2021-09-13-港交所-李氏大药厂_中期报告2021_86页_4mb

Lee's Pharmaceutical Holdings Limited Interim Financial Statements Summary (2021)

Core Content

Lee's Pharmaceutical Holdings Limited (the "Company") has released its unaudited consolidated interim financial results for the six months ended 30 June 2021, alongside comparative figures from the same period in 2020. The results have been reviewed by the Company's auditor, HLM CPA Limited, in accordance with the Hong Kong Institute of Certified Public Accountants' standards. The audit committee has also reviewed the results before recommending them to the Board for approval.

Financial Highlights

• Revenue: HK$584,052,000 for the first-half of 2021, up 4.9% year-on-year.
• Second-quarter Revenue: HK$300,910,000, up 6.1% compared to the prior-year quarter and 6.3% sequentially.
• Gross Profit: HK$386,546,000 for the first-half of 2021, up 5.7% from HK$365,619,000 in the first-half of 2020.
• Gross Profit Margin: 66.2% in the first-half of 2021, an increase of 0.5 percentage points from 65.7% in the first-half of 2020.
• Net Profit Attributable to Owners: HK$2,155,200,000 for the first-half of 2021, up approximately 21 times from the first-half of 2020, primarily due to a one-time gain of HK$2,300,000,000 from the derecognition of investment in Zhaoke Ophthalmology Limited (ZKO) after its separate listing on 29 April 2021.
• R&D Expenses: HK$240,043,000 for the first-half of 2021, representing 41.1% of revenue, up from 27.1% in the first-half of 2020. Of this, HK$112,899,000 was recognized as expenses, and HK$127,144,000 was capitalized as intangible assets.

Business Development and Drug Development

• The Group's management team continued to drive sales growth and overcome challenges.
• Key products contributing to growth include Yallaferon® (+94.8%), Ferplex® (+43.0%), Slounase® (+12.8%), and Treprostinil Injection (+142.7%).
• Sales of licensed-in products decreased to 57.3% of revenue in 2021 (from 60.9% in 2020), while proprietary and generic products increased to 42.7% (from 39.1% in 2020).
• The Group has optimized its R&D portfolio, identifying 14 projects to be postponed or terminated due to concerns about future revenue potential, resulting in a one-time loss of approximately HK$190.1 million.
• A one-time loss of HK$40.2 million was also recorded for Rasilez® due to concerns about its market potential.

Product Launches and Clinical Trials

• Fondaparinux Sodium Injection: Approved for manufacturing and marketing in February 2021, targeting DVT and PE prevention.
• Sodium Phenylbutyrate Granules: Approved in May 2021, the first generic version in China for urea cycle disorders.
• Intrarosa®: A product for the treatment of vulvovaginal atrophy, with no boxed warnings, and Phase III clinical trials expected to begin in September 2021.
• Cetraxal® Plus: Phase III trial started in January 2021 with 400 subjects enrolled.
• Socazolimab: A key oncology asset with multiple clinical trials ongoing for cervical cancer, osteosarcoma, and esophageal carcinoma. NDA for cervical cancer is expected in Q3 2021.
• Staccato® Fentanyl: A combination drug-device product for breakthrough cancer pain, with Phase I/IIa trials planned to start in September 2021.

Strategic Partnerships

• The Group entered into one in-licensing deal with Asahi Kasei Pharma Corporation for Bredinin™, a generic drug for kidney transplant rejection.
• A distribution agreement with Kunming Baker Norton Pharmaceutical Sales Co., Ltd. (KBNS) was signed on 2 March 2021, granting exclusive promotion rights for Fondaparinux Sodium Injection in 18 provinces, later expanded to 31 provincial-level regions.

Corporate Development

• ZKO (Zhaoke Ophthalmology Limited) was successfully listed on the Hong Kong Stock Exchange on 29 April 2021, raising HK$1,932.3 million.
• The Group derecognized its investment in ZKO and recorded a one-time gain of HK$2,300,000,000 in its consolidated statement of profit or loss.

Prospects

• The Group expects continued challenges from drug price pressures due to China's volume-based procurement (VBP) reforms.
• Despite these challenges, the Group remains optimistic, citing strong fundamentals, optimized R&D portfolio, and successful product launches.
• The Group is focused on new drug development, cost containment, and exploring new distribution channels to create long-term value for stakeholders.

Summary of Key Financial Metrics

Conclusion

The Group has demonstrated resilience and strategic focus in navigating the challenges of the year, with notable growth in specific product lines and a strong financial position. The optimization of R&D and the successful listing of ZKO have been key steps in enhancing the Group's long-term value creation potential.