[一季报]华东医药(000963):2022年第一季度报告（英文版）
原标题:华东医药:2022年第一季度报告（英文版） Huadong Medicine Co., Ltd. The First Quarterly Report 2022 The Company and all members of the Board of Directors hereby guarantee that the information presented in this report is authentic, accurate and complete and free of any false records, misleading statements or material omissions. Important Declaration: 1.The Board of Directors, Board of Supervisors, directors, supervisors and senior management of Huadong Medicine Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the information presented in this report is authentic, accurate and complete and free of any false records, misleading statements or material omissions, and shall undertake individual and joint legal liabilities. 2.The Company’s legal representative and the officer in charge of accounting, and head of accounting department (accounting supervisor) hereby declare and guarantee that the financial statements in this quarter report are authentic, accurate and complete. 3.Has the first quarterly report been audited? □ Yes √ No This report is prepared both in Chinese and English. Should there be any discrepancy between the Chinese and English versions, the Chinese version shall prevail. I. Key financial data (I) Key Accounting Data and Financial Indicators Whether the Company needs to perform retroactive adjustment or restatement of previous accounting data □ Yes √ No
√ Applicable □ N/A
No such case. If the Company recognizes a non-recurring gain/loss listed in the “Interpretative Announcement No. 1 on Information Disclosure Criteria for Public Companies – Non-Recurring Profit/Loss” as a recurring gain/loss, reasons should be specified. □ Applicable √ N/A No such case. (III)Changes in key accounting data and financial indicators and their reasons √ Applicable □ N/A
(I) Total number of shareholders of common shares and number of shareholders of preferred shares with voting rights restored, as well as information about top 10 shareholders Unit: share
□ Applicable √ N/A III. Other important matters √ Applicable □ N/A (I) Overview of operations 1. The Company’s operations during the reporting period In the first quarter of 2022, all work of the Company was carried out as planned. With the pharmaceutical industry and domestic aesthetic medicine business overcoming the impact of the Covid-19 pandemic at home, the Company’s operations were steadily improving on the whole, with business indicators witnessing an increase from the same period in 2021. From January to March 2022, the Company realized operating income of RMB8,933 million, up 0.4% year on year, and net profit attributable to listed company shareholders after deduction of non-recurring gains or losses of RMB699 million, up 0.39% year on year. Calculated by the same standard of the previous year’s annual report after excluding the controlling subsidiary Huadong Ningbo, operating income increased by 3.79% year on year, and net profit attributable to listed company shareholders after deduction of non-recurring gains or losses went up by 1.74% year on year. The core subsidiary Zhongmei Huadong implemented work closely centering on its strategic objectives and annual business plan during the reporting period. Its overall operations were stable and sales of major products maintained growth. Affected by decreases in prices of some products, it realized operating income of RMB2,791 million, down 9.73% year on year while up 19.45 % from the fourth quarter of 2021. Its net profit after deduction of non-recurring gains or losses registered RMB580 million, down 13.41% year on year while significantly up 48.08% quarter on quarter. Zhongmei Huadong is expected to maintain growth momentum throughout the year. During the reporting period, Zhongmei Huadong continued to deeply engage in the pharmaceutical business in the Zhejiang market, expanded out-of-hospital markets and accelerated expansion of agency business. Its operating income after digesting the impact of the liquidation of Huadong Ningbo went up by 5.8% year on year. It maintained stable growth (the controlling subsidiary Huadong Ningbo, which went into liquidation during this reporting period, realized operating income of RMB290 million in the same period last year including RMB96 million operating income from aesthetic medicine agency business, and net profit attributable to the Company’s consolidated statements of RMB9,265,000). During the reporting period, the Company’s industrial microbiology business maintained good development momentum. External order demand maintained a rapid growth, driving up the operating income from the business by 99% during the reporting period. Hubei Meiqi Health Technology Co., Ltd. (“Meiqi”), a joint venture established by the Company and Hubei Angel Biological Group, has already started construction, and it will focus on the R&D, manufacturing and sales of ingredients of nutritional and health food and functional ingredients for personal care. Anhui Huachang High-tech Pharmaceuticals Co., Ltd. (“Huachang”), all of whose equity has been acquired by the Company, has completed equity change registration at the administration for industry & commerce and has been included in the Company’s consolidated statements. It recently started trial production, with a focus on the industrialization of nucleoside series products, semisynthetic antiparasitic drugs with microbial origins and other drugs. It aims to become a wholly new industrialization platform of the Company in the field of industrial microbiology. The commencement of the construction of Meiqi and the trial production of Huachang mark an important step of the Company on its development path of industrial microbiology. This year the Company will continue to accelerate development of relevant products in this field, expand layout, increase product scale, promote business development, and further explore the new blue ocean of industrial microbiology. In February 2022, Sinclair, the Company’s wholly-owned subsidiary in the United Kingdom, officially included it into the Company’s consolidated statements. Viora has advanced product portfolios with technologies like laser, intense pulsed light, radio frequency, high-pressure jet and microdermabrasion. Its Reaction?, V series (V10, V20, V30), EnerJet and Pristine? and Infusion? are currently sold overseas. In 2015, Reaction? was granted the registration certificate of Class III medical devices by the National Medical Products Administration (NMPA). Viora’s products can effectively complement the Company’s existing energy-based product line, so the Company will have business layout in all types of energy-based aesthetic medical devices. Through efficient integration, High Tech will make full use of the channel resources accumulated by Viora to expand the U.S. market. Based on the acquisition, the Company has creatively put forward the product concept of “V Women Tech” that focuses on professional care for women with leading aesthetic medical technology. During the reporting period, the Company saw rapid growth in aesthetic medicine business at both home and abroad. The dual circulation strategy has produced initial mutual facilitation effect. The Company’s aesthetic medicine business realized total operating income of RMB453 million, up 226.8% year on year on a comparable basis (excluding Huadong Ningbo). Integration and synergy effects were seen in the injection and EBD segment of the wholly-owned subsidiary in the United Kingdom, Sinclair. With the lift of pandemic containment measures in a number of countries in the European market and the push of strong sales in the Asian Pacific market, it realized consolidated operating income of GBP31.04 million (about RMB260 million) during the reporting period, up 163.1% year on year, a record high in a single quarter. It turned around year on year and realized operating profit for the first time in history. After acquiring Viora, Sinclair has continued to implement operation integration. With a good number of orders in hand for the second quarter, it is expected to maintain the rapid growth trend on the whole, making a good start for the subsidiary to maintain rapid growth in operating income throughout the year and realize the first annual operating benefit since the subsidiary completed acquisition. During the reporting period, the Company’s domestic wholly-owned aesthetic medicine company Sinclair (Shanghai) realized operating income of RMB157 million and demonstrated strong profitability, which exceeded the contribution of Huadong Ningbo’s agency business income to the Company’s profit in the same period last year. Sinclair (Shanghai) has actively expanded the coverage of partner hospitals and promoted products. Currently it has signed a cooperation agreement with more than 400 hospitals, and has more than 700 certified doctors. Since its launch, ? Ellansé has maintained great market attention, enjoyed good reputation, and led the regenerative aesthetic medicine market. The subsidiary has actively launched the genuine product traceability into its cooperation blacklist and released it to the public, to urge beauty seekers to enhance self-protection awareness and protect their legal rights and interests. ? During the reporting period, Glacial Spa (F0, life cosmetology version of a frozen freckle-removing medical device), a cold-touch cosmetic instrument introduced by the Company from R2 Company (the USA), officially entered the Chinese market, and its sales and services were carried out by the first group of vanguard partners in five major Chinese cities in March. Meanwhile, the Company has worked actively despite the pandemic, leveraging its online advantages to expand business. It has opened the online “Glacial Flagship Shop” on TMall, to run synchronously with ? offline institutions. In terms of business model, Glacial Spa originated the DTC (Direct to Customer) model. After buying a care program online, consumers choose offline contracted cooperative institutions to provide specific services. By standardizing the purchase and consumption procedures, the Company has made prices transparent, thus providing consumers with high-quality services. Besides, the Company will take over Reaction? (used for body and face shaping and skin firming), a product of Viora that has already been on the domestic market, and plans to integrate domestic EBD market resources and channels to realize resource coordination and sharing and actively promote the rapid growth of the product in the domestic market. 2. R&D progress of the Company during the reporting period In the reporting period, the Company accelerated the R&D work and continued to increase the R&D investment. The total R&D investment in the pharmaceutical industry was RMB 410 million, with a year-on-year increase of 46.49%. As of the report release period, the innovative drug and biosimilar business of the Company has achieved a number of milestones, with the main progress as follows: (1) Endocrine The last subject completed the study in the phase II clinical trial of TTP273, a global innovative small molecule oral GLP-1 receptor agonist, in the first quarter of 2022. DR10624, a multi-agonist targeting GLP-1R/GCGR/FGF21R being developed by Doer Biologics, a holding subsidiary of the Company, has been approved for phase I clinical trials in New Zealand in April 2022 for the treatment of type 2 diabetes, obesity and metabolic syndrome. Liraglutide Injection, a GLP-1 receptor agonist, has been completed the drug registration inspection for diabetes indication, and it is expected to be approved for marketing by the end of 2022. The phase III clinical study on weight loss indication has been completed in China, it is in the pre-NDA stage now, and it is expected to submit the New Drug Application in the second quarter of The Investigational New Drug Application (IND) for Semaglutide Injection, a GLP-1 receptor agonist, has been accepted in April 2022. Insulin Aspart Injection: The clinical trial approval notice has been obtained in April 2022. Insulin Degludec Injection is in the preclinical phase, of which a pre-IND application has been submitted in March 2022. (2) Tumor HDM2002 (Mirvetuximab), the world's first ADC (in development) for folate receptor α (FRα)-positive ovarian cancer, is used to treat platinum-resistant ovarian cancer with high FRα expression. On March 20, 2022, ImmunoGen, the Company's R&D partner, announced all the results of its pivotal single-arm clinical trial (SORAYA Trial) in the U.S.: The trial has reached its primary endpoint, with a confirmed objective response rate (ORR) of 32.4%, including 5 cases of complete response. The updated median duration of response (DOR) was 6.9 months, and the clinical trial results showed that it had clinically significant antitumor activity, consistent safety and good tolerability for platinum-resistant ovarian cancer with a high expression of folate receptor α (FRα). On March 29, 2022, ImmunoGen announced the submission of a Biological License Application (BLA) for this product to the U.S. Food and Drug Administration (FDA). In addition to SORAYA trial, MIRASOL, an international multi-center randomized controlled phase III study, is being conducted now, and it is expected for ImmunoGen to obtain the top-line data from its MIRASOL trial in the third quarter of 2022. DR30303, an investigational product targeting Claudin 18.2 of the holding subsidiary Doer Biologics, was designed for the treatment of solid tumors, for which the clinical trial approval notice was obtained in January 2022, and the phase I clinical trial has been officially initiated. HDM2003 (AB002) is a double-target fusion protein targeting PD-L1/L2 and IL15 for the treatment of solid tumors. AKSO, a U.S. partner of the Company, is conducting preclinical studies on HDM2003. Heidelberg Pharma, a Germany partner of the Company, is currently conducting a phase I/IIa ? clinical trial on HDP-101, an ATAC drug (Antibody Targeted Amanitin Conjugate) targeting B cell maturation antigen (BCMA), for the treatment of relapsed/refractory multiple myeloma, and the first patient was dosed on February 15, 2022. Heidelberg Pharma, a Germany partner of the Company, is currently conducting preclinical ? trials on HDP-103, an ATAC drug targeting prostate-specific membrane antigen (PSMA), of which the target indication is metastatic castration-resistant prostate cancer (mCRPC). (3) Autoimmunity ? ARCALYST (Rilonacept), a recombinant dimer fusion protein that can block IL-1α and IL-1β signaling, was introduced by the Company in February 2022 under a partnership agreement ? with Kiniksa. ARCALYST is already available in the U.S. market for the treatment of cryopyrin-associated periodic syndromes, deficiency of IL-1 receptor antagonist, and recurrent ? pericarditis. ARCALYST has been listed in the List of the First Batch of Overseas New Drugs Urgently Needed in Clinical Practice by CDE for the treatment of cryopyrin-associated periodic syndromes. The Company will actively communicate with CDE, and promote the registration and marketing of this product in China as soon as possible. Mavrilimumab is a fully humanized monoclonal antibody targeting GM-CSFRα, for which Kiniksa, a partner of the Company, is preparing the phase II overseas clinical trial for GM-CSF related cardiovascular disease. HDM3002 (PRV-3279) is a drug used to treat systemic lupus erythematosus (SLE) and prevent or reduce the immunogenicity of gene therapy. In January 2022, Provention Bio (USA), a partner of the Company, announced that it would launch a phase IIa clinical trial for SLE indication in the U.S. and Hong Kong, China, and the subject screening is currently underway in the U.S. Domestic pre-IND application has been submitted and feedback has been obtained. HDM5001 (OP-101), an investigational product jointly developed by the Company and its joint-stock company Ashvattha Therapeutic, Inc (U.S.) for the treatment of hyperinflammation in hospitalized adult patients with severe COVID-19, is currently undergoing phase II clinical trial in the U.S. The product is undergoing preparation for clinical application in China, and it is expected to submit an IND application in the second quarter of this year. ? HDM3001 (QX001S), a biosimilar of Stelara , is a product being jointly developed by the Company and Qyuns Therapeutics for the treatment of moderate to severe plaque psoriasis in adult patients, and the subject enrollment for phase III clinical trial has been completed ahead of schedule in February 2022. 3. BD cooperation of the Company during the reporting period During the reporting period, the Company focused on innovative varieties with excellent clinical value and great market potential, continued the in-depth layout around the core therapeutic fields, and further enriched the autoimmune and tumor innovation pipeline. (1) In February 2022, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd., a wholly-owned subsidiary of the Company, signed a product exclusive license agreement with Kiniksa Pharmaceuticals (UK), Ltd. (hereinafter referred to as "Kiniksa"), a wholly-owned subsidiary of Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA). Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. obtained the exclusive license of Kiniksa's two globally innovative ? autoimmunology products namely ARCALYST and Mavrilimumab in 24 Asia-pacific countries and regions (excluding Japan), including China, South Korea, Australia, New Zealand and India. ? ARCALYST is already available in the U.S. market for the treatment of cryopyrin-associated periodic syndromes, deficiency of IL-1 receptor antagonist, and recurrent pericarditis, obtaining good clinical feedback. The product is the first and only drug approved by FDA available for the ? treatment of recurrent pericarditis in people aged 12 years and above. In China, ARCALYST has been listed in the List of the First Batch of Overseas New Drugs Urgently Needed in Clinical Practice by CDE for the treatment of cryopyrin-associated periodic syndromes. The introduction of the first-in-class biological drugs above is expected to accelerate to meet the clinical needs of domestic autoimmune and rare disease patients, and it also reflects that the Company has been accelerating the process of innovation and internationalization, and deepening the layout of immune products. (2) In February 2022, the Company and its wholly-owned subsidiaries Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. and Huadong Medicine Investment Holding (Hong Kong) Limited signed the Equity Investment Agreement and Exclusive Product License Agreement with Heidelberg Pharma AG (" Heidelberg Pharma "), a German listed company, and its shareholders' representatives. Through its wholly-owned subsidiary Huadong Medicine Investment Holding (Hong Kong) Limited, the Company will subscribe for the secondary public offering of Heidelberg Pharma and acquire part of the equity from the counterparty, ultimately acquiring a total of 35% of equity of Heidelberg Pharma and becoming its second largest shareholder. Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. has obtained the exclusive license (including exclusive development and commercialization) from Heidelberg Pharma for its 2 products under research, i.e., HDP-101 and HDP-103, in 20 Asian countries and regions including Chinese Mainland, Hong Kong SAR, Macao SAR, Taiwan Region, Korea and Singapore. In addition, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. will obtain the exclusive opt-in rights for two additional products under research of Heidelberg Pharma namely HDP-102 and HDP-104, as well as the right of first negotiation (ROFN) for two additional products in development. Heidelberg Pharma is the first company in the world that has successfully developed the toxin Amanitin and its derivatives ? for cancer treatment through its proprietary ATAC (Antibody Targeted Amanitin Conjugate) technology platform. Amanitin, the only known RNA polymerase II inhibitor in the world, is of a novel mechanism of action. The cooperation will enable the Company to fully integrate its own ? platform, further enriching the Company's global ADC R&D ecosystem. Mirvetuximab, the world's first ADC being developed by Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (a wholly-owned subsidiary of the Company) and ImmunoGen for the treatment of FRα -positive ovarian cancer, is in smooth clinical progress, and the pivotal single-arm clinical trial in the U.S. has reached its primary endpoint. The first subject enrollment and administration has been completed for phase I PK study and phase III clinical trial of Mirvetuximab in China, and related clinical work is progressing on schedule. To date,the exemption from the duty to make an offer issued by the Federal Financial Supervisory Authority (BaFin) have been obtained; the Company has also obtained the Certificate of Non-Objection from the German Federal Ministry for Economic Affairs and Climate Action (BMWK) regarding the transaction; and the approval or filing of relevant overseas investment in China for this transaction is progressing on schedule. The successful cooperation with ImmunoGen, Heidelberg Pharma and other leading global ADC technology companies has further enhanced the Company's R&D technology and clinical registration capabilities in the ADC field. The Company will gradually build a differentiated ADC independent R&D platform, strengthen and optimize the oncology product innovation chain and ADC eco-chain, and plan to develop at least 10 ADC innovative products and actively promote registered clinical studies within three years. (3) In February 2022, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd., a wholly-owned subsidiary of the Company, signed an exclusive strategic cooperation agreement with AKSO Biopharmaceutical, Inc., U.S. ("AKSO") for the clinical development and commercialization rights of AB002 in the Asia-pacific region (excluding Japan). AB002, a double-target fusion protein targeting PD-L1/L2 and IL15 in preclinical development, can be used for the treatment of solid tumors by inhibiting immune checkpoints and activating natural killer cells (NK cells). The Company believes that AB002's unique mechanism of action is of great potential in the immunotherapy of cancer, and this cooperation will also further enrich the Company's oncology product pipeline. (4) In January 2022, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd., a wholly-owned subsidiary of the Company, signed an exclusive product marketing agreement with Beijing Shenogen Pharmaceutical Co., Ltd. and Hainan Shenogen Pharmaceutical Co., Ltd., two wholly-owned subsidiaries of Beijing Shenogen Pharma Group Ltd. ("Shenogen"), and obtained the exclusive marketing rights of "Icaritin Soft Capsule", a first-in-class national innovative drug for small molecule immunoregulation in the treatment of advanced hepatocellular carcinoma, in 27 provinces in Chinese Mainland. The Company has a complete pharmaceutical service system and a wide range of market resources in the pharmaceutical industry, and this cooperation is just an affirmation of the Company's commercialization ability in the local market, which will help to build a win-win cooperation model that can achieve mutual complementarity and collaborative development. Moreover, it is expected to continuously improve the Company's market competitiveness in the oncology field. 4. Miscellaneous During the reporting period, the Company’s controlled subsidiary Huadong Ningbo officially went into liquidation due to expiry of operating period. The Company and Huadong Ningbo’s natural person shareholders submitted an application to Ningbo Beilun District People’s Court (“Beilun District Court”) respectively, requesting the court to preside over the liquidation of Huadong Ningbo. On March 14, 2022, the Company received the electronic civil ruling paper numbered (2022) Zh. 0206 Q.S. No. 1 from Beilun District Court. The ruling is as follows: The court accepts the application regarding the liquidation of Huadong Ningbo, and the ruling shall come into immediate effect. The liquidation of Huadong Ningbo is one presided over by a court. Currently, Beilun District Court has completed the selection and appointment of an intermediary to establish a liquidation team according to relevant procedures, and the liquidation team will preside over the liquidation of Huadong Ningbo. In the process of liquidation of Huadong Ningbo, the Company does not have dominance over the liquidation work or control Huadong Ningbo. According to the Company Law and the Accounting Standards for Business Enterprises, Huadong Ningbo is no longer included in the Company’s consolidated financial statements beginning on December 31, 2021. The Company will assign special personnel to actively participate in and cooperate in the subsequent liquidation work of Huadong Ningbo. The matter is unlikely to have a significant impact on the Company’s operations. （II）Registration form of receptions, including research, communication and interview, undertaken
(I) Financial Statements 1. Consolidated balance sheet Prepared by Huadong Medicine Co., Ltd. March 31,2022 Unit: RMB yuan
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