HONG
KONG, March 28, 2024 /PRNewswire/ --
Highlights of the Annual Results as of December 31, 2023:
- Revenue reached RMB2,155.6
million
- Gross profit amounted to RMB738.5
million
- Adjusted non-IFRS net loss improved to RMB208.8 million, representing a significant
turnaround from a negative position compared to the corresponding
period of last year
- Successfully attracted strategic investors such as Temasek,
Highlight Capital, True Light Capital and Investment Corporation of
Dubai with a total
financing size of nearly US$225
million
On March 28, 2024, Viva Biotech
Holdings Group ("Viva Biotech", "the Group" or "the Company", stock
code: 1873.HK) announced that the Group's revenue during the
Reporting Period achieved RMB2,155.6
million; and our gross profit amounted to RMB738.5 million. In 2023, the Group's net loss
amounted to RMB99.8 million, a
significant improvement from a loss of RMB504.2 million for the corresponding period of
last year. Adjusted non-IFRS net loss improved from RMB133.9 million for the corresponding period of
last year to an adjusted non-IFRS net profit of RMB208.8 million, representing a significant
turnaround from a negative position compared to the corresponding
period of last year, which was mainly attributable to the
stabilization of valuation of certain incubation portfolio
companies of the Group as well as the improvement in profitability
as a result of the Group's initiatives to reduce costs and increase
efficiency.
In addition, in 2023, the Group achieved breakthrough progress
in overall financing and the introduction of strategic investors.
We successfully attracted strategic investors such as Temasek,
Highlight Capital, True Light Capital and Investment Corporation of
Dubai with a total
financing size of nearly US$225
million. The completion of the Group's financing endeavors
and the successful introduction of strategic investors have
propelled the Company towards a trajectory of smooth and rapid
development. On one hand, the substantial financing obtained has
allowed the Company to fully repay its previously issued
convertible bonds, leading to a substantial improvement in the
Company's balance sheet and cash flow. On the other hand, the
successful inclusion of strategic investors will play a pivotal
role in enhancing corporate governance, facilitating business
operation, optimizing investment and financing plans, and driving
strategic development. This collective effort will greatly support
the Company's long-term growth and the successful implementation
and continuous advancement of its integrated strategy.
CRO Business Shows an Attractive Outlook in the Long Run
Despite Slight Fluctuation in the Short Term
In 2023, the Company's revenue from CRO business achieved
RMB844.9 million, and gross profit of
RMB363.7 million. The revenue for
2023 decreased compared to last year, primarily due to the impact
of the global slowdown in biopharmaceutical investment and
financing on the R&D of innovative drugs, as well as the
strategic contraction of the Company's EFS business. Nevertheless,
the Company effectively implemented measures such as cost reduction
and efficiency enhancement to maintain a solid profitability for
the CRO business.
As at December 31, 2023, the
Company had delivered more than 65,035 protein structures to our
clients, approximately 16,110 of which were newly delivered in
2023, and conducted R&D on over 1,886 independent drug targets,
8 of which were newly delivered in 2023. Currently, the Company
maintains a leading position in the industry worldwide in the field
of protein structure analysis. Furthermore, the Company has two key
strategies in place. Firstly, it aims to maximize the value from
existing customers by fostering synergistic development in
biochemistry. Secondly, it is actively enhancing the integration of
online digital marketing and offline BD, while expanding its
overseas BD team in order to stimulate the recovery and growth of
orders. Additionally, the Company is continuously expanding its
emerging technology platforms to create new growth drivers and
provide sustained support for its existing CRO business.
The cumulative number of CRO clients served had increased to
1,398, including the global top 10 pharmaceutical companies (by
reported total revenue for 2023), and revenue from the top ten
customers accounted for 25.7% of our total revenue. Clients of our
CRO business are geographically diverse, of whom those from
overseas contributed approximately 87.1% of our total revenue, and
those from Chinese Mainland contributed approximately 12.9% of our
total revenue.
During the Reporting Period, our utilization of synchrotron
radiation source reached 2,059 hours. The Company established
long-term cooperation with 13 synchrotron radiation source centers
around the world, which are distributed in ten countries/regions,
i.e., Shanghai, China,
the United States, Canada, Japan, Australia, the United Kingdom, France, Germany, Switzerland and Taiwan, China, thus guaranteeing uninterrupted data
collection all year round.
Expanding CDMO Capacity and Increasing CMC Projects
During the Reporting Period, the Group laid great emphasis on
strategic cooperation and synergy with Langhua Pharmaceutical. In
particular, we strengthened the capacity expansion and adjusted the
business structure of CDMO. In addition, efforts were made to
optimize and channel resources towards the CMC business.
In 2023, Langhua Pharmaceutical's revenue amounted to
RMB1,310.7 million, and its adjusted
gross profit amounted to RMB388.8
million, which was primarily attributable to the impact of
delay of orders of certain CDMO clients.
As at December 31, 2023, Langhua
Pharmaceutical had served a total of 880 clients, with the top ten
clients accounting for 51.2% of its total revenue and a 100%
retention rate of top ten clients. In addition, Langhua
Pharmaceuticals provided CMC and CDMO services to more than a dozen
incubation portfolio companies of the Group or companies redirected
from CRO business. During the Reporting Period, in respect of
capacity building, our total available capacity reached 860 cubic
meters. Furthermore, Langhua Pharmaceuticals plans to establish a
new production capacity of 400 cubic meters in 2024 and 2025 to
cater to the commercial production of new molecules. The civil
engineering project is currently in its final stages, with the
workshop's main structure almost completed. The next phase will
involve the procurement and installation of equipment, expected to
commence in 2024. This endeavor will provide ample assurance for
the Company's revenue growth with the launch of new products and
release of reserved capacity.
The number of CMC projects continues to grow, and the new
business is still in the initial phase of profitability. Since its
establishment, CMC has completed and is currently progressing with
a total of 183 new drug projects. As at the end of the Reporting
Period, CMC generated revenue of nearly RMB56.7 million. During the Reporting Period, the
projects driven by the Group progressed smoothly, and one pipeline
has rapidly advanced to Phase III clinical trials, showcasing the
success of the Group's integrated strategy. In the future, the
Group plans to enhance its efforts in BD and customer acquisition
for high-quality CMC projects. By fully utilizing internal project
resources and implementing cost reduction measures, the Group aims
to achieve a balanced financial outcome for its CMC business.
Additionally, in terms of customer orders, external BD accounted
for nearly 63.0%, while traffic from VIVA represented approximately
37.0%. In terms of order amount, external BD contributed 31.0%,
while traffic from VIVA contributed 69.0%.
Successful Exits of Certain Incubation Portfolio Companies
and Future Plans for Incubation Business through Establishment of
Investment Funds
During the Reporting Period, the Company achieved complete or
partial investment exits from six incubation portfolio companies,
realizing corresponding investment returns. In addition, one
startup company was newly invested and incubated, obtained through
a stock-for-stock exchange. In addition, the Company made a new
investment and provided incubation support to one startup company
through stock-for-stock arrangement. As at December 31, 2023, the Group had invested in a
total of 92 portfolio companies. The portfolio companies are mainly
from the United States,
Canada, Europe and China. 67.0% of the portfolio companies are
from North America and 26.0% are
from China.
In 2023, 12 of our portfolio companies completed or was close to
completing a new round of financing, raising approximately
US$236.0 million in total. The
R&D efforts of the portfolio companies were advancing smoothly,
with the total number of pipeline projects reaching close to 222,
of which 185 pipelines are in the preclinical stage and 37
pipelines in the clinical stage. So far, the Group has successfully
realized 13 investment exits or partial exits, and may have an
additional 7 potential exits for our portfolio companies in the
next one to three years.
As at the end of the Reporting Period, Viva has strategically
invested in a series of high-quality assets, including portfolio
companies such as Dogma, Arthrosi, Basking, Triumvira, Deka,
Mediar, Cybrexa, and VivaVision. In the future, as these portfolio
companies continue to develop successfully, secure ongoing
financing, and realize exits, the initial investments will
gradually enter the harvesting phase, providing sustained cash
returns for the Group.
In addition, the fund raising in and setting up of the
incubation fund of the Company in the early stage are progressing
smoothly. It also intends to conduct incubation business through
the establishment of investment funds in future, so as to mitigate
pressure on Group-level liquidity and the appropriation of
funds.
Technological Highlights and R&D Breakthroughs
For our CRO business, we have built several core technological
platforms, including: the PROTAC/molecular glue technology
platform, protein production& structural biology, Cryo-EM
technology platform, membrane protein technology, hit discovery
technology, Bioassay platform, computer-aided drug design (CADD)
and artificial intelligence in drug discovery (AIDD) platform,
antibody/biologics R&D service platform, medicinal chemistry,
etc. During the Reporting Period, the Company has introduced
several new platforms, including XDC platform, V-DEL technology
platform, covalent compound library and molecular glue technology
platform, and enhanced the peptide drug development platform.
Furthermore, the Company has expanded the services offered by the
antibody and large molecule drug R&D platform.
The CDMO business has further enhanced the construction of its
R&D technology platform. In terms of API (Active Pharmaceutical
Ingredient) R&D, Langhua Pharmaceutical has established a green
chemistry technology platform, including enzyme reaction,
continuous flow processes, catalyst and ligand screening platforms,
enabling the efficient and cost-effective development of optimized
synthetic routes. Additionally, in the field of formulation CMC
(Chemistry, Manufacturing, and Controls), Langhua Pharmaceutical
has established distinctive innovative platforms such as the
insoluble drug solubilization technology platform, compound drug
characterization, salt form and polymorph screening, etc.
During the Reporting Period, the development of the newly
expanded emerging technology platforms within the Company showed
promising progress. The V-DEL technology platform has introduced
novel library construction strategies and innovative DNA-compatible
reactions. Leveraging Viva's extensive experience in non-commercial
building block molecules, it has launched various 100-billion grade
DEL libraries for cyclic peptides, PROTAC, covalent inhibitors and
fragments. Furthermore, based on Viva's competitive strength in
protein production and structural biology, the platform engages in
specialized screening activities driven by artificial intelligence
and machine learning to facilitate next-generation data analysis
and prediction, and efficiently integrates subsequent validation
and synthesis processes to ensure seamless workflow.
Furthermore, regarding the latest progress in the peptide
technology platform, it has achieved the capability to synthesize a
wide range of peptides. Particularly, it focuses on the synthesis
of challenging and technologically advanced peptide chains.
Extensive research and technical expertise have been accumulated in
peptide coupling, PDC, RDC, monocyclic peptides, stapled peptides,
complex multi-cyclic peptides (involving peptide folding and
selective folding), biotin-labeled peptides and fluorescent-labeled
peptides. Viva's peptide technology platform envisions a
collaborative approach with Viva's phage display platform and V-DEL
platform, aiming to provide customers with one-stop comprehensive
services encompassing the entire process from the discovery and
validation of hit peptide chains to the identification and
optimization of lead compounds, and ultimately the determination of
candidate compounds.
In addition, the Company has made initial strides in
establishing the XDC platform, an all-in-one conjugate development
platform that integrates Viva's extensive R&D expertise in
antibody drugs, peptide drugs, and small molecule chemical drugs.
This platform is dedicated to delivering efficient and top-quality
services for conjugate development to clients.
For development of Viva's existing emerging technology
platforms, computer-aided drug design (CADD) and artificial
intelligence in drug discovery (AIDD) platforms have been widely
used in various stages of drug development, utilizing physical
chemistry models, artificial intelligence algorithms, and
leveraging supercomputing clusters. Various methods have been
extensively applied in drug discovery. The computational chemistry
division of the Company has developed a series of advanced
algorithms tailored to specific projects (such as FEP) to address
drug design challenges. Application of these cutting-edge
technologies has significantly facilitated the progress of drug
development projects compared to traditional computational tools
and commercial software packages. In addition to traditional small
molecule drug design, methods developed by the computational
chemistry platform have also been applied to various drug
modalities, achieving breakthroughs through experimental
validation. This includes the development of antibodies, peptides,
RNA-targeted small molecule drugs, and more. Overall, Viva's CADD
and AIDD platforms have assembled a talented and multidisciplinary
team, primarily consisting of individuals with advanced degrees
(Masters and Ph.D.). This team possesses the expertise to develop
proprietary algorithms and methods, as well as the capability to
explore various drug modalities with the hardware support of
computing force from the Shanghai Supercomputing Center.
Currently, the Company also provides services relevant to
PROTAC/molecular glue drug R&D, and revenue generated in this
regard accounted for almost 10.42% of total revenue from CRO
business. Our services primarily include studies on protein
production& structural biology, screening of PROTAC molecules,
kinetics studies, drug metabolism, medicinal chemistry, Bioassay,
CADD/AIDD, etc. As at December 31,
2023, the Company has studied more than 50 E3 ligases and
delivered 131 target protein-PROTAC-E3 ligase ternary complex
structures. Additionally, the PROTAC business is expected to
contribute to the continuous growth of CRO revenue in the
future.
Overall, based on the existing technology platforms, the Company
aims to serve the increasing demands of more customers, and
consistently invests in expanding and integrating emerging
technology platforms, thereby achieving channeling and synergy
among different platforms, driving continuous growth in CRO
revenue, and building a comprehensive and refined FIC drug R&D
platform.
Staff and Facilities
As at December 31, 2023, the Group
had a total of 2,077 employees, of whom the number of CRO R&D
personnel reached 1,155, and the number of Langhua Pharmaceutical
was 689. The Company also has been accelerating the construction of
office and laboratory facilities in line with its workforce
expansion plans and expanding production capacity to meet the
fast-growing business needs, including:
- The Group's new headquarters in Zhoupu, Shanghai with a total area of approximately
40,000 square meters had been put into full operation.
- The incubation center located in Faladi Road, Shanghai has an actual usable area of
approximately 7,576 square meters, including 5,552 square meters of
laboratory area.
- The park in Chengdu has a GFA of approximately 64,564
square meters, of which 12,210 square meters of properties had been
put into use as at December 31, 2023,
including 10,800 square meters of laboratory area.
- The novel drug incubation center in Qiantang New District,
Hangzhou has a GFA of
approximately 77,500 square meters. During the Reporting Period,
the Company successfully established a collaboration with a local
state-owned enterprise. Initially, the Company held full ownership,
but it has now transitioned to a 30% equity participation. In the
future, the Company plans to engage in cooperation through a
leasing arrangement upon completion of construction.
- A park in Suzhou with a total GFA of approximately 7,545
square meters, including nearly 5,305 square meters of laboratory
area.
- A park in Jiaxing with a GFA of approximately 6,362 square
meters, including nearly 5,335 square meters of laboratory
area.
- Shanghai Supercomputing Center has been officially put into
operation. At present, it can support computer aided drug design
(CADD) calculation, artificial intelligence in drug discovery
(AIDD) related calculation, and crystal structure and Cryo-EM
(Micro-ED) calculation.
- The factory of Langhua Pharmaceutical in Taizhou,
Zhejiang has a GFA of
approximately 35,168 square meters, including the Taizhou R&D
center with an area of approximately 2,500 square meters. The
R&D center of Ningbo Nuobai has an area of approximately 1,300
square meters and the office building of Ningbo Nuobai has an area
of approximately 1,500 square meters.
Dr. Chen (Cheney) Mao,
Chairman and CEO of Viva Biotech, said: "With unique advantages
in structure-based drug R&D (SBDD), the Company will increase
the cross-sell between biological and chemical businesses, continue
to strengthen the construction of a one-stop drug R&D and
manufacturing service platform, deepen the synergy between CRO and
CDMO business, improve the capacity building for front-end services
and drive business to back-end services to further enhance the
business funnel effect. The Company is in an effort to establish an
open eco-system for global biopharma innovators."
About Viva Biotech
Established in 2008, Viva Biotech (01873.HK) provides one-stop
services ranging from early-stage Structure-Based Drug R&D to
commercial drug delivery to global biopharmaceutical innovators.
The Group offers leading early-stage to late-phase drug discovery
expertise by integrating dedicated team of experts, cutting-edge
technology platforms, and state-of-the-art equipment in X-ray
crystallization, Cryo-EM, ASMS, SPR, HDX, CADD, and much more. The
business covers all aspects of therapeutic strategies and drug
modalities, including small molecules and biologics across the
pharma and biotech spectrum. The experienced chemistry team, led by
senior medicinal chemists and drug discovery biologists, provides
services for drug design, medicinal chemistry (hit to lead and lead
optimization), custom synthesis, chemical analysis and
purification, kilogram scale-up, peptide synthesis and
corresponding bioassays. With subsidiary Langhua Pharma, the Group
offer worldwide pharmaceutical and biotech partners a one-stop
integrated CMC (Chemical, Manufacturing, and Control) service from
preclinical to commercial manufacturing. Additionally, Viva Biotech
embedded an equity for service (EFS) model to high potential
startups to address unmet medical needs.
As of December 31, 2023, Viva
Biotech had cumulatively provided drug R&D and manufacturing
services to 2,278 global biotech and pharmaceutical clients and
invested in and incubated 92 biomedical startups. In the future,
the Company will continue to strengthen its technological barriers
and improve R&D and manufacturing service capabilities to
provide high-quality diversified services to more startup
innovative drug companies and mid-to-large pharmaceutical companies
globally, benefiting patients worldwide.
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SOURCE Viva Biotech Holdings