On October 30, 2023 WuXi AppTec (stock code: 603259.SH / 2359.HK), a global company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries to advance discoveries and deliver groundbreaking treatments to patients, reported its financial results for the third quarter and nine months ended September 30, 2023 ("Reporting Period") (Press release, WuXi AppTec, OCT 30, 2023, View Source [SID1234636468]):

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Revenue grew 4.0% year-over-year to RMB29,541 million; excluding COVID-19 commercial projects, revenue grew by 23.4%.
Adjusted non-IFRS gross profit increased 13.8% year-over-year to RMB12,511 million. Adjusted non-IFRS gross profit margin improved 3.6pts to 42.3%. The Company continued to improve operating efficiency; adjusted non-IFRS gross profit margin increased by ~1pt year-over-year at a constant exchange rate.
Net profit attributable to owners of the Company increased 9.5% year-over-year to RMB8,076 million; diluted EPS increased 18.7% year-over-year to RMB2.73. Adjusted non-IFRS net profit attributable to owners of the Company increased 20.6% year-over-year to RMB8,167 million; adjusted diluted non-IFRS EPS increased by 21.0% year-over-year to RMB2.77.
Free cash flow continued to grow. Resulting from the continued profit growth, better asset utilization and efficiency improvements, the Company’s operating cash flow grew strongly by 32.5% year-over-year.
In the first three quarters of 2023, we added over 900 new customers, and in total we served more than 6,000 active customers over the past 12 months. Demand from customers across regions globally continued to grow.
Excluding COVID-19 commercial projects, backlog maintained growth momentum of the first half of 2023, among which TIDES backlog accelerated growth by 245% year-over-year.
Revenue from the top 20 global pharmaceutical companies maintained rapid growth and reached RMB11.82 billion in the first three quarters of 2023, which grew strongly by 43% year-over-year excluding COVID-19 commercial projects.
The sustained and steady revenue growth is a result of our unique fully integrated Contract Research, Development and Manufacturing Organization (CRDMO) platform. WuXi Chemistry’s D&M pipeline has maintained rapid growth, with 343 new molecules added in the third quarter and a total of 926 new molecules added in the first three quarters of the year. To date, our D&M pipeline has exceeded 3,000 molecules for the first time, currently totaling 3,014, among which 12 commercial and phase III projects were added in the first three quarters of 2023. Revenue from D&M services maintained strong growth. Excluding COVID-19 commercial projects, D&M services revenue grew by 48.2%.
As an enabler of innovation, a trusted partner and a contributor to the global healthcare industry, the Company is committed to environmental protection and sustainability. We received the "AA" rating from MSCI for the third consecutive year, and upgraded to "Silver" rating by EcoVadis. Our outstanding ESG performance continues to be highly recognized by global ESG rating agencies, including MSCI, EcoVadis, S&P Global, Sustainalytics and CDP.
[1] In the first three quarters of 2022 and 2023, WuXi AppTec had a fully-diluted weighted average share count of 2,951,099,205 and 2,949,888,986 ordinary shares, respectively.

Fourth Quarter and 2023 Full Year Outlook

In the fourth quarter of 2023, revenue will all come from non-COVID-19 commercial projects. Without COVID-19 commercial projects, we expect the Company’s revenue in the fourth quarter to exceed RMB10 billion for the first time, among which WuXi Chemistry D&M will continue strong growth momentum and accelerate growth on top of the first three quarters. Excluding COVID-19 commercial projects, the Company’s revenue in the fourth quarter is projected to grow 29-34%. Excluding COVID-19 commercial projects, revenue will grow 25-26% in 2023, with the Company’s total revenue exceeding 40 billion for the first time. Due to lower than expected demand of early-stage drug discovery services, revenues from some lab service-related business will be significantly below budget. Therefore, we adjust 2023 revenue growth from 5-7% to 2-3%; excluding COVID-19 commercial projects, revenue growth from 29-32% to 25-26%.

Due to FX impact and efficiency improvements, adjusted non-IFRS gross profit margin expects to be up ~0.5pts and reach 41.7-42.1%; with further improved operating efficiency, adjusted non-IFRS net profit will exceed RMB 10 billion for the first time. Resulting from our unique CRDMO & CTDMO business model, better asset utilization and efficiency improvements, free cash flow expects to be up and reach RMB 4.5-5.0 billion, which will be over 17 times as compared to last year.

Due to lower than expected growth, the management team proactively proposes to terminate the 2023 H share incentive plan, repurchase and cancel 15,467,500 H shares, representing ~0.52% of the Company’s total share capital (worth of HKD ~1.3 billion[2]). This has been unanimously approved by the Company’s Board of Directors.

[2] Value based on the actual purchased price.

Management Comment

Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We achieved steady growth across revenue, net profit, and free cash flow in the first three quarters of 2023, and expect the fourth-quarter revenue (without COVID-19 commercial projects) to exceed RMB10 billion for the first time. The Company’s growing pipeline and expanding customer base demonstrates heightened demand from our customers globally as they seek our services to bring new treatments to patients."

"We have constant faith in the Company’s unique CRDMO and CTDMO business models, and believe that the Company will continue solid growth in the future. WuXi AppTec is committed to meeting the growing demands from customers worldwide, enhancing our capacity and capabilities, and relentlessly pursuing operational excellence, productivity and efficiency, as we support our customers’ efforts to bring groundbreaking therapies to patients around the world. Together, we can realize our vision that ‘every drug can be made and every disease can be treated’."

Business Performance by Segments

WuXi Chemistry: Integrated CRDMO Business Model Drives Steady Growth, with Continued Expansion in New Modalities (WuXi TIDES)
Q1-Q3 revenue from WuXi Chemistry grew 2.0% year-over-year to RMB 21.24 billion, excluding COVID-19 commercial projects, revenue grew strongly by 31.0%. Q1-Q3 adjusted non-IFRS gross profit margin was 45.7%, with 4.5pts year-over-year improvement, mainly due to FX impact, while efficiency continued to improve.
Drug discovery services ("R") continued to generate downstream opportunities. In the past 12 months, we successfully synthesized and delivered more than 420,000 new compounds to customers, which grew 11% year-over-year. Through our "follow-the-customer" and "follow-the-molecule" strategies, we established trusted partnerships with our global customers, supporting the sustainable growth of our CRDMO business.
Development and manufacturing (D&M) services delivered strong growth.
In the first three quarters, D&M services revenue grew 1.4% year-over-year to RMB15.63 billion. Excluding COVID-19 commercial projects, D&M services revenue grew strongly by 48.2%.
In the first three quarters, we added 926 molecules to our D&M pipeline. To date, our D&M pipeline has exceeded 3,000 molecules for the first time and reached 3,014, including 58 commercial projects, 61 in phase III, 316 in phase II and 2,579 in phase I and pre-clinical stages, among which 12 commercial and phase III projects were added in the first three quarters of 2023.
Specifically, TIDES business (mainly oligo and peptides) continued to expand.
In the first three quarters, TIDES revenue grew strongly by 38.1% year-over-year to RMB2.07 billion. Q4 revenue is expected to increase significantly, with TIDES full year 2023 revenue growth expected to exceed 60%. As of September 30, 2023, backlog of TIDES accelerated growth by 245% year-over-year.
In the first three quarters, the number of TIDES D&M customers increased 31% year-over-year to 127, and the number of TIDES molecules increased 48% year-over-year to 230.
We initiated capacity expansion in Changzhou and Taixing. The expanded workshops are expected to commence operation in December 2023, with the total reactor volume of peptide solid phase synthesizers increased from 20,000L to 32,000L.
WuXi Testing: Drug Safety Evaluation Service & SMO Maintain Leadership Position and Drive Steady Growth
Q1-Q3 revenue from WuXi Testing grew 16.2% year-over-year to RMB4.85 billion. Q1-Q3 adjusted non-IFRS gross profit margin was 38.6%, with 1.8pts year-over-year improvement, mainly due to FX impact, while efficiency continued to improve.
Q1-Q3 2023 revenue from lab testing services grew 16.3% year-over-year to RMB3.54 billion. Among which, revenue from drug safety evaluation services grew 26.9% year-over-year. We maintained our industry leadership position in Asia Pacific for drug safety evaluation services that meet global regulatory requirements. Meanwhile, new facilities in Qidong and Suzhou have begun delivering new projects.
Q1-Q3 2023 revenue from clinical CRO & SMO (Site Management Organization) grew 15.9% year-over-year to RMB1.32 billion.

SMO revenue grew strongly by 31.0% in Q1-Q3 2023, maintaining a leadership position in China. In the first three quarters of 2023, SMO supported 35 new drug approvals for customers.
In the first three quarters of 2023, clinical CRO enabled our customers to obtain 13 IND approvals and submit 5 NDA filings.

WuXi Biology: New Modalities Business Drives Growth; WuXi Biology Platform Continues to Generate Downstream Opportunities

Q1-Q3 revenue from WuXi Biology grew 6.5% year-over-year to RMB1.89 billion. Q1-Q3 adjusted non-IFRS gross profit margin was 42.8%, with 1.6pts year-over-year improvement due to FX impact.
The Company focused on improving capabilities related to new modalities. In the first three quarters of 2023, WuXi Biology revenue from new modalities grew strongly by 35% year-over-year, contributing to 25.9% of WuXi Biology revenue.

The comprehensive early discovery screening platform integrates multi-technologies (HTS, DEL, ASMS, FBDD, CADD etc.) and analysis capabilities of multi-dimensional databases, which can provide extensive and in-depth services to clients. In the first three quarters of 2023, it continued to generate downstream opportunities and contributed more than 20% of the Company’s new customers.

WuXi ATU: CTDMO Business Model Drives Growth

Q1-Q3 revenue from WuXi ATU grew 11.6% year-over-year to RMB1.03 billion. Q1-Q3 adjusted non-IFRS gross profit margin was (6.1)%, with 0.4pts year-over-year improvement due to FX impact.
The Company focused on improving our CTDMO integrated enabling platform and strengthening capabilities and capacities. We provided development, testing and manufacturing services to 68 projects, including 7 Phase III projects (2 projects in BLA review stage, and 2 projects in BLA preparation stage), 9 Phase II projects and 52 pre-clinical and Phase I projects.
In the first three quarters of 2023, we supported a customer to complete the BLA filing for a Tumor Infiltrating Lymphocyte (TIL) product with the FDA, which is expected to be the world’s first innovative TIL-based therapy, and our facilities in Philadelphia (U.S.) successfully passed the FDA pre-license inspection (PLI). In addition, we supported a customer to file BLA for Lenti-viral Vector (LVV) used in a CAR-T product, and became the first CGT CDMO in China to pass Center for Food and Drug Inspection of NMPA (CFDI) LVV on-site inspection. We expect that our customers will obtain approval for their products in the fourth quarter of 2023. Moreover, we completed the technology transfer for the manufacturing of a blockbuster commercial CAR-T product, whose process performance qualification is now in progress, and is expected to file pre-approval submission (PAS) to FDA in the first half of 2024. In June 2023, we signed an LVV manufacturing contract with a large pharmaceutical customer used in a commercial CAR-T product, which is expected to start manufacturing in the first half of 2024.

WuXi DDSU: the First Year to Receive New Drug Application (NDA) Approval of New Drugs Developed for Customers; Breakthrough to Receive the First Royalty Income

Q1-Q3 revenue from WuXi DDSU declined 26.9% year-over-year to RMB0.49 billion. Q1-Q3 adjusted non-IFRS gross profit margin was 31.6%, with 3.5pts year-over-year improvement mainly thanks to favorable project mix.

In the first three quarters of 2023, 2 new drugs developed for our customers have obtained National Medical Products Administration (NMPA) approvals, including one for COVID-19 infection treatment and the other for tumor treatment. Moreover, 2 new drug candidates are in the NDA review stage. We continued to receive the royalty income of the 2 approved new drugs from customers. Royalty income is estimated to grow with more than 50% CAGR over the next 10 years as more and more products are commercialized by customers.
In the first three quarters of 2023, we supported customers to file INDs for 15 drug candidates and obtain 19 Clinical Trial Approvals (CTAs). Cumulatively, we have submitted 187 new chemical entity IND filings and obtained 163 CTAs for customers, among which 2 projects have obtained NDA approvals, 2 projects are in the NDA review stage, 5 projects are in Phase III, 29 projects are in Phase II, and 70 projects are in Phase I, covering multiple therapeutic areas.

On October 30, 2023 Triumvira Immunologics, a clinical-stage company developing novel, targeted autologous and allogeneic T cell therapeutics that co-opt the natural biology of T cells to treat patients with solid tumors, reported that it will participate with one oral presentation and four posters at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 2023 Annual Meeting in San Diego, California, from November 1-5 (Press release, Triumvira Immunologics, OCT 30, 2023, View Source [SID1234636467]). The company will showcase clinical and preclinical data across various programs, including its ongoing Phase I/II study investigating the safety and efficacy of autologous TAC-T cells targeting human epidermal growth factor receptor 2 (HER2) in relapsed or refractory solid tumors (TACTIC-2 /NCT04727151) and its CLDN18.2, GUCY2C and allogeneic TAC T cell technologies.

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TAC01-HER2 is an innovative cell-based therapy that involves the utilization of genetically modified T cells derived from the patient themselves. These cells express a T-cell Antigen Coupler (TAC) which is designed to specifically recognize HER2 in tumors. In addition to the TAC01-HER2 candidate, the company is investigating TAC-GUCY2C for the treatment of colorectal cancer and TAC01-CLDN18.2 for the treatment of pancreatic ductal adenocarcinoma and gastric cancer.

"The new data we are presenting at SITC (Free SITC Whitepaper) demonstrates the robustness of our TAC-T cells platform and its potential for precise targeting of malignant cells expressing tumor-associated antigens such as HER2, Claudin 18.2 and GUCY2C," stated Dr. Paul Lammers, CEO of Triumvira Immunologics. "Our commitment to developing innovative T cell therapeutics that harness the natural biology of T cells is supported by the promising preliminary results from our ongoing Phase I/II study targeting HER2 in solid tumors. In addition, we are advancing our pipeline by evaluating the clinical efficacy of TAC01-CLDN18.2, a novel autologous cell therapy that recognizes Claudin 18.2, a promising therapeutic target that is selectively over-expressed in gastric cancers and other solid tumors."

Details of the abstract oral presentation are as follows:

Abstract Number: 654
Title: A phase I/II trial investigating safety and efficacy of autologous TAC01-HER2 in relapsed or refractory solid tumors
Presenter: Daniel Olson M.D., University of Chicago
Session: Concurrent Session 105b: Rapid Oral Abstracts – Clinical
Date: Friday, November 3 at 12:15 – 1:15 p.m. Pacific Time
Location: Ground Level, Exhibit Hall C, San Diego Convention Center

Details of the abstract poster presentations are as follows:

Abstract Number: 347
Title: Functional characterization of GUCY2C-TAC T cells for the treatment of colorectal cancer using preclinical models
Authors: Tania Benatar, Thanyashanthi Nitya-Nootan, Gargi Thakor, Suzanna Prosser, Philbert Ip, Prabha Lal, Alima Khan, Stacey Xu, Sailaja Pirati, Deepika Bhemarasetty, Christopher Helsen, Andreas Bader
Category: Cellular Therapies
Date: Friday, November 3 at 9 a.m. Pacific Time
Location: Exhibit and Poster Hall (Exhibit Hall B), San Diego Convention Center

Abstract Number: 372
Title: TAC-T cells persist and remain functional during and after repeated tumor exposure in vitro and in vivo
Authors: Heather MacGregor, Suzanna Prosser, Stacey Xu, Kyle MacDonald, Aksha Kadri, Ritu Randhawa, Swati Shetty, Sailaja Pirati, Deepika Bhemarasetty, Christopher Helsen, Sadhak Sengupta, Andreas Bader
Category: Cellular Therapies
Date: Saturday, November 4 at 9 a.m. Pacific Time
Location: Exhibit and Poster Hall (Exhibit Hall B), San Diego Convention Center

Abstract Number: 400
Title: Preclinical characterization and modeling of allogeneic Vγ9Vδ2 TAC T cells for the treatment of solid tumors
Authors: Stacey Xu, Suzanna Prosser, Ling Wang, Ritu Randhawa, Sailaja Pirati, Deepika Bhemarasetty, Kyle MacDonald, Seung Mi Yoo, Miyoung Jung, Laurentia Gheorghiu, Chris Ayers, Sadhak Sengupta, Christopher Helsen, Andreas Bader
Category: Cellular Therapies
Date: Saturday, November 4 at 9 a.m. Pacific Time
Location: Exhibit and Poster Hall (Exhibit Hall B), San Diego Convention Center

Abstract: Number 738
Title: A phase 1/2 study investigating the safety and efficacy of autologous TAC T cells in subjects with unresectable, locally advanced or metastatic claudin 18.2+ solid tumors
Authors: Daniel Olson, Ecaterina Dumbrava, Sam Saibil, Martin Gutierrez, Syma Iqbal, Davendra Sohal, Maria Apostolopoulou, Kara Moss, Deyaa Adib, Benjamin Schlechter
Category: Clinical Trial In Progress
Date: Friday, November 3 at 9 a.m. Pacific Time
Location: Exhibit and Poster Hall (Exhibit Hall B), San Diego Convention Center

On October 30, 2023 Regen BioPharma, Inc. (OTC PINK: RGBP) (OTC PINK: RGBPP), a biotechnology company advancing a diverse pre-clinical pipeline spanning cell therapies, RNA vaccines, RNA and DNA therapeutics and small molecule drugs reported that it will be presenting at the Emerging Growth Conference on November 1, 2023 (View Source) (Press release, Regen BioPharma, OCT 30, 2023, View Source [SID1234636466]).

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This live, interactive online event will give existing shareholders and the investment community the opportunity to interact with the Company’s CEO, Dr. David Koos, in real time. Please ask your questions during the event and Dr. Koos and his team will do their best to address as many of them as possible.

"We plan to use this time to discuss our most recent scientific results around our DuraCAR program as well as update our shareholders on our financial plan," says Dr. David Koos, CEO and Chairman of the Company.

Regen BioPharma, Inc. will be presenting at 2:20 – 2:50 Eastern time on Wednesday, November 1, 2023. Please register here to ensure you are able to attend the conference and receive any updates that are released View Source;tp_key=f701725cb0&sti=rgbp.

If attendees are unable to join the event live on the day of the conference an archived webcast will also be made available on EmergingGrowth.com.

On October 30, 2023 SparX Biopharmaceutical Corp. reported that its Investigational New Drug (IND) application for SPX-303, a First-in-Class anti-LILRB2/PD-L1 bispecific antibody drug candidate, has been greenlighted by the U.S. Food and Drug Administration (FDA) (Press release, Sparx Therapeutics, OCT 30, 2023, View Source [SID1234636465]). This approval propels SparX’s enduring commitment to deliver groundbreaking solutions to patients grappling with advanced or refractory solid tumors.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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Dr. Gui-Dong Zhu, Chief Executive Officer of SparX Biopharmaceutical, shared his exhilaration: "Receiving the FDA’s green light on our IND application is a seminal moment in our ongoing journey to redefine the paradigms of cancer treatment. The preclinical data for SPX-303 not only showcases promise but facilitate out confidence to harness its therapeutic prowess in a clinical setting, particularly for patients who previously had limited treatment options."

With this FDA endorsement, SparX Biopharmaceutical is primed to launch a Phase 1 clinical study, aiming to assess the safety, tolerability, and preliminary efficacy of SPX-303 in patients beleaguered by advanced or refractory solid tumors. This human trial is geared to evaluate the therapeutic potential of SPX-303, potentially heralding a new dawn of innovative and superior healthcare outcomes.

Developed by SparX, SPX-303 is a First-in-Its Class bispecific antibody therapy, ingeniously engineered to engage two cardinal immune checkpoint proteins, LILRB2 and PD-L1, simultaneously. Acting as pivotal fulcrums in sustaining the immune system’s equilibrium and vigor, these checkpoints help deter autoimmune anomalies. While LILRB2 majorly tempers overactive innate immune reactions, preserving the body’s natural defense harmony, PD-L1—often overexpressed in tumor cells—judiciously modulates T cell activation, curating a precise immune response. Yet, cancers often manipulate these immune-checkpoints, equipping themselves with a defense mechanism against immune retaliation. SPX-303 is meticulously designed to dismantle this barrier, empowering the immune system to discern and fervently annihilate malignant cells, thereby charting a transformative trajectory in cancer therapy.

On October 30, 2023 Applied BioMath (www.appliedbiomath.com), the industry-leader in providing model-informed drug discovery and development (MID3) support to help accelerate and de-risk therapeutic research and development (R&D), reported their participation at the 38th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) occurring November 1-5, 2023 in San Diego, CA (Press release, Applied BioMath, OCT 30, 2023, View Source [SID1234636464]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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During the conference, Fei Hua, PhD, Vice President of Modeling and Simulation Services at Applied BioMath, will present the poster entitled, "Overcoming the dose-response prediction limitation from bench to clinic for T-cell engagers: Using Quantitative Systems Pharmacology (QSP) modeling in the development of CDR404 for solid tumors."

While T-cell Engagers (TCEs) offer a potentially very potent approach to treat cancer, they also have complex relationships between binding potency, exposure, and efficacy. These complex relationships bring challenges to drug discovery and development such as identifying optimal Kd for the drug candidate, predicting efficacious doses, and selecting dosing regimens for clinical study.

Applied BioMath’s poster describes a QSP model developed to support the first-in-human trial design for CDR404, a highly potent and highly specific antibody-based T-cell engager that binds bivalently to a MAGE-A4 peptide displayed on HLA-A*02:01 on cancer cells and monovalently to CD3 on T-cells. The QSP model will become an integrated part of the clinical development program and can be updated with emerging clinical data to facilitate discovery of a safe and therapeutic dose range for CDR404.

"For therapeutics with complex mechanisms of action (MoA), QSP modeling can be integral for progressing through the R&D pipeline," said John Burke, PhD, Co-founder, President and CEO. "Particularly for TCEs, we’ve had experience where QSP modeling has tested target feasibility, optimized molecule design, predicted therapeutic index, and guided clinical trial design."

To learn more about Applied BioMath, visit www.appliedbiomath.com.