Luye Pharma Announces 2024 Half Year Results

Strong net profit growth: 201%

Five new drugs approved for marketing

Shanghai, August 28, 2024 -- Luye Pharma Group today announced its 2024 half-year results and latest developments.

During the reporting period, the total revenue was about RMB 3.07 billion, up 6% year-over-year; the gross profit was about RMB 2.08 billion, up 7% year-over-year; the EBITDA was about RMB 1.16 billion, up 33% year-over-year, the net profit was about RMB 438 million, up 201% year-over-year; and the net profit margin was 14%, up 9% year-over-year.

The combined selling and distribution, administrative, R&D, and financial expenses as a percentage of revenue was down 14% year-over-year. The selling and distribution expenses, in particular, dropped 9% to 31% of product sales revenue.

Since 2021, the group has launched 13 new drugs in China, the U.S., and several European countries. These products are mainly from two key therapeutic areas: CNS and oncology. The launch of them has reinforced the competitiveness of the group’s portfolios. At the same time, the group has also been upgrading its R&D strategy and marketing model while optimizing its financial structure to increase earnings and reduce expenses. This has created a clear growth path for the next three years.

 

CNS: A strong portfolio and a unique global footprint

The revenue from CNS products was about RMB 823 million, up 21% year-over-year. With a unique product development strategy and commercialization strategy, the group has become one of the leading CNS players in China. It is also moving toward a higher global goal to cement its position through several key products as follows:

• Ruoxinlin^® (toludesvenlafaxine hydrochloride extended-release tablets), an innovative Class 1 chemical drug, achieved a remarkable 210% year-on-year growth in the first half of this year, making it one of the fastest-growing new antidepressants in recent years.
   
• The patch portfolio, including the Rivastigmine Twice Weekly Transdermal Patch, achieved high-speed growth.
   
• Seroquel^® (quetiapine fumarate, immediate and extended release formulations), an established originator product, delivered a solid performance, expanding its global footprint via a sales network covering 51 countries and regions.

 

The group has had three major CNS drugs approved for marketing this year, to keep expanding its commercial footprint.  

• In July, the ERZOFRI^® (paliperidone palmitate) extended-release injectable suspension administered once a month for treating schizophrenia and schizoaffective disorder was approved by the U.S. Food and Drug Administration (FDA). This further enhanced the group’s CNS portfolio and provided a new driver for growth overseas.
   
• In June, Meibirui^® (paliperidone palmitate injection) for treating schizophrenia and Jinyouping^® (rotigotine microspheres for injection), which was the world's first long-acting microsphere formulation for the treatment of Parkinson’s disease, were approved for marketing in China.

 

Oncology: Multiple new products approved to ramp up sales

The revenue from oncology products was about RMB 1.14 billion, up 25% year-over-year. This business sector has been recovering since 2021. The ramp-up of new products has been offsetting the policy impact on existing products. The group has received marketing approval for two oncology products this year, with one more expected to be approved in the second half of the year. These new products, along with the existing ones, will quickly boost the revenue growth of the group’s oncology business and reinforce its bottom line.

• Boluojia^® (denosumab injection 120mg) and Mimeixin^® (oxycodone hydrochloride and naloxone hydrochloride sustained-release tablets) were approved for marketing in China in May and June, respectively. Mimeixin has the potential to become a new standard therapy for managing chronic cancer pain and a leading medication for cancer pain in China.
   
• Zepzelca^® (lurbinectedin), the only new chemical entity approved by the U.S. FDA for the treatment of relapsed Small Cell Lung Cancer (SCLC) since 1997, is expected to be approved for marketing in the Chinese mainland later this year. It has already been used for clinical practice in the Hong Kong and Macao Special Administrative Regions of China, the Greater Bay Area, and the Boao region of Hainan Province. The feedback from the users of the drug has been positive.

 

Cardiovascular: Established products remain strong and promising

In the cardiovascular therapeutic area, the group has several unique products, which are widely recognized in clinical practice thanks to the support from years of evidence. Standing out from the competition, these products have a long lifecycle and remain strong and promising. Here are two examples:    

• Xuezhikang^®: According to IQVIA, this product was the most popular natural medicine for the treatment of hypercholesterolemia and the fifth most-used lipid-regulating drug in China in the first half of 2024. Targeting the primary prevention of cardiovascular diseases, it taps into a blue ocean market with strong growth potential.
   
• Oukai^® (sodium aescinate tablets) continued to see rapid sales growth and is on track to become a blockbuster drug, with annual sales expected to exceed one billion yuan.

 

Corporate governance: Improving efficiency to fuel high-quality development

The group has taken a series of initiatives to improve efficiency and profitability focusing on innovating with its R&D activities, upgrading its sales & marketing model, and optimizing its financial structure.

• Upgrading the R&D strategy: A comprehensive upgrade has been carried out to develop first-in-class or best-in-class products. Meanwhile, the group has also tried to optimize its pipeline and increase the success rate of key drug candidates by out licensing non-core assets.
   
• Transforming the marketing model: The group has taken various measures to reduce selling expenses and sales efficiency. Those measures include restructuring its sales & marketing organization, improving personal productivity, adopting an innovative sales strategy, and unifying resource allocation.
   
• Improving the financial structure by reducing debts: During the reporting period, the group’s financial expenses decreased 9.5% year-over-year. The group is on track to meet its annual debt reduction target.

 

Rongbing Yang, President of Luye Pharma Group, said: “We have significantly boosted our profitability by ramping up new product sales and improving corporate governance. With the approval and fast market uptake of our high-potential new medications, we are confident that our portfolios comprising these new products and steadily growing existing products will be able to generate explosive growth. In 2025 and onward, all our key new products will hit the market to generate record sales and drive strong growth over the next three years.”