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Tuesday, 23 March 2021, 17:09 HKT/SGT
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Source: Sino Biopharmaceutical Limited
Sino Biopharmaceutical 2020 Net Profit Grows to RMB2.77 Billion amid Adversity
By Accelerating New Drug Development and Employing New Online Platforms
Sales of New Drugs Marketed over Past Three Years Double to RMB8.06 Billion

HONG KONG, Mar 23, 2021 - (ACN Newswire) - Sino Biopharmaceutical Limited ("Sino Biopharmaceutical" or the "Company", together with its subsidiaries, the "Group") (HKEX:1177), a leading and innovation-driven pharmaceutical conglomerate in the PRC, has announced its audited annual results for the year ended 31 December 2020. During the year, the Group switched marketing and sales resources towards new products by capturing opportunities arising from industry policies and boosted product sales by leveraging new online platforms. These efforts have brought about bountiful harvest, driving revenue from products that have been launched to market in the past three years to double to approximately RMB8.06 billion, and their contributions to total revenue jumping from 16.6% to around 34.1%.

Development Highlights
-- Profit attributable to the owners of the parent was approximately RMB2.77 billion, while earnings per share were approximately RMB14.74 cents, representing modest increases of approximately 0.3% and 0.4% respectively over the last year amid adversity.
-- Sales of new products launched within five years accounted for approximately 38.1% of the Group's total revenue, amounted to approximately RMB9.01 billion, an increase of approximately 79.3% over the last year. Cumulative revenue from 45 products that have been launched to market in the past three years has grown by over 100% compared with last year's level to around RMB8.06 billion, and their contributions to total revenue have also increased from 16.6% to about 34.1%.
-- The oncology drug FOCUS V (Anlotinib) has been approved for three new indications, namely non-small cell lung cancer, small cell lung cancer and soft tissue sarcoma, and it has been included to the National Medical Reimbursement Drug List. The Group has formed a strong product mix with over 23 oncology products for various solid or haematological tumors. Oncology products of the Group have included more and more new products which have generated strong revenue, accounting for 40.3% of total revenue, and becoming the Group's most important product category.
-- The Group made a capital contribution to Sinovac Life Sciences Co., Ltd. ("Sinovac LS") that amounted to US$515 million and becomes interested in a 15.03% equity interest in Sinovac LS. Sinovac LS has made significant progress in the phase III clinical trials of its inactivated COVID-19 vaccine and it has received orders from different countries, with a promising profitability outlook. The investment will help Sinovac enhance its R&D and production capabilities of CoronaVac, a COVID-19 vaccine. The investment also marks Sino Biopharm's foray into vaccine R&D and production.
-- Penpulimab (Annike), an anti-PD-1 monoclonal antibody drug that is jointly developed by the Group and Akeso, Inc., for third-line treatment of metastatic nasopharyngeal carcinoma has gained fast-track designation (FTD) from the U.S. Food and Drug Administration (FDA).
-- In the fourth quarter, the Group obtained 12 approvals for drug registration and passed (or are deemed to have passed) Consistency Evaluations for 23 chemical drugs. The Group obtained a total of 35 approvals for new drug registration and passed the Consistency Evaluations for 47 chemical drugs during 2020.

Net profit grows amid adversity
During the year, the Group recorded revenue of approximately RMB23.65 billion (2019: RMB24.23 billion). Profit attributable to the owners of the parent was approximately RMB2.77 billion, while earnings per share were approximately RMB14.74 cents, representing modest increases of approximately 0.3% and 0.4% respectively over the last year amid adversity. The Group has maintained a healthy financial position with cash and bank balances reaching approximately RMB11.26 billion at the year end.

The Board of Directors declared a final dividend of HK2 cents per share. Together with the dividend of HK2 cents per share already paid in each of the first three quarters, the total dividends for the year amounted to HK8 cents per share (2019: 8 cents).

Promptly responds to COVID-19 pandemic fight
At the start of the COVID-19 pandemic, the Group, with its strong sense of social responsibility and high sensitivity, responded promptly and donated funds and materials to efforts aimed at controlling the pandemic. It made an emergency decision to add mask production lines and production of masks commenced to meet the urgent needs amid the pandemic. Since January 2020, the Group has made 18 donations of funds, drugs and materials involving a combined amount of RMB22 million. In addition, the Group resumed work and production as soon as possible while complying strictly with the government's COVID-19 prevention and control measures. While according high priority to the production of drugs that were urgently needed during the pandemic, the Group also strived to meet market demand for other general drugs.

By directing marketing and sales resources towards new products in response to policy changes, revenue from new products marketed over the past three years rises to account for around 34.1%
The Group addressed the impact of centralized drug procurement by switching marketing and sales resources towards new products that have been approved for launch in the last three years and carry significant academic value. Cumulative revenue from 45 products that have been marketed in the past three years has grown by over 100% compared with last year to RMB8.06 billion, and their contributions to total revenue have also enlarged from 16.6% to around 34.1%, which has partially mitigated the influence from old products due to the centralized drug procurement program.

As for the therapeutic categories, the oncology drug FOCUS V (Anlotinib) has been approved for three new indications, namely non-small cell lung cancer, small cell lung cancer and soft tissue sarcoma, and it has been included to the National Medical Reimbursement Drug List. The Group has formed a strong product mix with over 23 oncology products for various solid or haematological tumors. The Group's oncology products have included more new products which have generated strong revenue, accounting for 40.3% of total revenue, and becoming the Group's most important product category. The new respiratory drug Tianqingsuchang generated strong sales of over RMB500 million after it was launched to market more than six months ago and it is therefore worth looking forward to its higher revenue and profit contributions.

Promotes product sales with the use of new online platforms and achieves impressive results
Amid the pandemic, numerous academic exchanges and other forms of academic activities, organized in new online platforms, have brought about bountiful harvest. The Group actively explored and expanded investments in online marketing, academic activities and services. Nearly 80,000 different kinds of online academic activities were held for nearly 30 million customers and patients. The Group also strived to connect with and optimize sales terminals by working with over 60,000 pharmacies, which had served nearly 2 million patients. Its efforts successfully boosted product sales. Online marketing and academic services have since become an important part of the Group's sales and marketing operations.

Stepping up investment in R&D reaps bountiful harvest
For the year, the total R&D expenditure of approximately RMB2.85 billion, which accounted for approximately 12.1% of the Group's revenue. The Group's increase in investments in R&D has achieved fruitful results during the year.

During the fourth quarter, the Group was granted 5 clinical trial approvals, 12 production approvals, and 23 approvals for Consistency Evaluation, and made 6 clinical trial applications, 2 applications for Consistency Evaluation and 4 production applications. Cumulatively, a total of 391 pharmaceutical products had obtained clinical trial approval, or were under clinical trial or applying for production approval. Out of these, 39 were for hepatitis medicines, 183 for oncology medicines, 22 for respiratory system medicines, 20 for endocrine, 16 for cardio-cerebral medicines and 111 for other medicines.

In 2020, the Group obtained 35 approvals for drug registration and 47 approvals for Consistency Evaluation. It submitted 41 applications for clinical trial, and completed production filing after clinical trials for 25 products. 12 applications for Consistency Evaluation were made. The Group obtained 191 patent approvals, including 158 invention patents. Cumulatively, the Group has obtained 924 invention patent approvals, making the Group the leading pharmaceutical company in China in terms of patent approvals.

Looking ahead: The Group will adopt marketing & sales and service model that employs online platforms
Looking forward to 2021, domestic supply and demand have rebounded strongly. After COVID-19 vaccines have been given conditional approvals for launch, vaccinations will provide major hope of containing the disease. With the increasing number of people around the world receiving COVID-19 vaccinations, the Group's investment in Sinovac LS, the vaccine manufacturer, stands to make attractive return.

The expansion of the centralized drug procurement scheme and its coverage has become a new normal in the domestic pharmaceutical industry, and consolidation in the industry will accelerate. Leading companies with a strong R&D capability, top R&D teams and product pipelines, leading technological platform, high technology barrier and the ability to produce new products continuously will enjoy distinct advantages. Noting the increasing importance of marketing and sales and service model that employs online platforms in the pharmaceutical industry, the Group has undertaken moves to keep abreast of these latest developments.

About Sino Biopharmaceutical Limited (HKEX:1177)
Sino Biopharmaceutical Limited is a leading, innovative R&D driven pharmaceutical conglomerate in the PRC. Its business encompasses a fully-integrated chain which covers an array of R&D platforms, a line-up of intelligent production and a strong sales system. The Group's products have gained a competitive foothold in various therapeutic categories with promising potentials, comprising a variety of biopharmaceutical and chemical medicines for treating tumors, liver diseases, orthopedic diseases, anti-infectious diseases and respiratory system diseases.

Sino Biopharm is a constituent stock of the following indices: MSCI Global Standard Indices - MSCI China Index, Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng Composite Index, Hang Seng Healthcare Index, Hang Seng SCHK Mainland China Healthcare Index, Hang Seng Composite LargeCap Index, Hang Seng Composite LargeCap & MidCap Index, Hang Seng China (Hong Kong-listed) 100 Index and Hang Seng Stock Connect Hong Kong Index, etc.. Sino Biopharm was ranked as one of "Asia's Fab 50 Companies" by Forbes Asia for three consecutive years in 2016, 2017 and 2018.




Topic: Press release summary
Source: Sino Biopharmaceutical Limited

Sectors: BioTech, Healthcare & Pharm
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