永泰生物(06978) - 2024 - 中期业绩

Interim Results Announcement Summary Financial Summary For the six months ended June 30, 2024, the company's pre-tax loss narrowed by 22.0% to RMB92.6 million, driven by a net gain in other income and reduced administrative expenses, while R&D expenses increased by 22.6% | Indicator | As of June 30, 2024 (RMB thousands) | As of June 30, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 6,526 | 5,533 | 17.9 | | Net gain (loss) on other income and losses | 19,836 | (20,269) | (197.9) | | Administrative expenses | (23,048) | (25,035) | (7.9) | | Research and development expenses | (91,118) | (74,315) | 22.6 | | Finance costs | (3,851) | (4,372) | (11.9) | | Other expenses | (901) | (144) | 525.7 | | Loss before tax | (92,556) | (118,602) | (22.0) | | Loss and total comprehensive expenses for the period | (92,556) | (118,602) | (22.0) | | Loss per share (basic and diluted) | (0.18) | (0.23) | - | | Indicator | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 538,889 | 632,390 | (14.8) | | Current assets | 180,830 | 213,894 | (15.5) | | Current liabilities | (478,206) | (530,275) | (9.8) | | Net current liabilities | (297,376) | (316,381) | (6.0) | | Non-current liabilities | (163,179) | (145,119) | 12.4 | | Net assets | 78,334 | 170,890 | (54.2) | Company Overview Overview Yongtai Biological Pharmaceutical Co., Ltd. is a leading Chinese T-cell immunotherapy biopharmaceutical company with nearly 18 years of R&D and commercialization experience, featuring core product EAL® and a pipeline of non-genetically modified and genetically modified products - The company is a leading cell immunotherapy biopharmaceutical company in China, focusing on T-cell immunotherapy R&D and commercialization for nearly 18 years[3] - The core investigational product EAL® is a multi-target cell immunotherapy product with over a decade of clinical application track record, demonstrating therapeutic effects on various cancers[3] - The product pipeline covers non-genetically modified and genetically modified products, with key investigational products including EAL®, 6B11, CAR-T cell series, and TCR-T cell series[4] Business Review R&D of Pipeline Products The company is advancing multiple cell immunotherapy products, with core product EAL® completing Phase II patient enrollment, receiving breakthrough therapy designation, and expected NDA submission in H2 2024, while CAR-T and TCR-T pipelines also show significant progress - EAL® was granted breakthrough therapy designation by the Center for Drug Evaluation for preventing recurrence of liver cancer after surgery, expected to accelerate clinical development[6] - EAL® has completed Phase II clinical trial enrollment of 430 target patients, with NDA submission to the NMPA expected in H2 2024 and product launch in 2025[6] - CAR-T-19 Injection has completed Phase II clinical trial enrollment of 25 target patients, with preliminary analysis and results expected in H1 2026[8] Non-Genetically Modified Cell Product Pipeline The non-genetically modified product pipeline, centered on EAL®, has completed Phase II patient enrollment for liver cancer recurrence prevention and received breakthrough therapy designation, while 6B11-OCIK injection has completed Phase I enrollment - EAL® is undergoing a Phase II clinical trial for preventing recurrence of liver cancer after surgery, with 430 target patients enrolled[6] - EAL® was granted breakthrough therapy designation for preventing recurrence of liver cancer after surgery by the Center for Drug Evaluation in September 2023[6] - 6B11-OCIK Injection has completed Phase I clinical trial enrollment of six target patients, with Phase II clinical trials to commence as appropriate based on business arrangements[7] Genetically Modified Cell Products in Development The genetically modified cell product pipeline includes CAR-T and TCR-T series, with CAR-T-19 completing Phase II enrollment, Dinolunsa Injection and aT19 Injection entering Phase I trials, and TCR-T products in preclinical research targeting renal cell carcinoma and viral antigens - CAR-T-19 Injection has completed Phase II clinical trial enrollment of 25 target patients, with preliminary analysis and results expected in H1 2026[8] - Dinolunsa Injection has received clinical approval from the NMPA and completed Phase I clinical trial enrollment of eight target patients, with preliminary analysis and results expected in H1 2025[9] - aT19 Injection received IND approval for Phase I clinical trials in February 2024, aiming to enhance the persistence and immune memory function of CAR-T cells[10] - The TCR-T cell product pipeline currently has multiple investigational products undergoing preclinical research, targeting HERV-E antigen, CMV, and HBV viral antigens[12] The Group's Facilities The company operates a 27,604 sqm R&D and production center in Beijing and is expanding production facilities in populous regions like Beijing, Shaoxing, and Shanghai to address EAL®'s transport limitations and future commercialization needs, significantly boosting annual output - The Beijing R&D and production center has a total area of approximately 27,604 sqm, capable of supporting preclinical and clinical R&D, as well as early-stage production needs for investigational products[13] - The Beijing production center is expected to involve an investment of RMB1.2 billion, with an annual cell drug production capacity exceeding 200,000 batches upon completion, covering the North and Northeast China markets[13] - The Shaoxing EAL® production center project in East China has an estimated total investment of approximately RMB1 billion and has commenced construction[14] Quality Assurance The company has established a GMP-compliant quality management system ensuring product quality consistency, with standardized manufacturing for EAL® and CAR-T-19 Injection, and an independent quality department of 45 employees reporting directly to the CEO - The Group has developed quality management documents in accordance with GMP, covering production process procedures, product quality standards, equipment, and facility operating procedures[16] - The production of EAL® and CAR-T-19 Injection has been standardized to ensure consistent product quality[16] - The head of the Quality Department reports directly to the CEO, with two sub-teams for Quality Assurance and Quality Control, comprising 45 employees as of June 30, 2024[16] Future and Outlook Accelerate EAL® Clinical Trial Progress and Advance Commercialization Layout The company plans to accelerate EAL® Phase II clinical trial submission, production, and quality validation for faster registration and early commercialization, establishing R&D and production centers in populous regions like Guangzhou and Chengdu to address EAL®'s transport radius limitations - The company plans to comprehensively advance the EAL® Phase II clinical trial submission, production, and quality validation to accelerate registration and obtain necessary data[17] - To address EAL®'s six-hour transport radius, the company plans to establish R&D and production centers in populous regions of China, such as Guangzhou and Chengdu[18] - The company expects to submit the NDA for EAL® to the NMPA in H2 2024 and launch the product in 2025[18] Advance Preclinical Research of Pipeline Products and Accelerate Entry into Clinical Trial Stage The company will continue investing in CAR-T and TCR-T cell product pipelines, with Dinolunsa Injection and aT19 Injection already clinically approved, and the first TCR-T-CMV product targeting clinical trials by 2025 for CMV infection-related malignancies post-hematopoietic stem cell transplantation - The company will continue to invest in CAR-T and TCR-T cell product pipelines, with Dinolunsa Injection and aT19 Injection having received clinical approval from the NMPA[18] - The first TCR-T-CMV investigational product is targeted to enter clinical trials in 2025, for the treatment of CMV infection-related malignancies after hematopoietic stem cell transplantation[18] Enhance Technology Platform and Further Enrich Product Pipeline The company is committed to developing cell immunotherapy products for various tumor types and stages, enhancing existing product efficacy, and will focus on TCR identification for solid tumor neoantigens, establishing a TCR gene database, and researching TCR-T cell products targeting viral antigens - The company is committed to developing cell immunotherapy products suitable for different tumor types and stages, and improving the efficacy of existing products[19] - The company plans to conduct TCR identification for individualized tumor mutation neoantigens in solid tumors and establish a TCR gene database targeting tumor neoantigens[19] - Research on TCR-T cell products targeting viral antigens (such as CMV and HBV viruses) is currently underway[19] Develop Viral Vector Production and Early R&D Services Business The company has established a GMP-compliant viral vector production system for large-scale manufacturing and is developing CDMO services based on its systematic cell immunotherapy R&D platform, offering customized solutions to meet domestic CAR-T cell companies' needs - A viral vector production system compliant with pharmaceutical GMP production quality standards has been established, capable of large-scale production[20] - The company is developing CDMO services based on its systematic technology platform for cell immunotherapy product R&D, offering customized services according to client needs[20] Expand Strategic Cooperation and Explore Acquisition Opportunities Based on Organic Growth The company plans to expand strategic collaborations and explore M&A opportunities to enhance sales, technology transfer, and strategic partnerships for existing and pipeline products, while continuously seeking new potential development directions for cell immunotherapy products - The company plans to expand strategic collaborations, explore M&A opportunities, and seek sales, technology transfer, and strategic partnerships for existing and pipeline products[21] - The company continuously seeks new potential development directions for cell immunotherapy products, exploring M&A and strategic cooperation opportunities[21] Financial Information Financial Review For the six months ended June 30, 2024, the company's pre-tax loss decreased by 22.0% to RMB92.6 million, with other income increasing by 17.9% and a net gain in other income and losses, while administrative expenses decreased by 7.9% and R&D expenses increased by 22.6% Operating Performance Overview | Indicator | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 6,526 | 5,533 | 17.9 | | Net gain (loss) on other income and losses | 19,836 | (20,269) | (197.9) | | Administrative expenses | (23,048) | (25,035) | (7.9) | | Research and development expenses | (91,118) | (74,315) | 22.6 | | Finance costs | (3,851) | (4,372) | (11.9) | | Loss before tax | (92,556) | (118,602) | (22.0) | - Other income increased by 17.9% to RMB6.5 million, primarily due to an increase in government grants for machinery[24] - Net gain (loss) on other income and losses turned from a loss of RMB20.3 million in the same period of 2023 to a gain of RMB19.8 million in 2024, mainly due to fair value gains on other financial liabilities[25] - Research and development expenses increased by 22.6% to RMB91.1 million, primarily due to higher contracting costs[27] Income Tax Expense The company incurred no income tax expense during the reporting period, primarily due to tax losses generated by Chinese subsidiaries and the 15% preferential tax rate enjoyed by Beijing Yongtai and Yongtai Ruike as high-tech enterprises - For the six months ended June 30, 2024, the company had no income tax expense[31] - Beijing Yongtai and Yongtai Ruike are recognized as high-tech enterprises, enjoying a 15% preferential corporate income tax rate[31] Liquidity and Capital Resources As of June 30, 2024, bank balances and cash increased to RMB79.6 million due to the sale of certificates of deposit, with the capital structure shifting to 89.1% debt and 10.9% equity, and RMB192.7 million of the RMB300 million convertible bonds utilized for EAL® clinical trials and new R&D and production centers - Bank balances and cash increased from RMB52.2 million as of December 31, 2023, to RMB79.6 million as of June 30, 2024, primarily due to the sale of certificates of deposit[32] - As of June 30, 2024, the company's capital structure was 89.1% debt and 10.9% equity, compared to 62.6% debt and 37.4% equity as of June 30, 2023[35] - In February 2023, secured convertible bonds with a principal amount of RMB300 million were issued for EAL® clinical trials and the construction of new R&D and production centers[36][37] Use of Proceeds from Convertible Bonds | Use of Proceeds | Allocated (RMB millions) | Unutilized as of January 1, 2024 (RMB millions) | Utilized as of June 30, 2024 (RMB millions) | Unutilized as of June 30, 2024 (RMB millions) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | EAL® clinical trials | 102.3 | 43.2 | 32.6 | 10.6 | H1 2025 | | Construction costs for new R&D and production centers | 197.7 | 117.7 | 21.0 | 96.7 | End of 2025 | | Total | 300.0 | 160.9 | 53.6 | 107.3 | - | Selected Financial Ratios As of June 30, 2024, both current and quick ratios decreased, primarily due to a reduction in financial assets at fair value through profit or loss, with the debt-to-equity ratio not applicable due to no interest-bearing borrowings Selected Financial Ratios | Indicator | As of June 30, 2024 (Unaudited) | As of December 31, 2023 (Audited) | | :--- | :--- | :--- | | Current ratio | 0.38 | 0.40 | | Quick ratio | 0.36 | 0.39 | | Debt-to-equity ratio | – | – | - The current ratio and quick ratio decreased, mainly due to a reduction in financial assets at fair value through profit or loss[41] Notes to the Condensed Consolidated Financial Statements The financial statements are prepared under IAS 34, with retrospective application of IAS 1 amendments reclassifying convertible bonds from non-current to current liabilities, and other key notes detailing other income, net gains/losses, income tax, loss per share, and financial assets/liabilities - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[47] - Following the application of amendments to IAS 1, convertible bonds were reclassified from non-current liabilities to current liabilities as they are exercisable within 12 months[51] Details of Net Gain (Loss) on Other Income and Losses | Item | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Fair value gain (loss) on financial assets at fair value through profit or loss | 3,323 | (10,126) | | Fair value gain (loss) on other financial liabilities | 41,048 | (10,152) | | Loss on termination of an intangible asset | (19,316) | – | | Impairment loss on prepayments to a supplier | (5,183) | – | | Exchange gain, net | 11 | 76 | | Loss on disposal of property, plant and equipment | (41) | (83) | | Others | (6) | 16 | | Total | 19,836 | (20,269) | - The termination of the T-Cure license agreement resulted in the recognition of a loss on intangible assets of RMB19,316,000 and an impairment loss on prepayments of RMB5,183,000[56] Other Information Use of Net Proceeds from Listing and Over-allotment Option The company's net proceeds of approximately HKD1,127.8 million from its 2020 listing and over-allotment option have been substantially utilized, with HKD1,124.8 million expended by June 30, 2024, primarily for EAL® clinical trials and commercialization, and other R&D, with remaining funds expected to be depleted by end of 2025 - The net proceeds from the listing and over-allotment option amounted to approximately HKD1,127.8 million[75] - As of June 30, 2024, approximately HKD1,124.8 million has been utilized, primarily for EAL® clinical trials and commercialization, CAR-T-19 and TCR-T clinical trials, expansion of EAL®'s other clinical indications R&D, other investigational product development, and working capital[75] - The remaining net proceeds are expected to be fully utilized by the end of 2025[77] Material Investments, Acquisitions and Disposals As of June 30, 2024, the company held financial assets at fair value through profit or loss totaling approximately RMB65.7 million, including unlisted limited partnership interests, financial products, and certificates of deposit, having disposed of some certificates of deposit for RMB82.6 million while retaining RMB30.0 million - As of June 30, 2024, the Group recorded financial assets at fair value through profit or loss of approximately RMB65.7 million[78] - During the reporting period, the company disposed of eight certificates of deposit for a total consideration of approximately RMB82.6 million, and still held three certificates of deposit totaling RMB30.0 million[78] Employees and Remuneration Policy As of June 30, 2024, the company had 202 employees (201 in China, 1 in Korea), with total employee remuneration of approximately RMB36.6 million, supported by a regular evaluation system, training, and social insurance and housing provident fund contributions for Chinese employees - As of June 30, 2024, the Group had a total of 202 employees, with 201 in China and 1 in Korea[79] - For the six months ended June 30, 2024, total employee remuneration was approximately RMB36.6 million[79] Number of Employees by Function | Function | Number of Employees | | :--- | :--- | | General Management and Administration | 29 | | Research and Development | 22 | | Senior Management | 10 | | Product and Technology R&D | 30 | | Production, Purification, Equipment and Safety | 37 | | Quality | 45 | | Clinical Support and Business Development | 29 | | Total | 202 | Share Option Schemes The company operates pre-IPO and post-IPO share option schemes to reward and incentivize employees, with 35,930,000 unexercised options under the pre-IPO scheme as of June 30, 2024, representing 6.98% of total issued shares, and no activity under the post-IPO scheme since adoption - The company adopted the Pre-IPO Share Option Scheme on December 31, 2019, and the Post-IPO Share Option Scheme on June 6, 2020[82] - As of June 30, 2024, 35,930,000 share options remained unexercised under the Pre-IPO Share Option Scheme, representing approximately 6.98% of the total issued shares[83][85] - No share options have been granted, exercised, cancelled, or lapsed under the Post-IPO Share Option Scheme from the listing date to the date of this announcement[86] Corporate Governance and Audit Committee The company maintains high corporate governance standards, complying with all applicable code provisions during the reporting period, and the Audit Committee has reviewed the unaudited consolidated interim results for the six months ended June 30, 2024, confirming adherence to accounting principles and disclosure requirements - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the six months ended June 30, 2024[87] - The Audit Committee has reviewed the company's unaudited consolidated interim results for the six months ended June 30, 2024, and confirmed compliance with applicable accounting principles, standards, and requirements[91] Definitions and Glossary of Technical Terms