Genscript Biotech Reports Full Year 2020 Financial Results

- Achieved Historical High Revenue- Non-Cell Therapy Segment Shows Over 100%+ Adjusted Net Profit Growth

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Mar 26, 2021, 13:37 ET

Highlights:

Revenue of the Group for the year ended December 31, 2020 was approximately US$390.8 million, representing an increase of 42.9% as compared with approximately US$273.4 million for the year ended December 31, 2019
Gross profit of the Group for the year ended December 31, 2020 was approximately US$255.9 million, representing an increase of 41.9% as compared with approximately US$180.3 million recorded for the year ended December 31, 2019
The adjusted net profit* of non-cell therapy business was approximately US$44.4 million, representing an increase of 105.6% as compared with approximately US$21.6 million for the year ended December 31, 2019, and the adjusted net loss* of cell therapy business was approximately US$213.3 million, whilst the adjusted net loss* of cell therapy business was approximately US$131.9 million for the year ended December 31, 2019
Loss of the Group for the year ended December 31, 2020 was approximately US$281.4 million, whilst loss was approximately US$117.5 million for the year ended December 31, 2019. The adjusted net loss* of the Group was approximately US$168.9 million, whilst the adjusted net loss* of approximately US$110.3 million was recorded for the year ended December 31, 2019

NANJING, China, March 26, 2021 /PRNewswire/ -- Genscript Biotech (HKEX: 1548.HK) (GenScript), a global leading biotech company, today announced its audited financial results for the year ended December 31, 2020.

"In 2020, the outbreak of COVID-19 pandemic presented both challenges and opportunities to the life science community. Thanks to concerted efforts of all GenScript people, the Group delivered historically strong results amid the outbreak," said Patrick Liu, Rotating CEO of GenScript. "In the past year, our business segments tided over difficulties, turned challenges into opportunities and achieved many breakthroughs. In the future, we will move forward with dedication and create more value for both our investors and customers. We are committed to our mission of "making people and nature healthier through biotechnology" and strive for human wellbeing."

Financial Results Highlits for the Year Ended December 31, 2020

Revenue

In 2020, the Group recorded revenue of approximately US$390.8 million, representing an increase of 42.9% from approximately US$273.4 million in 2019. This was primarily attributable to (i) the strong growth in business of specially-functioned protein and antibody which meet market demands on key products related to COVID-19, (ii) the continuing increase from life-science services and products from major strategic customers and new competitive services and products, (iii) the increase of contract revenue derived from Legend's collaboration with Janssen with new milestone achieved, and (iv) the increase in both the number of customers and their purchase volume of industrial synthetic biology products.

Gross Profit

In 2020, the Group's gross profit increased by 41.9% to approximately US$255.9 million from approximately US$180.3 million in 2019. The increase in gross profit was primarily attributable to the (i) strong growth in life-science and biologics development business and high gross margin products, especially for COVID-19, and (ii) significant improvement on capacity utilization of materials and labor efficiency in industrial synthetic biology products.

Selling and distribution expenses

The selling and distribution expenses increased by 52.4% to approximately US$107.3 million in 2020 from approximately US$70.4 million in 2019. This was mainly attributable to the (i) increased investment into the commercial talent pool by recruiting more experienced personnel and improving incentive packages, and (ii) increased expenses for the global expansion of our business.

Administrative expenses

In 2020, the administrative expenses increased by 63.3% to approximately US$90.3 million from US$55.3 million in 2019. This was mainly caused by (i) competitive compensation package for our employees including shared-based payment provided to recruit experienced talents for all business segments, (ii) the reinforcement of some key administrative functions such as information technology, supply chain and finance to build up capable and professional administrative team to support the Group's overall business expansion, and (iii) the expansion of the European and Asia- Pacific Regional centers to accelerate the Group's global market penetration.

Research and development expenses

The research and development expenses increased by 41.6% to approximately US$263.4 million in 2020 from approximately US$186.0 million in 2019. This was mainly due to the (i) investment in COVID-19 related projects and other new challenging research and development projects, which significantly strengthened our competitiveness in the market and improved our production efficiency, (ii) increase in clinical trial expenses and preclinical study costs, especially in the cell therapy segment, and (iii) increase in compensation package including shared-based payment for research and development personnel.

*Adjusted net profit/(loss)

		Non-cell therapy *US$'000*	Cell therapy *US$'000*	Total *US$'000*
Net profit/(loss)		22,054	(303,477)	(281,423)
Excluding: Share-based payment expenses, net of tax		10,904	4,760	15,664
Exchange differences, net of tax		6,526	(66)	6,460
Consultation expenses for the Investigation, net of tax		1,086	—	1,086
Impairment loss on goodwill, other intangible assets and long-term investments, net of tax		3,806	—	3,806
Fair value loss of convertible redeemable preferred shares		—	79,984	79,984
Service fee for the issuance of Legend Series A Preference Shares		—	4,014	4,014
Spin-off expenses relating to the separate listing of Legend		24	1,439	1,463
Adjusted net profit/(loss)	44,400		(213,346)	(168,946)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

REVENUE	2020 *US$'000* 390,846	2019 US$'000 273,354
Cost of sales	(134,953)	(93,064)
Gross profit	255,893	180,290
Other income and gains	24,795	21,185
Selling and distribution expenses	(107,341)	(70,358)
Administrative expenses	(90,341)	(55,256)
Research and development expenses	(263,401)	(186,022)
Fair value loss of convertible redeemable preferred shares	(79,984)	—
Finance costs	(5,432)	(781)
Other expenses	(15,497)	(589)
Share of losses of associates	(599)	(308)
Reversal of/(provision for) impairment of financial assets, net	7	(1,851)
LOSS BEFORE TAX	(281,900)	(113,690)
Income tax credit/(expense)	477	(3,826)
LOSS FOR THE YEAR	(281,423)	(117,516)

Attributable to: Owners of the parent	(204,945)	(96,912)
Non-controlling interests	(76,478)	(20,604)
	(281,423)	(117,516)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

NON-CURRENT ASSETS	2020 *US$'000*	2019 US$'000
Property, plant and equipment	345,215	235,986
Advance payments for property, plant and equipment	5,906	8,585
Investment properties	7,726	7,442
Right-of-use asset	34,017	29,642
Goodwill	14,116	15,245
Other intangible assets	26,020	25,482
Investment in associates	3,433	2,615
Financial assets at fair value through profit or loss	10,555	4,667
Other non-current asset	3,542	—
Deferred tax assets	3,702	5,701
Total non-current assets	454,232	335,365
CURRENT ASSETS Inventories	31,745	16,486
Contract costs	5,785	3,369
Trade and notes receivables	141,748	73,067
Prepayments, other receivables and other assets	32,834	31,621
Financial assets at fair value through profit or loss	5,866	25,434
Loans to an associate	2,422	2,007
Restricted cash	7,471	972
Time deposits	136,245	148,693
Cash and cash equivalents	629,058	252,397
Total current assets	993,174	554,046

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CURRENT LIABILITIES	2020 *US$'000*	2019 US$'000
Trade and bills payables	23,376	17,627
Other payables and accruals	168,980	125,035
Interest-bearing bank borrowings	44,642	17,008
Lease liabilities	2,588	1,769
Tax payable	3,532	2,846
Contract liabilities	84,414	60,130
Government grants	379	90
Total current liabilities	327,911	224,505
NET CURRENT ASSETS	665,263	329,541
TOTAL ASSETS LESS CURRENT LIABILITIES	1,119,495	664,906
NON-CURRENT LIABILITIES Interest-bearing bank loans	1,260	1,748
Lease liabilities	6,513	3,608
Contract liabilities	277,052	277,827
Deferred tax liabilities	7,030	5,582
Government grants	11,495	3,843
Other non-current liability	554	—
Total non-current liabilities	303,904	292,608
NET ASSETS	815,591	372,298

EQUITY
Equity attributable to owners of the parent Share capital	1,954	1,879
Treasury shares	(16,712)	(7,774)
Reserves	916,463	388,699
	901,705	382,804
Non-controlling interests	(86,114)	(10,506)
TOTAL EQUITY	815,591	372,298

About GenScript Biotech Corporation

GenScript Biotech Corporation (Stock Code: 1548.HK) is a global biotechnology group. Based on its leading gene synthesis technology, GenScript has developed four major platforms including the global cell therapy platform, the biologics contract development and manufacturing organization (CDMO) platform, the contract research organization (CRO) platform and the industrial synthesis product platform. GenScript's business operation spans over 100 countries and regions worldwide with legal entities located in the US, the Chinese mainland, Hong Kong of China, Japan, Singapore, Netherlands and Ireland.

SOURCE GenScript Biotech Corporation