On March 26, 2021 Genscript Biotech (HKEX: 1548.HK) (GenScript), a global leading biotech company, reported its audited financial results for the year ended December 31, 2020 (Press release, GenScript, MAR 26, 2021, View Source [SID1234577215]).
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"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.