Lee's Pharm 2016 Interim Net Profit Up 17.9%

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Thursday, 25 August 2016, 19:00 HKT/SGT

Steadfast Commitment to R&D

HONG KONG, Aug 25, 2016 - (ACN Newswire) - Lee's Pharmaceutical Holdings Limited ("Lee's Pharm" or the "Group", Stock Code: 950), an integrated research-driven and market-oriented pharmaceutical group in China, today announced its unaudited interim results for the six months ended 30 June 2016 (the "period under review").

During the period under review, turnover of Lee's Pharm was HK$449,729,000. The Group's flagship products such as Yallaferon and Livaracine have recorded a mild revenue growths of 9.3% and 10.1% respectively, while Ferplex has successful renewed the Import Drug License in early 2016. During the period under review, the gross profit margin was 72.9%, notably improvedby 2.2 percentage points over same period last year which reflected the increasing revenues from the Group's proprietary products that normally have higher profit margin than licensed-in products. The cost-optimality of its sales and marketing strategies remained in effect, resulting in the profit attributable to the equity shareholders for the period under review increasing by 17.9%, to HK$121,418,000. The Group recommended an interim dividend of HK$0.033 per share.

Dr. Benjamin Li, Chief Executive Officer of the Group, said, "The tougher market environment persisted during the period under review and Renminbi devaluation continued to cast a shadow over the performance of the Group in year 2016.While the top-line growth remained sluggish during the quarter under review, the Group managed to achieve decent net profit growth despite the market environment remained subdued. This is the result of steadfast cost saving benefit reaped from the implementation of the streamlined cost structure launched since year 2015 in sales and marketing spending. The healthy growth in profit allows the Group to keep spending heavily in research and development ("R&D") for new products at different development stages that would enable the Group to widen its product portfolio and gear up for future growth."

In June 2016, the Group's solid dose production facility in Guangzhou Nansha has successfully obtained the first pharmaceutical manufacturing license for tablet and capsule from the China Food and Drug Administration (the "CFDA"). The approval was a major milestone in its efforts to enhance drug manufacturing and developing capability. The Group's ophthalmic drugs production facility in Nansha has also commenced its construction work.

With the continuous efforts in knowledge-based promotion, the number of medical practitioners / physicians registered to the Group's fully sponsored China-Europe Echocardiography CME Project has reached the "10,000" mark in June 2016. Leveraging on new media to disseminate scientific and educational information together with the transformation of its sales and marketing organisation continued to improve operation efficiency. Besides the new business unit has been created to focus on sales and marketing of new and newer products in the last quarter, the Group has planned to create another new business unit specifically focus on oncology products soon.

During the quarter under review, the CFDA modified its regulations for conducting clinical trials in the PRC, in which the CFDA changed its regulations to allow Phase 1 or Phase 2 clinical trials with drug candidates manufactured abroad (including both the active pharmaceutical ingredient and the finished product). This rule change can significantly speed up drug development in China as the local drug development in China may now rely on drugs sourced outside of the country in early clinical trials. This change allowed the Group to immediately resume its previous development activities in China for RGN-259 to treat ocular disorders prior to the completion of the Group's manufacturing capability in ophthalmic products.

Phase Ib/IIa clinical study of Adapalene and Clindamycin combination hydrochloride gel for acne vulgaris is in progress. Its Phase IIa component of the study has since been completed and the remaining Phase Ib study has finished enrollment. Phase III study is envisaged to initiate by first quarter of 2017. For Natulan registration study, the study protocol has been confirmed by the CFDA. The preparation for the study was substantially completed and first enrollment is expected in the fourth quarter of 2016.

Phase IIb clinical study in Taiwan for Rostafuroxin capsule with antihypertensive effect is in full swing. The Phase IIb clinical study in Italy of Istaroxime, a first-in-class luso-inotropic agent for the treatment of acute decompensated heart failure ,was substantially completed.

In addition, pexa-Vec (formerly JX-594) is continuing its Phase III registration enabling clinical study at the moment. The multinational randomised Phase 3 open-label study of Pexa-Vec, in patients with advanced liver cancer, also known as hepatocellular carcinoma (HCC) has been commenced early this year in New Zealand, the United States and Europe. For the clinical trial to be conducted in mainland China, the approval certificate from CFDA is expected to be received in the fourth quarter of 2016.

Overall, the Group has more than 13 clinical studies in either operational or preparatory stage. Several of those clinical studies are registration enabling study and successful conclusion of those studies is the Group's priority. The Group will continue to commit in these new drugs development as the engines for sustainable growth,

Looking ahead, Dr. Li added, "While the structural headwinds to revenue growth persists, the Group is cautiously optimistic for the rest of the year and beyond. The Group will continue to commit high percentage of total revenue to R&D spending in order to bring in new products to fuel growth as soon as practicable. Together with the next milestone of the manufacturing facility in Nansha to obtain Good Manufacturing Practice ("GMP") certification in next year, we believes that a pathway to future success has already created. We will also continue our efforts to the revenue growth of the six major products and will also focus on the growth of newer products such as Remodulin, Gaslon N, oral L-Carnitine, as well as Mictonorm which is expected to launch within the year.The board of directors is confident that the Group will bounce back and resume revenue growth trajectory and will continue to deliver satisfactory return to its shareholders in the upcoming period."

About Lee's Pharmaceutical Holdings Limited
Lee's Pharm is a research-based biopharmaceutical company listed in Hong Kong with over 20 years' operation in China's pharmaceutical industry. It is fully integrated with strong infrastructures in drug development, manufacturing, sales and marketing, it has established extensive partnership with over 20 international companies and currently has 15 products in the market place. Lee's Pharm focuses on several key disease areas such as cardiovascular diseases, oncology, gynecology, dermatology and ophthalmology. Lee's Pharm's development program is lauded with more than 30 products stemming from both internal R&D efforts and collaborations with US, European and Japanese companies and aspires to combat diseases such as liver cancer and pulmonary hypertension. The mission of Lee's Pharm is to become a successful biopharmaceutical group in Asia providing innovative products to fight diseases and improve health and quality of life.

Additional information about Lee's Pharm is available at www.leespharm.com.

Topic: Press release summary Sectors: Daily Finance, Daily News, BioTech, BioTech
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