迈博药业(02181) - 2024 - 中期财报

Company Information Board of Directors and Management The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Dr. Wang Hao serving as CEO and Mr. Jiao Shuge as Chairman; Dr. Qian Weizhu was re-designated from non-executive to executive director on July 10, 2024 - Executive Directors include Dr. Wang Hao (CEO), Mr. Li Yunfeng, Mr. Tao Jing, Dr. Hou Sheng, and Dr. Qian Weizhu, who was re-designated from non-executive to executive director on July 10, 2024[2] - Non-Executive Directors include Mr. Jiao Shuge (Chairman) and Mr. Cen Jialin (appointed on July 10, 2024)[3] - Independent Non-Executive Directors include Dr. Zhang Yanyun, Mr. Liang Haoming, and Dr. Tao Qian (appointed on July 10, 2024)[3] Registration and Contact Information The company's registered office is in the Cayman Islands, with its principal place of business and headquarters in Taizhou China Medical City, and a principal place of business in Hong Kong; Ernst & Young serves as the auditor, with legal counsel from Cleary Gottlieb Steen & Hamilton (Hong Kong) and Shanghai Jingtian & Gongcheng (Shenzhen) - Cayman Islands Registered Office: Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands[3] - China Principal Place of Business and Headquarters: 1st Floor, Data Building, Taizhou Avenue, Taizhou Medical High-tech Zone, Jiangsu Province, China[3][4] - Auditor: Ernst & Young[4] - Stock Code: 2181[4] Financial Summary Income Statement Summary For the six months ended June 30, 2024, the company's revenue significantly increased by 146.4% year-on-year to RMB108,483 thousand, and gross profit grew by 149.5% to RMB94,356 thousand; despite a notable increase in selling and distribution expenses, R&D expenses decreased, resulting in a 2.4% narrower loss for the period, totaling RMB97,569 thousand Key Financial Data for H1 2024 (Unaudited) | Indicator | 2024 (RMB'000) | 2023 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 108,483 | 44,020 | 146.4 | | Cost of sales | (14,127) | (6,198) | 127.9 | | Gross profit | 94,356 | 37,822 | 149.5 | | Other income | 1,315 | 3,730 | (64.7) | | Other gains and losses | (522) | (2,688) | (80.6) | | Selling and distribution expenses | (69,600) | (27,045) | 157.3 | | Research and development expenses | (56,293) | (59,527) | (5.4) | | Administrative expenses | (60,651) | (47,154) | 28.6 | | Impairment loss on financial assets | (756) | (639) | 18.3 | | Finance costs | (5,418) | (4,498) | 20.5 | | Loss before tax | (97,569) | (99,999) | (2.4) | | Loss and total comprehensive expenses for the period | (97,569) | (99,999) | (2.4) | | Basic/Diluted Loss Per Share | RMB (0.02) | RMB (0.02) | - | Financial Position Summary As of June 30, 2024, both non-current and current assets decreased, accompanied by a reduction in current liabilities; net assets declined by 43.8% from the end of 2023 to RMB115,191 thousand, while non-current liabilities increased Balance Sheet Summary as of June 30, 2024 (Unaudited) | Indicator | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 663,324 | 692,767 | (4.3) | | Current assets | 283,070 | 342,206 | (17.3) | | Current liabilities | 265,312 | 316,191 | (16.1) | | Net current (liabilities)/assets | 17,758 | 26,015 | (31.7) | | Non-current liabilities | 565,891 | 513,725 | 10.2 | | Net assets | 115,191 | 205,057 | (43.8) | Company Profile Business Positioning and Product Pipeline Mabpharm is a leading Chinese biopharmaceutical company focused on R&D and commercialization of novel drugs and biosimilars for cancer and autoimmune diseases, currently boasting a pipeline of 9 monoclonal antibody drugs and 1 strong antibody drug, with 3 core products already approved for market launch - The company focuses on the R&D and industrialization of novel drugs and biosimilars for treating cancer and autoimmune diseases[7] - The drug pipeline includes 9 monoclonal antibody drugs and 1 strong antibody drug, with 3 core products already approved for market launch[7] Core Product Details The company's three core products, CMAB009 Enlituo®, CMAB008 Leiteng®, and CMAB007 Omaishu®, have all been approved for market launch, achieving significant progress in market promotion, medical insurance inclusion, and sales; CMAB009 is the first domestic anti-EGFR monoclonal antibody innovative drug, CMAB008 sales have substantially grown with overseas market expansion, and CMAB007 sales have rapidly increased and been included in medical insurance - CMAB009 Enlituo® (Cetuximab Beta Injection) was approved by the NMPA in June 2024 for first-line treatment of RAS/BRAF wild-type metastatic colorectal cancer, marking it as the first approved domestic anti-EGFR monoclonal antibody innovative drug with independent intellectual property rights[7][8] - CMAB009 Enlituo® has entered into an exclusive commercial rights cooperation agreement for mainland China with Jiangsu Simcere Zaiming and is actively applying to participate in medical insurance negotiations[8][9] - CMAB008 Leiteng® (Infliximab Injection) was approved for market launch in July 2021 for six indications, with sales in H1 2024 significantly increasing by 47% year-on-year, and registration and expansion efforts initiated in over 30 countries and/or regions[9][10] - CMAB007 Omaishu® (Omalizumab Alpha Injection) was approved for market launch in May 2023 for IgE-mediated asthma patients, becoming China's first domestic therapeutic antibody new drug for allergic asthma; its sales in H1 2024 grew over 778% compared to H2 2023 and it has been included in the National Medical Insurance Negotiation Catalog[11] Other Candidate Drugs The company possesses multiple candidate drugs at various clinical stages, including CMAB015 (Secukinumab) and CMAB022 (Ustekinumab) for autoimmune diseases, CMAB807/CMAB807X (Denosumab) for osteoporosis, and the innovative drug CMAB017 (Strong Antibody) for advanced solid tumors - CMAB015 (Secukinumab) has completed Phase I clinical trials and initiated Phase III, demonstrating significant efficacy advantages in autoimmune diseases such as psoriasis[13] - CMAB807/CMAB807X (Denosumab) has completed Phase III clinical trials for osteoporosis, with NDA application data currently being compiled, and plans to pursue full indication registration[13] - The 'Strong Antibody' innovative drug CMAB017 has been approved by the NMPA for clinical trials in advanced solid tumors (including colorectal cancer, head and neck squamous cell carcinoma, and esophageal squamous cell carcinoma), demonstrating good efficacy and safety[13] - The biosimilar CMAB022 (Ustekinumab) holds promising market prospects in areas such as psoriasis, psoriatic arthritis, Crohn's disease, and ulcerative colitis[13] R&D and Production Capabilities The company possesses robust in-house drug research, production, preclinical, and clinical development capabilities with an experienced core R&D team; the Taizhou production base features four antibody drug production lines, has completed construction of a 7,500-liter GMP production line at its new R&D industrial base, with total cell reactor capacity exceeding 40,000 liters, and is actively expanding its CDMO business - The company possesses strong in-house drug research, production, preclinical, and clinical development capabilities, with core R&D team members having over 20 years of experience[13] - Taizhou currently has four antibody drug production lines, with the new R&D industrial base's 7,500-liter GMP production line entering commissioning and trial production phases, and total cell reactor capacity exceeding 40,000 liters[14] - The company is actively expanding its CDMO business, leveraging its domestic advantages in antibody drug R&D and industrialization capabilities[14] Market Opportunities and Strategy The company believes China's vast market opportunities, particularly healthcare regulatory reforms and medical insurance centralized procurement policies, will reshape the pharmaceutical market; it plans to actively participate in national healthcare reform and has initiated global market expansion, leveraging advanced technology, quality, cost advantages, and flexible product cooperation models - The company will seize significant market opportunities in China, especially those arising from new medical insurance measures, focusing on monoclonal antibody drugs for cancer and autoimmune diseases[15] - The company will participate in national healthcare reform and has initiated global market expansion, leveraging advanced technology, quality, cost advantages, and proactive, flexible product cooperation models[15] Management Discussion and Analysis Business Review This section details the company's R&D progress, commercialization strategies, production facility construction, market development and marketing, and quality assurance system for its core products and other candidate drugs; core products CMAB009, CMAB008, and CMAB007 have achieved significant market promotion and sales progress, with multiple candidate drugs in late-stage clinical trials - The company's launched core products, CMAB009, CMAB008, and CMAB007, have achieved significant progress in market promotion and sales[19][23][25] - Multiple candidate drugs (e.g., CMAB807/CMAB807X, CMAB015) are in late-stage clinical trials, with potential for market launch in the coming years[16][17] - The company actively participates in medical insurance negotiations, leveraging policy reform opportunities, and expanding into overseas markets[35][38] R&D Status of Candidate Drugs This section outlines the R&D status, indications, targets, classifications, and anticipated regulatory milestones for the company's key candidate drugs, encompassing both launched core products and biosimilars and innovative drugs at various clinical stages Core Product Launch Status | Candidate Drug Code | Indication | Estimated Completion of Regulatory Review | | :--- | :--- | :--- | | CMAB009 (Cetuximab Beta) | Colorectal cancer | Approved for market launch in June 2024 | | CMAB008 (Infliximab) | Rheumatoid arthritis, adult ulcerative colitis, ankylosing spondylitis, adult and pediatric Crohn's disease (6+ years), fistulizing Crohn's disease, psoriasis | Approved for market launch in July 2021 | | CMAB007 (Omalizumab Alpha) | Asthma | Approved for market launch in May 2023 | Key Candidate Drug R&D Progress | Candidate Drug Code | Indication | Expected Next Regulatory Milestone | Estimated Completion of Regulatory Review | | :--- | :--- | :--- | :--- | | CMAB807/CMAB807X (Denosumab) | Osteoporosis, tumor bone metastasis, giant cell tumor of bone | NDA submission (Q4 2024) | Q1 2026 | | CMAB015 (Secukinumab) | Plaque psoriasis, psoriatic arthritis, and ankylosing spondylitis | NDA submission (Q4 2026) | Q1 2028 | | CMAB017 | Colorectal cancer, head and neck squamous cell carcinoma, and esophageal squamous cell carcinoma | Phase I (Q1 2025) | Q2 2030 | | CMAB022 (Ustekinumab) | Psoriasis, psoriatic arthritis, Crohn's disease, ulcerative colitis | CTA submission (Q3 2025) | Q4 2029 | | CMAB023 (Tezepelumab) | Severe asthma in adults and children aged 12 and above | CTA submission (Q4 2025) | Q4 2028 | | CMAB016 (Dupilumab) | Atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyps, eosinophilic esophagitis, and prurigo nodularis | CTA submission (Q3 2025) | Q3 2029 | Core Product Details This section elaborates on the specific details of the three core products: CMAB009 Enlituo®, CMAB008 Leiteng®, and CMAB007 Omaishu®, including their mechanisms of action, clinical advantages, market collaborations, sales performance, and future indication expansion plans - Enlituo®-CMAB009 (Cetuximab Beta Injection) was approved by the NMPA in June 2024 for first-line treatment of mCRC in combination with FOLFIRI regimen, making it the first approved domestic anti-EGFR monoclonal antibody innovative drug with independent intellectual property rights[19] - CMAB009 Enlituo® demonstrates significant clinical efficacy, no black box warning, superior safety profile compared to mainstream imported drugs, has completed its first shipment and initial patient use, and is actively applying to participate in medical insurance negotiations[20] - Leiteng®-CMAB008 (Infliximab Injection) saw its sales in H1 2024 significantly increase by 47% compared to the same period in 2023, has achieved online sales in all provinces within mainland China, and has initiated overseas market expansion, with GMP inspection certification approved in Brazil and market registration approved in Peru[23] - Omaishu®-CMAB007 (Omalizumab Alpha Injection) recorded sales growth of over 778% in H1 2024 compared to H2 2023, was successfully included in the medical insurance catalog in Q4 2023, and has initiated Phase III clinical trials for urticaria[25] Other Candidate Product Details This section details the R&D progress, mechanisms of action, indications, and estimated launch timelines for CMAB807/CMAB807X (Denosumab), CMAB017 (Anti-EGFR Strong Antibody), CMAB015 (Secukinumab), CMAB819 (Nivolumab), CMAB022 (Ustekinumab), CMAB023 (Tezepelumab), and CMAB016 (Dupilumab) - CMAB807/CMAB807X (Denosumab) has completed Phase III clinical trials for osteoporosis, with NDA application data currently being compiled, and is expected to be approved by the NMPA for market launch in Q1 2026 for the treatment of osteoporosis, tumor bone metastasis, and giant cell tumor of bone[27] - CMAB017 (Anti-EGFR Strong Antibody) has been approved by the NMPA for clinical trials in advanced solid tumors (including colorectal cancer, head and neck squamous cell carcinoma, and esophageal squamous cell carcinoma), with Phase I clinical trials expected to start in Q1 2025 and market approval anticipated in Q2 2030[27] - CMAB015 (Secukinumab) has completed Phase I clinical trials and initiated Phase III, with NDA submission expected in Q4 2026 and market approval anticipated in Q1 2028 for plaque psoriasis, psoriatic arthritis, and ankylosing spondylitis[28] - CMAB022 (Ustekinumab) is expected to complete all preclinical studies and submit clinical trial applications in Q3 2025, with market approval anticipated in Q4 2029 for inflammatory diseases such as psoriasis[29] - CMAB023 (Tezepelumab) is expected to receive market approval in Q4 2028, serving as a broad-spectrum anti-allergic antibody drug for a wide population of severe asthma patients[30] - CMAB016 (Dupilumab) is expected to complete all preclinical studies and submit clinical trial applications in Q3 2025, with market approval anticipated in Q3 2029 for autoimmune diseases such as atopic dermatitis and asthma[31] R&D System The company possesses efficient R&D capabilities, extensive and advanced preparation technologies, and low-cost drug production capabilities, holding multiple core technology patents including antibody engineering and humanization technologies; R&D activities are conducted by three core teams—basic research, clinical trials, and GMP-compliant product preparation—comprising experienced professionals - The company possesses efficient R&D capabilities, extensive and advanced preparation technologies, and low-cost drug production capabilities, enabling it to provide high-quality and affordable innovative biopharmaceutical products[33] - The company holds multiple core technology patents, including antibody engineering and humanization technologies, high-expression vector construction technology, efficient clone screening technology, and proprietary R&D animal models[33] - The R&D team comprises professionals with extensive industry experience in biopharmaceutical R&D[33] Commercialization and Production Facility Construction of Candidate Drugs The company operates two production bases in Taizhou, where existing facilities have passed GMP compliance inspections for CMAB008, CMAB007, and CMAB009 and commenced commercial production; construction and installation of large-scale monoclonal antibody drug substance production lines and drug filling lines in the new production area are complete, with total cell reactor capacity exceeding 40,000 liters - The Taizhou production base currently features four 3×1,500-liter antibody bioreactor systems and associated purification lines, one injection filling line (4 million vials annually), and one pre-filled syringe production line (1 million syringes annually)[34] - Production facilities have successfully passed GMP compliance inspections for CMAB008, CMAB007, and CMAB009 and have commenced commercial production; one production line has also passed GMP compliance inspections by overseas countries, including Brazil, a PIC/S member state[34] - Construction of the new production area's plant and installation of one drug substance production line and formulation line are complete, with total cell reactor capacity exceeding 40,000 liters[34] Market Development and Marketing Leveraging advanced technology, quality, and cost advantages, the company collaborates with experienced partners to participate in medical insurance centralized procurement and exclusive product medical insurance negotiations, seizing opportunities from China's healthcare reform; it is also actively expanding into overseas markets, with CMAB008 having passed GMP inspection in Brazil and approved for market launch in Peru; the company has established a distributor network and plans to actively monitor inventory for efficiency improvements - The company will actively participate in national healthcare reform with its partners, leveraging advanced technology, quality, and cost advantages to seize opportunities arising from policy reforms[35] - Market registration for CMAB008 Leiteng® has been initiated in over 30 countries and/or regions, with GMP inspection certification approved in Brazil and market approval granted in Peru for CMAB008[35] - The company has established a distributor network, selecting sales service providers and distributors based on qualifications, reputation, market coverage, and sales experience, in accordance with national drug sales regulations[35] Quality Assurance The company has established a corporate-level quality assurance department to ensure raw materials, equipment, and finished products meet high industry standards; all manufacturing and R&D business lines are inspected according to China's national laboratory quality control standards and GMP regulations to maintain reputation and success - The company has established a corporate-level quality assurance department to inspect product and service quality, and is responsible for approving, organizing, and coordinating quality control and quality assurance procedures across its subsidiaries[36] - Manufacturing business lines are inspected according to China's national laboratory quality control standards and GMP regulations; R&D business lines are also inspected according to GMP regulations[36] Future and Outlook The company plans to capitalize on China's healthcare reform opportunities through an efficient, market-specific sales system, actively participate in medical insurance negotiations, and leverage drug quality and cost advantages to meet market demand; concurrently, it will advance clinical research and commercialization of candidate drugs, sustain investment in advanced technology and product development, attract and cultivate high-caliber talent, build global brand awareness, and expand domestic and international collaborations - The company will seize opportunities arising from China's healthcare reform through an efficient sales system focused on specific markets, with a particular emphasis on gastroenterology, pulmonology, rheumatology, and oncology[37] - The company will actively monitor and participate in medical insurance negotiations, focusing on the significant opportunities presented by centralized procurement negotiations for medical insurance biopharmaceuticals, to meet China's unmet market needs with high-quality products[37] - The company collaborates closely with overseas market expansion partners to comprehensively and flexibly pursue new drug registration and market launch for various products in different countries and regions, thereby enhancing the global impact of its products[38] - In the short term, the company intends to focus on the market development and sales of CMAB008, CMAB007, and CMAB009, and complete the clinical trials and ultimate commercialization of other candidate drugs, particularly CMAB807/CMAB807X and CMAB015[39] - The company plans to enhance its integrated technology platform development from molecular design to commercial production, continuing to increase investment in innovative technologies to develop drugs with superior efficacy and fewer side effects[40] - The company plans to recruit and cultivate outstanding R&D personnel by leveraging close collaborations with top universities in China and globally, and provide systematic and advanced training and development programs[41] - The company plans to obtain licenses from global pharmaceutical companies to sell products in China and/or intends to transfer or license overseas product rights for certain candidate drugs to other pharmaceutical companies to expand its global market presence[42] Financial Review This section provides a detailed review of the company's financial performance for the six months ended June 30, 2024, covering changes and reasons for revenue, cost of sales, other income, other gains and losses, R&D expenses, administrative expenses, finance costs, liquidity and capital resources, debt, capital structure, foreign exchange risk, and key financial ratios Summary of Operating Results for H1 2024 | Indicator | 2024 (RMB'000) | 2023 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 108,483 | 44,020 | 146.4 | | Cost of sales | (14,127) | (6,198) | 127.9 | | Gross profit | 94,356 | 37,822 | 149.5 | | Other income | 1,315 | 3,730 | (64.7) | | Other gains and losses | (522) | (2,688) | (80.6) | | Selling and distribution expenses | (69,600) | (27,045) | 157.3 | | Research and development expenses | (56,293) | (59,527) | (5.4) | | Administrative expenses | (60,651) | (47,154) | 28.6 | | Finance costs | (5,418) | (4,498) | 20.5 | | Loss before tax | (97,569) | (99,999) | (2.4) | - Revenue increased by 146.4% to RMB108.5 million, primarily due to significant growth in pharmaceutical product sales revenue[45] - R&D expenses decreased by 5.4% to RMB56.3 million, primarily due to the approval of core products for market launch, leading to reduced R&D activities[49] - Administrative expenses increased by 28.6% to RMB60.7 million, mainly due to optimization of the administrative team and increased depreciation of new property, plant, and equipment[50] - As of June 30, 2024, trade receivables increased by 230.3% to RMB64.2 million, primarily due to a significant increase in pharmaceutical product sales volume[52] - As of June 30, 2024, the capital gearing ratio was 87.8% (December 31, 2023: 80.2%), the current ratio was 1.1, and the quick ratio was 0.7[57][59] Other Information Dividends and Investments The Board recommends no interim dividend payment for the six months ended June 30, 2024; as of the reporting period end, the company had fully utilized the net proceeds from its listing and had no significant investments, acquisitions, or disposals - The Board recommends no interim dividend payment for the six months ended June 30, 2024[61] - As of June 30, 2024, the company had fully utilized the net proceeds from its global offering, approximately HKD1,144.5 million, for the purposes outlined in the prospectus[62] - As of June 30, 2024, the Group held no significant investments, and there were no material acquisitions or disposals during the reporting period[63] Employees and Remuneration Policy As of June 30, 2024, the company had a total of 297 employees, with 191 in R&D; the company is committed to attracting and retaining high-caliber talent by offering competitive remuneration and benefits, along with training and development opportunities Employee Breakdown by Function (as of June 30, 2024) | Function | Number of Employees | | :--- | :--- | | Business Unit | 50 | | R&D Personnel (1) | 191 | | Administrative | 24 | | Management | 32 | | Total | 297 | - The company offers employees opportunities to work on cutting-edge biopharmaceutical projects with world-class scientists, aiming to attract qualified employees with overseas educational backgrounds and relevant experience[65] - Employee remuneration typically includes salaries and bonuses, determined by qualifications, position, and performance, along with contributions to social insurance funds[65] Shareholding Structure and Share Options This section discloses the interests and short positions of directors, chief executives, and substantial shareholders in the company's shares and related shares, along with details of the pre-IPO share option scheme; as of June 30, 2024, 74,383,258 share options remained unexercised, representing 1.80% of the issued share capital Interests of Directors and Chief Executives in Shares or Related Shares (as of June 30, 2024) | Director Name | Nature of Interest | Number of Shares or Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Dr. Hou Sheng | Spouse's Interest (L) | 29,642,137 | 0.72% | | Dr. Qian Weizhu | Beneficial Owner (L) | 29,642,137 | 0.72% | | Dr. Wang Hao | Beneficial Owner (L) | 24,827,006 | 0.60% | | Mr. Li Yunfeng | Beneficial Owner (L) | 3,236,234 | 0.08% | | Mr. Tao Jing | Beneficial Owner (L) | 3,236,234 | 0.08% | Interests of Substantial Shareholders in Shares or Related Shares (as of June 30, 2024) | Shareholder Name/Entity | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Asia Mabtech | Beneficial Owner (L); Controlled Corporation Interest (L) | 2,227,000,000 | 54.00% | | Yulian | Beneficial Owner (L) | 167,025,000 | 4.05% | | Trustee of Guo Family Trust | Controlled Corporation Interest (L) | 2,227,000,000 | 54.00% | | CDH PE | Beneficial Owner (L) | 742,348,180 | 18.00% | | FH Investment | Beneficial Owner (L) | 213,435,680 | 5.18% | - As of June 30, 2024, the number of shares related to unexercised potential share options granted under the pre-IPO share option scheme was 74,383,258, representing 1.80% of the company's issued share capital as of the date of this interim report[70] Corporate Governance and Compliance The company is committed to maintaining high standards of corporate governance, having adopted the Corporate Governance Code and the Model Code for Securities Transactions; directors confirm compliance with relevant codes during the reporting period, and neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor were involved in any material litigation or arbitration - The company has consistently complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period[73] - Following specific inquiries to all directors, each director confirmed compliance with the applicable standards set out in the Model Code during the reporting period[74] - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities on the Stock Exchange[75] - During the reporting period, the company was not involved in any material litigation or arbitration[76] Audit Committee and Post-Reporting Period Events The Audit Committee has reviewed the Group's interim condensed consolidated financial statements for the six months ended June 30, 2024, and is confident that the internal control system is sufficient to identify, manage, and mitigate operational risks; subsequent to the reporting period, the company's core product CMAB008 Leiteng® received market registration approval from the Peruvian Ministry of Health, marking the company's first product approved for launch in Peru - The Audit Committee reviewed the effectiveness of the risk management and internal control systems, confirming that the internal control system is sufficient to identify, manage, and mitigate various risks arising from operating activities[78] - The Audit Committee reviewed the Group's interim condensed consolidated financial statements for the six months ended June 30, 2024[78] - Subsequent to the reporting date, the company's core product CMAB008 Leiteng® received market registration approval from the Peruvian Ministry of Health, marking the company's first product approved for launch in Peru[80] Independent Review Report Scope of Review and Conclusion Ernst & Young has reviewed Mabpharm Limited's interim financial information in accordance with Hong Kong Standard on Review Engagements 2410; the review found no matters leading them to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 - Ernst & Young has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[82][83] - The scope of review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[83] - Conclusion: Nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[84] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss and Comprehensive Income Overview For the six months ended June 30, 2024, the company's revenue significantly increased to RMB108,483 thousand, and gross profit rose to RMB94,356 thousand; despite increased selling and distribution expenses and administrative expenses, reduced R&D costs led to a slight narrowing of the loss and total comprehensive expenses for the period to RMB97,569 thousand Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Revenue | 108,483 | 44,020 | | Cost of sales | (14,127) | (6,198) | | Gross profit | 94,356 | 37,822 | | Other income | 1,315 | 3,730 | | Other gains and losses | (522) | (2,688) | | Selling and distribution expenses | (69,600) | (27,045) | | Research and development expenses | (56,293) | (59,527) | | Administrative expenses | (60,651) | (47,154) | | Impairment loss on financial assets | (756) | (639) | | Finance costs | (5,418) | (4,498) | | Loss before tax | (97,569) | (99,999) | | Income tax expense | – | – | | Loss and total comprehensive expenses for the period | (97,569) | (99,999) | | Loss Per Share Attributable to Owners of the Company (Basic and Diluted) | RMB (0.02) | RMB (0.02) | Interim Condensed Consolidated Statement of Financial Position Financial Position Overview As of June 30, 2024, the company's total non-current assets were RMB663,324 thousand, and total current assets were RMB283,070 thousand; total current liabilities amounted to RMB265,312 thousand, and total non-current liabilities were RMB565,891 thousand, with net assets decreasing from RMB205,057 thousand on December 31, 2023, to RMB115,191 thousand Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Assets | | | | Total non-current assets | 663,324 | 692,767 | | Property, plant and equipment | 590,824 | 615,232 | | Right-of-use assets | 66,684 | 71,304 | | Other non-current assets | 5,816 | 6,231 | | Total current assets | 283,070 | 342,206 | | Trade receivables | 64,151 | 19,423 | | Prepayments and other receivables | 34,638 | 39,084 | | Inventories | 101,703 | 102,037 | | Cash and bank balances | 74,066 | 173,345 | | Liabilities | | | | Total current liabilities | 265,312 | 316,191 | | Trade and other payables | 169,967 | 150,640 | | Interest-bearing bank and other borrowings (current) | 30,014 | 108,260 | | Total non-current liabilities | 565,891 | 513,725 | | Interest-bearing bank and other borrowings (non-current) | 163,814 | 101,469 | | Equity | | | | Net assets | 115,191 | 205,057 | | Share capital | 2,804 | 2,804 | | Reserves | 112,387 | 202,253 | | Total equity | 115,191 | 205,057 | Interim Condensed Consolidated Statement of Changes in Equity Changes in Equity Overview For the six months ended June 30, 2024, the company's total equity decreased from RMB205,057 thousand at the beginning of the period to RMB115,191 thousand; key changes include a loss and total comprehensive expenses for the period of RMB97,569 thousand and recognition of share-based payments of RMB7,703 thousand Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2024 (RMB'000) | Loss and Total Comprehensive Expenses for the Period (RMB'000) | Share-based Payments (RMB'000) | June 30, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 2,804 | – | – | 2,804 | | Share premium | 1,400,504 | – | – | 1,400,504 | | Other reserves | (32,763) | – | – | (32,763) | | Share option reserve | 67,186 | – | 7,703 | 74,889 | | Accumulated losses | (1,232,674) | (97,569) | – | (1,330,243) | | Total Equity | 205,057 | (97,569) | 7,703 | 115,191 | Interim Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2024, net cash used in operating activities was RMB(64,177) thousand, net cash used in investing activities was RMB(12,298) thousand, and net cash used in financing activities was RMB(22,812) thousand; cash and cash equivalents at period-end totaled RMB74,066 thousand, a significant decrease from the beginning of the period Summary of Interim Condensed Consolidated Statement of Cash Flows | Activity Type | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (64,177) | (33,534) | | Net cash (used in)/from investing activities | (12,298) | 8,016 | | Net cash (used in)/from financing activities | (22,812) | 15,368 | | Net decrease in cash and cash equivalents | (99,287) | (10,150) | | Cash and cash equivalents at end of period | 74,066 | 23,142 | Notes to the Interim Condensed Consolidated Financial Information General Information Mabpharm Limited was incorporated in the Cayman Islands on June 1, 2018, and listed on The Stock Exchange of Hong Kong Limited on May 31, 2019; the company and its subsidiaries primarily engage in the research, development, and production of monoclonal antibody drugs for cancer and autoimmune diseases, as well as intellectual property transfers - The company was incorporated in the Cayman Islands on June 1, 2018, and its shares were listed on The Stock Exchange of Hong Kong Limited on May 31, 2019[92] - The Group primarily engages in the research, development, and production of monoclonal antibody drugs for cancer and autoimmune diseases, as well as intellectual property transfers[92] Basis of Preparation The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, presented in RMB, with all amounts rounded to the nearest thousand unless otherwise stated - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[93] - The interim condensed consolidated financial information is presented in RMB, with all amounts rounded to the nearest thousand[93] Changes in Accounting Policies and Disclosures Revised International Financial Reporting Standards, including IFRS 16 (Revised), IAS 1 (Revised), and IAS 7 & IFRS 7 (Revised), were adopted for the first time during the reporting period; these revisions had no significant impact on the company's financial position or performance, as the company was not involved in relevant transactions or had already reclassified liabilities - The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2023, except for the revised International Financial Reporting Standards adopted for the first time during the current period[94] - The revised International Financial Reporting Standards had no impact on the Group's financial position or performance[95] Operating Segment Information The company operates as a single reportable segment, with key management reviewing consolidated results for resource allocation and performance assessment; all revenue is derived from customers in China, and most non-current assets are located in China, thus no geographical information is presented; no single customer accounted for more than 10% of the Group's total revenue during the reporting period - The Group has only one reportable segment, and no further analysis of this single segment is presented[97] - All of the Group's revenue during the reporting period was derived from customers located in China, and the majority of the Group's non-current assets are located in China; therefore, no geographical information is presented in accordance with IFRS 8 Operating Segments[98] - During the reporting period, no revenue from a single customer accounted for more than 10% of the Group's total revenue[99] Revenue Analysis For the six months ended June 30, 2024, total revenue amounted to RMB108,483 thousand, primarily comprising revenue from pharmaceutical product sales (RMB98,532 thousand) and exclusive promotion license rights in mainland China (RMB9,951 thousand) Revenue Composition | Revenue Source | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Pharmaceutical product sales revenue | 98,532 | 36,071 | | Exclusive promotion license rights revenue in mainland China | 9,951 | 7,312 | | Revenue from contract services | – | 637 | | Total | 108,483 | 44,020 | Other Income Analysis For the six months ended June 30, 2024, other income totaled RMB1,315 thousand, primarily consisting of government grants and subsidies related to income (RMB1,095 thousand) and bank interest income (RMB215 thousand) Other Income Composition | Revenue Source | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Bank interest income | 215 | 20 | | Government grants and subsidies related to income | 1,095 | 3,626 | | Others | 5 | 84 | | Total | 1,315 | 3,730 | Other Gains and Losses Analysis For the six months ended June 30, 2024, other gains and losses resulted in a loss of RMB522 thousand, primarily comprising net exchange losses (RMB454 thousand) and fair value gains on financial assets at fair value through profit or loss (RMB115 thousand) Other Gains and Losses Composition | Item | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Net exchange losses | (454) | (2,747) | | Fair value gains on financial assets at fair value through profit or loss | 115 | 59 | | Others | (183) | – | | Total | (522) | (2,688) | Finance Costs Analysis For the six months ended June 30, 2024, finance costs amounted to RMB5,418 thousand, primarily including interest on bank and other borrowings (RMB3,651 thousand), interest on lease liabilities (RMB1,346 thousand), and interest on related party loans (RMB421 thousand) Finance Costs Composition | Item | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Interest on related party loans | 421 | 833 | | Interest on bank and other borrowings | 3,651 | 2,512 | | Interest on lease liabilities | 1,346 | 1,153 | | Total | 5,418 | 4,498 | Loss Before Tax Adjustments For the six months ended June 30, 2024, the loss before tax was RMB97,569 thousand, primarily influenced by depreciation of property, plant and equipment, depreciation of right-of-use assets, staff costs, share-based payment expenses, and cost of inventories sold Key Adjustments to Loss Before Tax | Item | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 26,550 | 23,514 | | Depreciation of right-of-use assets | 4,622 | 4,174 | | Staff costs (including directors' emoluments) | 45,364 | 41,702 | | Share-based payment expenses | 7,703 | 5,678 | | Cost of inventories sold | 14,098 | 5,715 | | Cost of inventories recognized as expenses (included in R&D expenses) | 8,464 | 7,640 | Income Tax The company is incorporated in the Cayman Islands and exempt from income tax; during the period presented in the interim condensed consolidated financial information, neither the Group's Hong Kong nor China subsidiaries were subject to income tax, thus no provision for income tax was made - The company was incorporated in the Cayman Islands and is exempt from income tax[106] - During the period presented in the interim condensed consolidated financial information, neither the Group's Hong Kong nor China subsidiaries were subject to income tax, and therefore no provision for income tax was made[106] Dividends For the six months ended June 30, 2024, the company neither paid nor proposed to pay any dividends to ordinary equity holders - No dividends were paid or proposed to be paid to the ordinary equity holders of the company for the six months ended June 30, 2024[107] Loss Per Share Attributable to Ordinary Equity Holders of the Company For the six months ended June 30, 2024, both basic and diluted loss per share attributable to ordinary equity holders of the company remained at RMB(0.02), consistent with the prior year period, calculated based on a weighted average of 4,124,080 thousand ordinary shares Loss Per Share Calculation Data | Indicator | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the company for the purpose of calculating basic and diluted loss per share | (97,569) | (99,999) | | Weighted average number of ordinary shares for the purpose of calculating basic and diluted loss per share (thousand shares) | 4,124,080 | 4,124,080 | Property, Plant and Equipment For the six months ended June 30, 2024, the Group acquired assets at a cost of RMB2,142 thousand, including construction in progress of RMB2,117 thousand; concurrently, asset-related government grants of RMB296 thousand were deducted from the carrying value of acquired property, plant and equipment - For the six months ended June 30, 2024, the Group acquired assets at a cost of RMB2,142 thousand, including construction in progress of RMB2,117 thousand[109] - For the six months ended June 30, 2024, asset-related government grants of RMB296 thousand were deducted from the carrying value of acquired property, plant and equipment[109] Other Non-Current Assets As of June 30, 2024, other non-current assets totaled RMB5,816 thousand, primarily comprising prepayments for property, plant and equipment, construction deposits for production facilities, and recoverable value-added tax Other Non-Current Assets Composition | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Prepayments for property, plant and equipment | 1,707 | 1,421 | | Construction deposits for production facilities | 3,000 | 3,000 | | Recoverable value-added tax | 1,109 | 1,810 | | Total | 5,816 | 6,231 | Trade Receivables As of June 30, 2024, net trade receivables significantly increased to RMB64,151 thousand from RMB19,423 thousand on December 31, 2023, primarily concentrated within the 3-month aging category Aging Analysis of Trade Receivables (Net of Loss Allowance) | Aging | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Within 3 months | 42,795 | 16,454 | | 4 to 6 months | 20,655 | 2,182 | | 7 to 9 months | 528 | 109 | | 10 to 12 months | 173 | 678 | | Total | 64,151 | 19,423 | Prepayments and Other Receivables As of June 30, 2024, prepayments and other receivables totaled RMB34,638 thousand, a decrease from RMB39,084 thousand on December 31, 2023, primarily due to a reduction in recoverable value-added tax Composition of Prepayments and Other Receivables | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Other receivables | 5,126 | 979 | | Prepayments for R&D services | 12,976 | 11,280 | | Other deposits and prepayments | 4,091 | 3,834 | | Recoverable value-added tax | 12,445 | 22,991 | | Total | 34,638 | 39,084 | Trade and Other Payables As of June 30, 2024, trade and other payables totaled RMB169,967 thousand, an increase from RMB150,640 thousand on December 31, 2023, primarily comprising accrued R&D service expenses, other payables for property, plant and equipment acquisition, and other payables Composition of Trade and Other Payables | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 12,246 | 10,012 | | Accrued R&D service expenses | 28,213 | 32,091 | | Other payables for acquisition of property, plant and equipment | 47,927 | 57,831 | | Accrued salaries and bonuses | 10,648 | 15,160 | | Other tax payables | 1,012 | 658 | | Accrued listing fees and issue costs | 11,262 | 11,189 | | Other payables | 58,659 | 23,699 | | Total | 169,967 | 150,640 | Aging Analysis of Trade Payables | Aging | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Within 60 days | 4,442 | 4,467 | | Over 60 days but less than one year | 7,804 | 5,545 | | Total | 12,246 | 10,012 | Interest-Bearing Bank and Other Borrowings As of June 30, 2024, total interest-bearing bank and other borrowings amounted to RMB193,828 thousand, with RMB30,014 thousand as current and RMB163,814 thousand as non-current; some bank borrowings are secured by land and buildings, while certain entrusted bank borrowings are pledged against production facilities Details of Interest-Bearing Bank and Other Borrowings | Type | Effective Interest Rate (%) | Due Date (June 30, 2024) | Amount (RMB'000) | Due Date (December 31, 2023) | Amount (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Current | | | | | | | Bank loans (secured) | Loan Prime Rate + 50 bps | 2025 | 30,014 | 2024 | 49,077 | | Other loans (unsecured) | - | - | - | 2024 | 59,183 | | Total - Current | | | 30,014 | | 108,260 | | Non-current | | | | | | | Bank loans (secured) | Loan Prime Rate | 2026 | 100,000 | 2026 | 100,000 | | Other loans (unsecured) | 6.0% | 2032 | 63,814 | 2025 | 1,469 | | Total - Non-current | | | 163,814 | | 101,469 | | Total | | | 193,828 | | 209,729 | - As of June 30, 2024, the Group pledged land parcels of approximately RMB33.9 million and buildings of approximately RMB110.8 million to Bank of Communications Taizhou Branch as collateral for the Group's bank loans of RMB30.0 million as of June 30, 2024[117] - Additionally, the Group pledged equipment with a carrying value of RMB197.5 million to an independent third-party customer as collateral for the Group's entrusted loans of RMB100.0 million as of June 30, 2024[118] Share Capital As of June 30, 2024, the company's issued and fully paid share capital comprised 4,124,080,000 ordinary shares, with a total par value of RMB2,804 thousand Share Capital Composition | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Issued and fully paid: 4,124,080,000 ordinary shares | 2,804 | 2,804 | Capital Commitments As of June 30, 2024, the company's contracted but unprovided capital commitments amounted to RMB3,485 thousand, primarily related to new production facilities on an industrial land parcel of approximately 100,746 square meters in Taizhou High-tech Zone Capital Commitments | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Contracted but not provided for | 3,485 | 3,978 | - Capital commitments are primarily related to new production facilities on an industrial land parcel of approximately 100,746 square meters in Taizhou High-tech Zone[121] Related Party Transactions This section discloses transactions between the company and related party Mabtech, including clinical business expenses paid by Mabtech on behalf of the Group, interest on lease liabilities payable to related parties, interest on related party loans, and outstanding balances such as trade payables and loans payable to Mabtech; additionally, remuneration for the Group's key management personnel is disclosed Related Party Transactions During the Period (for the six months ended June 30, 2024) | Item | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Clinical business expenses and expenses arising from CMAB807 paid by related party on behalf of the Group | 983 | 70 | | Repayment of clinical business expenses and expenses arising from CMAB807 paid by related party on behalf of the Group | 983 | – | | Interest on lease liabilities payable to related party (Mabtech) | 108 | 251 | | Interest on related party loans (Mabtech) | 421 | 833 | Outstanding Balances with Related Parties (as of June 30, 2024) | Item | June 30, 2024 (RMB'000) | December 31, 2023 (RMB'000) | | :--- | :--- | :--- | | Rental deposits paid to related party (Mabtech) | 411 | 411 | | Amounts due from related party (Mabtech) | 398 | 398 | | Amounts due to related party (Mabtech) | 47,252 | 47,326 | | Interest payable (Mabtech) | 1,485 | 1,064 | | Loans payable (Mabtech) | 22,500 | 22,500 | | Lease liabilities due to related party (within one year) | 2,608 | 4,386 | - Trade payables to Mabtech are unsecured and non-interest bearing[125] - The due date for the remaining payable of RMB47,170,000 to Mabtech for the acquisition of CMAB807-related intellectual property has been extended to December 31, 2027[126] Key Management Personnel Remuneration (for the six months ended June 30, 2024) | Item | 2024 (RMB'000) | 2023 (RMB'000) | | :--- | :--- | :--- | | Salaries and other benefits | 1,819 | 2,094 | | Contributions to retirement benefit schemes | 140 | 115 | | Directors' fees | 165 | 157 | | Share-based payments | 1,772 | 2,626 | | Consulting fees | – | 298 | | Total | 3,896 | 5,290 | Approval of Interim Financial Statements The interim financial statements were approved and authorized for issue by the Board of Directors on August 28, 2024 - The interim financial statements were approved and authorized for issue by the Board of Directors on August 28, 2024[128] Definitions Definitions of Report Terms This section provides definitions for key terms and abbreviations used in the report to ensure consistent understanding of its content, covering company entities, committees, products, financial, and legal terminology - This section includes definitions for terms related to company entities (e.g., Asia Mabtech, Mabtech), committees (e.g., Audit Committee, Board), products (e.g., Core Products), finance (e.g., HKD, RMB), and legal aspects (e.g., Listing Rules, SFO)[129][130][131][132] Glossary of Technical Terms Biopharmaceutical Technical Terms This section provides explanations for specialized technical terms in the biopharmaceutical field, aiding readers in understanding the scientific and medical concepts within the report, including allergic asthma, autoimmune diseases, biosimilars, cancer, CDMO, cell culture, CMAB series products, clinical trial phases, and more - This section includes definitions for specialized terms such as allergic asthma, autoimmune diseases, biosimilars, cancer, CDMO, cell culture, cell line, Cetuximab, CHO cells, CMAB series products, cytokines, DNA, EGFR, IBD, IgE, IgG1 κ, immunoglobulin, in vitro/in vivo studies, Infliximab, mCRC, monoclonal antibody, Nivolumab, Omalizumab, oncology, pathogens, PD, pharmacodynamics, pharmacokinetics, clinical trial phases, preclinical phase, rheumatoid arthritis, recombinant, TNF, TNFα, and vector[134][135][136][137][138][139]