荣昌生物(09995) - 2024 - 中期业绩

Performance Summary Business Summary The company achieved significant progress in commercialization, product pipeline, and operations, with strong sales of core products Telitacicept and Disitamab Vedotin driving a 76.5% year-on-year revenue increase, alongside key clinical trial advancements including FDA Fast Track Designation Revenue Performance for H1 2024 | Metric | H1 2024 (RMB) | H1 2023 (RMB) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue from Product Sales & R&D Services | 739.7 million | 419.1 million | 76.5% | - Core product Telitacicept (RC18) received FDA Fast Track Designation (FTD) for the treatment of primary Sjögren's Syndrome (pSS)[3] - Core product Disitamab Vedotin (RC48) achieved its primary endpoint in a Phase III clinical study for HER2-positive advanced breast cancer[3] - Investigational drug RC88 received FDA FTD for the treatment of platinum-resistant recurrent epithelial ovarian cancer and other indications[4] Financial Summary For the six months ended June 30, 2024, the Group's revenue reached RMB 739.7 million with a gross profit of RMB 570.4 million, but a 49.2% increase in R&D expenses to RMB 806.2 million led to a 11.0% expansion in pre-tax loss to RMB 780.5 million, with cash and bank balances at RMB 673.3 million Key Financial Data for H1 2024 | Financial Metric | Amount (RMB) | YoY Change | | :--- | :--- | :--- | | Revenue | 739.7 million | N/A | | Gross Profit | 570.4 million | N/A | | R&D Expenses | 806.2 million | +49.2% | | Loss Before Tax | 780.5 million | +11.0% | | Loss for the Period | 780.5 million | +11.0% | | Adjusted Net Loss | 743.4 million | +12.7% | | Period-end Bank Balances & Cash | 673.3 million | N/A | Management Discussion and Analysis Company Overview The company is a fully integrated biopharmaceutical firm focused on innovative biologics discovery, development, and commercialization in autoimmune, oncology, and ophthalmology, having successfully commercialized two products, Telitacicept and Disitamab Vedotin, and built an integrated platform with over ten drug candidates - The company is positioned as a fully integrated biopharmaceutical company, focusing on three major therapeutic areas: autoimmune diseases, oncology, and ophthalmology[6] - The company has successfully commercialized two products: Telitacicept (Tai'ai®) and Disitamab Vedotin (Aidexi®), and possesses a product pipeline of over ten drug candidates, with seven in clinical development[6] Extensive Product Pipeline As of June 30, 2024, the company's extensive product pipeline spans autoimmune, oncology, and ophthalmology, with core products Telitacicept and Disitamab Vedotin undergoing clinical development for over twenty indications, alongside other candidates like RC88 and RC28 in various clinical stages, demonstrating continuous innovation - The company has over ten drug candidates, with seven in clinical development, targeting more than twenty indications[6] Key Pipeline Products and Progress | Candidate Drug | Target | Indications (Partial) | Development Stage | | :--- | :--- | :--- | :--- | | Telitacicept (RC18) | BLyS/APRIL | Neuromyelitis Optica, IgG4-Related Disease, etc. | Pivotal/Phase III, Commercialized | | Disitamab Vedotin (RC48) | HER2 | Urothelial Carcinoma, Breast Cancer, Gastric Cancer | Pivotal/Phase III, Commercialized | | RC88 | Mesothelin | Ovarian Cancer, Various Solid Tumors | Phase I/II | | RC28 | VEGF/FGF | Wet Age-related Macular Degeneration, Diabetic Macular Edema | Phase III | Business Review During the reporting period, the company achieved significant business progress, with core products Telitacicept and Disitamab Vedotin showing positive clinical trial results and regulatory approvals across multiple indications, while ophthalmology drug RC28-E's Phase III study advanced steadily, and other early-stage pipeline products like RC88 demonstrated promising potential Telitacicept (RC18, Tai'ai®) Telitacicept (RC18) demonstrated rapid clinical development progress across multiple autoimmune diseases, with its rheumatoid arthritis (RA) indication approved in China post-period, and key advancements in Phase III trials for primary Sjögren's Syndrome (pSS) and generalized Myasthenia Gravis (gMG), securing FDA Fast Track or Orphan Drug Designations, highlighting its global market potential - In July 2024, Telitacicept was approved for the treatment of rheumatoid arthritis (RA) in China[11] - For primary Sjögren's Syndrome (pSS), patient enrollment for the Phase III clinical trial in China has been completed, and it received FDA Fast Track Designation (FTD) in March 2024[13] - For generalized Myasthenia Gravis (gMG), the Phase III clinical trial in China met its primary endpoint, and the first patient was enrolled in the global multi-center Phase III clinical study in the US[14] Disitamab Vedotin (RC48, Aidexi®) Disitamab Vedotin (RC48), China's first approved domestic ADC, continues to achieve breakthroughs in treating various HER2-expressing solid tumors, with its Phase III trial for HER2-positive advanced breast cancer with liver metastasis meeting its primary endpoint, and combination studies with PD-1 antibodies for urothelial and gastric cancers showing encouraging efficacy, while global collaboration with Seagen/Pfizer progresses with ongoing international clinical trials - The Phase III clinical trial for HER2-positive advanced breast cancer with liver metastasis achieved positive results, meeting its primary endpoint[20] - Patient enrollment for the Phase III clinical trial of Disitamab Vedotin combined with a PD-1 antibody as first-line treatment for advanced urothelial carcinoma has been completed[18] - Global collaboration with Seagen/Pfizer is progressing well, with Seagen conducting a pivotal Phase II clinical trial in the US evaluating Disitamab Vedotin for urothelial carcinoma[21][22] RC28-E RC28-E, a novel VEGF and FGF-targeting fusion protein for ophthalmic diseases, has published positive Ib clinical data for wet Age-related Macular Degeneration (wAMD) in an international journal, demonstrating good safety and efficacy, with its Phase III study initiated in China, and patient recruitment completed for the Phase III trial in Diabetic Macular Edema (DME) - Ib clinical study results for wet Age-related Macular Degeneration (wAMD) were published in an international journal, showing good safety and efficacy, with its Phase III clinical study initiated in China[24] - Patient recruitment for the Phase III clinical trial of RC28-E for Diabetic Macular Edema (DME) has been completed[25] Other Clinical Stage Drug Candidates The company actively advances clinical development for other innovative drugs, with RC88 (mesothelin-targeting ADC) progressing well in Phase II trials for ovarian cancer and other solid tumors, and first patient enrollments achieved for multiple Phase I candidates including RC148 (PD-1/VEGF bispecific antibody), RC198 (IL-15/IL-15Rα fusion protein), and RC248 (DR5-targeting ADC), showcasing a rich early-stage R&D pipeline - RC88 (mesothelin-targeting ADC) is progressing well in its Phase II clinical trial for platinum-resistant recurrent ovarian cancer and other indications[26] - First patient enrollments have been achieved for Phase I clinical programs including RC148 (PD-1/VEGF bispecific antibody), RC198 (IL-15 fusion protein), and RC248 (DR5-targeting ADC)[27] Commercialization Progress The company established two independent sales teams for autoimmune and oncology products, significantly enhancing market access as core products Telitacicept and Disitamab Vedotin were included in the National Medical Insurance Drug List, with Telitacicept gaining access to over 900 hospitals and Disitamab Vedotin to over 700 hospitals by June 30, 2024, demonstrating effective commercialization - The company has established two independent sales teams for autoimmune and oncology fields, responsible for product commercialization[28] Core Product Hospital Access (As of June 30, 2024) | Product | Number of Hospitals Accessed | | :--- | :--- | | Telitacicept | Over 900 | | Disitamab Vedotin | Over 700 | - Both core products have been included in the National Medical Insurance Drug List, significantly improving product accessibility[28] Significant Events After Reporting Period Post-reporting period, the company achieved several key milestones, including Telitacicept's rheumatoid arthritis (RA) indication approval in China, its generalized Myasthenia Gravis (gMG) China Phase III trial meeting its primary endpoint, and the first patient enrolled in its global Phase III trial in the US, alongside Disitamab Vedotin's Phase III trial with PD-1 for advanced urothelial carcinoma completing patient enrollment, further solidifying the late-stage pipeline value - In July 2024, Telitacicept was approved for the treatment of rheumatoid arthritis (RA) in China[29] - In August 2024, Telitacicept's China Phase III clinical trial for generalized Myasthenia Gravis (gMG) met its primary endpoint, and the first patient was enrolled in its global Phase III clinical trial in the US[29] - In August 2024, patient enrollment for Disitamab Vedotin combined with PD-1 as first-line treatment for advanced urothelial carcinoma Phase III clinical trial was completed[29] Future Development The company aims to become a world-class biopharmaceutical leader, continuing to advance the commercialization of Telitacicept and Disitamab Vedotin in China and accelerating other pipeline clinical trials in H2 2024, while internationally focusing on global clinical studies for core products, including multiple Telitacicept Phase III trials in the US, and collaborating with Pfizer/Seagen on Disitamab Vedotin's global development - Domestic Strategy: Continuously advance the commercialization of Telitacicept and Disitamab Vedotin, and accelerate clinical trials for other investigational products[30] - International Strategy: Accelerate international clinical research for core products, especially Telitacicept's Phase III clinical trials in the US, and collaborate with Pfizer/Seagen to advance the global development of Disitamab Vedotin[30] Financial Review Operating Performance Analysis In H1 2024, the company's revenue grew 76.5% year-on-year to RMB 739.7 million due to strong core product sales, but total expenses significantly increased, with R&D expenses rising 49.2% to RMB 806.2 million and sales and distribution expenses increasing 11.3% to RMB 389.7 million, alongside higher finance costs, resulting in a loss for the period expanding from RMB 703.4 million to RMB 780.5 million Key Income Statement Item Changes for H1 2024 | Item | H1 2024 (RMB) | H1 2023 (RMB) | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | 739.7 million | 419.1 million | Strong growth in core product sales | | Sales and Distribution Expenses | 389.7 million | 350.2 million | Increased team building and promotional investment | | Administrative Expenses | 155.2 million | 168.6 million | Slight decrease | | R&D Expenses | 806.2 million | 540.5 million | Increased clinical trial expenses (especially overseas) | | Finance Costs | 31.9 million | 6.0 million | Increased interest on bank borrowings and bill discounts | | Loss for the Period | 780.5 million | 703.4 million | R&D and other expenses grew faster than revenue | - The increase in R&D expenses was primarily driven by clinical trial expenses (an increase of RMB 120.2 million), raw material expenses (an increase of RMB 62.2 million), and employee benefit expenses (an increase of RMB 33.5 million)[34][35] Liquidity and Capital Resources As of June 30, 2024, the company's cash and cash equivalents decreased to RMB 673.3 million from RMB 726.6 million at year-end 2023, primarily used for daily operations, while total interest-bearing bank and other borrowings reached RMB 2.2745 billion, and the debt-to-asset ratio rose from 37.8% to 53.7%, reflecting increased debt financing to support R&D and operations Key Financial Position Indicators | Indicator | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 673.3 million | 726.6 million | | Interest-bearing Bank and Other Borrowings | 2.2745 billion | N/A | | Debt-to-Asset Ratio | 53.7% | 37.8% | - Net cash used in operating activities during the reporting period was RMB 826.3 million, primarily funding R&D expenses[40] Financial Statements Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company reported revenue of RMB 739.7 million, a 76.5% increase from RMB 419.1 million in the prior year, with gross profit at RMB 570.4 million, but high R&D costs (RMB 806.2 million) and sales and distribution expenses (RMB 389.7 million) led to a pre-tax loss of RMB 780.5 million, expanding from RMB 703.4 million in the previous period H1 2024 Statement of Profit or Loss Summary | Item (Thousand RMB) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 739,656 | 419,073 | | Gross Profit | 570,385 | 316,418 | | R&D Costs | (806,233) | (540,453) | | Loss Before Tax | (780,460) | (703,362) | | Loss for the Period | (780,460) | (703,362) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were RMB 5.7545 billion, total liabilities RMB 3.0899 billion, and net assets RMB 2.6646 billion, with total assets slightly decreasing and total liabilities significantly increasing from year-end 2023, primarily due to interest-bearing bank and other borrowings rising from RMB 1.127 billion to RMB 2.2745 billion, and net current assets decreasing from RMB 1.0914 billion to RMB 845.5 million Statement of Financial Position Summary (As of June 30, 2024) | Item (Thousand RMB) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 3,260,658 | 3,299,310 | | Total Current Assets | 2,493,879 | 2,228,933 | | Total Assets | 5,754,537 | 5,528,243 | | Total Current Liabilities | 1,648,428 | 1,137,541 | | Total Non-current Liabilities | 1,441,499 | 953,433 | | Total Liabilities | 3,089,927 | 2,090,974 | | Net Assets | 2,664,610 | 3,437,269 | Other Information Corporate Governance and Compliance During the reporting period, the company adopted and complied with all applicable provisions of the Corporate Governance Code, with directors and supervisors confirming adherence to the standard code for securities transactions, and interim financial results reviewed by independent auditor Ernst & Young and confirmed by the audit committee to comply with accounting standards and regulations - The company complied with all applicable provisions of the Corporate Governance Code during the reporting period[46] - The interim financial information has been reviewed by independent auditor Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410[47] Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of an interim dividend for 2024[48]