East China Pharmaceutical's revenue and net profit in the pharmaceutical industry grew by double digits in the first quarter, and a number of products reached milestones

On the evening of April 25, 2024, Huadong Medicine (000963. SZ) announced its results for the first quarter of 2024. In the first quarter, the net profit of revenue and net profit increased steadily, with operating income of 10.411 billion yuan, a year-on-year increase of 2.93%, a net profit attributable to the parent company of 862 million yuan, a year-on-year increase of 14.18%, a net profit attributable to the parent company of 838 million yuan, a year-on-year increase of 10.66%, and a positive growth in operating income and net profit compared with the fourth quarter of 2023.

On the same day, Huadong Medicine announced that the registration application for Class III medical devices of its high-end hyaluronic acid product MaiLi Extreme was accepted by the NMPA, and the medical aesthetic sector ushered in important progress.

The pharmaceutical industry continues to innovate, and there is a lot of progress in hot fields

In the first quarter of 2024, the overall operation of Zhongmei East China, the core subsidiary of Huadong Pharmaceutical and Pharmaceutical Industry Sector, continued to maintain a stable growth trend, achieving operating income (including CSO business) of 3.399 billion yuan, a year-on-year increase of 10.53%, and a consolidated net profit of 751 million yuan, a year-on-year increase of 11.67%.

With continuous R&D and innovation, Huadong Medicine has a first-in-class layout of first-in-class drugs in the three core therapeutic areas of anti-tumor, endocrine and autoimmunity, and has formed three characteristic R&D matrices of ADC, GLP-1 and topical preparations to build differentiated advantages. In 2024, Huadong Pharmaceutical's innovative drugs and biosimilar business are expected to usher in a number of milestones.

It is worth mentioning that Huadong Medicine and CARsgen reached an exclusive commercialization of BCMA CAR-T product Zewogene autoleucel injection (trade name: Saikaize ®) was the first to be approved for marketing in the first quarter of 2024, successfully entering the new track of CAR-T. ®

IN ADDITION, HUADONG MEDICINE'S TWO INDICATIONS OF LINACEPT FOR INJECTION (ARCALYST®), AND FIVE PRODUCTS, INCLUDING ELAHERE®, SENAPARIB AND USTEKINUMAB, ARE IN THE CRITICAL STAGE OF MARKETING SPRINT, AND ARE EXPECTED TO USHER IN THE HARVEST PERIOD IN 2024.

In March 2024, ELAHERE®, the first and only ADC approved in the U.S. for the treatment of platinum-resistant ovarian cancer, was converted from accelerated approval to full approval in the® U.S. Its domestic marketing application was accepted in October 2023 and has been included in the list of domestic priority review varieties, and is expected to be approved for marketing in 2024. In addition, Huadong Medicine is actively expanding the indication of ELAHERE, and the product was approved to join the international multicenter PSOC (platinum-sensitive ovarian cancer) phase III clinical study for the front-line treatment of ovarian cancer in April 2024, in combination with bevacizumab for the maintenance treatment of adult patients with folate receptor α (FRa)-positive recurrent platinum-sensitive epithelial ovarian cancer, fallopian tube cancer or primary peritoneal cancer who have not progressed after second-line platinum-based chemotherapy.

In December 2023, Huadong Medicine entered into an exclusive marketing cooperation with Yingpai Pharmaceutical on the innovative PARP inhibitor senaparib, which is suitable for adult patients with advanced epithelial ovarian cancer, fallopian tube cancer or primary peritoneal cancer for the maintenance treatment of first-line platinum-containing chemotherapy after achieving complete remission or partial response, and the indication is positioned as first-line maintenance therapy for the whole population, which can prolong the remission time after first-line platinum-containing chemotherapy and delay recurrence, which can be compared with ELAHERE®Complementing each other and highly synergistic, its China listing application was accepted in August 2023.

In March 2024, Huadong Medicine's China marketing authorization application for the recurrent pericarditis indication of Linatercept for Injection (ARCALYST®), a global innovative product introduced from Kiniksa in the United States, was accepted. IN ADDITION, THE CHINA MARKETING APPLICATION FOR ARCALYST® FOR THE TREATMENT OF COLD PYRILINE-ASSOCIATED PERIODIC SYNDROME HAS ALSO BEEN ACCEPTED. Both indications are varieties of the National Rare Disease Catalogue, and both have been included in the list of priority review varieties.

According to the announcement, Huadong Medicine's independent research and development achievements are also constantly enriched, and the research and development work is progressing steadily. The China IND application for GLP-1R/GIPR dual-target long-acting peptide agonist HDM1005 for weight management in overweight or obese populations and type 2 diabetes mellitus for two indications of type 2 diabetes was approved in March 2024, and the first subject enrollment and dosing of the Phase Ia clinical study in China were completed in March 2024. In addition, HDM1005 U.S. IND application for the indication of overweight or obesity was approved in April 2024. The company's first self-developed ADC project HDM2005, which is intended to be developed for the treatment of advanced solid tumors and hematologic tumors, has submitted an IND application in China in March 2024 and has been accepted.

According to Huadong Medicine's 2023 annual report, as of April 2024, the company has a total of 111 pharmaceutical projects under research, including 73 innovative products and biosimilar projects, which has formed a good development trend of continuous clinical promotion and listing of innovative products, providing new momentum for medium and long-term development.

Medical cosmetology maintained stable growth, and the advantages of differentiated product matrix were highlighted

In the first quarter of 2024, East China Pharmaceutical's medical aesthetic business continued to maintain a good growth trend as a whole, with a total operating income of 630 million yuan (excluding internal offsets), a year-on-year increase of 25.30%. Among them, Xinkeli Aesthetics, a wholly-owned subsidiary of domestic medical cosmetology, actively expanded the domestic market, and achieved operating income of 257 million yuan during the reporting period, an increase of 22.65% year-on-year and 13.38% month-on-month in the fourth quarter of 2023.

Huadong Medicine is one of the few companies in China with a global operation layout of medical aesthetics, and its medical aesthetic business has created a comprehensive, differentiated and international product matrix, with the number of products and coverage areas at the forefront of the industry, and the future potential is worth looking forward to.

Especially in the field of medical aesthetic injection products, Huadong Medicine has achieved full coverage of the three major categories of regeneration, hyaluronic acid and botulinum toxin, and the above three categories have formed more than two differentiated product pipelines, including polycaprolactone microspheres for injection Ellansé® ® series, poly-L-lactic acid collagen stimulator Lanluma®, new high-end lidocaine-containing hyaluronic acid MaiLi series, biphasic hyaluronic acid Perfectha®, A variety of high-end medical aesthetic products such as ATGC-110 and recombinant botulinum toxin type A YY001 can provide one-stop facial complete aesthetic solutions for beauty seekers in the future.

On the day of the release of the first quarterly report, Huadong Medicine announced that the medical device registration application of MaiLi Extreme was accepted by the NMPA, which is an important progress in the research and development process of this product in China. Previously, the product has successfully met the primary endpoint in clinical trials in China, and has shown that the product has good filling performance and safety.

The MaiLi range consists of 4 products, including MaiLi Precise, MaiLi Define, MaiLi Volume and MaiLi Extreme, all of which have been launched in Europe, and can be applied to different parts of the face through a variety of formulations, providing beauty seekers with a total solution for facial beauty fillers. As the one with the highest concentration of hyaluronic acid and the strongest volumizing ability in the MaiLi series, MaiLi Extreme can provide instant filler sculpting and quickly improve chin retraction after injection.

Botulinum toxin products are the mainstream and core products in the field of light medical aesthetics, and Huadong Medicine has long been optimistic about the development prospects of the botulinum toxin market. In the first quarter of 2024, Huadong Medicine, South Korea's ATGC and Chongqing Yuyan Co., Ltd., two innovative botulinum toxin products under development, ATGC-110 and recombinant botulinum toxin type A YY001, respectively, made important progress. The marketing application of ATGC-110 has been accepted by the Ministry of Food and Drug Safety (MFDS) of South Korea for the indication of improving moderate to severe glabellar lines in adult patients, and YY001 has completed the enrollment of Phase III clinical subjects in China. YY001 and ATGC-110 are two botulinum toxin products that will fully meet the needs of rejuvenation and high safety of beauty seekers based on differentiated efficacy.

For a long time, Huadong Medicine has focused on the global high-end medical aesthetic market, diversified its product pipeline, and has achieved full coverage of the mid-to-high-end market of non-surgical medical aesthetic injection products and energy source devices, and its product portfolio covers non-surgical mainstream medical aesthetic fields such as glabellar line improvement, facial and body filling, thread lifting, skin management, body contouring, hair removal, and intimate restoration. At present, the company has 38 "minimally invasive + non-invasive" international high-end products of medical cosmetology, of which 24 have been marketed at home and abroad, and 14 global innovative products are under development.

In the industrial microbiology segment, revenue maintained stable growth, with a year-on-year increase of 23.00%. Subsequently, with the active expansion of overseas markets, the domestic animal protection business has increased online and offline market promotion and the production of Hubei Qi Health, the business growth rate of the industrial microbial sector will accelerate in the future.

In the first quarter of 2024, Huadong Pharmaceutical made a good start, ushered in a number of milestones in its innovative drugs and biosimilars business, and continued to advance the registration and implementation of key medical aesthetic products in China. In 2024, as the reform of the domestic pharmaceutical industry continues to deepen, Huadong Pharmaceutical will continue to promote the steady progress of the four major business segments and write a more brilliant road of innovation and development.