Zelgen(SH:688266)2022-04-26 16:00Financial Performance - As of December 31, 2021, the company has not yet achieved profitability and has accumulated losses due to significant R&D expenditures and market expansion costs for its approved product, Donafenib Tablets[5]. - The company raised a net amount of RMB 1,908.22 million during its IPO in January 2020, but still relies heavily on external financing for its working capital[5]. - The company does not plan to distribute cash dividends or issue bonus shares for the 2021 fiscal year, as approved by the board[10]. - The company has incurred significant losses and will continue to do so in the near term, impacting its ability to distribute profits to shareholders[5]. - The net profit attributable to shareholders was a loss of CNY 450.99 million in 2021, compared to a loss of CNY 319.23 million in 2020, representing an increase in net loss of 13,176.99 million[36]. - The basic earnings per share were -CNY 1.88 in 2021, compared to -CNY 1.36 in 2020, indicating a worsening financial performance[36]. - The company reported a net cash flow from operating activities of -CNY 454.62 million in 2021, compared to -CNY 343.86 million in 2020[36]. - The company has incurred significant cash outflows since its establishment, with net cash flows from operating activities of -180.43 million, -343.86 million, and -454.62 million in 2019, 2020, and 2021 respectively[159]. - The company’s financial condition may affect employee compensation, impacting talent retention and the ability to achieve R&D and commercialization goals[145]. Research and Development - Future profitability will depend on the number and scope of drug development projects, associated costs, and the ability to generate revenue from approved products[5]. - Research and development expenses amounted to CNY 509.39 million, a 62.13% increase from the previous year, reflecting the company's commitment to enhancing its core competitiveness[36]. - The company has 16 major drugs in development, with 42 key projects, including 8 indications in NDA, Phase III, or registration clinical trial stages[49]. - The company is focused on developing innovative drugs with clear clinical value and has not yet launched any of its new drugs in the domestic or international markets[22]. - The company is actively involved in multiple clinical trials, including Phase I/II studies for various drug candidates targeting different cancers[108]. - The company has established a comprehensive new drug R&D system, covering all stages from early discovery to late development, with international-level patent candidates in various clinical trial phases[136]. - The company has developed a leading drug stability technology that ensures a high success rate in new drug development[97]. - The company has applied for a total of 205 invention patents globally, with 96 patents granted, including 28 in China and 68 overseas[109]. - The company is developing innovative drugs, including ZG5266, which is undergoing non-clinical pharmacokinetic studies[108]. - The company is expanding its research capabilities with the establishment of a U.S. R&D center, enhancing its international presence[108]. Product Development and Pipeline - The company has received approval for Donafenib Tablets for first-line treatment of advanced liver cancer as of June 2021[5]. - The company has developed a first-class new drug, Donafenib, which is approved for the treatment of unresectable hepatocellular carcinoma and is marketed under the name "Zepzelca®" in China[22]. - The company is conducting clinical trials for its core product, recombinant human thrombin, marketed as "Zepthrombin®"[22]. - The company is developing a first-class new drug, ALK or ROS1 inhibitor, marketed as "Zepcitinib®"[22]. - The company is focused on expanding its product pipeline with innovative therapies targeting various cancers and autoimmune diseases[69]. - The company aims to accelerate the market launch of its products through ongoing clinical trials and regulatory communications[70]. - The company has successfully initiated Phase III clinical trials for several drugs, including Jackatinib for severe alopecia areata and recombinant human thrombin for surgical hemostasis[49]. - The company has established strategic collaborations for combination therapies involving its products, enhancing the potential for improved efficacy[68]. - The company has multiple small molecule new drugs at different stages of research and development, with several products already on the market[97]. Market and Competitive Landscape - The company faces potential risks related to ongoing R&D, including the possibility of not completing clinical trials or obtaining regulatory approvals for its pipeline products[5]. - The company faces intense competition in the pharmaceutical market, particularly for its drug Donafenib, which has been approved for commercialization but competes with imported original drugs and generics[158]. - The oncology drug market in China is driven by an increasing number of cancer patients, with 4.57 million new cases reported in 2020, expected to rise to 5.2 million by 2025, leading to growing demand for oncology drugs[93]. - The company is exposed to risks from changes in the regulatory environment and market rules due to ongoing healthcare reforms in China[162]. - The company may encounter challenges in international markets due to varying legal and operational environments, which could hinder its revenue growth potential[164]. Strategic Initiatives - The company is planning a refinancing initiative to enhance its R&D capabilities and accelerate the development of its drug pipeline[49]. - The company is committed to maintaining high standards in clinical trials and manufacturing practices, adhering to GCP and GMP guidelines[22]. - The company has established three R&D centers in Jiangsu, Shanghai, and California, focusing on biological new drugs, chemical new drugs, and innovative antibodies[77]. - The company is actively pursuing international development of its products to enhance global competitiveness and collaboration opportunities[137]. - The company has built GMP production facilities for both small molecule drugs and biological new drugs, ensuring flexible production capabilities and cost control advantages[140]. Risks and Challenges - The company faces risks of substantial declines in sales revenue due to ongoing losses and the need for continuous investment in R&D[146]. - There is uncertainty regarding the pricing of the company's drugs post-launch, which may affect sales volume and profitability[147]. - Clinical trial progress may not meet expectations due to challenges in patient recruitment and collaboration with clinical trial institutions[152]. - The company may face significant adverse impacts if clinical trial results do not meet expectations, potentially hindering business operations[151]. - The company’s ability to commercialize its drugs is contingent upon successful regulatory approvals and market acceptance[146]. - The company faces risks related to patent disputes and reliance on key technical personnel, which could impact its R&D and commercialization goals[169]. Revenue and Sales - The company achieved a significant increase in revenue, reaching CNY 1,903.61 million in 2021, up 588.19% from CNY 276.61 million in 2020[36]. - The company’s revenue from pharmaceutical manufacturing reached ¥190,360,565.54, with a year-on-year increase of 588.19%[179]. - The sales revenue from pharmaceuticals was CNY 163.17 million, while the revenue from technology licensing for antibody products was CNY 25.82 million[170]. - The total cost of sales was ¥6,268,583.43, with direct materials constituting 68.25% of total costs[183]. - The company reported a significant change in revenue structure due to the launch of its first Class 1 new drug, leading to a notable shift in gross margin levels[185].