(Shenzhen, China, August 30, 2024) As a leading multinational biopharmaceutical company, with its core business in heparin industrial chain, large molecule biologics CDMO services, and the research, development, and commercialization of innovative drugs, Shenzhen Hepalink Pharmaceutical Group Co., Ltd. (Stock Codes: 002399.SZ, 09989.HK, “Hepalink”), has announced its 2024 first-half financial results. During the Reporting Period, Hepalink has achieved remarkable revenue of RMB 2.837 billion, marking a year-on-year increase of 4.59%. The net profit attributable to shareholders of the Company surged by 438.05% to RMB 664 million. Additionally, the net cash flow from operating activities reached RMB 1.295 billion, soaring 338.57% compared to the same period last year, maintaining a positive inflow for four consecutive quarters.

Deepening presence in the heparin industry for over two decades, Hepalink is one of a few biopharmaceutical companies with vertically integrated capabilities covering the entire heparin industrial chain that spans from raw material sourcing to API production and all the way to the marketing of enoxaparin sodium injections. As Hepalink continually refines its core heparin business, it is also swiftly enhancing the profitability of its CDMO operations, and laying out the research and commercialization of innovative drugs, collaboration of three main business segments not only drives exceptional financial performance but also fuels its growth engine for the future.

Deepening Presence in Heparin Industrial Chain

During the Reporting Period, finished dose enoxaparin sodium reached a global sales milestone of over 110 million units by the end of June, and remained its dominance in Europe, the US, and China markets. During the Reporting Period, enoxaparin sodium injection products achieved sales revenue of RMB 1,454 million with gross profit margin of 35.79%.

In 2024 H1, Hepalink’s heparin injections business continued to thrive. Leveraging extensive global marketing network, it has sustained sales growth both domestically and internationally, bolstering global market share.

The European market remained a key area for Hepalink’s finished dose enoxaparin sodium pharmaceutical products business in the Reporting Period. The products’ sales volume ranked second in market share in this region. During the Reporting Period, the Company secured new orders and will commence supply of such in the fourth quarter of 2024. In terms of the United States market, Hepalink’s impressive growth in sales revenue during the Reporting Period mainly benefitted from the Company’s two-pronged engines of self-operation and agency in the US, which added growth momentum to the stable sales revenue base. In terms of the China market, the Company continued to maintain sales growth through the national centralized drug procurement platform with double-digit growth in sales volume. The non-European and American overseas markets have recovered in an orderly manner, experiencing significant sales growth during the Reporting Period, with sales volume doubling. During the Reporting Period, Hepalink obtained market access to Thailand and New Zealand, which is favorable to further expand the Company’s overseas market coverage.

Diving into API business, the first half ended with robust sales of approximately RMB 748 million, marking a 7.06% year-on-year increase, and over 40% surge in volume. This achievement was accompanied by a soaring gross margin of 36.45%, up 12.26 percentage points from the previous year.

Amid improved global API demand yet raw material price deflation compared to the previous year and heightened competition in 2024, Hepalink tackled them head-on. To navigate these external challenges, it upheld the product-centric strategy centered around quality and brand, balancing price stability with a focus on mature, regulated markets. This strategy has paid off, securing premium orders from overseas customers.

Boosting Profitability of CDMO Business with Two Engines

Hepalink’s CDMO business continued to be driven by its two wholly-owned subsidiaries, Cytovance Biologics and SPL, creating synergies. For the first half of 2024, CDMO segment achieved the sales of approximately RMB 560 million, marking a year-on-year growth of 41.73%, accompanied by an increase in gross margin, up 12.89 percentage points to 31.15%.

During Reporting Period, Hepalink actively integrated the R&D resources and production capacity of both platforms, channeled greater efforts into drug development processes. It empowered customers to complete their projects faster and better, driving up customer retention rates and deepening and broadening cooperation. Moreover, Hepalink sought out new business opportunities and potential customers for the two engines, nurtured a pipeline of early-stage projects and expanded ongoing research projects, positioning CDMO business well for the future growth.

Empowering Chinese Pharma on the Global Journey

To address unmet medical needs, Hepalink harnessed equity investments and regional rights acquisitions to boast a portfolio of over 20 novel drug candidates, covering more than 30 indications, with exclusive rights to 10 of these in Greater China.

Its commitment to internationalization and facilitating Chinese pharmaceutical companies' entry into the EU and US markets remains steadfast. In the first half of 2024, partnering with Chia Tai Tianqing Pharmaceutical Group Co. Ltd., Hepalink's US-based self-operated team was relentlessly advancing the commercialization of Fosaprepitant Dimeglumine in the American market. Furthermore, leveraging the strong overseas marketing expertise, it actively explored potential cooperations with renowned domestic pharmaceutical companies, aiming to propel exceptional products beyond borders and jointly unlock new horizons for growth.

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