TOT BIOPHARM Reached New Milestones in Interim Results, with Sales Volume of over RMB 100 million, a Significantly Improved Capital Structure
On 12 August, 2022, TOT BIOPHARM International Company Limited (“TOT BIOPHARM” or the “Company”; stock code: 1875.HK), a clinical-stage biopharmaceutical company dedicated to developing and commercializing innovative oncology drugs and therapies, was pleased to announce its unaudited interim results for the six months ended 30 June 2022 (the “Period”).
Milestones reached in the first half of 2022
In the first half of 2022, TOT BIOPHARM achieved significant results in revenue from sales of products and continued growth in its CDMO business. During the Period, the Company achieved operating revenue of RMB 182 million, a significant increase of 687% year-on-year. Specifically, revenue from sales of products reached RMB 104 million, which was mainly attributable to satisfactory sales performance of its core product Pusintin®(Bevacizumab injection); revenue from CDMO services and others reached RMB 77.85 million. The net loss of the Company was reduced by 86% year-on-year to RMB 15.72 million. In addition, the Company entered into subscription agreements with two shareholders, generating net proceeds of approximately HKD 470 million, providing financial support for the Company’s sustainable development and further boosting the confidence of the capital market.
Accelerated commercialization of products
In respect of the domestic market for Pusintin®(Bevacizumab injection), the sales network has covered all provinces and autonomous regions across China other than the Tibet Autonomous Region thanks to TOT BIOPHARM’s close cooperation with Jixin Pharmaceutical, a wholly-owned subsidiary of Jiangxi Jimin Kexin Pharmaceutical Industry Investment Co., Ltd.; as to the overseas markets, TOT BIOPHARM entered into license cooperation with Kexing Biopharm Co., Ltd.; in addition, Pusintin® has been approved for all six indications, including advanced, metastatic or recurrent non-squamous non-small cell lung cancer (nsNSCLC) and metastatic colorectal cancer (mCRC), further opening up its markets.
Tazian® (Temozolomide capsule), used for the treatment of newly diagnosed glioblastoma multiforme, entered the centralized procurement market as the Company was selected as the supplier in the renewal of centralized procurement by the Thirteen Allied Provinces, Jiangsu Province and Hebei Province. Meanwhile, the Company has entered into marketing cooperation with Jixin Pharmaceutical to expand its market share in China and channels in the non-centralized procurement market, driving up the market share of its products.
The Company granted Frontier Biotechnologies Inc. (stock code: 688221.SH) the marketing promotion license of Megaxia® (Megestrol acetate oral suspension), a product used for the treatment of anorexia associated with acquired immunodeficiency syndrome (“AIDS”)patients, in the mainland market to enhance the accessibility of the drug.
Major milestones in Key Product Pipelines
Patient enrollment for Phase III clinical trial of the Company’s self-developed ADC drug TAA013 used for treating inoperable locally advanced breast cancer that has failed to be cured by trastuzumab or metastatic HER2-positive breast cancer has been completed, and follow-up interviews with the subjects are being carried out currently; meanwhile, the Company has been actively seeking domestic and overseas cooperation opportunities for TAA013 and will submit the EMA consultation paper.
The enrollment of the first patient for the Phase III clinical trial of the Company’s self-developed monoclonal antibody drug TAB014, which is used for the treatment of wet (neovascular) age-related macular degeneration (“wAMD”), was completed successfully. Besides, TOT BIOPHARM granted the license for commercialization of TAB014 in China (including Hong Kong and Macao) to Zhaoke Guangzhou (Zhaoke (Guangzhou) Ophthalmology Pharmaceutical Limited), a wholly-owned subsidiary of Zhaoke Ophthalmology Limited (stock code: 6622.HK). TOT BIOPHARM will continue to be responsible for the clinical trials and commercial production of TAB014.
Major milestones in commercial production
The Company’s biopharmaceutical commercial production base is internationally competitive. The production scale of mAb drug substances has reached 20,000L, and multi-batch commercial production of bevacizumab injection (Pusintin®) products has been successfully carried out, with a product qualification rate of 100%. In the first half of 2022, TOT BIOPHARM continued to expand its commercial production capacity, improve the comprehensive capabilities of the ADC commercial production platform, and successfully completed the renovation of ADC preparations pilot production workshop, adopting complete single-use systems to better serve the CDMO business.At the same time, it actively promoted the construction of the second ADC drug products commercial production line and ADC drug substances pilot production line.Currently, the Company has a full range of capabilities from R&D to process development to large-scale commercial production.
Construction of the Company’s Global Research and Development Center is progressing at an accelerated pace. The main building is expected to be put into use in 2023, with a gross floor area of 25,000 m2 and will house functions such as early R&D, process development, quality research and head office. Placing R&D and production under one roof will help enhance the Company’s R&D efficiency and cost advantages.
Extremely competitive CDMO business
Leveraging the great location advantage of a pharmaceutical industry cluster in Suzhou, a leading ADC research & development and large-scale commercial production platform, a professional CDMO management system and team, and our world-class large-scale biopharmaceutical commercial production facilities and capabilities and according to the high-quality requirements of NMPA, FDA and EMA regulations and guidelines, the Company’s one-stop CDMO business is extremely competitive, and providing one-stop services from drug R&D to commercial production.
In the first half of 2022, the Company's CDMO cooperation projects involved a variety of drug types such as ADCs, antibody drugs and chemical drugs, covering different clinical stages, and including NMPA, FDA and EMA applications. Revenue from CDMO services in the Period representing an increase of 94% year-on-year.
Proceeds from shareholders’ subscriptions at a premium price provided financial support for strategic transformation.
Vivo (Suzhou) Health Industry Investment Fund (Vivo Capital LLC) and Center Laboratories Inc. (Centerlab) respectively subscribed for 116,250,000 shares and 33,750,000 shares of TOT BIOPHARM at the subscription price of HKD 3.15 per share, adding up to a total of 150,000,000 shares and generating net proceeds of approximately HKD 470 million. The subscriptions were completed in full on 29 July 2022. Since then, Vivo Capital LLC and Centerlab hold approximately 28.68% and 28.66% of the Company’s shares, respectively. Subscriptions by the two largest shareholders will further enlarge the Company’s capital base and provide financial support for the Company’s continued development.
Response to COVID-19 outbreaks and ESG management
TOT BIOPHARM has actively responded to a series of pandemic prevention and control tasks carried out by the government. While strictly implementing the pandemic prevention measures, the Company actively maintained production lines and stabilized production capacity to minimize the impact of the COVID-19 outbreaks on the Company. As such, we were highly recognized by our customers and industrial partners.
On the basis of the Strategy and ESG (Environmental, Social and Governance) Committee, TOT BIOPHARM has conducted a thorough study and review on the internal and external environments of the Company, and formulated reasonable and normalized working mechanisms and goals in line with the actual development of the Company, so as to incorporate ESG concepts into all aspects of the Company’s operations, thereby effectively improving the standard of corporate governance and enhancing the sustainable development capabilities of the Company.
According to Dr. Liu, Jun, Chief Executive Officer, Chief Science Officer and Executive Director of TOT BIOPHARM,
“Looking into the second half of 2022, with the impact of COVID-19 easing off, we will continuously increase the market share of Pusintin® and Tazian® and promote the Phase III clinical data analysis and marketing approval process of our ADC core product TAA013. We will keep on exploring new customer groups to rapidly grow the scale of our CDMO business. We will also advance the construction of our Global Research and Development Center and accelerate the upgrade of our ADC commercial production capacity. We will continue to optimize our capital structure and support the strategic transformation of the Company and the leapfrog development of our CDMO business through diversified financing and strategic cooperation. TOT BIOPHARM’s core competitiveness will continue to be strengthened to create greater value for our shareholders.”
The Company’s operating revenue reached RMB182 million , increasing by 687% year-on-year, which was mainly attributable to satisfactory sales performance of Pusintin®, fast-growing CDMO business and revenue from grant of product licenses.
The Company’s research and development expenses were RMB70,268 thousand a decrease of 21% year-on-year, which was mainly attributable to the reduction of raw material procurement as a result of the completion of patient enrollment for the TAA013 project and the optimization of product pipelines that resulted in a convergence of research and development resources.
The Company’s selling expenses were RMB70,091 thousand, representing an increase of 526% year-on-year, which was mainly due to the increase in sales of self-developed products and the increase in marketing and promotion expenses resulting therefrom.
The Company’s general and administrative expenses were RMB25,698 thousand, representing a decrease of 4% year-on-year.
In view of the abovementioned factors, the Company recorded a net loss of RMB15,724 thousand for the first half of 2022, representing a decrease of 86% year-on-year.