GENSCRIPT BIO(HK:01548)2020-04-24 09:05Revenue and Financial Performance - The company generated approximately $170.4 million from life sciences services and products, accounting for about 62.3% of total revenue[4] - The CDMO platform contributed approximately $22.5 million, representing around 8.2% of total revenue[4] - The industrial synthetic products platform generated approximately $23.1 million, making up about 8.5% of total revenue[4] - The cell therapy platform achieved approximately $57.4 million, which is about 21.0% of total revenue[4] - For the year ended December 31, 2019, the company's revenue increased by 18.4% to approximately $273.4 million from about $231.0 million in 2018[10] - Gross profit for the year ended December 31, 2019, rose by 13.8% to approximately $180.3 million, compared to about $158.5 million in 2018[10] - The company's revenue grew by 20.4% to a significant level, while gross profit increased by 15.1%[14] - The gross margin decreased year-on-year due to changes in the product and service mix, with new products typically having lower profit margins before achieving scale[14] - The adjusted net loss for the reporting period was approximately $107.1 million, compared to an adjusted net profit of about $29.6 million for the year ended December 31, 2018[23] - The company reported a loss attributable to owners of approximately $96.9 million, compared to a profit of about $21.2 million for the year ended December 31, 2018[23] - The company reported a loss of approximately $117.5 million for the year ended December 31, 2019, compared to a profit of about $20.8 million in 2018[10] Research and Development - Research and development expenses for the year ended December 31, 2019, were approximately $186.0 million, a significant increase of 151.0% from about $74.1 million in 2018[10] - The company has invested significantly in strategic R&D activities to drive long-term sustainable growth across all business segments[22] - The company is actively developing new CAR-T projects, with potential IND approvals expected within the next 12 months[21] - The company aims to expand its CAR-T and other technologies to treat malignant hematological diseases, solid tumors, and infectious diseases[68] - The company has ten projects currently in clinical development using CAR-T technology targeting various blood cancers and solid tumors[16] Market Presence and Operations - The company operates in over 100 countries, with a workforce of 3,738 employees as of December 31, 2019[4] - Sales generated from North America, China, Europe, Asia Pacific (excluding China and Japan), Japan, and others were approximately $168.9 million, $55.5 million, $26.6 million, $16.0 million, $4.8 million, and $1.6 million, respectively, accounting for about 61.8%, 20.3%, 9.7%, 5.9%, 1.7%, and 0.6% of total revenue[7] - The company has established a world-class management team to lead its subsidiary, Legend Biotech, towards becoming a fully integrated global biopharmaceutical company[21] - The company is strategically betting on the CDMO business, capitalizing on the rapid growth of the global biopharmaceutical industry driven by aging populations and advancements in precision medicine[16] Corporate Governance and Leadership - The board of directors consists of nine members, including three executive directors, three non-executive directors, and three independent non-executive directors[74] - The company has expanded its board to include diverse expertise, enhancing governance and strategic oversight[74] - The company emphasizes innovation, with Dr. Zhang being an inventor on over five biotechnology-related patents[77] - The company has a robust leadership team with extensive experience in finance, operations, and biotechnology, positioning it for future growth[79] - The company is focused on strategic and operational management through its board of directors[81][83] Stock Options and Employee Incentives - The company granted stock options totaling 4,515,000 shares at an exercise price of HKD 18.3 and 5,885,000 shares at HKD 19.132 under the post-IPO share option plan[108] - The company’s stock option plan includes options granted to senior management and employees, reflecting a commitment to incentivize key personnel[114] - The company aims to attract and retain qualified personnel through its stock option plans, enhancing overall shareholder value[128] - The company has adopted a Restricted Share Award Scheme on March 22, 2019, allowing for the issuance of shares not exceeding 10% of the issued share capital as of that date[134] - A total of 1,048,116 restricted shares and 150,000 restricted shares were granted to employees on July 19, 2019, and November 29, 2019, respectively, at closing prices of HKD 18.30 and HKD 18.90 per share[134] Environmental and Social Responsibility - The company implemented energy-saving measures, resulting in a monthly saving of 680 tons of fresh water through the renovation of cooling methods at its Nanjing facility[167] - The company reduced NOx emissions from two natural gas boilers from 86 mg/m³ to 12 mg/m³ through selective catalytic reduction modifications[167] - The company improved the treatment of organic waste, processing 70 tons of organic waste using a distillation recovery method, which reduced costs and pollution[167] - The company made charitable donations amounting to $172,000 for community purposes during the year ended December 31, 2019[155] Financial Risks and Compliance - The major financial risks faced by the company are detailed in the financial statements under note 41 regarding financial risk management objectives and policies[163] - The company confirmed it maintained a sufficient public float of over 25% of its issued share capital as required by the Listing Rules[158] - The company is committed to maintaining the highest standards of corporate governance and has complied with the mandatory provisions of the corporate governance code during the reporting period[157] - The audit committee reviewed the annual performance announcement and financial statements prepared in accordance with Hong Kong Financial Reporting Standards for the year ended December 31, 2019[156] Strategic Goals and Future Outlook - The company aims to achieve the business and financial goals approved by the board for 2020, utilizing existing financial resources and talent[18] - The company believes that maximizing shareholder value is best achieved through investments in future growth, despite short-term profitability pressures[18] - The proposed IPO of Legend Biotech is expected to provide flexible funding channels for clinical development while retaining significant upside potential for existing shareholders[165] - The company plans to invest further in R&D, focusing on cell therapy, biopharmaceutical CDMO services, and molecular biology CRO to enhance its global leadership in gene synthesis[165] - The company is actively seeking acquisition and investment opportunities to enhance existing internal capacity and accelerate overall growth[68]