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Thursday, 23 March 2017, 17:54 HKT/SGT
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Source: Lee's Pharmaceutical Holdings Limited
Lee's Pharm Announces 2016 Annual Results
Profit Attributable to the Owners of the Company Surged 10% to HK$252 Million;
Profitability Maintained Stable; Drug Development Achieved Breakthrough

HONG KONG, Mar 23, 2017 - (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 annual results for the year ended 31 December 2016 (the "year under review").

During the year under review, facing the challenging industry and market, the Group was able to maintain its profitability. The Group recorded sales revenue of HK$929,821,000, a year-on-year increase of 0.8%. Sales of licensed-in products accounted for 52.7% (2015: 54.6%) of the Group's revenue while sales of proprietary products contributed 47.3% (2015: 45.4%) of the Group's revenue. The proprietary products maintained a steady revenue growth of 5.1% during the year under review. While both Yallaferon and Livaracine achieved modest revenue growth of 9.3% as compared to 2015, the revenue from the sale of Slounase has fairly improved by 1.3%. In addition, the sale of Eyprotor get off to good start since its relaunch in September 2016 which contributed HK$3.6 million to the revenue of the Group.

Overall gross margin improved in the year under review hit 71.9% in 2016 (2015: 70.3%). Net profit attributable to the owners of the Company was HK$252,002,000 (2015: HK$229,052,000), a year-on-year increase of 10%, and recorded an improved net profit margin of 27.1% (2015: 24.8%). The Group continued the streamlining process on its sales and marketing efficiency and selling expenses to revenue ratio has further lowered to 22.0% (2015: 27.8%). R&D expense increased by 74.6% compared to 2015, which mainly invested in its pipeline products development in cardiovascular, oncology and ophthalmology therapeutic areas. The Board of Directors recommended the payment of final dividend of HK$0.079(2015: HK$0.074) per ordinary share.

Dr. Benjamin Li, Executive Director and Chief Executive Officer of the Group, said, "In 2016, the pharmaceutical market environment has been surrounded by persistent challenges arising from unstable and unsettled Chinese economy, regulatory shakeups, drug cost containment measures and healthcare reform turbulences. Facing the fluctuating micro economy and the industry, the Group has exercised cost discipline while continued to invest in future growth, explored and capitalised the potential of pipeline product collaboration opportunities to create values, and end up maintained profitability in 2016."

On the quality system, production and manufacturing facilities front, the Group has completed its HK$80 million investment in the solid dose production facility located on the sixth floor of the factory building in its manufacturing site in Nansha District, Guangzhou, and has successfully obtained the first pharmaceutical manufacturing license for tablet and capsule from the CFDA. The capacity of this facility is estimated at up to 1 billion tablet/capsule units per year; The Group has also budgeted approximately HK$80 million for the ophthalmic drugs production facility located on the fifth floor of the factory building in Nansha, of which the construction has been commenced and is expected to be completed in mid-2017; In the Hefei site, a new prefilled syringe facility for the upgrading of production capability and to meet all the needs for injection products has been completed in 2016, and the next milestone therefor will be the manufacturing license application. Together with works in the Nansha site, those efforts significantly enhance the Group's manufacturing capability and enable it to move towards the target to become a fully integrated specialty pharma in China.

In addition, the Group also achieved import progress in its drug development. Natulan registration study has successfully enrolled the first patient in December 2016; Phase Ib/IIa clinical study of Adapalene and Clindamycin combination hydrochloride gel for acne vulgaris has been completed and Phase III study is envisaged to initiate in the second quarter of 2017; Phase IIb study of Anfibatide is in good progress and the application to the US FDA for orphan drug designation for Anfibatide on TTP has been approved in March 2016; The development of the two cardiovascular assets, namely Rostafuroxin and Istaroxime has also made significant progress therein during the year under review; In August 2016, PPI (Powder Pharmaceuticals Incorporated, an associated company of the Group) has successfully completed the first 10 subjects of its Clinical Study for CGM in Hong Kong; In March 2017, Zingo has been granted by CFDA priority review for its clinical trial application. The clinical program thereof is targeted to be approved by CFDA in 2018.

In 2016, the Group has also made great strike in international partnerships. In August, the Group entered a collaboration agreement with Beijing Shenogen Pharma Group Limited to jointly develop and commercialise a combination product, Pexa-Vec (formerly JX-594), for treatment of late stage cancers; In September, the Group has made a licensing agreement with a private company in the United States to license a novel therapeutic formulation for treatment of Diabetic Retinopathy ("DR") and other diseases of the eye, which will definitely strengthen its pipeline on ophthalmology diseases area; In December, the Group has entered into a licensing agreement with TOT Biopharm Company Limited to license TAB014, the monoclonal antibody drug for the treatment of wet age-related macular degeneration (wAMD), exclusively within China, Hong Kong and Macau.

For the sales and marketing development, the Group endure ongoing efforts in knowledge-based promotion and leverage on new media to support physician education and to disseminate scientific information for its products. In 2016, the number of medical practitioners/physicians registered to the Group's fully sponsored China-Europe Echocardiography CME Project has exceeded 14,000. In addition, two new business units have been created to focus on sales and marketing of new and newer products as well as oncology products, respectively. The teams are currently working in full swing to the preparation works for the expected launch of Mictonorm and Sancuso in 2017.

Looking forward, Dr. Li said, "The announcements of a slew of new regulations and policies by Chinese government indicate that a more price-sensitive environment is expected to remain in 2017. Nevertheless, the government determined to accelerate approvals for new drugs and urges generics to pass the quality consistency tests. As a company always relies on new drug development as its engine for growth, the Group could become one of main beneficiaries of these regulatory changes. With the full spectrum of manufacturing capability, comprehensive product pipeline and variety of partnerships, enhanced sales and marketing efficiency, strengthened regulatory expertise and healthy balance sheet, the Group is well positioned to capitalize the opportunities therefrom and to face the coming challenging year."

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 40 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
Source: Lee's Pharmaceutical Holdings Limited

Sectors: Daily Finance, Daily News, BioTech
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