On September 8, the Chief Executive Officer of Sino Biopharm (1177.HK) was invited to attend the 32nd CITIC CLSA Investors' Forum and delivered a speech titled "Sino Biopharm: A Leading Innovation-Driven Pharmaceutical Company," systematically elaborating on the company's achievements and plans in strategic transformation, R&D innovation, and global layout. This forum brought together global industry experts, corporate executives, and top analysts to discuss investment trends and industry dynamics.

Steady Performance Growth, Significant Results from Innovative Transformation

Mr. Eric Tse introduced that the company has achieved a remarkable 21% compound annual growth rate over the past two decades, demonstrating sustained growth capability and development potential. Entering 2025, the company's growth momentum has become even stronger, with revenue in the first half of the year reaching RMB 17.57 billion, with a year-on-year increase of 10.7%, and net profit attributable to the parent company reaching RMB 3.39 billion, with a substantial year-on-year increase of 140.2%. At the same time, the company has RMB 30.5 billion in gross cash and RMB 18.5 billion in net cash on its books, providing a solid financial foundation for its comprehensive innovative transformation.

For the full year of 2025, revenue and profit are expected to continue their strong momentum of double-digit growth. This is partly due to the company's continuous optimization of operational efficiency through its "organizational integration and digitalization" strategy, with the sales and administrative expense ratio significantly decreasing from 49% in 2018 to 42.9% in the first half of 2025, and the gross profit margin increasing to 82.5%. On the other hand, the accelerated commercialization of innovative products is becoming the core engine driving performance growth. In the next three years, the company will launch at least 5 innovative drugs annually to form a strong product echelon.

Focusing on Four Major Areas to Build a "Globally New" Pipeline

In the innovation track, the company focuses on four major therapeutic fields: oncology, hepatology, respiratory, and surgery/analgesic, building a comprehensive and competitive business matrix.

● Oncology field: Covering high-incidence cancer types such as lung cancer, breast cancer, and digestive tract cancer, building a comprehensive, multi-layered, and multi-technology product portfolio.

● Hepatology field: Targeting the global market of over 200 million MASH patients, with a pipeline of globally leading drug candidates.

● Respiratory field: Targeting huge markets such as COPD and asthma, with a rich product pipeline including aerosol, dry powder, and soft mist formulations.

● Surgery/Analgesic: More than ten patch products under development will continue to consolidate the leading position of its subsidiary Beijing Tide Pharmaceutical as the "King of Patches."

Notably, the LaNova Medicines team acquired by the company this year has achieved impressive results. A team of over 50 people has secured 2 out-licensing deals with MNCs in 6 years. Eight projects have been advanced into clinical trials, and there are over 20 preclinical ADC and bispecific antibody projects that will continue to release value. In the future, LaNova Medicines will focus on early-stage R&D and clinical development, creating synergy with the commercial team of Chia Tai Tianqing.

Accelerating Globalization Strategy to Solidify the Foundation for Sustainable Development

Mr. Eric Tse pointed out that the frequent good news of domestic innovative drugs going overseas marks a golden window for China's pharmaceutical industry to go international. However, seizing opportunities does not mean overextending, but rather requires precise efforts.

Currently, the implementation of commercial insurance directories for innovative drugs is accelerating. Shanghai and other regions, as frontrunners in policy reform, will be the first to open up new space for innovative drug reimbursement. A steady advancement strategy should be adopted for overseas markets. On one hand, this involves promoting product exports to Southeast Asia and South America to expand into emerging markets. On the other hand, it means increasing out-licensing to make BD transactions a regular source of income. In addition, the company's Shanghai Global R&D Center will be completed by the end of the year. In the future, it will focus on the development of FIC/BIC projects and further strengthen its source innovation capabilities through the RMB 1 billion industry funds established with the governments of Shanghai and Wuxi, respectively.

Mr. Eric Tse emphasized that China's pharmaceutical industry is entering a new cycle of rational development, and the valuation logic for innovative drugs is becoming increasingly clear. Sino Biopharm will take innovation as its core and globalization as its path, making solid strides toward its goal of ranking among the top 30 global pharmaceutical companies and continuously creating value for industry development and public health.

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