Viva Biotech Announced 2020 Annual Results
Financial Highlights of the year ended December 31, 2020:
— Revenue reached RMB 697.0 million, representing a year-on-year (YoY) increase of 115.7%
— Gross profit reached RMB 304.9 million, representing a YoY increase of 95.6%
— Adjusted non-IFRS net profit amounted to RMB 252.3 million
— Adjusted earnings per share amounted to RMB 0.18
— The Board recommended the payment of a final dividend of HK$0.01
Driven by the increase in outsourcing proportion of large-scale pharmaceutical enterprises and demand from small and medium-sized biotechnology companies, the global drug research and development (“R&D”) and production service industry continued demonstrating an upbeat trend. Viva Biotech proactively grasped the opportunity and achieved both internal growth and external expansion. The synergistic effects of the Group’s cash-for-service (CFS) model and equity-for-service (EFS) model were further demonstrated. The Group has thus made substantial progress in vertical integration and expansion along the industry chain to CDMO business.
Revenue from CFS Business Surged, Diversified & Extensive Customer Groups
During the Reporting Period, Viva Biotech’s revenue from the CFS business increased significantly by 146.3% YoY to RMB 604.7 million. The total number of clients amounted to 1,252. The growth was primarily attributable to the extensive and diverse quality client groups, increase in orders from clients, and the CDMO and commercialization services due to acquisition of Langhua Pharmaceutical.
The backlog order under the CFS business model grew by approximately 54.7% and reached approximately RMB 416 million. As of December 31, 2020, the Company had accumulatively provided drug discovery services to over 543 biotechnology and pharmaceutical clients, delivered more than 21,000 protein structures and conducted R&D into over 1,500 independent drug targets. Clients included the global top 10 pharmaceutical companies (in terms of revenue in 2019) and 35 companies included in Fierce Biotech’s Fierce 15. Revenue from repeated clients accounted for over 85% of the revenue during the Reporting Period.
Industry Chain Integration and Expansion of CDMO Business
Holding the aim to establish a one-stop platform from discovery to commercial production of novel drugs, the Company completed the strategic integration of Langhua Pharmaceutical in November 2020. As a comprehensive pharmaceutical R&D and manufacturing company, Langhua Pharmaceutical is mainly engaged in the production of small molecule APIs and intermediated and CDMO business. As of December 31, 2020, Langhua Pharmaceutical recorded revenue of RMB1,518.1 million throughout the year, representing a YoY increase of 22.7%. Sales revenue from its CDMO business amounted to RMB 875 million, representing a YoY increase of 54%. Langhua Pharmaceutical had served a total of over 709 clients, of whom the retention ratio of top ten clients reached 100%, and has independently produced 95 varieties of API and CDMO projects so far.
EFS Business Continuously Expanding, Portfolio Companies Made Substantial R&D Progress
During the Reporting Period, due to the increase in the incubated companies and their growing demands, revenue from the EFS business increased by 19.1% YoY to RMB 92.3 million, and backlog order climbed by approximately 138.8% YoY and reached approximately RMB 191 million. Throughout 2020, the Company reviewed a total of over 834 projects globally and added 21 start-ups to its portfolio companies, and added additional investment in 10 existing portfolio companies, covering multiple indications, modalities and locations. During the Reporting Period, R&D for all of the portfolio companies rolled out smoothly and total number of pipeline projects exceeded 120, half of which had entered PCC/IND-enabling stage. Meanwhile, the Company proactively carried out post-investment support, including enhancing talent recruitment, optimizing product pipeline development strategies, bridging financing resources and launching industry events such as Demo Day and Viva Biotech Partnership Summit, to develop and enhance ecosystem construction.
Enhancing Strengths of Technology Platforms, Expanding Scales of Staff and Facilities
During the Reporting Period, the Company invested RMB 66.0 million in R&D, representing a YoY increase of 46.7%. Besides the continuous optimization of existing technology platforms, the investment was primarily used for the introduction of new technology platforms, such as Cryo-EM and computational chemistry. The Company also actively expanded into the field of antibody macromolecules and set up CMC process development team, so as to take the initiative to expand and meet clients’ demand for R&D and production services at various stages.
As of December 31, 2020, the Group had a total of 1,619 employees, including 643 employees newly consolidated from Langhua Pharmaceutical. The Company (excluding Langhua Pharmaceutical) had 976 employees, including 817 R&D personnel, with a laboratory and office premise of approximately 24,000 square meters. To better accommodate the rapid-growing business needs and personnel increase, save rental expenses and provide stable R&D, production and operation premises, the Company proactively expanded its business bases and obtained properties and land banks in Zhoupu, Shanghai; Zhangjiang, Shanghai; Chengdu, Sichuan; and Qiantang New District, Hangzhou.
Dr. Cheney Mao, Chairman and Chief Executive Officer of Viva Biotech Holdings, said, “Positioning at the early drug discovery sources from ‘0’ to ‘1’, the Company enjoys advantages in terms of technology platforms, client flow and talents. In the future, the Company will continue to construct and raise technology barriers, enhance talent recruitment, strengthen bridging of customers and portfolio companies, improve operating efficiency, tap into the synergistic effect, accelerate the construction of one-stop drug discovery and production service platforms from ‘0’ to ‘1’ and to ‘N’, to establish an open and cooperative platform targeting global biopharmaceutical innovators.”
About Viva Biotech Holdings
Viva Biotech’s mission is to become a cradle for innovative biotechnology companies from around the world. We have developed a scalable business model combing the conventional cash-for-service (CFS) model and its unique equity-for-service (EFS) model. Under the CFS model, the Group provides one-stop service for novel drug discovery and production to global pharmaceutical clients. EFS business is dedicated to investing globally in biotech innovation with novel solutions to unmet medical needs across multiple therapeutic areas. As of December 31, 2020, Viva Biotech had provided drug discovery and production services to 1,252 pharmaceutical clients worldwide, worked on over 1,500 independent drug targets, delivered approximately over 21,000 independent protein structures and incubated/invested 67 biotech companies.
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