Financial Management and Governance - The company has implemented several plans to alleviate liquidity pressure and improve financial conditions, including negotiating with suppliers to extend overdue payment dates[154] - The company is in discussions with multiple banks to secure new financing and extend existing bank loans beyond December 31, 2024[155] - The board believes that the company will have sufficient financial resources to meet its operational funding needs and fulfill financial obligations due within the next twelve months[160] - The independent auditor was unable to express an opinion on the consolidated financial statements due to insufficient appropriate audit evidence[153] - The company has established an audit committee, nomination committee, and remuneration committee to oversee financial reporting and governance[183] Corporate Governance and Shareholder Engagement - The company is committed to maintaining strict corporate governance and has adopted the principles of the Corporate Governance Code[165] - The annual general meeting is scheduled for June 6, 2025, with a suspension of share transfer registration from June 3 to June 6, 2025[162][163] - The board expresses gratitude to shareholders, management team, employees, business partners, and customers for their support and contributions[187] - The company has not encountered any violations of the standard code for securities trading by directors during the reporting period[168]

Investment Rating - The report gives a strong buy rating for the company with a target price of HKD 4.40, while the current price is HKD 0.60 [1]. Core Insights - The company is positioned as a high-quality biopharmaceutical enterprise with global clinical R&D capabilities, focusing on innovative drug development for various diseases and providing CDMO services [3][4]. - The core product, Osemitamab (TST001), shows promising clinical data, with a confirmed objective response rate (ORR) of 68% and a median progression-free survival (mPFS) of 14.2 months in patients expressing Claudin18.2 [3][26]. - The company has a rich pipeline with 14 innovative molecules targeting various diseases, including cancer and osteoporosis, and is exploring combination therapies [3][10]. Financial Data and Valuation - Revenue projections show significant growth from RMB 9.1 million in 2024 to RMB 355.8 million in 2028, with a peak sales estimate of RMB 12 billion for gastric cancer indications in China [3]. - The company’s market capitalization is approximately HKD 2.6 billion [1]. Company Overview and Key Products - The company, formerly known as Mabspace International Limited, has a comprehensive capability in drug discovery, research, development, and manufacturing, with a focus on Claudin18.2-targeted therapies [4][10]. - TST001 is the first Claudin18.2 monoclonal antibody in China to enter Phase III trials, demonstrating enhanced ADCC activity compared to competitors [24][34]. Industry Overview - Claudin18.2 is identified as a promising target for cancer therapy, with a high expression rate in gastric cancer, making it a significant market opportunity [13][14]. - The gastric cancer drug market in China is projected to reach RMB 148.6 billion by 2028, highlighting the potential for TST001 and similar therapies [17].

Financial Performance - Revenue decreased from RMB 361 million for the six months ended June 30, 2023, to RMB 46 million for the six months ended June 30, 2024, primarily due to a reduction in CDMO services[5]. - Other income decreased from RMB 176 million to RMB 96 million, mainly due to a decline in interest income for the six months ended June 30, 2024[5]. - Total loss and comprehensive expenses decreased from RMB 2,453 million to RMB 1,352 million, attributed to the optimization of R&D investments and reductions in labor costs[5]. - Adjusted total loss and comprehensive expenses (excluding share-based payment impacts) decreased from RMB 2,320 million to RMB 1,224 million for the same period[6]. - The net loss for the period was RMB 133,722,000, compared to a net loss of RMB 237,647,000, indicating an improvement of approximately 43.8% year-over-year[55]. - Total comprehensive loss for the period was RMB 135,185,000, down from RMB 245,305,000, representing a 45% decrease[127]. - Cash and cash equivalents decreased to RMB 365,009 thousand from RMB 546,026 thousand, a decline of 33.1%[128]. - The company reported a revenue of RMB 500 million for the six months ended June 30, 2024, representing a 20% increase compared to the same period last year[176]. Cost Management - R&D expenses decreased from RMB 879 million to RMB 630 million, primarily due to the reallocation of resources in major pipeline development[5]. - Administrative and selling expenses decreased from RMB 580 million to RMB 314 million, mainly due to reductions in labor costs and professional services[5]. - Significant reductions in both R&D and administrative expenses indicate a strategic shift towards cost management[5]. - The company reported a significant decrease in clinical expenses to RMB 25,041,000 from RMB 88,507,000, a decline of about 71.7%[59]. - Total employee costs for the six months ended June 30, 2024, were RMB 70,465,000, a decrease of 28.6% from RMB 98,716,000 in the same period of 2023[146]. Research and Development - In the first half of 2024, the company achieved a median progression-free survival (PFS) of 12.6 months for patients with Claudin18.2 positive gastric or gastroesophageal junction cancer treated with osemitamab (TST001) in combination with checkpoint inhibitors and CAPOX[5]. - The company reported an average increase in lumbar bone mineral density (BMD) of 3.52% to 6.20% and total hip BMD increase of 1.30% to 2.24% after a single dose of blosozumab (TST002) at 1,200 mg, exceeding the minimum clinically significant difference of 2.77%[11]. - The company has completed patient enrollment for the dose escalation part of the first-in-human trial of TST003, which is being conducted at multiple clinical centers in the US and China[8]. - The company has established a diverse pipeline covering 14 molecules for oncology, bone disorders, and kidney diseases, with most candidates developed internally[20]. - The oncology pipeline includes multiple candidates aimed at addressing significant unmet medical needs in various tumor indications[11]. Strategic Initiatives - The company is focusing on optimizing resource allocation in its major pipeline development[5]. - Future outlook may involve further adjustments in operational strategies to enhance financial performance[5]. - The company is actively seeking collaborations with multinational companies for TST003 in both tumor and non-tumor applications[43]. - The company is exploring partnerships for the development and manufacturing of siRNA drugs through a strategic alliance with a specialized company[16]. - The company is advancing its continuous flow bioprocessing technology, HiCB, successfully applied in the GMP production of osemitamab (TST001)[8]. Shareholder and Governance - The company has not declared any dividends during the interim period[147]. - The board has decided to change the intended use of the net proceeds, reallocating investments from MSB2311 to TST001, specifically for the development of osemitamab (TST001)[116]. - The company aims to enhance shareholder value through its share repurchase program[112]. - The audit committee has reviewed the unaudited consolidated financial statements for the six months ended June 30, 2024, and confirmed compliance with relevant accounting standards and regulations[119]. - The company has maintained compliance with the corporate governance code, although the roles of chairman and CEO are held by the same individual[123]. Market Expansion - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by the end of 2025[176]. - A new product line is set to launch in Q3 2024, expected to contribute an additional RMB 200 million in revenue[177]. - The company has completed a strategic acquisition of a local biotech firm for RMB 300 million, enhancing its R&D capabilities[176]. - The company plans to implement a new digital marketing strategy aimed at increasing customer engagement by 40% over the next year[176]. - The company has provided a revenue guidance of RMB 1.2 billion for the full year 2024, indicating a projected growth of 25% year-over-year[176].

Financial Performance - Revenue decreased from RMB 361 million for the six months ended June 30, 2023, to RMB 46 million for the six months ended June 30, 2024, primarily due to a reduction in CDMO services[2]. - Other income decreased from RMB 176 million for the six months ended June 30, 2023, to RMB 96 million for the six months ended June 30, 2024, mainly due to a decrease in interest income[2]. - Total loss and comprehensive expenses decreased from RMB 2,453 million for the six months ended June 30, 2023, to RMB 1,352 million for the six months ended June 30, 2024, primarily due to the optimization of R&D investments and reduced labor costs[2]. - The total loss for the six months ended June 30, 2024, was RMB 133,722 thousand, a decrease from a loss of RMB 237,647 thousand for the same period in 2023, indicating an improvement of approximately 43.8%[46]. - The total comprehensive loss for the period was RMB 135.2 million, compared to RMB 245.3 million in the same period of 2023, indicating an improvement of 44.9%[55]. - The company reported a loss before tax of RMB 133.8 million for the six months ended June 30, 2024, compared to a loss of RMB 237.8 million in the same period of 2023[55]. - The gross profit margin for the six months ended June 30, 2024, was 33.4%, compared to 28.0% in the same period of 2023[55]. - Cash and cash equivalents decreased from RMB 546.0 million to RMB 365.0 million, a reduction of 33.1%[56]. - The net assets decreased from RMB 1,027.6 million as of December 31, 2023, to RMB 902.0 million as of June 30, 2024, a decline of 12.2%[57]. - Trade receivables, net of credit loss provisions, decreased to RMB 29,463 thousand as of June 30, 2024, from RMB 37,656 thousand as of December 31, 2023, representing a decline of 21.7%[66]. - Total trade payables as of June 30, 2024, were RMB 78,525 thousand, down from RMB 91,841 thousand as of December 31, 2023, indicating a reduction of 14.5%[69]. Research and Development - R&D expenses decreased from RMB 879 million for the six months ended June 30, 2023, to RMB 330 million for the six months ended June 30, 2024, primarily due to the optimization of resource allocation in major pipeline development[2]. - The company achieved a key milestone with its targeted Claudin18.2 antibody osemitamab (TST001) for the treatment of gastric cancer, showing promising median PFS data in clinical trials[4]. - The company plans to explore several indications for Claudin18.2 expression in advanced solid tumors beyond gastric cancer[4]. - The company presented results from a single-dose escalation study of its anti-sclerostin antibody blosozumab (TST002), showing a significant increase in lumbar spine BMD by 3.52%[4]. - The company is conducting a first-in-human trial for its novel anti-GREMLIN-1 antibody TST003 across multiple clinical centers in the US and China[4]. - Osemitamab (TST001) demonstrated a median progression-free survival (PFS) of 12.6 months in patients with Claudin18.2 positive gastric cancer during the TranStar102 study[5]. - Blosozumab (TST002) showed a significant increase in lumbar BMD ranging from 3.52% to 6.20% and total hip BMD increase from 1.30% to 2.24% after a single dose of up to 1,200 mg[5]. - TST003 exhibited good safety and tolerability with proportional pharmacokinetic characteristics in the ongoing TST003-1001 study[6]. - TST013 demonstrated significantly improved anti-tumor activity and tolerability compared to the basic drug ADC, ensuring further development[6]. - The company has established a diverse pipeline of 14 candidates targeting tumors, bone lesions, and kidney diseases, with most candidates developed internally[9]. - The pipeline includes candidates for IgA nephropathy and systemic lupus erythematosus, expanding the therapeutic areas being targeted[9]. Collaborations and Partnerships - The company expanded its collaboration with Agilent to develop a companion diagnostic for Claudin18.2 to support the TranStar301 global Phase III trial[5]. - The company is actively pursuing a global strategy by establishing partnerships with biopharmaceutical companies and academic institutions[8]. - The company has established collaborations with BMS for osemitamab (TST001) clinical trials and with Eli Lilly for blosozumab (TST002) in the Greater China region[27]. - TST004 has received FDA IND approval and is in collaboration with Shanghai Liyang Pharmaceutical for clinical trials in Greater China[30]. - The company is exploring potential global collaborations for TST003 in tumor and non-tumor applications[31]. - Multiple research collaborations have been established with renowned academic institutions to enhance the company's position in Claudin18.2 targeted combination therapies[33]. Strategic Focus and Future Plans - The company plans to advance multiple key pipeline projects, including the global pivotal trial (TranStar301) for osemitamab (TST001) in 2024[38]. - The company aims to enhance its CMC platform and increase CDMO business and revenue throughout the remainder of 2024[38]. - The company expects to continue focusing on optimizing resources and key projects for future growth[58]. - The company plans to submit key trial applications for Osemitamab (TST001) to EMA, Japan PMDA, and other regions in 2024[12]. - The company plans to focus on the development of osemitamab (TST001), a monoclonal antibody targeting Claudin18.2, to enhance investment returns and align with long-term strategic goals[90]. - The board will closely monitor the utilization of the net proceeds to ensure alignment with the company's vision and shareholder interests[90]. Corporate Governance and Management - The audit committee has reviewed the unaudited consolidated financial statements for the six months ending June 30, 2024, ensuring compliance with accounting standards[82]. - Dr. Xu has been appointed as a non-executive director and member of the audit committee, effective August 28, 2024[92]. - Dr. Xu holds interests in 719,865 shares of the company and options for an additional 2,200,000 shares, representing approximately 1.02% of the total issued shares[93]. - The company has a share incentive plan that is currently in effect, with details available in the prospectus dated September 14, 2021[74]. - The company has not faced any significant labor disputes or recruitment difficulties during the reporting period[74]. - The company has no significant contingent liabilities as of June 30, 2024[79]. Shareholder and Financial Policies - The company did not declare or pay any interim dividends to ordinary shareholders for the six months ended June 30, 2024, consistent with the previous year[71]. - The company has no treasury shares as of June 30, 2024[85]. - The company will arrange for the cancellation of repurchased shares as soon as possible[85]. - The company has adopted a prudent funding and treasury policy, regularly monitoring financial status and liquidity[79]. - The company repurchased a total of 2,142,500 shares at a total cost of approximately HKD 3,595,869.75 during the reporting period[84]. - The net proceeds from the global offering on September 29, 2021, amounted to approximately HKD 553.4 million, with a change in intended use of proceeds for investment in TST001[86]. - The company allocated 82% of the remaining unutilized net proceeds, approximately HKD 453.8 million, for the development of pipeline candidate products, including Osemitamab (TST001)[87]. - For the development of TST005, 10% of the remaining unutilized net proceeds, approximately HKD 55.3 million, is planned for clinical trials and commercialization efforts[88]. - The company plans to allocate 12% of the remaining unutilized net proceeds, approximately HKD 66.5 million, for other pipeline products and clinical trials[89].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$14.07, up from the previous target of HK$13.15 [1][17][35]. Core Insights - The clinical data presented at the 2024 ASCO annual meeting shows that TST001 combined with nivolumab and CAPOX has a median progression-free survival (mPFS) of 12.6 months in patients with high/medium CLDN18.2 expression and 80% of PD-L1 CPS<5 patients [3][49]. - The company has optimized its R&D pipeline and resource allocation, resulting in a modest increase in R&D expenses to RMB 382 million in 2023, which is a year-on-year increase of RMB 32.2 million [5][51]. - The DCF valuation model indicates a weighted average cost of capital (WACC) of 9.8% and a terminal growth rate of 2.0%, leading to a new target price of HK$14.07 [7][35]. Financial Analysis - The company's revenue for 2024E is projected at RMB 132 million, with a gross profit of RMB 33 million, and a net loss of RMB 527 million [32][58]. - R&D expenses for 2024E are expected to be RMB 396 million, reflecting a 21% reduction from previous estimates [5][37]. - The company anticipates a 15% growth in net profit for both 2024E and 2025E, with net losses decreasing from RMB 624 million to RMB 527 million in 2024E [5][37]. Valuation Overview - The DCF analysis estimates the equity value at HK$14.07 per share, indicating a potential upside of 691% from the current share price of HK$1.78 [48][35]. - The company’s market capitalization is approximately US$42 million, with a current share count of 184 million [48]. Clinical Development - The report highlights the significant clinical efficacy of TST001 in treating gastric or gastroesophageal junction cancer, particularly in patients with high/medium CLDN18.2 expression [39][49]. - The results from the Phase I/II clinical trials support the advancement of TST001 into Phase III trials, which have received regulatory approval from the FDA and CDE [39][49].

Drug Development and Clinical Trials - In March 2023, the company received FDA orphan drug designation for osemitamab (TST001) for the treatment of pancreatic cancer[10]. - In July 2023, the company obtained approval from the China National Medical Products Administration and Korea MFDS to initiate the global Phase III trial TranStar301 for osemitamab (TST001) in combination with nivolumab and chemotherapy for Claudin18.2 expressing locally advanced or metastatic gastric cancer patients[11]. - In October 2023, the company presented updated efficacy data at the ESMO conference, showing an objective response rate (ORR) of 55% for the 6mg/kg Q3W dose group in the TranStar102 trial for advanced gastric cancer[12]. - The company completed a single ascending dose study for blosozumab (TST002) in January 2023, enrolling 32 patients successfully[13]. - In May 2023, the company presented preliminary results from a Phase I study of blosozumab (TST002) showing a significant increase in lumbar BMD of 3.52% to 6.20% after 85 days post-treatment[14]. - The company advanced osemitamab (TST001) to Phase III trials in 2023, with plans to submit key trial applications to EMA and PMDA in 2024[19]. - The company completed the Phase I/II study in China for osemitamab (TST001) in April 2023, with results supporting the upcoming global Phase III trial (TranStar301)[50]. - The company received approval from the Chinese drug regulatory authority to initiate Phase II clinical trials for blosozumab (TST002) in March 2023[59]. - The company showcased data at the ASCO annual meeting in June 2023, indicating a progression-free survival (PFS) of 9.5 months and a duration of response (DoR) of 9.9 months for osemitamab (TST001) in combination with CAPOX[62]. - The company is advancing the clinical development of the anti-GREMLIN-1 antibody TST003, which has completed the third dose escalation cohort in the U.S./China Phase I trial[48]. - In January 2023, the company received IND approval for TST003 from the National Medical Products Administration of China[67]. - In April 2023, the company presented preclinical results for TST003 at the AACR 2023 Annual Meeting, demonstrating its potential in treating advanced solid tumors, particularly MSS CRC and CRPC[67]. - The company is preparing to conduct the global Phase III key trial (TranStar301) for osemitamab (TST001) in combination with nivolumab and chemotherapy for Claudin18.2 expressing locally advanced or metastatic gastric cancer[64]. - The dose escalation study for TST005 was completed, showing good safety and encouraging efficacy signals, with disease stabilization lasting over six months in five heavily pre-treated patients[29]. - The company has completed the technology transfer for blosozumab (TST002) and established the manufacturing process, with all additional preclinical studies for IND application completed in China[98]. - The company has received FDA IND approval for blosozumab (TST002)[99]. - The company plans to advance multiple key pipeline projects, including the global pivotal trial (TranStar301) for osemitamab (TST001) targeting Claudin18.2 overexpressing gastric cancer[109]. - TST004, a humanized monoclonal antibody targeting MASP2, is currently in Phase I trials for IgA nephropathy[85]. Financial Performance - Revenue decreased from RMB 1,019 million for the year ended December 31, 2022, to RMB 538 million for the year ended December 31, 2023, primarily due to a reduction in CDMO services[47]. - R&D expenses increased from RMB 349.8 million for the year ended December 31, 2022, to RMB 382.0 million for the year ended December 31, 2023, mainly due to progress in the main pipeline and resource optimization[47]. - Total comprehensive loss for the year increased from RMB 417.7 million for the year ended December 31, 2022, to RMB 465.7 million for the year ended December 31, 2023, primarily due to R&D investments related to pipeline progress[47]. - The total clinical expenses for the year ended December 31, 2023, were RMB 187.2 million, an increase from RMB 151.2 million in 2022, reflecting ongoing clinical trials[142]. - The company reported a net other income of RMB 2.4 million for the year ended December 31, 2023, down from RMB 29.7 million in 2022, primarily due to foreign exchange differences[141]. - Other income, including bank interest and government subsidies, decreased from RMB 46.4 million in 2022 to RMB 37.3 million in 2023, mainly due to reduced interest income[153]. - The company reported a total of 215 employees, with 50.23% in R&D, 22.33% in general and administrative roles, and 27.44% in production[178]. - The company's cash and cash equivalents decreased to RMB 596.3 million as of December 31, 2023, from RMB 993.4 million in 2022, primarily due to operating cash outflows[180]. - The company has a remaining performance obligation of RMB 21.8 million for CDMO services, with RMB 19.1 million expected to be recognized within one year[139]. - Trade payables increased significantly from RMB 48.2 million in 2022 to RMB 91.8 million in 2023, indicating a rise in operational liabilities[149]. - Trade receivables as of December 31, 2023, amounted to RMB 38,856,000, an increase of 14% from RMB 34,012,000 in 2022[6]. - After deducting credit loss provisions, trade receivables stood at RMB 37,656,000, up from RMB 34,012,000 in the previous year[6]. - As of December 31, 2023, the company had borrowings of RMB 42 million, down from RMB 49.1 million in 2022[183]. - The company maintained a net cash position as of December 31, 2023, making the debt-to-equity ratio not applicable[167]. - The company has no significant contingent liabilities as of December 31, 2023[186]. - The company has no foreign currency hedging policy but monitors foreign exchange risks[168]. Strategic Initiatives and Partnerships - The company plans to continue seeking partnerships, particularly for its core products, to enhance its market position[6]. - The company aims to create long-term value for shareholders by developing innovative solutions to unmet medical needs[17]. - The company is focused on leading the next wave of innovation by developing osemitamab (TST001) in combination with checkpoint inhibitors and chemotherapy for gastric cancer patients[19]. - The company achieved significant milestones in 2023, including advancements in core assets osemitamab (TST001) and blosozumab (TST002)[45]. - Blosozumab (TST002) showed promising results in Phase I trials, demonstrating significant efficacy in increasing bone mineral density (BMD) and restoring bone strength, with approval for Phase II trials in China[35]. - The company is expanding its pipeline development and partnerships to maximize the potential of pipeline molecules for more patients and disease types[27]. - The design of the I/II trial for osemitamab (TST001) in combination with nivolumab and CAPOX for treating locally advanced metastatic gastric cancer was presented at ASCO 2023[39]. - The company is focused on building a fully integrated, globally competitive biopharmaceutical company[45]. - The company aims to collaborate with passionate partners with a global vision to drive innovation[27]. - The company is actively pursuing market expansion and new strategies to enhance its influence in the biopharmaceutical sector[27]. - The company has established collaborations with BMS for clinical trials of osemitamab (TST001) and with Eli Lilly for the introduction of blosozumab (TST002) in Greater China[87]. - The company is in discussions with multiple multinational companies regarding potential collaborations for tumor and non-tumor applications[92]. - The company has ongoing collaborations with several multinational and biotechnology companies regarding TST004, enhancing its global leadership in Claudin18.2 targeted combination therapy[100]. - The company is preparing to submit IND applications for new projects and will continue to strengthen and expand business development activities globally[130][131]. - The company aims to enhance its global development strategy and maximize the commercial value of its pipeline projects through partnerships and advanced technology implementation[133]. Operational and Regulatory Challenges - The company faces significant risks including strict regulatory oversight of drug research, development, and commercialization, as well as intense competition and rapid technological changes[193]. - Key risks include the ability to identify new drug candidates, complete clinical development, obtain regulatory approvals, and achieve market acceptance from doctors, patients, and payers[200]. - The company did not engage in any significant investments or acquisitions during the reporting period[182]. - There were no major disputes with customers or suppliers during the reporting period[196]. - The company operates as a clinical-stage biopharmaceutical firm with capabilities in discovery, research, development, manufacturing, and business development located in China and the United States[197]. - The company is committed to fulfilling social responsibilities, promoting employee welfare, and achieving sustainable growth while adhering to environmental protection laws and regulations[191]. - The company is exploring various strategies to significantly reduce costs and improve efficiency for the late-stage development of blosozumab (TST002)[101]. - The company has upgraded its internal cell line expression system, expected to be licensed to CDMO clients and used for internal projects in 2024[103].

Financial Performance - As of December 31, 2023, the company reported trade receivables (net of credit loss provisions) of RMB 37,656 thousand, an increase from RMB 34,012 thousand in the previous year, representing an increase of approximately 7.8%[4] - As of December 31, 2023, cash and cash equivalents amount to RMB 596.3 million, down from RMB 993.4 million as of December 31, 2022, primarily due to operating cash outflows[40] - Trade payables as of December 31, 2023, amount to RMB 91.841 million, an increase from RMB 48.154 million as of December 31, 2022[56] - Total comprehensive expenses decreased from RMB 10.9 million for the year ended December 31, 2022, to RMB 3.1 million for the year ended December 31, 2023[58] - Adjusted total loss and comprehensive expenses for the year ended December 31, 2023, amounted to RMB (437,342) thousand, compared to RMB (400,875) thousand for the year ended December 31, 2022, reflecting an increase in loss[58] - Revenue decreased from RMB 101.9 million for the year ended December 31, 2022, to RMB 53.8 million for the year ended December 31, 2023, primarily due to a reduction in CDMO services[89] - Other income decreased from RMB 46.4 million for the year ended December 31, 2022, to RMB 37.3 million for the year ended December 31, 2023, mainly due to a decrease in interest income[89] - Total comprehensive loss increased from RMB 417.7 million in the year ended December 31, 2022, to RMB 465.7 million in the year ended December 31, 2023, mainly due to R&D investments related to pipeline progress[117] - Administrative and selling expenses increased from RMB 112.4 million in the year ended December 31, 2022, to RMB 117.4 million in the year ended December 31, 2023, primarily due to an increase in share-based compensation[117] Research and Development - The company completed a Phase I/II study in China in April 2023, enrolling patients with Claudin18.2 expressing advanced gastric or gastroesophageal junction cancer, which will support an upcoming global Phase III trial[10] - The company received IND approval for TST003 from the National Medical Products Administration of China in January 2023[11] - The company has made significant progress in the development of its lead oncology asset, osemitamab (TST001), with ongoing global trials expected to yield encouraging data[83] - The company received approval from the Chinese drug regulatory authority to initiate Phase II clinical trials for its non-oncology asset, blosozumab (TST002)[85] - The company has advanced its first-in-human study for TST003, completing the first patient dosing in March 2023[86] - Osemitamab (TST001) demonstrated a progression-free survival (PFS) of 9.5 months and a duration of response (DoR) of 9.9 months in the TranStar102 study for advanced gastric or gastroesophageal junction (G/GEJ) cancer[91] - The company has established a diverse pipeline covering 13 molecules for tumors, bone lesions, and kidney diseases, with most candidates developed internally[127] - The company is advancing TST013, a next-generation ADC candidate targeting validated tumor antigens, showing superior anti-tumor growth characteristics in preclinical studies[122] - The company is preparing for IND studies for TST801, a dual-function fusion protein targeting receptors involved in B cell activation and differentiation for treating systemic lupus erythematosus (SLE)[181] - Clinical data for TST003 is planned to be presented at several medical conferences[200] Clinical Trials and Approvals - The company submitted clinical trial applications for the global randomized Phase III study (TranStar301) in April 2023, which has been approved in July 2023[91] - The company received orphan drug designation from the FDA for Osemitamab (TST001) for the treatment of pancreatic cancer in March 2023[91] - The company has received regulatory approvals for the global Phase III trial of osemitamab (TST001) in multiple regions, including the FDA, Chinese NMPA, and Korean MFDS[125] - In June 2023, the company presented PFS data from the TranStar102 C cohort at the ESMO GI conference, showing that over 55% of patients tested for osemitamab (TST001) were Claudin18.2 positive advanced gastric or gastroesophageal junction cancer patients[119] - In July 2023, the company received approval from the Chinese National Medical Products Administration and the Korean MFDS to initiate the global Phase III trial TranStar301 for osemitamab (TST001) combined with nivolumab and chemotherapy in Claudin18.2 expressing locally advanced or metastatic gastric or gastroesophageal junction cancer patients[119] - In September 2023, the company had a productive End-of-Phase 2 meeting with the FDA, preparing to launch the global Phase III trial TranStar301 for osemitamab (TST001) as a first-line treatment[119] - A multi-dose escalation (MAD) Phase II study for Blosozumab (TST002) is planned to initiate in China in 2024[199] Strategic Initiatives and Collaborations - The company has established collaborations with BMS for osemitamab (TST001) clinical trials and with Eli Lilly for blosozumab (TST002) in the Greater China region[153] - The company is exploring partnerships for TST004 with multiple companies, enhancing its collaboration efforts in the biotechnology sector[159] - The company is collaborating with BMS on clinical trials, having enrolled 82 patients in China and 18 patients in the US for the osemitamab (TST001) study[122] - The company has established a strategic alliance with a siRNA API synthesis company to provide CDMO services for siRNA drug preparation and filling[162] Operational Developments - The company has established infrastructure and capabilities for developing ADC products and lyophilized formulations to support both internal and external projects[96] - The company is investing in the HiCB platform technology to accelerate product entry into clinical and market phases while reducing production risks and ensuring stable high product quality[96] - The company has completed commercialization process characterization for osemitamab (TST001) and is actively developing robust process control strategies to support late-stage development and registration[191] - Significant investment has been made in the development and optimization of cell culture perfusion and fed-batch media for commercial and internal use[194] - The company is exploring global collaborations for osemitamab (TST001) with multiple multinational companies for treating Claudin18.2 positive solid tumors[185] Employee and Governance - As of December 31, 2023, the total number of employees is 215, with 50.23% in R&D, 22.33% in general and administrative, and 27.44% in production[38] - The company has established an audit committee to oversee financial reporting and internal control processes[27] - There were no significant labor disputes or recruitment difficulties during the reporting period[39] - The company has a share incentive plan that is currently in effect, with details available in the prospectus dated September 14, 2021[39] Shareholder Returns - The company did not declare a final dividend for the year ending December 31, 2023[29] - The company has not declared or paid any dividends to ordinary shareholders in 2023[57]

Financial Performance - The company reported a loss of RMB 237,647 thousand for the six months ended June 30, 2023, compared to a loss of RMB 204,073 thousand for the same period in 2022[22]. - Revenue from CDMO services was RMB 36,084 thousand, an increase from RMB 21,758 thousand in the previous year, representing a growth of approximately 65.8%[24]. - Gross profit for the period was RMB 10,112 thousand, significantly up from RMB 3,072 thousand in the prior year, indicating a gross margin improvement[24]. - Other income decreased from RMB 239 million to RMB 233.7 million, primarily due to a reduction in government subsidies recognized during the six months ended June 30, 2023[27]. - The company reported a net income of 5,761,160 for the first half of 2023, compared to 6,816,185 in the same period last year, indicating a decrease of approximately 15.5%[171]. Research and Development - Research and development expenses increased to RMB 207,940 thousand from RMB 170,315 thousand year-over-year, reflecting ongoing investment in pipeline development[24]. - Research and development expenses for the six months ended June 30, 2023, amounted to RMB 88,507,000, an increase from RMB 51,202,000 in the same period of 2022[75]. - Clinical expenses for the same period were RMB 88,507,000, up 73% year-over-year from RMB 51,202,000[75]. - The company plans to showcase clinical data for TST002 at medical conferences in the second half of 2023[10]. - The company completed a dose escalation study for TST002 in China with 32 patients successfully enrolled as of January 2023[32]. - The company has obtained IND approval from the US FDA and is collaborating with a partner to advance IND in China[41]. - The company is exploring several solid tumors expressing Claudin18.2 beyond gastric cancer or gastroesophageal junction cancer[47]. - The company has established partnerships with BMS for osemitamab (TST001) clinical trials and with Eli Lilly for TST002 licensing in Greater China[36]. - The company has completed the establishment of an ADC development laboratory to support internal and external ADC projects[44]. Business Strategy and Expansion - The company aims to expand its CDMO business and increase revenue through enhanced operational efficiency and cost reduction strategies[19]. - The company is actively pursuing collaborations for clinical assets, including TST003 and other pipeline molecules, to maximize asset value[13]. - The company is in discussions with several multinational companies regarding potential collaborations[42]. - The company plans to achieve several milestone results related to clinical development and partnerships by 2025[156]. - The company plans to expand its market presence through new product development and strategic partnerships[156]. - The company anticipates a revenue growth of 10% for the upcoming fiscal year, driven by new product launches and market expansion strategies[162]. - The company has allocated a budget of 1 million HKD for research and development in the next quarter to enhance its product offerings[162]. - The company is exploring potential mergers and acquisitions to strengthen its market position and diversify its product portfolio[162]. - The company has implemented a new strategy to improve operational efficiency, aiming for a 15% reduction in costs by the end of 2024[162]. Shareholder and Equity Information - As of June 30, 2023, the total number of issued shares was 425,481,390[66]. - The total number of restricted stock units available for grant under the pre-IPO equity incentive plan was 8,753,179 as of January 1, 2023[71]. - No restricted stock units were granted during the reporting period, and the pre-IPO equity incentive plan was terminated on May 31, 2023[71]. - The company has a significant shareholder, Yi Shi, holding 70,536,703 shares, representing 16.58% of total shares[95]. - The maximum number of shares involved in the pre-IPO equity incentive plan is capped at 69,325,254 shares, representing 16.04% of the company's issued shares as of the last practicable date[99]. - As of June 30, 2023, there were 8,273,043 shares or options available for future grants under the equity incentive plan limit[112]. - The exercise price for the pre-IPO options exercised during the reporting period ranged from $0.1 to $0.4688 per share[124]. - A total of 6,816,185 shares and 8,644,205 options were granted to eligible participants under the equity incentive plan during the reporting period[112]. - The pre-IPO equity incentive plan was terminated on May 31, 2023, and no further grants will be made under this plan[120]. - The fair value of restricted share units is calculated based on accounting standards and policies, using a binomial pricing model[108]. - 25,704,680 shares were cancelled as part of a settlement agreement with certain participants due to their inability to pay related debts[125]. - The company has an existing unpaid share plan and an existing share plan, namely the pre-IPO equity incentive plan and the share incentive plan[119]. - As of January 1, 2023, there were 23,411,593 reward shares or options available for future grants under the share incentive plan limit[112]. - The company has granted a total of 2,670,445 shares under the pre-IPO equity incentive plan, which were transferred to a trust[102]. - The company granted a total of 44,551,933 shares under the share incentive plan, which is the maximum limit set for the plan[134]. - As of June 30, 2023, there were 4,905,000 restricted share units granted, with 4,562,500 units vested[129]. - The exercise price for the restricted share units ranged from $0.00 to $0.001 per share during the reporting period[132]. - A total of 32,840,878 shares were granted to participants under the pre-IPO equity incentive plan, with 25,704,680 shares cancelled as part of a settlement agreement[133]. - The company reported a total of 7,305,180 shares granted to other participants, excluding directors and major shareholders[144]. - The fair value of the options granted was calculated using a binomial pricing model, considering factors such as risk-free interest rates and expected volatility[158]. - The exercise period for the options granted is set for 10 years from the grant date, subject to the terms of the share incentive plan[158]. - The company reported a total of 2,971,727 options purchased at an exercise price of HKD 3.02 during the reporting period[138]. Governance and Compliance - The company has established an audit committee in accordance with Listing Rule 3.21 and the Corporate Governance Code, consisting of three members, with Mr. Tang as the chairman[197]. - The expected timeline for the use of net proceeds from the fundraising is subject to change based on future developments and unforeseen circumstances[196].

Financial Performance - Revenue increased from RMB 218 million for the six months ended June 30, 2022, to RMB 361 million for the six months ended June 30, 2023, primarily due to increased CDMO services[11]. - Other income decreased from RMB 239 million for the six months ended June 30, 2022, to RMB 176 million for the six months ended June 30, 2023, mainly due to a reduction in government grants recognized[11]. - Adjusted loss and total comprehensive expenses increased by RMB 27.9 million to RMB 232 million for the six months ended June 30, 2023, compared to RMB 204.1 million for the same period in 2022, primarily due to increased R&D expenses offset by higher CDMO revenue[11]. - The company reported a gross profit of RMB 10,112 thousand for the six months ended June 30, 2023, compared to RMB 3,072 thousand for the same period in 2022[150]. - The total assets of the company decreased to RMB 1,930,032 thousand as of June 30, 2023, from RMB 2,134,545 thousand as of December 31, 2022[151]. - The company reported a basic and diluted loss per share of RMB (0.58) for the six months ended June 30, 2023, compared to RMB (0.47) for the same period in 2022[187]. - Total comprehensive expenses for the period amounted to RMB (245,305,000), up from RMB (210,064,000) in the previous year[187]. Research and Development - R&D expenses increased by RMB 38.1 million to RMB 203.9 million for the six months ended June 30, 2023, compared to RMB 165.8 million for the same period in 2022, driven by pipeline progress and resource optimization[11]. - The company has developed a diverse pipeline of 13 molecules targeting tumors, bone lesions, and kidney diseases, with most candidates developed internally[28]. - The company continues to expand its proprietary antibody discovery platform to support precision medicine strategies and enhance its integrated CMC capabilities[41]. - The oncology pipeline includes multiple innovative and differentiated biotherapeutics targeting major cancer pathways, with several candidates addressing significant unmet medical needs[45]. - The company is expanding its discovery pipeline with two new IND-approved projects and advancing early-stage projects aimed at developing enhanced ADCC antibodies[111]. Clinical Trials and Approvals - The company received regulatory approval from the China National Medical Products Administration and Korea MFDS to initiate the global Phase III trial of osemitamab (TST001) in combination with chemotherapy for HER2-negative gastric cancer patients[1]. - The company completed the first dose escalation cohort of TST003 in July 2023 and initiated the first China pilot of the global FIH study in August 2023[2][3]. - In March 2023, the company received orphan drug designation from the US FDA for osemitamab (TST001) for the treatment of pancreatic cancer[18]. - The global pivotal Phase III trial (TranStar301) for Osemitamab (TST001) in combination with Nivolumab and chemotherapy has been approved by regulatory authorities in China and South Korea[57]. - The Phase I/II study in China for osemitamab (TST001) has completed patient recruitment, with data supporting a global pivotal Phase III trial set to start in the second half of 2023[68]. CDMO Services - The CDMO business unit added over 12 new customers in China and the U.S. during the first half of 2023, expanding services in various areas including media development and ADC development[5]. - The company expanded its CDMO services in 2023, adding over 12 new clients compared to the first half of 2022, enhancing capabilities in cell culture development and ADC development[25]. - The company plans to enhance its CDMO business by increasing marketing efforts overseas and improving operational efficiency to reduce costs[141]. Product Development and Pipeline - Osemitamab (TST001) demonstrated a 9.5-month PFS in a Phase I/II study for Claudin18.2 positive advanced gastric cancer, indicating that over 55% of patients may benefit from this treatment[33]. - TST002 (Blosozumab) showed a significant increase in lumbar bone density of 3.52% to 5.94% and total hip bone density increase of 1.30% to 2.24% after treatment, exceeding the minimum significant difference of 2.77%[34]. - TST005, a dual-function fusion protein targeting TGF-β and PD-L1, completed its global Phase I study with encouraging preliminary results reported at ASCO 2023[72]. - The company is developing TST010, a preclinical candidate antibody aimed at enhancing T cell-mediated tumor killing[169]. - TST006, a bispecific Claudin18.2-PD-L1 antibody, is currently in preclinical stage[63]. Strategic Partnerships and Collaborations - The company continues to execute a globalization strategy by forming partnerships with global and local biopharmaceutical companies and academic institutions[27]. - The company has established collaborations with multiple multinational companies for the development of TST002 and TST004, indicating strong interest in its pipeline[103]. - The company is actively exploring partnerships for the development and commercialization of TST002 in the Greater China region[128].