GenScript Reports 2020 Interim Results and Provides Business Update
Company highlights revenue of non-cell therapy business doubled and its subsidiary Legend Biotech was listed on Nasdaq
NANJING, China, Aug. 31, 2020 /PRNewswire/ -- GenScript Biotech Corp. (Stock Code: 1548.HK), a leading global biotechnology company, today reported interim results for the six months ended June 30, 2020 and provided a corporate update. Revenue of the Group for the six months ended June 30, 2020 was approximately US$166.4 million, representing an increase of 36.5% from the same period in 2019. The external revenue for non-cell therapy business was approximately US$143.3 million, representing an increase of 41.6% from the same period of 2019. The adjusted profit of non-cell therapy business more than doubled. The revenue for cell therapy business was approximately US$23.1 million, representing an increase of 11.6% from the same period of 2019.
In the first half of 2020, the Group maintained strong momentum across all four business segments. Among others, life science CRO business delivered impressive results and saw fastest growth since IPO of the Company, with revenue increasing by 49.1%. Revenue from CDMO business (GenScript ProBio) increased by over 100% in the first half of 2020. Despite the COVID-19 outbreak, industrial synthetic biology business managed to grow faster than the industry average. In the cell therapy segment, the subsidiary Legend Biotech was listed on Nasdaq Global Market in June 2020 as China's first CAR-T stock, expecting to initiate a biologics license application (BLA) for its first CAR-T therapy ciltacabtagene autoleucel (cilta-cel) with US Food and Drug Administration (FDA) by the end of 2020.
"GenScript's business is well on the right track of increasing revenue and profit. We have confidence in continued future growth," said Dr. Frank Zhang, Founder & Chairman of GenScript, "I believe that, under the leadership of rotating CEO Dr. Liu Zhenyu, the Company will maintain strong momentum and achieve brilliant success."
Non-cell therapy business delivered impressive results, witnessing fastest growth since IPO of GenScript
For the six months ended June 30, 2020, the external revenue for non-cell therapy business was approximately US$143.3 million, representing an increase of 41.6% as compared with approximately US$101.2 million for the same period of 2019. The gross profit of non-cell therapy business was approximately US$95.4 million, representing an increase of 48.8% as compared with approximately US$64.1 million for the same period of 2019. The adjusted net profit of non-cell therapy business was approximately US$25.2 million, representing an increase of 110.0% as compared with approximately US$12.0 million for the same period of 2019.
In terms of results of the four business segments, revenue from life science services and products amounted to approximately US$115.0 million, representing an increase of 39.9% from the same period in 2019. The gross profit was approximately US$78.0 million, representing an increase of 49.1% from the same period in 2019. The gross profit margin increased from 63.6% for the same period last year to 67.8% this year. The adjusted operating profit of life science services and products (excluding share-based compensation expenses and central management expenses) was approximately US$41.6 million, representing an increase of 65.8%. Revenue growth was mainly attributable to the (i) successful commercial operation that focused on COVID-19 related products such as protein and antibody, (ii) expanded capacity and productivity in gene synthesis and customized reagent services, (iii) successful development of key accounts, and (iv) improvement of online commercial platform and tools to attract new customers.
Revenue from biologics CDMO business amounted to approximately US$19.0 million, representing an increase of 102.1%. The gross profit was approximately US$4.7 million, representing an increase of 51.6% as compared with approximately US$3.1 million for the same period in 2019. The adjusted operating loss from biologics development services narrowed. The rapid growth in revenue was mainly attributable to the (i) establishment of Good Manufacturing Practice ("GMP") capacity in both antibody development and plasmid and virus process, (ii) successful commercial operation in both the China and Asia-Pacific market, (iii) fast growing talent pool and introduction of senior management teams for sales and marketing teams, and (iv) enhancement of the capability and process to support the successful delivery of the ongoing projects. The operating loss was primarily attributable to the (i) lower gross profit due to significant fixed cost such as quality system and talent pool, etc. at early stage of business set up period, and (ii) significant investment in commercial and senior management team.
External revenue from industrial synthetic biology products increased by 2.9% from the same period in 2019. After adjusting for the effect of currency translation, the revenue grew 14%. The growth of the revenue was mainly attributable to the (i) continuous strategic implementation of key accounts business development and significant breakthroughs in both overseas and domestic feed enzymes markets and grain processing business in China, providing customized service to strategic accounts in strain development, process development and new enzymes products development, and (ii) further optimization of the organization structure and significant improvement of business capability of commercial team. The gross profit was approximately US$4.3 million, representing an increase of 16.2% from the same period in 2019. Gross profit margin increased from 30.3% for the same period last year to 38.4% this year. During the Reporting Period, the adjusted operating loss of industrial synthetic biology products narrowed to US$0.7 million.
Revenue of cell therapy increased by 11.6% to approximately US$23.1 million. The gross profit was approximately US$23.1 million. The adjusted operating loss of cell therapy was approximately US$96.4 million.
In the first half of 2020, GenScript captured a number of growth opportunities. As the world's largest gene synthesis provider, GenScript's life science CRO business witnessed fastest growth since IPO of GenScript in 2015, maintained its industry leadership, and continuously generated profit for the Group. Amid the COVID-19 outbreak, in response to intensified demand from downstream customers for detection and diagnostic raw materials, life science CRO business team provided first-class products and services for gene synthesis, protein synthesis, antibody preparation, and COVID-19 R&D and diagnosis, and teamed up with the industry to fight against COVID-19. In addition, GenScript, Duke-NUS Medical School (Duke-NUS), and the Diagnostics Development Hub (DxD) at Singapore's Agency for Science, Technology and Research (A*STAR) launched cPass™ sVNT kit, a first-in-the-world rapid test kit of SARS-CoV-2 Surrogate Virus neutralizing antibodies. This is an example of GenScript's ability to work together with global academia and quickly commercialize research results.
With its GMP plasmid production, GenScript's CDMO team has assisted a number of companies at home and abroad in developing mRNA vaccines, including the first mRNA vaccine that obtained IND approval from China's National Medical Products Administration (NMPA). CDMO team is also supporting 6 drug discovery and development programs related to COVID-19. The biologics CDMO platform served customers in the fight against the epidemic.
Cell therapy was granted China's first "breakthrough therapy designation"; "China's first CAR-T stock" was listed on the Nasdaq
In June 2020, Legend Biotech, a subsidiary of GenScript, was listed on the Nasdaq global select market, making it "China's first CAR-T stock". Legend Biotech raised about US $500 million in the IPO, which is the largest IPO in the biotech industry so far this year.
In terms of clinical development, Legend Biotech has continuously advanced its first CAR-T product. At the American Society of Clinical Oncology (ASCO) meeting in May 2020, Legend Biotech presented updated results from Phase 1b/2 CARTITUDE-1 study of cilta-cel (LCARB38M/JNJ-4528) in the treatment of patients with relapsed or refractory multiple myeloma. At a median follow-up time of 11.5 months, the overall response rate (ORR) was maintained at 100%, and 86% of patients achieved stringent complete response. Legend Biotech has started enrolling patients who have received 1-3 lines of prior treatment and are refractory to lenalidomide for phase III global randomized study.
In August 2020, Legend Biotech was granted China's first "breakthrough therapy designation", which is meant to speed up the approval of cilta-cel. In the first half of 2020, this product was granted orphan drug designation in South Korea and Japan. Earlier in 2019, this product obtained PRIME designation from European Medicines Agency (EMA) and orphan drug designation and breakthrough therapy designation from FDA. Legend Biotech expects its partner Jassen to initiate a BLA filing in US by the end of 2020. Janssen also intends to file a Marketing Authorization Application (MAA) with EMA in early 2021 and file BLAs in China and Japan in 2021.
Continued investment in core competencies bolsters GenScript's solid progress
In the first half of 2020, GenScript's four business segments progressed steadily under the established strategy. GenScript continuously invested in talent pipelines, innovation, R&D, infrastructure and other core competencies that are essential to the longevity of an enterprise, building underlying strength and bolstering GenScript's solid progress.
For the six months ended June 30, 2020, the Group's R&D expense was approximately US$115.5 million, representing an increase of 83.9% from the same period in 2019, in which the total investment in R&D was approximately US$101.6 million on cell therapy. The R&D expense of non-cell therapy business segments remained at about 10% of revenue. Continued R&D investment will underpin GenScript's presence in the fast-growing market and help leverage GenScript's leadership in gene synthesis to increase market penetration of other products and services.
In June 2020, GenScript started the molecular building (covering more than 20,000 m2) project in Zhenjing,Jiangsu Province for the innovative biologics R&D and production service platform. The molecular building is an important presence of GenScript in precision treatment and an important part of GenScript's CRO/CDMO platform. After commissioning, the platform will become the world's largest production and R&D platform for customized peptide services and China's first one-stop service platform from neoantigen peptide R&D to GMP production, and will help GenScript maintain its competitive edge in peptide drugs and oligo services.
As development and approval of biologics and GCT drugs are thriving, GenScript will continue to invest in these areas to meet customer demand and propel future growth. At present, GenScript is building the second GMP plasmid plant in Zhenjiang, which will double the plasmid and virus capacity after completion. The third GMP plant designed for clinical and commercialization stages of GCT projects will be launched in the next few years. In terms of antibody drug development, GenScript is also building a GMP biologics facility in Nanjing to increase total capacity to 2,600 L.
The Group invested significantly in the cell therapy segment. In the first half of 2020, the R&D expense of cell therapy increased by 88.5% from the same period in 2019. In addition to clinical trial expenses for the BCMA program in US and China, Legend Biotech continues to invest in the next-generation cell therapy pipeline. The ongoing trials are targeting hematological tumors, solid tumors and infectious diseases, using autologous and allogeneic CAR-T technology. This will create new growth potential for Legend Biotech and help grow the business to become the world's leading cell therapy company.
"Over the past 18 years, GenScript has come a long way to get on the fast track, building a strong foundation for breakthroughs. In the future, GenScript will continue to invest in enhancing core competencies. While establishing our presence in major global markets, we will stay committed to our four business segments, helping the Company get bigger and stronger," said Dr. Liu Zhenyu, Rotating CEO of GenScript.
GenScript Biotech Corporation
GenScript Biotech Corporation (Stock Code: 1548.HK) is a global biotechnology group. Built upon its leading gene synthesis technology, GenScript is divided into four major platforms including the contract research organization (CRO) platform, the biologics contract development and manufacturing organization (CDMO) platform, the global cell therapy platform, and the industrial synthesis product platform.
GenScript was founded in New Jersey, US in 2002 and listed on the Hong Kong Stock Exchange in 2015. GenScript's business operations span over 100 countries and regions worldwide with legal entities located in the US, Mainland China, Hong Kong, Japan, Singapore, the Netherlands and Ireland. GenScript provides premium, convenient, and reliable products and services to over 100,000 customers.
As of June 30, 2020, GenScript had more than 3,900 employees globally, over 36% of whom hold master's and/or Ph.D. degrees. In addition, GenScript owns a number of intellectual property rights and trade secrets, including over 140 patents and over 450 pending patent applications.
Driven by the corporate mission of "making people and nature healthier through biotechnology", GenScript strives to become the most trustworthy biotech company in the world. As of June 30, 2020, GenScript's products and services have been cited by 51,000 peer-reviewed journal articles worldwide.
For more information, visit GenScript's official website https://www.genscript.com.
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