GenScript Biotech Reports First Half 2021 Results

Posts explosive growth in GCT CDMO business and strategic GCT investments

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Aug 24, 2021, 09:38 ET

In the first half of 2021, the Group reported a revenue of approximately USD 229.6 million, a 38.0% YoY increase, and a gross profit of USD 138.6 million, achieving a 28.1% YoY growth. All four of the Group's business segments demonstrated steady growth.
Building on early strategic investments, the Group saw explosive growth in its gene and cell therapy (GCT) CDMO business in revenue.
The Group invested USD 175.1 million in R&D, a 51.6% YoY increase, as it expanded its presence in the GCT industry.

NANJING, China, Aug. 24, 2021 /PRNewswire/ -- GenScript Biotech Corporation (HKEX: 1548.HK), a leading global technology and service provider of life science R&D and manufacture, today reported its first half 2021 financial results for the six months ended June 30. It also announced that the Group has expanded its presence in the gene and cell therapy (GCT) industry, with aggressive investments from the Group's life science services and products business, biologics CDMO business, and cell therapy business.

In the first half of 2021, the Group maintained strong momentum across all business segments. Total revenue increased by 38% to USD 229.6 million, and gross profit increased by 28.1% to USD 138.6 million.

The Group's non-cell therapy business revenue increased by 36.6% to USD 195.7 million, with gross profit of USD 104.7 million, a 23.0% YoY increase. This impressive success was driven by the launch of new products, advanced sales capability and capacity expansion, including its GCT CDMO business' historic breakthrough in explosive revenue growth. This built on the Group's early investments in the field and advantages in plasmid and lentivirus R&D and manufacturing solutions. For the Group's cell therapy business, revenue increased by 46.8% YoY to USD 33.9 million, benefitting from continued recognition of its successes and milestone investments.

As the world's No. 1 gene synthesis supplier, GenScript Biotech has been dedicated to the gene synthesis business for more than one decade and continues to hone its competitive edge in the field. It has laid a strong technical foundation for its GCT business, which also serves as a major revenue stream for the Group. As GenScript Biotech's life science services and products business, biologics CDMO business, and cell therapy business are all achieving strong momentum and investing aggressively in the GCT industry, the Group's is expanding its presence throughout the GCT value chain.

GenScript Biotech has been continuing its strategic investments in R&D and innovation. In the first half of 2021, R&D expenses increased by 51.6% YoY to USD 175.1 million. The non-cell therapy business invested about 10% of its revenue in GMP facility construction and other infrastructure expansion. The cell therapy business spent USD154.5 million on R&D, a 52.1% YoY increase, with an investment focus on clinical studies of cilta-cel and manufacturing facilities that support the business' ongoing clinical trials and future commercialization.

GenScript Biotech is ushering in the rise of GCT as the next biotech industry revolution, tapping into the huge potential of CRO and CDMO platforms. Over the next two to three years, the life science business and biologics CDMO business will increase their strategic investments into the field. This includes investments in GCT-related ssDNA and sgRNA services, utilizing automation technology to upgrade production lines, and accelerate the launch of ongoing cell therapy products and R&D in new pipelines.

"While the global pandemic continues to impact the world and the life science community, GenScript Biotech was able to harness opportunity to maintain strong momentum. We especially made rapid progress GCT-related products and services, a key strategic field for the Group. This was made possible by our unwavering dedication to the frontier of life science technology and our market insights. As we look ahead, GenScript Biotech will continue to invest aggressively in the GCT industry to meet booming demand and fulfill our mission to make people and nature healthier through biotechnology," said Dr. Patrick Liu, Rotating CEO of GenScript Biotech.

First Half 2021 Business Highlights by Segment

The life science services and products business reported a remarkable boost in the first half of 2021. Revenue increased by 32.2% YoY to USD 152.0 million, and operating profit before unallocated central expenses and share based compensations increased by 25.5% to USD 55.2 million, maintaining great profitability.

The business has also further diversified. Gene synthesis services increased in cost efficiency, while services in protein, peptide, antibody and oligo businesses were also expanding fast, becoming the Group's second growth driver.

Gene synthesis service costs were successfully reduced by about 10%. To enhance these services, GenScript Biotech built a fully-automated gene synthesis production line covering 5,000 square feet in the US, which is expected to increase its capacity tenfold, and save transportation costs and lead time for overseas customers.
Gene editing business increased by over 65% YoY.
Oligo business increased by over 90% YoY.
To support protein production capacity, GenScript Biotech will launch two facilities in Shanghai and Singapore.

Apart from gene synthesis services, the life science services and products business is also accelerating development across the GCT industrial chain, strengthening GenScript Biotech's presence in this field. In the coming years, the business will deepen its investments in two GCT directions: customized products and services to meet GCT needs, including developing laboratory-level ssDNA and sgRNA, reagents and instruments; and specification upgrades made possible by industrial line automation to improve market share and profitability.

GenScript ProBio, the biologics CDMO business, generated USD 31.5 million in revenue, a 65.8% YoY increase, in the first of 2021. Gross profit yielded USD 10.0 million, representing a 112.8% YoY increase, and gross margin rose from 24.7% last year to 31.7% this year. Revenue growth was mainly driven by successful ongoing antibody CDMO projects and rapid expansion of the GCT CDMO business.

The business has advanced its capabilities in challenging molecule development, driving revenue from antibody and protein CDMO services to increase by 58.3%. Revenue from emerging GCT CDMO services skyrocketed YoY, maintaining GenScript ProBio's leading position in the GCT CDMO industry:

In terms of plasmid services, GenScript ProBio is the only company in China equipped with a GMP certified linearized plasmid production platform. GenScript ProBio has virtually cornered the pre-clinical and clinical plasmid supply market for mRNA vaccine R&D companies in China.
On viral vectors, GenScript ProBio developed China's first proprietary lentivirus suspension production platform, with a virus yield that is equivalent to or higher than that of the most widely used cell line on the market. The business will also soon be launching its proprietary AAV suspension production platform.

With its independent financing capabilities, GenScript ProBio is prioritizing investments in capacity upgrades and infrastructure for its both GCT CDMO business and antibody CDMO business.

The second GMP certified plasmid facility in Zhenjiang, China, is expected to be up and running within the year, which will enable GenScript ProBio to more than double its current plasmid production capacity.
A new R&D building in Nanjing will be added to further enhance GenScript ProBio's antibody discovery and development capabilities in upstream services.
The biologics fill-and-finish line is now under construction and is expected to be operational in the second half of 2022 to better meet customer needs for commercial production.
A 12,000 L-capacity production center in Zhenjiang, China is under construction to accelerate capacity expansion in commercialization.

Legend Biotech, the cell therapy business, continued to progress in the first half of 2021 and yielded USD 33.9 million in revenue, a 46.8% YoY increase, mainly from amortization of upfront and milestone payments received from its collaboration with Johnson & Johnson. Legend's R&D expenses rose to USD 154.5 million in the first half of 2021, mainly on cilta-cel clinical trials in the US and China.

As Genscript Biotech continues to expand its business in the GCT industry, Legend Biotech has leveraged cilta-cel to enhance its in-depth industry experience and insights, which also betters the Group's understanding of client demands in its non-cell therapy business. Legend Biotech is expected to obtain commercialization approval for cilta-cel from the US FDA for end-line treatment before the end of this year. Legend will submit BLAs for cilta-cel in China and Japan in the second half of 2021, and strives to acquire commercialization approval in Europe and China in 2022.

The company also has several CAR-T therapies in the pipeline targeting hematologic malignancies, solid tumors and infectious diseases, along with a variety of autologous CAR-T, allogenic CAR-T and TCR-T R&D platforms. Legend Biotech is pushing forward its LB1901 program for the treatment of refractory and recurring T-cell lymphoma.

In addition, Legend Biotech has established production facilities in New Jersey (US), Belgium (Europe), and Nanjing (China), expanding its capacity for upcoming global commercialization.

Bestzyme, the industrial synthetic biology products business, generated USD 18.0 million in revenue, a 60.7% YoY increase, and USD 5.1 million in gross profit, a 18.6% YoY increase. Revenue growth was mainly driven by a series of new product launches and continued implementation of major account strategies. In the future, Bestzyme plans to deepen its reach in the F&B, home care and chemical substitution fields. By leveraging synthetic biology, the company aims to construct new functional proteins and functional small molecules to create new value for its customers.

About GenScript Biotech Corporation

GenScript Biotech Corporation (Stock Code: 1548.HK) is the world's leading technology and service provider of life science R&D and manufacture. Built upon its solid gene synthesis technology, GenScript Biotech is divided into four major platforms including the life science service and product platform, the biologics contract development and manufacturing organization (CDMO) platform, the global cell therapy platform and the industrial synthesis biological product platform.

GenScript Biotech was founded in New Jersey, US in 2002 and listed on the Hong Kong Stock Exchange in 2015. GenScript Biotech's business operations span over 100 countries and regions worldwide with legal entities located in the US; Mainland China; Hong Kong, China; Japan; Singapore; the Netherlands and Ireland. GenScript Biotech provides premium, convenient and reliable services and products for over 100,000 customers.

As of December 31, 2020, GenScript Biotech had more than 4600 employees globally, over 39% of whom hold master's and/or Ph.D. degrees. In addition, GenScript Biotech owns a number of intellectual property rights, including over 140 patents, over 510 pending patent applications and great numbers of trade secrets.

Driven by the corporate mission of "making people and nature healthier through biotechnology", GenScript Biotech strives to become the most trustworthy biotech company in the world. As of December 31, 2020, GenScript Biotech's services and products have been cited by 52,500 peer-reviewed journal articles worldwide.

For more information, please visit GenScript Biotech's official website
https://www.genscript.com.

SOURCE GenScript Biotech Corporation