Innovation & R&D - The US leads the world in life science innovation due to a combination of factors including investment in basic research, venture capital, strong companies, and protection of intellectual property [3][5] - Big Pharma increasingly relies on external innovation, with internal drug development accounting for less than 30% of FDA approvals between 2015 and 2021 [11] - AI and machine learning are accelerating drug discovery by enabling the screening of 1.7 million compounds in approximately 5-10 days, significantly reducing the time required for identifying lead compounds [3][14][15] Investment & Finance - In 2021, the pharmaceutical industry invested over $80 billion annually in R&D, a tenfold increase over 10 years, representing approximately 25% of pharma companies' revenues [4] - Venture capital firms investing in biotech require patience, with a time horizon of 10-15 years to see a drug from discovery to commercialization [13] - New Jersey offers an R&D tax credit to attract big pharma companies and has a program allowing early-stage life sciences companies to monetize their net operating losses [20][21] Company Strategy & Focus - Johnson & Johnson (J&J) has invested $50 billion in R&D and M&A since the beginning of last year [10] - J&J actively scouts the world for promising innovations and technologies to leverage its scale in research, development, manufacturing, and commercialization [6] - J&J is developing an oral medicine, icotrokinra, to treat plaque psoriasis, which is expected to be a significant breakthrough and contribute to growth in the second half of the decade [7][9]

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Financial Data and Key Metrics Changes - The company has grown margins by almost 400 basis points from 2018 to now and is on track to increase its margin profile by another 300 basis points over the next four years [22][23] - The company reaffirmed a revenue growth of 5% to 7% for Q3 and expects a margin profile of approximately 14% [75][76] Business Line Data and Key Metrics Changes - The advanced facilities and advanced manufacturing sectors, which include life sciences and semiconductor industries, represent about 25% of the company's business [40] - The industrial water space is at an inflection point, with significant growth potential due to increasing water scarcity and the need for treatment systems [47] Market Data and Key Metrics Changes - The private sector continues to move forward with capital projects, particularly in life sciences and chip manufacturing, despite uncertainties like tariffs [30][31] - State and local governments have not paused projects, continuing to utilize appropriated funds [33] - The federal sector, which represents about 9% of the business, has seen some pausing but is now starting to resume projects [34][35] Company Strategy and Development Direction - The company has redefined its asset life cycle approach, engaging earlier in clients' business to optimize capital and enhance project outcomes [17][18] - The company aims to increase its global delivery model from 10% of overall delivery to potentially doubling it in the next three to five years [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline for the pharma sector, driven by advancements in AI for drug discovery, which allows for faster R&D processes [68][69] - The company is optimistic about the future, citing strong secular tailwinds across various markets, including water, environmental, and advanced facilities [12][13] Other Important Information - The company has a diverse project portfolio with 29,000 engagements, reducing exposure to any single client [79] - The company is focusing on enhancing its tech platforms to improve efficiency and develop unique solutions for clients [82][83] Q&A Session Summary Question: How are customers responding to the current economic environment? - Management noted that private sector clients are moving forward with capital projects, while state and local governments continue to utilize appropriated funds without pausing projects [30][33] Question: What is the company's strategy regarding the global delivery model? - The company aims to increase its global delivery model from 10% to potentially doubling it in the next three to five years, emphasizing the importance of trust built over decades with clients [49][51] Question: How does the company plan to balance M&A, buybacks, and dividends? - Management indicated that in the near term, M&A is not a focus, and the company plans to continue returning a significant portion of free cash flow to shareholders while reinvesting in itself [86]

Jan Hatzius +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC Alec Phillips +1(202)637-3746 | alec.phillips@gs.com Goldman Sachs & Co. LLC David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC 17 May 2025 | 10:29PM EDT US Daily: Tracking Trade with High-Frequency Data (Peng) Manuel Abecasis +1(212)902-8357 | manuel.abecasis@gs.com Goldman Sachs & Co. LLC Elsie Peng +1(212)357-3137 | elsie.peng@gs.c ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 47% year-over-year to $7,900,000, exceeding guidance of $7,800,000, driven by balanced growth in the Vinia business [5][20] - Gross profit rose by 53% to $4,600,000, representing 58.5% of total revenue, up from 56.2% a year ago, primarily due to increased manufacturing scale and improved yield [20][21] - Net loss for Q1 2025 was $2,300,000, or $0.13 per share, compared to a net loss of $6,600,000, or $0.48 per share in the same quarter last year [21][22] Business Line Data and Key Metrics Changes - The Direct to Consumer Health and Wellness Products Division, led by Vinia, accounted for the majority of revenue, with total active subscribers exceeding 50,000 in the USA, and recurring subscribers making up 90% of revenue [6][13] - The Amazon channel represented 20% of the business, with improvements in customer conversion and repeat purchase rates [6] - The company launched new products, including a superfood tea lineup and plans for a hydration beverage, targeting significant market segments [9][12][60] Market Data and Key Metrics Changes - The company is expanding its reach into new consumer segments and channels, including international shipping and social media platforms like TikTok [42][43] - The market for non-GMO, plant-based compounds is growing, with increasing consumer awareness of health benefits related to blood flow and longevity [8][79] Company Strategy and Development Direction - The company aims to achieve adjusted EBITDA breakeven at $11,000,000 to $12,000,000 in quarterly revenue by the second half of 2025, focusing on balancing growth with profitability [17][18] - Strategic investments will be made in expanding the direct-to-consumer portfolio, enhancing R&D processes, and building AI-powered tools for CDMO services [18] - The company is targeting a 20% adjusted EBITDA margin for its direct-to-consumer division and higher margins in the CDMO segment [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its growth strategy and deliver life-changing compounds, highlighting the synergy between the direct-to-consumer and CDMO divisions [23][70] - The company is optimistic about the increasing interest from pharmaceutical companies in its botanical synthesis technology, which offers consistent and economically viable compounds [70][71] Other Important Information - The company raised $3,900,000 in debt financing during the quarter, increasing cash and cash equivalents to $3,400,000 [22] - The company is preparing to launch the olivoboscoside cell product in 2026, targeting significant market opportunities in liver health and cholesterol management [13][79] Q&A Session Summary Question: Can you provide details on the Phase two portion of the CDMO contract? - Management explained that Phase two involves moving from solid media to liquid media for cell conditioning, with an expected timeline of six to nine months [27][28] Question: How long will it take to narrow down targets with Tate and Lyle? - Management indicated that significant work is underway, with a comprehensive update expected by the end of the year [30] Question: Should we expect continued gross margin expansion as revenue grows? - Management affirmed the intention to drive continued gross profit margin improvement alongside revenue growth [31][32] Question: How many products contributed to revenue in Q1, and how many are expected by year-end? - Management noted that three product lines contributed to Q1 revenue, with expectations to increase to four by Q2 and five by Q3 or Q4 [36][38] Question: Will marketing costs drop due to increased ad inventory? - Management highlighted efforts to reduce marketing costs as a percentage of revenue while exploring new channels for customer acquisition [39][44] Question: Does the second quarter guidance include contributions from the CDMO business? - Management confirmed that the guidance includes revenue recognition from existing CDMO projects and potential new catalysts [45][46] Question: How many CDMO programs can be run concurrently? - Management stated that the current capacity allows for five to seven concurrent projects in stage one [49] Question: What is the long-term opportunity for the beauty product? - Management discussed a focused strategy on high-margin categories, including health and beauty, with plans for a launch in Q1 next year [60][61]

Core Viewpoint - The upcoming 2025 China Industrial Transfer Development Matching Event in Sichuan represents a significant opportunity for the province to enhance its industrial capabilities and drive high-quality economic development [1] Industrial Development - Sichuan has been actively exploring high-quality industrial development, focusing on six key industries: electronic information, equipment manufacturing, food and textiles, energy and chemicals, advanced materials, and pharmaceutical health, which form the backbone of its industrial economy [1][4] - In the first quarter of this year, the province's industrial added value above designated size grew by 7.2% year-on-year, with 33 out of 41 major industrial categories showing growth, indicating a robust industrial development momentum [1][4] Policy Support - In 2023, Sichuan introduced the "Action Plan for Quality Improvement and Doubling of Six Key Industries (2022-2027)," targeting 20 clusters and 50 industrial chains to create national and world-class manufacturing clusters [4][10] - The provincial government has committed to implementing ten support policies to advance the quality improvement of these six key industries [4][10] Digital Transformation - Sichuan has launched a comprehensive "Smart Transformation and Digital Upgrade" initiative, with 95 key tasks aimed at guiding enterprises in their transformation efforts [7][8] - By the end of last year, over 400 key projects had received support, leveraging more than 56 billion yuan in social investment and leading to the establishment of over 1,200 digital workshops [8][9] Emerging Industries - Sichuan is also focusing on emerging and future industries such as artificial intelligence, biotechnology, and drone technology, which are becoming significant drivers of economic growth [10][13] - The province has outlined 25 new industrial tracks in its "Action Plan for Competing in New Industrial Tracks (2023-2027)," emphasizing support for strategic emerging industries [10][11] Future Goals - By 2027, Sichuan aims to establish six trillion-yuan industries to support the construction of a modern industrial system [9][14] - The province is actively planning for future industries like 6G and quantum technology, aiming to cultivate new business models and industries [13][14]

Core Viewpoint - The pharmaceutical sector is at risk of facing new tariffs from the Trump administration, which has already caused investor anxiety despite no direct impact yet [1][2]. Industry Summary - The pharmaceutical industry, particularly companies like Eli Lilly, is bracing for potential tariffs that could increase costs for raw materials sourced overseas [4][5]. - The uncertainty surrounding tariffs has made investors jittery, affecting stock performance and market sentiment [2][3]. Company Summary: Eli Lilly - Eli Lilly has been a strong performer in the pharmaceutical sector, primarily driven by its GLP-1 medications, Mounjaro and Zepbound, which compete with Novo Nordisk's products [7]. - The company also has a promising cancer drug, Verzenio, which has received multiple FDA approvals, expanding its oncology market opportunities [8]. - Eli Lilly's recent FDA approval for its Alzheimer's medication, Kisunla, positions it well in a fragmented market expected to grow significantly [9][10]. - Despite the potential for increased operating expenses and profit margin compression due to tariffs, the long-term outlook for Eli Lilly remains positive due to its diversified portfolio and growth opportunities [6][15]. Investment Considerations - Current market conditions suggest that investing in Eli Lilly may require a long-term perspective, as short-term volatility is anticipated due to potential tariff impacts [12][14]. - A strategy of dollar-cost averaging is recommended for long-term investors to mitigate risks associated with price fluctuations [14].

Financial Data and Key Metrics Changes - For the full year 2024, revenue increased by 23.5% to $58.4 million, and adjusted EBITDA increased by 43.3% to $9.6 million [8] - Adjusted EBITDA margins improved by 230 basis points to 16.5% [8] - Fourth quarter total revenues of $15.6 million increased by $1.9 million or 14% compared to the same period last year [21] - Net income for the fourth quarter was $1.4 million or $0.02 per fully diluted share, down from $5.6 million or $0.05 per fully diluted share in the same period last year [23] Business Line Data and Key Metrics Changes - The patient affordability business grew 212% year-over-year, reaching $12.7 million compared to $4.1 million in 2023 [9] - Claims processed in the patient affordability segment increased by 272%, with 33 net programs added, representing a 77% increase over the previous year [9] - Plasma donor compensation business contributed $43.9 million in revenue for the year, a 4.6% increase over 2023's $42 million [11] - Fourth quarter plasma revenue decreased by 6.2% to $10.8 million, primarily due to oversupply issues [18] Market Data and Key Metrics Changes - The company exited 2024 with 480 plasma centers, an increase of 16 centers over the previous year, and anticipates adding 10 to 15 centers in 2025 [11] - The average revenue per plasma center decreased by 9.5% to $7,510 [18] - Fourth quarter pharma revenues of $12.7 million accounted for 21.7% of total revenue, up from 8.6% during the same period last year [20] Company Strategy and Development Direction - The long-term strategy focuses on expanding solutions to create new revenue streams, particularly in maturing segments [13] - The acquisition of Gamma Innovation LLC aims to enhance capabilities in plasma donor and pharmaceutical patient engagement [14] - The company plans to enter the high-margin software-as-a-service market, significantly expanding its total addressable market [14] Management's Comments on Operating Environment and Future Outlook - Management expects the patient affordability business to sustain its strong growth trajectory in 2025, projecting to at least double in revenue [10] - The plasma business is facing challenges due to oversupply and increased donation yields, which are expected to persist [12] - Guidance for 2025 anticipates total revenues between $68.5 million and $70 million, reflecting year-over-year growth of 17.5% to 20% [26] Other Important Information - The company exited the year with $10.8 million in unrestricted cash and zero debt, a decrease of $6.3 million from 2023 [24] - The company repurchased 36,700 shares in the fourth quarter for approximately $135,000 [25] Q&A Session Summary Question: Can you help us understand the strength in Q4 and the contributions from existing vs. new pharma patient affordability programs? - Management noted that 14 new programs were launched in the first quarter of 2025, with 10 added in Q4 2024, indicating strong revenue visibility from historical programs [35][37] Question: What is the marketing strategy behind the Gamma acquisition? - The acquisition is aimed at enhancing engagement tools and capabilities for both plasma and pharmaceutical businesses, with no revenue from Gamma factored into guidance [39][41] Question: Can you provide a deeper dive into the issues causing the slowdown in the plasma business? - Management explained that oversupply is due to post-COVID overproduction and increased plasma yields, leading to lower donations and compensation [50][51] Question: How many new programs are anticipated in the patient affordability segment this year? - Management indicated that they aim to at least double the number of programs added last year, with 14 already added in Q1 2025 [66] Question: Can you quantify the cash portion of the purchase price related to Gamma? - The cash portion will be paid out over five years, with the company maintaining a cautious approach to its cash position [73]

Investment Rating - The report maintains a "BUY" rating for Sino Biopharm with a target price of HK$4.50, up from a prior target price of HK$4.20, indicating a potential upside of 22% from the current price of HK$3.70 [1][10]. Core Insights - Sino Biopharm reported a revenue increase of 10.2% year-on-year to RMB28.9 billion, slightly below expectations, while adjusted net profit surged by 33.5% year-on-year to RMB3.46 billion, exceeding market expectations. The management anticipates continued double-digit growth in revenue driven by innovative and biosimilar drugs, alongside stable growth in generic drugs [3][7]. - The company has fine-tuned its revenue forecasts and adjusted its expense assumptions, leading to the revised target price. The management expects to achieve double-digit growth in 2025, with innovative drug sales projected to contribute significantly to revenue [3][10]. Financial Forecasts - Revenue projections for Sino Biopharm are as follows: RMB32.17 billion for 2025, RMB34.20 billion for 2026, and RMB35.62 billion for 2027. The reported net profit is expected to be RMB3.28 billion in 2025, with core EPS projected at RMB0.174 [5][14]. - The report indicates a gross margin improvement to 81.6% in 2025, with operating profit margins expected to stabilize around 23% [14][16]. Key Performance Metrics - The company achieved a gross profit of RMB23.53 billion in 2024, with a gross margin of 82%. The selling and administrative expenses ratio decreased slightly to 42.1% [11][16]. - The report highlights a significant increase in the sales of innovative drugs, which grew by 21.9% year-on-year, accounting for 41.8% of total revenue [7][11]. Market Position and Strategy - Sino Biopharm's management plans to expand its innovative drug portfolio, expecting to have over 30 innovative drugs by the end of 2027, which will enhance revenue contributions from these products [7][8]. - The company is also focusing on cost control while anticipating a slight increase in R&D expenses in absolute terms, with a goal of maintaining profitability [7][10].

Group 1: Med Spa Industry Overview - The med spa industry has experienced significant growth, expanding sixfold from 2010 to 2023, with over 10,000 locations in the U.S. and average annual revenue per spa nearing $1.5 million [33] - In 2023, the med spa market was valued at $15 billion, with projections indicating a 15% annual growth rate moving forward [34] - The industry is characterized by a mix of medical and spa services, requiring medical professionals for certain procedures, but with relatively low barriers to entry [32] Group 2: Investment Opportunities - Limited direct investment opportunities exist in the med spa business, as many are privately held, but there are opportunities in the products sold, particularly dermal fillers and neurotoxins [34][35] - AbbVie, the owner of Botox, and Evolus, which specializes in aesthetic products like Jeuveau, are key players in this market, with Evolus expected to expand its product line to include fillers [35][37] - Evolus' unique cash pay business model allows for greater flexibility in pricing and marketing compared to competitors, potentially leading to higher profitability for injectors [36] Group 3: Competitive Landscape - Botox remains the market leader with a market share in the mid-60s, but faces increasing competition from Evolus and other neurotoxins, which have been gaining market share [39] - Evolus has reported a 30% year-over-year sales growth for Jeuveau, indicating strong demand and market penetration [39] - The overall market for neurotoxins and fillers is expected to grow at high single-digit to low double-digit rates, driven by increasing consumer demand [39]