YICAI | China's InnoCare Pharma Turns a Profit in First Half on Surging Overseas Licensing Revenue
(Yicai) Aug.28 -- Chinese drugmaker InnoCare Pharma swung into the black in the first half of the year, buoyed by rapid revenue growth from overseas licensing deals.
InnoCare had a net profit of CNY239.7 million (USD35.7 million) in the six months ended June 30, versus a net loss of CNY35.6 million (USD5.3 million) a year earlier, the Beijing-based company said in a semiannual earnings report on Aug.25.Revenue climbed 56 percent to CNY1.1 billion (USD169.6 million).
Drug sales jumped 43 percent to CNY918.1 million, while income from business collaborations, including overseas licensing deals, surged 142 percent to CNY213.4 million. Revenue from the United States alone soared 162 percent to CNY218.7 million.
"With further growth in drug sales and the realization of business development-related milestone revenues in the second half of the year, we expect to maintain profitability for the full year and report earnings per share higher than in the first half," Chief Financial Officer Xin Fu said on InnoCare's earnings conference call.
InnoCare's profit turnaround comes amid a boom in international out-licensing deals by Chinese drugmakers, which signed a record 81 deals in the first half worth a potential USD110 billion, reaching roughly 80 percent of last year's total, according to China's National Medical Products Administration.
Its US subsidiary reached a milestone for drug candidate orelabrutinib (ICP-022) under a licensing agreement with Zenas BioPharma this month, entitling it to receive two million shares of the US clinical-stage biopharmaceutical firm and USD25 million in cash. Worth more than USD2 billion, the deal granted Zenas the global rights to orelabrutinib for multiple sclerosis and other non-oncology indications.
In January last year, InnoCare and Chinese peer KeyMed Biosciences jointly licensed bispecific antibody ICP-B02, also called CM355, to Prolium Bioscience for as much as USD520 million and a minority stake in the US clinical-stage biotech company.
In their recent interim financial statements, other Chinese drugmakers have also released figures for their international licensing. For instance, CSPC Pharmaceutical Group said its licensing revenue soared almost 450 percent to CNY5.9 billion in the first half, mainly thanks to an USD840 million upfront payment from AstraZeneca tied to a deal signed in January.
Hengrui Pharmaceuticals saw income from innovative drugs licensing rise to CNY1.4 billion in the six months, accounting for about 9.2 percent of total revenue, mainly thanks to income recognized under its licensing deal with UK pharmaceutical giant GlaxoSmithKline and a milestone payment from Braveheart Bio, a US-listed biotech firm to which Hengrui licensed a heart drug candidate.
InnoCare's shares [SHA: 688428] closed 0.6 percent higher at CNY29.04 (USD4.32) each in Shanghai today. The stock has gained 32 percent so far this year.