Author：Luye Life Sciences
Luye Pharma Group (02186.HK) reported its financial results for 2019 on March 27, 2020. According to the results, the company has achieved a total revenue of RMB 6.358 billion, up 22.9% year-on-year. EBITDA was RMB 2.488 billion, up 26.9% year-on-year; and normalized profit attributed to shareholders was RMB 1.592 billion, up 19.4% year-on-year.
Over the past year, Luye Pharma has achieved remarkable progress in R&D, marketing, business development and collaboration by resolutely carrying out its corporate strategies. The company is also actively transforming itself to lay a solid foundation for the sustainable growth in the future. Financial highlights of 2019 are as follows:
R&D: Luye Pharma has achieved breakthroughs around the world in pipeline building, putting into place a strong biological antibody pipeline
Luye Pharma has continuously increased investment into R&D, focusing intently on driving the new drug development and application progress, with R&D spending having increasing by 18% year-on-year in 2019. The company has over 40 drug candidates in China, and over 10 additional drug candidates in other international markets, with much significant progress made.
In terms of drug candidates developed by the Novel Drug Delivery Systems platform, the high dosage strength (13.3mp/24h) Rivastigmine Once-A-Day Transdermal Patch has received market authorization in Germany; the Risperidone Extended-Release Microspheres for Injection (LY03004) has entered into the New Drug Application (NDA) phase in the U.S., with its manufacturing facility successfully passing U.S. Food and Drug Administration (FDA) Pre-Approval Inspection (PAI). The NDA for LY03004 was also granted, with priority review status in China; the Rotigotine Extended-Release Microspheres for Injection (LY03003) has entered into phase III clinical trials in both the U.S. and China, and into phase I trials in Japan; the Paliperidone Palmitate Injectable Suspension for Intramuscular Use (LY03010) has entered into clinical stages in the U.S.; the Rivastigmine Multi-Day Transdermal Patch has completed a pivotal study in Germany and the Rivastigmine Once-A-Day Transdermal Patch is soon to be approved for launch in China.
In terms of new chemical entities, LY03005 has entered into the NDA phase in the U.S., started phase I clinical trials in Japan, and is about to complete phase III trials in China.
Moreover, the biological antibodies pipeline has been upgraded across the board: LY01008, a biosimilar of Avastin® has completed phase III clinical trials and is soon to file an NDA in China, while LY06006, a biosimilar of Prolia® has seen smooth progress in phase III trials. In addition, LY09004, a biosimilar of Eylea® and LY01011, a biosimilar of Xgeva® have also started phase I clinical trials in China.
Sales & Marketing: All the existing key products maintained double-digit growth, with strong momentum in CNS drugs
Due to unique product advantages and efficient business operations, all key products have maintained double-digit growth, including Lipusu®, Seroquel®, Xuezhikang®, Beixi®, Maitongna® and others. The company’s other two exclusive products CMNa® and Okai® also performed strongly, indicating the potential to reach an annual sales revenue of over RMB 100 million each.
Luye Pharma is actively driving post-launch clinical studies, enhancing academic promotions and expanding channel coverage, aiming to further consolidate the advantages of its existing products. In oncology, Lipusu® has been included in the 2019 CSCO Primary Lung Cancer Treatment Guidelines as a first-line treatment, as well as in the Expert Consensus on the Clinical Application of Taxanes for the Treatment of Gynecologic Malignancies. Moreover, Lipusu® and CMNa® were also included in the 2019 Chinese Guidelines for the Radiotherapy of Esophageal Cancer.
The natural lipid-regulation drug Xuezhikang® achieved new heights in sales this year. After Luye Pharma granted the exclusive promotion rights for Xuezhikang® capsules to AstraZeneca in mainland China, the two companies have combined their best resources to increase the depth and breadth of the product’s coverage, and to lay a solid foundation for its continued growth in the future. Multiple joint clinical studies of Xuezhikang® capsules are in progress currently.
The antidiabetic drug Beixi® was able to successfully capitalize on policy opportunities, passing the Generic Drug Quality Consistency Evaluation conducted by China’s National Medical Products Administration, and going on to become the only locally produced acarbose to win the bid during the 2020 national volume-based drug procurement in China.
In the central nervous system (CNS) therapeutic area, which is of strategic importance to Luye Pharma, the global business integration for Seroquel® and Seroquel XR® is progressing smoothly to date. The company has put together a CNS team with over 100 professionals in China, managed the distribution of the Seroquel products in more than ten countries and regions worldwide, and also created its own sales team in some regions, to actively drive the marketing of these products globally, and to get ready for the launch of subsequent CNS drugs under development. Future high-speed growth in this field is very possible for Luye Pharma.
M&As and Collaboration: Targeting innovative products and high-potential products to build strong partnerships and reinforce strategic synergies
Luye Pharma carried out a number of M&As and collaborations in 2019, driving technological transformation and upgrades, as well as actively integrating resources to enhance competitiveness in the marketplace.
Following the successful collaboration with AstraZeneca in mainland China, Luye Pharma has deepened its strategic cooperation with AstraZeneca to promote Xuezhikang® capsules in other countries. Thanks to this strong partnership, Xuezhikang® has achieved very impressive high-speed growth.
By acquiring Shandong Boan Biological Technology Co., Ltd., Luye Pharma has obtained the entire pipeline including innovative drugs and biosimilars, the antibody screening platform and production platform, the intellectual properties, and other assets. As such, Luye Pharma has been able to quickly establish a complete industry chain covering R&D, manufacturing and commercialization, laying solid foundations for development of the biopharmaceutical business in the future.
Luye Pharma and a Spanish biopharmaceutical company PharmaMar entered into an exclusive license agreement for the development and commercialization of the innovative anticancer drug Zepsyre® (Lurbinectedin) in mainland China, a move which will further expand Luye Pharma’s oncology pipeline. The U.S. FDA has accepted the NDA for Zepsyre®, and has granted priority review status for the treatment of patients with small cell lung cancer who have progressed after prior platinum-containing therapy.
Looking ahead, a senior management representative of Luye Pharma Group stated, “The year 2020 is a year of both opportunities and challenges. We will initiate a series of changes to adapt to the evolving environment, to improve our operational and management efficiency, to keep increasing the market share of our existing products, and to have multiple new drugs launched in the international markets as soon as possible. We are confident that, by leveraging the competitive advantage of our innovative products, our robust pipeline, our global supply chain, our commercial operation capabilities, and our strong M&A capabilities, we will be able to ensure high-quality and sustainable growth in the future."