Company Overview Company Profile Alphamab Oncology is a biopharmaceutical company focused on oncology treatments, leveraging its bispecific antibody, multifunctional protein, and ADC technology platforms - The company positions itself as a leading biopharmaceutical company in China, specializing in innovative therapeutic biologics in bispecific antibodies, multifunctional protein engineering, and ADC fields16 - The product pipeline is highly differentiated, including the marketed KN035 (Envida®) and three late-stage clinical products such as KN046 (PD-L1/CTLA-4 BsAb) and KN026 (HER2 BsAb)1718 - Next-generation ADC drugs like JSKN003 (HER2 ADC), JSKN033 (ADC combination), and JSKN016 (HER3/TROP2 ADC) are actively progressing in clinical trials, with positive early data presented at multiple international academic conferences19 Company Information This section lists key company information including the core management team, committee members, company secretary, registered office, principal place of business, legal advisors, auditors, and share registrar - The Chairman and CEO is founder Dr. Ting Xu. The composition of the Audit, Remuneration, Nomination, and Strategy Committees is clearly defined20 - The company's auditor is Deloitte Touche Tohmatsu22 Business and Financial Highlights Financial Highlights In the first half of 2024, the company's revenue increased by 27.2% year-on-year to RMB 174 million, with gross profit growing 38.2% to RMB 143 million. Loss for the period expanded slightly to RMB 44.9 million from RMB 39.9 million in the prior year period. Net assets remained stable Key Financial Data for H1 2024 (Condensed Consolidated Statement of Profit or Loss) | Indicator | 2024 H1 (RMB Thousands) | 2023 H1 (RMB Thousands) | | :--- | :--- | :--- | | Revenue | 173,561 | 136,465 | | Gross Profit | 142,754 | 103,300 | | R&D Expenses | (194,531) | (194,681) | | Loss for the Period | (44,896) | (39,862) | | Total Comprehensive Expenses | (44,614) | (40,434) | Balance Sheet Summary as of June 30, 2024 | Indicator | June 30, 2024 (RMB Thousands) | December 31, 2023 (RMB Thousands) | | :--- | :--- | :--- | | Non-current Assets | 549,170 | 578,583 | | Current Assets | 1,592,832 | 1,558,530 | | Net Assets | 1,628,751 | 1,672,112 | Business Highlights During the reporting period, the company achieved significant progress in its product pipeline, external collaborations, and production capacity. The Phase III clinical trial for core product KN046 completed final OS analysis, showing positive results. Multiple ADC drugs (JSKN003, JSKN016, JSKN033) advanced smoothly in clinical trials, and an ADC development collaboration was established with ArriVent. KN035 was approved for launch in Macau and production capacity expanded - The Phase III clinical trial of KN046 for advanced squamous non-small cell lung cancer (sq NSCLC) completed final OS analysis, demonstrating statistically significant OS benefit after model adjustment, with significant PFS benefit also observed1727 - ADC pipeline progressed rapidly: JSKN003 presented positive Phase I data at AACR and ASCO annual meetings; JSKN016 completed first patient dosing in China; JSKN033 completed first patient dosing in Australia2627 - External collaborations achieved breakthroughs, including a licensing agreement with Glenmark for the development and commercialization of KN035 in multiple overseas markets, and a research collaboration with ArriVent BioPharma, Inc. for the discovery and development of novel ADC products2627 - Production base capacity continued to expand, with 6,000L capacity expansion completed and operational, and construction of ADC drug substance and drug product manufacturing facilities initiated28 Management Discussion and Analysis Product Pipeline, Commercialization, and Future Development Leveraging its proprietary technology platforms, the company has built a differentiated oncology drug pipeline including monoclonal antibodies, bispecific antibodies, and ADCs. KN035 has been successfully commercialized, with core products KN046 and KN026 planned for NDA submission in 2025. Future strategies include enriching early-stage pipelines, focusing on bispecific antibodies and bispecific ADCs, and actively pursuing global strategic collaborations - The company possesses multiple proprietary technology platforms, including sdAb/monoclonal antibody, CRIB, CRAM, and BADC, supporting its diverse drug candidate development32 - Regarding commercialization, KN035 (Envida®) commenced commercialization in November 2021. Core products KN046 and KN026 are expected to submit NDAs in 202533 - Future development strategy focuses on leveraging in-house R&D capabilities to enrich early-stage pipelines, particularly in tumor immunotherapy bispecific antibodies and bispecific ADCs, and will continue to seek strategic collaboration opportunities such as co-development and out-licensing for core products34 Financial Review Total revenue for the first half of 2024 increased by 27.2% year-on-year, primarily driven by a significant increase in license fee income. R&D expenses remained stable, while other income substantially decreased due to exchange rate impacts. Loss for the period expanded from RMB 39.9 million to RMB 44.9 million Revenue Analysis Total revenue for the first half of 2024 was RMB 173.6 million, a 27.2% year-on-year increase. This growth was primarily driven by license fee income, which significantly rose from RMB 7.2 million in the prior year period to RMB 78.2 million, while drug sales and royalty income decreased Revenue Composition (For the Six Months Ended June 30) | Revenue Source | 2024 (RMB Thousands) | 2023 (RMB Thousands) | | :--- | :--- | :--- | | Drug Sales and Royalty Income | 90,643 | 117,015 | | License Fee Income | 78,613 | 7,511 | | Provision of R&D Project Goods/Consumables | 4,305 | 11,939 | | Total | 173,561 | 136,465 | - The significant increase in license fee income (recognized at a point in time) primarily stemmed from new collaboration and licensing agreements signed in the first half of 202438 - Drug sales and royalty income decreased year-on-year, with sales-based royalty income declining from RMB 45.5 million to RMB 20.8 million38 Cost and Expense Analysis During the reporting period, cost of sales and administrative expenses remained relatively stable. R&D expenses were RMB 194.5 million, largely consistent with the prior year period, with staff costs and outsourced service fees being the main components, accounting for 34.3% and 27.8% respectively - Cost of sales slightly decreased from RMB 33.2 million to RMB 30.8 million, remaining relatively stable39 R&D Expense Composition (For the Six Months Ended June 30) | Expense Nature | 2024 (RMB Thousands) | Proportion | 2023 (RMB Thousands) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Outsourced Service Fees | 54,040 | 27.8% | 64,156 | 33.0% | | Staff Costs | 66,861 | 34.3% | 66,961 | 34.4% | | Raw Material Costs | 28,326 | 14.6% | 23,924 | 12.3% | | Depreciation and Amortization, etc. | 36,566 | 18.8% | 30,905 | 15.9% | | Others | 8,738 | 4.5% | 8,735 | 4.4% | | Total | 194,531 | 100.0% | 194,681 | 100.0% | Balance Sheet and Cash Flow Analysis As of June 30, 2024, the company's net assets were RMB 1.629 billion. Cash and cash equivalents increased to RMB 1.14 billion. Current ratio and quick ratio decreased but remained at healthy levels. Total bank borrowings increased to RMB 320 million - Inventories decreased from RMB 78.7 million to RMB 65.2 million, primarily due to optimized inventory management51 - As of June 30, 2024, cash and cash equivalents were RMB 1.14 billion, an increase from RMB 1.086 billion at the end of 202354 - Bank borrowings increased from RMB 250 million to RMB 320 million to support working capital needs60 Key Financial Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 4.61 | 5.84 | | Quick Ratio | 4.42 | 5.55 | | Debt-to-Equity Ratio | (0.50) | (0.50) | Corporate Governance and Other Information Share Incentive Schemes The company has Pre-IPO and Post-IPO Share Option Schemes and a Restricted Share Award Scheme to incentivize employees. During the reporting period, 1.18 million share options were granted under the Post-IPO Share Option Scheme, and 130,000 award shares were granted under the Restricted Share Award Scheme. The company revised relevant scheme terms and updated authorization limits in June 2024 - During the reporting period, 406,065 share options under the Pre-IPO Share Option Scheme were cancelled, and 80,000 were exercised85 - During the reporting period, 1,180,000 new share options were granted under the Post-IPO Share Option Scheme, with an exercise price of HKD 4.350; an additional 120,000 share options lapsed8687 - During the reporting period, 130,000 award shares were newly granted under the Post-IPO Restricted Share Award Scheme, with 88,000 shares vested and 157,037 shares lapsed9192 Use of Proceeds As of June 30, 2024, approximately HKD 1.888 billion (about 92.5%) of the HKD 2.043 billion net proceeds from the Global Offering have been utilized, primarily for R&D and commercialization of core products KN046 and KN026. Approximately HKD 39.4 million of the HKD 376 million net proceeds from the 2023 Top-up Placement have been utilized, mainly for clinical trials of the ADC pipeline Use of Net Proceeds from Global Offering (As of June 30, 2024) | Purpose | Allocated Amount (HKD Millions) | Utilized Amount (HKD Millions) | Unutilized Amount (HKD Millions) | | :--- | :--- | :--- | :--- | | KN046 R&D and Commercialization | 1,021.3 | 947.7 | 73.6 | | KN026 R&D and Commercialization | 408.5 | 328.0 | 80.5 | | KN019 R&D | 102.1 | 102.1 | 0.0 | | Construction of New Suzhou Facilities | 306.4 | 306.4 | 0.0 | | Working Capital, etc. | 204.3 | 204.3 | 0.0 | | Total | 2,042.5 | 1,888.4 | 154.1 | Use of Net Proceeds from Top-up Placement (As of June 30, 2024) | Purpose | Allocated Amount (HKD Millions) | Utilized Amount (HKD Millions) | Unutilized Amount (HKD Millions) | | :--- | :--- | :--- | :--- | | JSKN003 Clinical Trials | 301.0 | 30.4 | 270.6 | | JSKN016 Clinical Development | 37.6 | 8.4 | 29.2 | | General Corporate Purposes | 37.6 | 0.6 | 37.0 | | Total | 376.2 | 39.4 | 336.8 | Condensed Consolidated Financial Statements Principal Financial Statements and Notes This section contains the condensed consolidated financial statements and related notes for the six months ended June 30, 2024, reviewed by Deloitte. The statements show total revenue of RMB 174 million and a loss for the period of RMB 44.9 million. Notes provide detailed explanations of accounting policies, revenue composition, various expenses, asset and liability positions, share-based payments, and related party transactions Note 3: Revenue and Segment Information The company's revenue primarily derives from drug sales and royalties, license fees, and provision of R&D goods. The company operates as a single reportable business segment. During the reporting period, three major customers contributed over 10% of total revenue - The Group's business is managed and assessed as a single segment, with the vast majority of non-current assets located in China123124 Major Customer Revenue Contribution (For the Six Months Ended June 30, 2024) | Customer | Revenue (RMB Thousands) | | :--- | :--- | | Customer A | 90,643 | | Customer B | 42,563 | | Customer C | 35,634 | Note 16: Bank Borrowings As of June 30, 2024, the company's total bank borrowings amounted to RMB 320 million, an increase from RMB 250 million at the end of 2023. Of this, RMB 200 million were secured borrowings, with an effective annual interest rate ranging from 2.50% to 2.87% Bank Borrowings Composition (RMB Thousands) | Type | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Secured Bank Borrowings | 200,000 | 200,000 | | Unsecured Bank Borrowings | 120,000 | 50,000 | | Total | 320,000 | 250,000 | - Secured bank borrowings are collateralized by the Group's property, plant, and land use rights150171 Note 17 & 18: Share Capital and Share-based Payments During the reporting period, 80,000 ordinary shares were issued due to the exercise of share options. 1.18 million new share options were granted under the Post-IPO Share Option Scheme, with fair value calculated using a binomial model. 130,000 award shares were newly granted under the Restricted Share Award Scheme. The notes detail the changes in each scheme and valuation model parameters - As of June 30, 2024, the total number of ordinary shares issued by the company was 964,923,807153 - The 1.18 million share options newly granted on April 23, 2024, had an estimated total fair value of HKD 2,048,689, calculated using a binomial option pricing model160161 - During the reporting period, unvested restricted shares changed from 1,051,068 at the beginning of the period to 936,031 at the end of the period166
康宁杰瑞制药(09966) - 2024 - 中期财报