三叶草生物(02197) - 2022 - 年度业绩

2022 Full-Year Results Announcement Financial Highlights In 2022, the company significantly narrowed its net loss to RMB 2.45 billion due to the elimination of fair value changes in convertible redeemable preferred shares, though adjusted net loss, reflecting core operations, expanded to RMB 2.36 billion, and cash and bank balances decreased to RMB 1.86 billion due to commercialization preparations 2022 vs 2021 Financial Indicators Comparison | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Other income and gains | 23,246 | 38,262 | ↓40% | | Research and development expenses | (1,465,324) | (1,826,301) | ↓20% | | Administrative expenses | (410,237) | (345,710) | ↑19% | | Loss for the year | (2,451,903) | (6,016,303) | ↓59% | | Adjusted loss for the year* | (2,356,880) | (2,083,451) | ↑13% | | Cash and bank balances | 1,856,513 | 2,835,259 | ↓34% | - The reduction in loss for the year was primarily due to the fair value loss on convertible redeemable preferred shares decreasing from RMB 3.81 billion in 2021 to zero in 2022, as all preferred shares were converted to ordinary shares upon listing[31][20] - Adjusted loss for the year is a non-IFRS measure that excludes the impact of non-cash and non-recurring items such as share-based payment expenses and fair value changes of convertible redeemable preferred shares[3][99][120] Management Discussion and Analysis The company successfully transitioned into a commercial-stage biopharmaceutical company in 2022, with its core COVID-19 vaccine SCB-2019 approved for emergency use and commercialized in China, while also expanding its respiratory vaccine pipeline through an exclusive agreement for the quadrivalent influenza vaccine AdimFlu-S, and raising capital to support commercialization and production expansion Business Review The business review focuses on the progress and commercialization of the COVID-19 vaccine SCB-2019 (CpG 1018/Aluminum Hydroxide Adjuvant), which received Emergency Use Authorization (EUA) in China and is recommended as a booster, demonstrating broad and robust neutralizing responses against Omicron variants in clinical trials, and the company also expanded its commercial product portfolio by exclusively distributing the quadrivalent influenza vaccine AdimFlu-S in China - The COVID-19 vaccine SCB-2019 received Emergency Use Authorization (EUA) in China in December 2022 and was officially launched in Zhejiang Province in February 2023, subsequently expanding to 24 provinces and cities nationwide[7][161][166] - Phase III study data showed that SCB-2019 as a heterologous booster, against Omicron sub-variants (including BQ.1.1 and XBB.1.5), induced broad and good cross-neutralizing responses[9][123] - An exclusive agreement was reached with Adimmune Corporation to distribute the quadrivalent seasonal influenza vaccine AdimFlu-S (QIS) in China, with revenue contributions expected from 2023 onwards[5][12][142] Research and Development The company strategically refocused R&D resources on mid-to-late-stage and commercialization projects with long-term value, pausing certain early-stage programs like SCB-808, and plans to expand its respiratory and pediatric vaccine pipeline through business development opportunities in 2023, while also advancing multivalent COVID-19 vaccine candidates - The company reallocated resources to focus on late-stage/commercialization projects and paused several early-stage programs, including SCB-808[11] - Plans are in place to expand the mid-to-late-stage pipeline in 2023, with a focus on respiratory disease vaccines and pediatric vaccines, and at least one more vaccine in-licensing transaction is anticipated[42][43] - A multivalent S-Trimer COVID-19 vaccine candidate is being advanced, with clinical development planned for 2023[41] Product Pipeline Overview | Category | Candidate Product | Status | | :--- | :--- | :--- | | Vaccine | SCB-2019 (CpG 1018/Aluminum Hydroxide Adjuvant) | Emergency Use Authorization granted in China | | Vaccine | Quadrivalent Influenza Vaccine AdimFlu-S | Approved in China, preparing for commercialization | | Vaccine | In-license at least one mid-to-late-stage vaccine project | Planned (Phase II/III/Approved) | | Vaccine | Multivalent COVID-19 Vaccine | Clinical development planned for 2023 | | Other | SCB-313 (TRAIL-Trimer) | Development paused | Manufacturing The company successfully established a supply chain to support SCB-2019 commercial manufacturing, with its own facility in Changxing, Zhejiang, and CDMO partner facilities both passing GMP inspections (China GMP and EU GMP, respectively), and strategic procurement and stockpiling of key raw materials sufficient to support potential production of over 100 million vaccine doses - The company's own Changxing manufacturing facility (China GMP) and CDMO facility (EU GMP) have both passed inspections, demonstrating commercial manufacturing capability for SCB-2019[14][35][170] - Strategic procurement and stockpiling of key raw materials have been completed, supporting potential production of over 100 million doses of SCB-2019[145] Other Key Corporate Developments To address macroeconomic challenges and support company growth, the company completed a placement of 128 million new shares in December 2022, raising net proceeds of approximately HKD 500.5 million, which will be used to expand commercialization and production capacity and meet working capital needs, thereby improving the company's financial position - A placement of 128 million new shares was completed in December 2022, raising net proceeds of HKD 500.5 million for expanding commercialization, production capacity, and working capital[162][171] - To enhance efficiency, the company streamlined its organizational structure, reduced non-core positions (primarily in general administration and non-core R&D departments), and paused non-core activities such as monoclonal antibody platform development[108] Outlook Looking ahead to 2023, the company will focus on executing its commercialization strategy, including expanding SCB-2019 sales in China and other countries, and commercializing the influenza vaccine AdimFlu-S in the second half of the year, while continuing to leverage its R&D and collaboration capabilities to introduce more mid-to-late-stage vaccine projects for near-term value creation and long-term sustainable growth - In 2023, the focus will be on expanding the commercialization of SCB-2019 in China and launching it in other countries[45] - Plans are in place to commercialize the influenza vaccine AdimFlu-S (QIS) in the second half of 2023, leveraging existing commercial infrastructure[45] - The company plans to further expand its mid-to-late-stage vaccine pipeline to create near-term value, with expectations for continued expansion and long-term sustainable growth in 2023[45][146] Financial Review For fiscal year 2022, the company's net loss significantly narrowed from RMB 6.02 billion to RMB 2.45 billion, primarily due to the absence of the large fair value loss on convertible preferred shares from the prior year, though the core operating metric "adjusted net loss" expanded from RMB 2.08 billion to RMB 2.36 billion, with R&D expenses decreasing due to clinical trial completion but administrative expenses rising due to increased personnel, and other expenses surging due to inventory write-downs and project termination fees, while cash reserves declined but liquidity was secured through equity financing and bank credit Income Statement Analysis In 2022, other income and gains decreased due to exchange losses, administrative expenses rose due to increased staff costs and consulting fees, and R&D expenses significantly reduced as late-stage clinical trials were largely completed in 2021, while other expenses surged primarily due to inventory write-downs, costs associated with exiting the Shanghai R&D center project, and exchange losses, with the substantial narrowing of the loss for the year mainly attributable to the large, non-cash "fair value loss on convertible redeemable preferred shares" in 2021 being zero in 2022 Income Statement Item Changes (RMB thousands) | Item | 2022 | 2021 | Primary Reason for Change | | :--- | :--- | :--- | :--- | | Other income and gains | 23,246 | 38,262 | Exchange gains in 2021, exchange losses in 2022 | | Administrative expenses | (410,237) | (345,710) | Increase in staff costs and consulting fees | | Research and development expenses | (1,465,324) | (1,826,301) | Significant reduction in late-stage clinical trial expenses | | Other expenses | (593,658) | (66,700) | Increase in inventory write-downs and costs for exiting Shanghai R&D center project | | Fair value change of convertible redeemable preferred shares | 0 | (3,807,638) | Preferred shares converted to ordinary shares | | Loss for the year | (2,451,903) | (6,016,303) | Primarily due to the disappearance of fair value change of preferred shares | - The decrease in R&D expenses was primarily due to the substantial completion of late-stage clinical development for SCB-2019 in 2021, leading to a significant reduction in clinical trial costs[19][133] - The increase in other expenses was mainly due to inventory write-downs, costs incurred from exiting the Shanghai R&D center project (termination fees, asset disposal losses, etc.), and severance payments from company restructuring[114][199] Statement of Financial Position Analysis As of the end of 2022, the company's cash and bank balances decreased to RMB 1.86 billion, primarily due to strategic inventory procurement for SCB-2019 commercialization, leading to a significant increase in inventory to RMB 2.38 billion, and the company recorded a net liability of RMB 668 million as total liabilities exceeded total assets, mainly driven by RMB 2.50 billion in deferred revenue (a non-cash outflow liability), while new bank borrowings of RMB 294 million were added in the second half of 2022, and a total of USD 350 million in bank credit facilities were secured to support operations Statement of Financial Position Summary (As of December 31, RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Current assets | 4,389,929 | 5,076,495 | | Non-current assets | 304,777 | 269,165 | | Total assets | 4,694,706 | 5,345,660 | | Current liabilities | 2,829,205 | 2,148,109 | | Non-current liabilities | 2,533,638 | 1,978,403 | | Total liabilities | 5,362,843 | 4,126,512 | | (Net liabilities) / Total equity | (668,137) | 1,219,148 | - Cash and bank balances decreased from RMB 2.84 billion to RMB 1.86 billion, primarily due to strategic procurement and stockpiling of key raw materials for SCB-2019 commercialization[77][132] - The recorded net liability was mainly due to significant deferred revenue of RMB 2.50 billion, which does not require cash outflow within the next twelve months[72][89] - To enhance capital efficiency, new short-term bank loans of RMB 294 million were added in the second half of 2022, and credit agreements totaling USD 350 million were entered into with China Merchants Bank and HSBC[115] Non-IFRS Measures To better reflect core operating performance, the company disclosed adjusted loss for the year, which was RMB 2.36 billion in 2022, an increase from RMB 2.08 billion in 2021, and this metric excludes the impact of non-cash and non-recurring items such as share-based payment expenses and fair value changes of convertible redeemable preferred shares Reconciliation of Loss for the Year to Adjusted Loss for the Year (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Loss for the year | (2,451,903) | (6,016,303) | | Add: Fair value change of convertible redeemable preferred shares | – | 3,807,638 | | Add: Share-based payment expenses | 95,023 | 125,214 | | Adjusted loss for the year | (2,356,880) | (2,083,451) | - The company believes that adjusted loss for the year, a non-IFRS measure, better reflects the Group's normal operating performance and provides a stronger basis for comparing operating performance across different periods[23][110] Consolidated Financial Statements This section provides the company's detailed audited consolidated financial statements for the year ended December 31, 2022, including the consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position, showing a loss for the year of RMB 2.45 billion and basic and diluted loss per share of RMB 2.22, with the company in a net liability position of RMB 668 million at year-end Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended December 31, 2022, the company recorded a loss for the year of RMB 2.452 billion, a significant reduction from RMB 6.016 billion in 2021, with total comprehensive loss for the year amounting to RMB 2.431 billion, and basic and diluted loss per share of RMB 2.22 Consolidated Income Statement Key Data (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Loss before tax | (2,451,903) | (6,016,303) | | Loss for the year | (2,451,903) | (6,016,303) | | Other comprehensive income for the year, net of tax | 20,455 | 109,491 | | Total comprehensive loss for the year | (2,431,448) | (5,906,812) | - Basic and diluted loss per share attributable to ordinary equity holders of the parent was RMB 2.22, compared to RMB 13.02 in 2021[160] Consolidated Statement of Financial Position As of December 31, 2022, the company's total assets were RMB 4.695 billion and total liabilities were RMB 5.363 billion, resulting in a total equity of negative RMB 668 million (i.e., net liabilities), with net current assets of RMB 1.561 billion, and significant items on the asset side include inventory of RMB 2.384 billion, while significant items on the liability side include contract liabilities and deferred revenue totaling approximately RMB 4.052 billion Consolidated Statement of Financial Position Key Data (As of December 31, RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Non-current assets | 304,777 | 269,165 | | Current assets | 4,389,929 | 5,076,495 | | Of which: Inventories | 2,384,340 | 768,691 | | Of which: Cash and cash equivalents | 1,607,409 | 2,767,371 | | Current liabilities | 2,829,205 | 2,148,109 | | Of which: Contract liabilities | 1,555,297 | 1,423,546 | | Non-current liabilities | 2,533,638 | 1,978,403 | | Of which: Deferred revenue | 2,496,900 | 1,931,963 | | (Net liabilities) / Net assets | (668,137) | 1,219,148 | Notes to the Consolidated Financial Statements The notes explain the basis of financial statement preparation, emphasizing that despite the net liability position at year-end, the directors believe the company can continue as a going concern based on future cash flow forecasts, and the notes detail changes in accounting policies, segment information, composition of income and expenses, tax situation, and loss per share calculation methods, with inventory write-down being the largest item in other expenses, and no income tax paid due to losses, with a significant amount of unrecognized deferred tax assets - The financial statements are prepared on a going concern basis; despite net liabilities, the directors believe the Group has sufficient liquidity to meet operational needs for the next 12 months, considering cash and net current assets, and that deferred revenue will not result in cash outflow[92][72] - Total other expenses amounted to RMB 594 million, with the largest item being "write-down of inventories to net realizable value" at RMB 476 million, and an additional loss of RMB 55.3 million incurred from exiting the Shanghai R&D center project[187][199] - As of the end of 2022, the Group had accumulated tax losses of RMB 1.933 billion, for which no deferred tax assets were recognized due to uncertainty regarding future taxable profits[207][233] - The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2022[243][208] Corporate Governance and Other Information The company emphasizes its adherence to high corporate governance standards, having complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period, with the Audit Committee reviewing annual results, and the report details the use of net proceeds from the 2021 Global Offering (IPO) and 2022 placement, with most funds utilized as planned for core product R&D, manufacturing, and commercialization - The company has adopted and complied with the Listing Rules' Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period[244][221] - The Audit Committee, comprising three independent non-executive directors, reviewed the annual results and discussed accounting policies and internal controls with management[278][249] Global Offering (IPO) Net Proceeds Utilization (As of 2022/12/31) | Use | Planned Use (RMB millions) | Accumulated Used (RMB millions) | Unutilized (RMB millions) | | :--- | :--- | :--- | :--- | | R&D, manufacturing, and commercialization of core products | 1,006.9 | 701.6 | 305.3 | | R&D, manufacturing, and commercialization of other products | 348.5 | 225.8 | 122.7 | | Working capital and others | 193.6 | 193.6 | 0 | | Total | 1,549.0 | 1,121.0 | 428.0 | 2022 Placement Net Proceeds Utilization (As of 2022/12/31) | Use | Planned Use (RMB millions) | Actual Used (RMB millions) | Unutilized (RMB millions) | | :--- | :--- | :--- | :--- | | Expand commercialization and production capacity | 404.1 | 41.5 | 362.6 | | Expanded working capital needs | 44.9 | 5.8 | 39.1 | | Total | 449.0 | 47.3 | 401.7 |