Boan Biotech Announces 2024 Half Year Results: Revenue Grows by 39%, Net Profit Increases by RMB 180 Million

YANTAI, China, Aug. 27, 2024 -- Boan Biotech (6955.HK) today announced its 2024 half-year results and latest developments.

During the reporting period, the company's total revenue was RMB 363 million, up 39% year-over-year. In this, the revenue from product sales was RMB 332 million, up 28% year-over-year. The company was able to break even in this period, generating a net profit of RMB 61.67 million, up RMB 180 million from the previous period, with a net profit margin of 17%.

Boan Biotech was profitable for two consecutive half-year periods: the second half of 2023 and the first half of 2024. Together, they constituted the first profitable full-year period for the company, demonstrating a strong growth momentum and a promising future. It is now one of a few profitable HKEX-listed biotech companies.

Robust product sales driven by a growing portfolio

Boan Biotech has a portfolio characterized by a balance between innovation and risk. By commercializing biosimilars first, the company is able to generate cash quickly and fund new drug development.

It's time for the company to reap the benefits of its first research results. Thanks to its strong commercial capabilities, the company has launched three products. The combined sales of these products grew 28% year-over-year in the reporting period. Specifically, 

• Boyuonuo® (bevacizumab injection) for the treatment of multiple cancers recorded a double-digit sales growth, to keep expanding its coverage;
• Boyoubei® (denosumab injection 60 mg) for the treatment of osteoporosis quickly ramped up in sales, with a significant increase of patients;
• Boluojia® (denosumab injection 120 mg) for the treatment of giant cell tumor of bone was approved for marketing in China at the end of May this year. The company is leveraging its commercial team and resources in oncology to make the product a new growth engine.

In addition, 6 R&D projects in the company's pipeline are expected to be commercialized soon. Under development both in China and overseas, they will dramatically boost the company's revenue growth.

• BA5101 (dulaglutide injection) for the treatment of diabetes is under review for its Biologics License Application (BLA) in China, and is expected to be approved for launch next year. It has also been approved for clinical trials in the U.S., ahead of the competition not just in China, but overseas as well.
• BA9101 (aflibercept injection), an ophthalmology drug, is also under review for its BLA in China, and is expected to be approved for launch next year as well.
• BA1102 (denosumab injection 120 mg) and BA6101 (denosumab injection 60 mg) are undergoing international multicenter Phase 3 clinical trials in Europe, the U.S., and Japan. The clinical trials are scheduled to be completed next year, followed by the submission of their BLA.

The unique platforms have demonstrated their value for innovation

The core strength of any biopharmaceutical company lies in its ability to develop innovative drugs. Boan Biotech develops innovative biologics on three platforms: Human Antibody Transgenic Mouse and Phage Display Technology Platform, Bispecific T-cell Engager Technology Platform, and Antibody-drug Conjugate (ADC) Technology Platform. Its pipeline contains candidates with the potential to become first-in-class or best-in-class drugs.

• BA1302, currently undergoing a Phase 1 clinical trial in China, is the world's only innovative anti-CD228 ADC under clinical development.
• BA1301, an anti-Claudin18.2 ADC, is undergoing a Phase 1 clinical trial in China. It has been granted the Orphan Drug Designation (ODD) by the U.S. FDA for the treatment of gastric cancer and pancreatic cancer.
• BA1106, a non-IL-2 blocking anti-CD25 antibody, is the first innovative anti-CD25 antibody for the treatment of solid tumors to undergo a Phase 1 clinical trial in China.
• BA1202, an anti-CEA/anti-CD3 bispecific antibody, is the first one of its kind to undergo a Phase 1 clinical trial in China.
• BA2101, a long-acting anti-IL-4Rα monoclonal antibody administered once every four weeks, is undergoing a Phase 2 clinical trial in China.

On these platforms, the company is building a portfolio of immune-oncology (IO) + ADC drugs. It is also exploring combination therapies consisting of investigational drugs with the above-mentioned targets and the company's own PD-1 and VEGF inhibitors for major indications, to improve the outcomes of existing standard therapies, to drive up pipeline value, and to increase the success rate of new drug development.

Support high-speed growth through international collaboration

Boan Biotech is gradually being recognized in the industry for its ability to innovate and the value of its products. The company is collaborating with partners around the world to unleash the clinical value of its products and their potential for marketing, and to drive high-speed sales growth. Here are some examples:

• It granted Qingdao Conson Pharmaceutical the exclusive right to commercialize Boyoubei® (denosumab injection 60 mg) in the Chinese mainland.
• It also granted Ocumension the exclusive right to commercialize BA9101 (aflibercept) in the Chinese mainland.
• It granted Joincare the exclusive rights to develop and commercialize BA2101 (long-acting anti-IL-4Rα monoclonal antibody) in the Chinese mainland for the treatment of respiratory diseases.
• It granted Zencore Biologics the non-exclusive right to use the company's proprietary BA-HIEXcell® platform to develop stable cell lines in the Chinese mainland.
• It entered into strategic collaboration with global partners regarding its bevacizumab and denosumab products in some overseas markets.

Growing operational efficiency and profitability

Boan Biotech is among a small number of Chinese biopharmaceutical companies that are able to develop, manufacture, and sell products at the same time. The highly integrated system helps to facilitate efficient commercialization and lay a solid foundation for lean management and long-term growth.

Due to the reduction of R&D expenses, the company optimized the allocation of resources to focus on key projects. In the first half of 2024, it secured marketing approval for 1 drug, had the BLA accepted for 2 drugs, implemented Phase 3 clinical trials for 2 drugs, and advanced the IND/Phase 1 clinical trial processes for 5 drugs.

In manufacturing, the company significantly increased its gross profit to RMB 283 million during the reporting period, up 79% year-over-year. Its gross margin excluding income from licensing deals was 76%, up 16% year-over-year. The company was able to significantly increase yields and reduce costs through various measures such as upgrading to smart manufacturing, optimizing manufacturing processes for marketed products, and sourcing from Chinese suppliers. It has established an entire suite of production and quality management systems conforming to Chinese, American, EU, and Japanese standards. The capacity of its manufacturing system is able to meet the commercial supply of products for both Chinese and overseas markets in the near term or the long term.

In terms of sales and administration, the company implemented various initiatives, including optimizing organizational structure, enhancing employee productivity, and innovating business models. As a result, in the first half of 2024, it achieved a 28% year-on-year increase in product sales revenue, while selling and distribution expenses grew by 15% and administrative expenses decreased by 8%. These efforts have further enhanced its profitability and competitiveness.

"We were able to become one of the first HKEX-listed biotech companies to break even in a tumultuous environment for the industry thanks to our differentiated strategy and efficient execution," said Jiang Hua, Chairlady and Chief Executive Officer of Boan Biotech. "With strong business operation capabilities and improved management, we are confident that we will be profitable for the whole year of 2024." She believes that the company will be able to maintain its high-speed growth over the next three years with the launch of more products including investigational biologics both in China and abroad. "We will stick to our existing strategy and spare no effort to meet our target for each stage, to reward our shareholders with exceptional results, and to maximize the value for society with high-quality, innovative products," she added.