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Genscript Biotech Reports 2021 Interim Financial Results

On August 23, 2021 Genscript Biotech (HKEX: 1548.HK) (GenScript), a global leading biotech company, reported its audited financial results for the year ended June 30, 2021 (Press release, GenScript, AUG 23, 2021, View Source [SID1234586825]).

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"In the first half of 2021, the Group maintained a strong momentum across all business segments. Among others, our gene and cell therapy CDMO business scored historic breakthrough," said Dr. Patrick Liu, Rotating CEO of GenScript. "Over the past six months, the COVID-19 pandemic is still raging around the world. All GenScript employees overcame challenges and seized industry opportunities amid the pandemic, contributing the Group’s rapid growth. In the next few years, GenScript will accelerate strategic investment in the gene and cell therapy industry supply chain in an effort to meet strong demand from customers on this revolutionary industry. We are confident in our ability to continue to create value for our customers and shareholders and fulfill our mission to make people and nature healthier through biotechnology".

BUSINESS REVIEW

For the six months ended June 30, 2021, the Group’s overall revenue increased by 38.0% to approximately US$229.6 million (the same period in 2020: approximately US$166.4 million). Gross profit was approximately US$138.6 million, representing an increase of 28.1% from approximately US$108.2 million for the same period in 2020. The loss attributable to the shareholders of the Company (the "Shareholders") was approximately US$91.1 million, whilst the loss attributable to the Shareholders of approximately US$113.1 million was recorded for the same period of 2020.

During the Reporting Period, the external revenue of (i) life-science services and products, (ii) biologics development services, (iii) industrial synthetic biology products, (iv) cell therapy, and (v) operation unit accounted for approximately 63.7%, 13.6%, 7.8%, 14.8%, and 0.1%, respectively, of the total revenue of the Group.

Results Analysis of the Four Business Segments

Life-science Services and Products

During the Reporting Period, revenue of life-science services and products amounted to approximately US$152.0 million, representing an increase of 32.2% (the same period in 2020: approximately US$115.0 million. The gross profit was approximately US$91.7 million, representing an increase of 17.6% as compared with approximately US$78.0 million for the same period in 2020. During the Reporting Period, the segment operating profit of life-science services and products was approximately US$52.2 million, representing an increase of 25.5% from approximately US$41.6 million for the same period in 2020.

The growth of revenue was mainly attributable to the (i) expanded capacity and productivity in molecular biology and oligo synthesis, (ii) continued growth in protein and reagent antibody production services, (iii) successful development of new accounts, and partially offset by (iv) the decrease in COVID-19 related products. The decrease in gross profit margin was primarily attributable to the (i) significant decrease of exchange rate of USD against RMB as compared to the same period of last year, caused an increase of converted cost as most part of production cost occurs in Mainland China, (ii) change of product portfolio strategy which caused higher proportion of products with lower gross profit margin, and (iii) increased freight and duty costs. The increase in operating profit was primarily attributable to the (i) increased revenue, (ii) increased efficiency and profitability of oligo synthesis service resulted from capacity development, and (iii) continuous improvement of operation efficiency in both commercial and management team. The increase in operating profit was partly offset by unfavorable exchange rate movements.

Biologics Development Services

During the Reporting Period, revenue of biologics development services amounted to approximately US$31.5 million, representing an increase of 65.8% (the same period in 2020: approximately US$19.0 million). The gross profit was approximately US$10.0 million, representing an increase of 112.8% as compared with approximately US$4.7 million for the same period in 2020. The gross profit margin increased from 24.7% for the same period last year to 31.7% this year. During the Reporting Period, the operating loss of biologics development services was approximately US$2.4 million.

The rapid growth of revenue was mainly attributable to the (i) significant increase of customer projects for antibody and protein drug development, (ii) significant increase in plasmid and viral vector revenue from the booming development in gene and cell therapies ("GCT") and mRNA vaccines, (iii) improved capacity for pre-clinical and clinical development, (iv) improvement of delivery quality and turnaround time, and (v) new and upgraded service offering and integrated service package which contributed to extra opportunities and better market awareness. The operating loss was primarily attributable to the (i) continuous investment in selling and distribution to build a robust pipeline of future projects, and (ii) investment into research and development for the establishment of adeno-associated virus ("AAV") platform and optimization of lentivirus ("LVV") platform and plasmid platform, as well as development and optimization of antibody production process platform.

Industrial Synthetic Biology Products

During the Reporting Period, revenue for industrial synthetic biology products increased by 60.7% to approximately US$18.0 million (the same period in 2020: approximately US$11.2 million). The gross profit was approximately US$5.1 million, representing an increase of 18.6% as compared with approximately US$4.3 million for the same period in 2020. During the Reporting Period, the operating loss of industrial synthetic biology products was approximately US$0.4 million.

The growth of the revenue was mainly attributable to the (i) launch of innovative products such as Catalse and Amylase, (ii) increased penetration into big industrial customers by providing upgraded marketing strategy from a product seller to a solution provider, and (iii) business development in overseas area. The operating loss was primarily attributable to the (i) significant investment in research and development activities, especially in labor costs led by the recruitment of highly-skilled persons, (ii) reinforcement in marketing activities for our core products and sales force expansion to enhance coverage and market share for our products quickly, and (iii) investment into synthetic biology area such as using enzymatic process to produce high value industrial products.

Cell Therapy

During the Reporting Period, revenue of cell therapy increased by 46.8% to approximately US$33.9 million (the same period in 2020: approximately US$23.1 million). The gross profit was approximately US$33.9 million, representing an increase of 46.8% as compared with approximately US$23.1 million for the same period in 2020. During the Reporting Period, the operating loss of cell therapy was approximately US$172.5 million.

The increase in both revenue and gross profit was primarily attributable to additional milestones achieved in December 2020 and May 2021 and thus further recognition of contract revenue from the collaboration with Janssen on developing cilta-cel. The operating loss was primarily attributable to the (i) higher number of clinical trials with more patients enrolled and a higher number of research and development product candidates, (ii) expansion of Legend’s supporting administrative functions to aid continued research and development activities, and (iii) growth in the cost associated with commercial preparation activities for cilta-cel.

Revenue

During the Reporting Period, the Group recorded revenue of approximately US$229.6 million, representing an increase of 38.0% from approximately US$166.4 million for the same period of 2020. This is mainly attributable to (i) the continued increase from life-science services and products from major strategic customers and new competitive services and products, (ii) the growth in biologics development services as project numbers continued to increase, and (iii) the increase of contract revenue derived from Legend’s collaboration with Janssen with new milestones achieved.

Gross profit

During the Reporting Period, the Group’s gross profit increased by 28.1% to approximately US$138.6 million from approximately US$108.2 million for the same period of 2020. The increase in gross profit was mainly attributable to the (i) rapid growth of revenue, especially in life-science, biologics CDMO and cell therapy business, and (ii) improved capacity utilization and production efficiency. The increase in gross profit was partially offset by unfavorable exchange rate fluctuation and increased shipping costs.

Selling and distribution expenses

During the Reporting Period, the Group’s selling and distribution expenses increased by 41.8% to approximately US$58.3 million from approximately US$41.1 million for the same period in 2020. This increase is mainly driven by the (i) increased investment into the commercial talent pool by recruiting more experienced personnel and improved incentive packages, (ii) increased marketing and advertising expenses, primarily attributable to the global expansion of our business, and (iii) the increased marketing expenses related to Legend’s collaboration with Janssen.

Administrative expenses

During the Reporting Period, the administrative expense increased by 54.7% to approximately US$56.3 million from approximately US$36.4 million for the same period in 2020. This is mainly attributable to the (i) reinforcement of some key administrative functions such as information technology, supply chain and legal to build up capable and professional administrative team to support the Group’s overall business expansion, and (ii) one-time consultation expenses and other costs related to the Investigation.

Research and development expenses

During the Reporting Period, the research and development expenses increased by 51.6% to approximately US$175.1 million from approximately US$115.5 million for the same period in 2020. This is mainly attributable to the (i) increase in clinical trial expenses and preclinical study costs, especially in the cell therapy segment related to Legend’s collaboration with Janssen, (ii) investment in new challenging research and development projects, which will significantly strengthen our competitiveness in the GCT market and related supply chain, (iii) investment in development projects that improved our production efficiency, and (iv) increase in compensation package including shared-based payment for research and development personnel.

Privo Technologies, Inc. Awarded $3M NIDCR NIH Commercialization Readiness Pilot Grant

On August 23, 2021 Privo Technologies, Inc. ("Privo"), a biopharmaceutical company focused on optimizing state-of-the-art chemotherapies to be "Tough on cancer, Easy on patients", reported that the National Institute of Dental and Craniofacial Research (NIDCR) of the National Institutes of Health (NIH) has awarded Privo approximately $3 million over three years in a Commercialization Readiness Pilot (CRP) grant as part of the Small Business Innovation Research (SBIR) Program (Press release, Privo Technologies, AUG 23, 2021, View Source [SID1234586824]). The grant was awarded on February 3, 2021, and builds upon previous Phase 1 and Phase 2 SBIR awards from the NIDCR to support the late-stage development of PRV111, Privo’s lead asset that allows for locoregional control of chemotherapeutic via topical application.

"We are very grateful to the NIDCR and NIH for their continued support for the late-stage development and commercialization of PRV111," said Manijeh Goldberg, Ph.D., CEO of Privo Technologies, Inc. and Principal Investigator on the grants. "Here at Privo, we seek to transform the standard of care for patients suffering from mucosal cancers that typically require disfiguring and disabling surgeries. By alleviating the safety concerns with traditional chemotherapies, our lead asset facilitates locoregional sequestration of the chemotherapeutic to the tumor site and has demonstrated superior efficacy and safety profiles in comparison to standard chemotherapies. This grant will be instrumental in developing PRV111 from a clinical to a commercial stage asset."

LUNGevity Foundation and Partner Hamoui Family Foundation Issue 2022 Request for Applications for RET-Positive Clinical Lung Cancer Research

On August 23, 2021 LUNGevity Foundation, the nation’s leading lung cancer-focused nonprofit organization, reported that it is partnering with The Hamoui Foundation to offer a new lung cancer research award program (Press release, LUNGevity Foundation, AUG 23, 2021, View Source [SID1234586823]). The award supports research that will change RET-positive lung cancer into a chronic or curable condition. This will be transformative for the approximately 1%-2% of people with non-small cell lung cancer with the RET driver mutation. Funding for this award is being provided by The Hamoui Foundation, while LUNGevity will provide research infrastructure and scientific expertise. Funded research projects should have a direct impact on the outcomes of patients with advanced RET-positive lung cancer.

The Hamoui Foundation/LUNGevity award may be for a maximum of $1 million: $500,000 per year for up to two years. Projects funded through this award will have direct clinical implications in 1-2 years.

"In 2020, the United States Food and Drug Administration approved two targeted therapies for RET fusion-positive lung cancer. These new drugs have greatly impacted the treatment of RET+ lung cancer. However, like all targeted therapies, we are seeing resistance develop to these new drugs. Through this partnership with The Hamoui Foundation, we hope to address the What’s next after these drugs," explained Dr. Upal Basu Roy, Executive Director of Research at LUNGevity.

"We’re excited to partner with LUNGevity on research that will improve outcomes for patients with RET+ lung cancer," said Omaima Salous, co-founder of the Hamoui Foundation. "As a mother of young children and a survivor living with RET+ lung cancer, I know how vital this research is for our community."

The RFA for this award is available on the LUNGevity website at www.LUNGevity.org/apply-for-award and on the proposalCentral website at proposalcentral.com.

Letters of intent for the award must be submitted by September 17, 2021.

Antengene Announces Approval of the Phase II Study of Selinexor for the Treatment of Myelofibrosis in China

On August 23, 2021 Antengene Corporation Limited ("Antengene", SEHK: 6996.HK), a leading innovative biopharmaceutical company dedicated to discovering, developing and commercializing global first-in-class and/or best-in-class therapeutics in hematology and oncology, reported that China’s National Medical Products Administration has approved a Phase II study of selinexor (XPOVIO) for the treatment of patients with myelofibrosis (MF) (Press release, Antengene, AUG 23, 2021, View Source [SID1234586822]).

MF is a clonal bone narrow neoplasm which can emerge either as primary MF (PMF), polycythemia vera (PV) or essential thrombocythemia (ET). The disease is primarily characterized by fibrosis in the bone marrow, extramedullary hematopoiesis, anemia, splenomegaly, constitutional symptoms, and possible progression to leukemia that would shorten patients’ survival. Allogeneic hematopoietic stem cell transplantation (allo-HSCT) is currently the only curative treatment for MF. However, such treatment is commonly associated with a high rate of complications and treatment-related deaths. According to the National Comprehensive Cancer Network (NCCN) Guidelines for the Treatment of MF, patients with intermediate-2 or high-risk MF ineligible for allo-HSCT and with a platelet count of ≥50×109/L should be treated with JAK inhibitors ruxolitinib or fedratinib (2020 NCCN Guidelines). Due to the poor prognosis of patients who have failed or developed resistance to these targeted therapies, MF still represents an urgent unmet medical need.

This randomized, open-label, global multicenter Phase II study will be conducted at 15 centers across China, including the primary trial center the First Affiliated Hospital Soochow University, and enroll approximately 20 patients in total. The study is designed to evaluate the safety and efficacy of selinexor versus physician’s choice (PC) in patients with MF who had received at least six months of treatment with a JAK1/2 inhibitor. Enrolled patients will be randomized in a 1:1 ratio into one of the two treatment arms, to receive either single agent selinexor or PC treatment. The primary endpoint of the study is the proportion of patients with a ≥35% spleen volume reduction from baseline (SVR35), as assessed by the independent radiographic review committee (IRC).

Prof. Depei Wu, Director of Hematology Department at the First Affiliated Hospital Soochow University, and the principal investigator of the study, noted: "MF is a relatively rare form of proliferative neoplasm in the bone narrow that has long lacked effective treatment options before the emergence of targeted therapies. Allo-HSCT is currently the only curative treatment for patients with MF, yet not all patients with MF are eligible to or tolerant of the treatment. Although ruxolitinib has already been approved in China for the treatment of MF, patients who have failed on or developed resistance to the therapy still have very limited treatment options. This randomized, open-label, global multicenter Phase II study is designed to assess the safety and efficacy of selinexor versus physician’s choice (PC) in patients with MF who had received at least six months of treatment with a JAK1/2 inhibitor. We are very hopeful that this study will provide additional evidence supporting the exploration of effective treatments for MF and ultimately provide a new treatment option to patients with MF in China."

Dr. Jay Mei, Founder, Chairman and CEO of Antengene, commented: "The NMPA’s approval for this clinical trial of selinexor in patients with MF marks another major milestone in our effort in developing selinexor in a broad range of diseases, and a big step towards expanding potential indications for this candidate drug. We are confident that selinexor will demonstrate its clinical utility in the treatment of MF as we progress with this clinical development program. We look forward to advancing this study under the oversight of the NMPA, and aim to achieve a clinical breakthrough for patients with MF in China."

About Selinexor (XPOVIO)

Selinexor is a first-in-class oral selective inhibitor of nuclear export (SINE) compound discovered and developed by Karyopharm Therapeutics Inc. (NASDAQ: KPTI), Selinexor is currently being developed by Antengene, which has the exclusive development and commercial rights in certain Asia-Pacific markets, including Greater China, Korea, Australia, New Zealand and the ASEAN countries, and already obtained an NDA approval in South Korea through a priority review process.

In July 2019, the US Food and Drug Administration (FDA) approved selinexor in combination with low-dose dexamethasone for the treatment of relapsed/refractory multiple myeloma (RRMM) and in June 2020 approved selinexor as a single-agent for the treatment of relapsed/refractory diffuse large B-cell lymphoma (RR DLBCL). In December 2020, selinexor also received FDA approval as a combination treatment for multiple myeloma after at least one prior therapy. In February 2021, selinexor was approved by the Israeli Ministry of Health for the treatment of patients with RRMM or RR DLBCL and in March 2021, the European Commission (EC) has granted conditional marketing authorization for selinexor (NEXPOVIO) for the treatment of adult patients with RRMM.

Selinexor is so far the first and only oral SINE compound approved by the FDA and is the first drug approved for the treatment of both MM and DLBCL. Selinexor is also being evaluated in several other mid-and later-phase clinical trials across multiple solid tumor indications, including liposarcoma and endometrial cancer. In November 2020, at the Connective Tissue Oncology Society 2020 Annual Meeting (CTOS 2020), Antengene’s partner, Karyopharm, presented positive results from the Phase III randomized, double blind, placebo controlled, cross-over SEAL trial evaluating single agent, oral selinexor versus matching placebo in patients with liposarcoma. Karyopharm also announced that the ongoing Phase III SIENDO trial of selinexor in patients with endometrial cancer passed the planned interim futility analysis and the Data and Safety Monitoring Board (DSMB) recommended the trial should proceed as planned without any modifications. Top-line SIENDO trial results are expected in the second half of 2021.

Antengene is currently conducting multiple clinical trials of selinexor for the treatment of MM, DLBCL, endometrial cancer, and peripheral T and NK/T-cell lymphoma, and five of these trials are at late-stages (Phase II/III).

China Medical System Holdings Limited 2021 Interim Results Announcement

On August 23, 2021 China Medical System Holdings Limited reported that 2021 Interim Results Announcement (Press release, China Medical System, AUG 23, 2021, View Source [SID1234586821])

Performance Highlights

Maintained Good Business Growth: Turnover increased by 23.6% to RMB3,843.0 million; in the case that all medicines were directly sold by the Group, turnover increased by 28.7% to RMB4,269.3 million; profit for the period increased by 25.5% to RMB1,631.6 million.
Initiated the Industrial Investment in Chinese Biotech: Capitalized on strong capabilities on clinical execution, commercialization and capital strength to empower the clinical development and commercialization of domestic innovative products; made equity investment in Trinomab, would establish a joint venture, and added two natural fully human antibody drugs into the pipeline.
Upgraded the Innovative Pipeline: Deployed more than 20 innovative products, among which 9 products had been approved for marketing in the U.S./Europe, and 4 had completed or were under registration clinical trials in China. The harvest of innovation is coming.
The Professional Dermatology and Medical Aesthetic Business System Has Taken Shape: Acquired the dermatology and medical aesthetic specialty company Luqa to enrich the dermatological product portfolio and extend its reach to the medical aesthetic field; acquired Carnation, entered into collaboration with EC Healthcare and Shandong Chuangxin successively, to constantly expand the dermatology and medical aesthetic business layout.
Expanded and Optimized the Healthcare Business: Flagship stores have been launched on three mainstream cross-border e-commerce platforms, namely JD Worldwide, Youzan Mall and Tmall International. A total of 88 quality products from 14 well-known European and American brands have been put on the stores.
HONG KONG, Aug. 23, 2021 /PRNewswire/ — China Medical System Holdings Limited ("CMS", or the "Company", SEHK: 867), together with its subsidiaries (the "Group"), a well-established, innovation-driven specialty pharma with a focus on sales and marketing in China, announced its unaudited results for the 6 months ended 30 June 2021 (the "Reporting Period").

In the first half of 2021, the Group had a turnover of RMB3,843.0 million (H1 2020: RMB3,108.1 million), an increase of 23.6% over the same period last year; in the case that all medicines were directly sold by the Group, turnover increased by 28.7% to RMB4,269.3 million (H1 2020: RMB3,316.6 million). Profit for the period recorded an increase of 25.5% to RMB1,631.6 million (H1 2020: RMB1,300.5 million). Declared interim dividend was RMB0.2641 per share.

Mr. Lam Kong, Chairman and Chief Executive of CMS, said "In the first half of 2021, CMS achieved sound business growth under the synergy of positive brand images of its products, the professional academic promotion, and the compliant, efficient and refined management. With the rich experience in international development and academic promotion network resources in multiple therapeutic fields, the Group achieved in-depth development in the pharmaceutical business, while constantly expanding its business boundaries and rapidly promoting the development of the dermatology and medical aesthetic business as well as the healthcare business. At the same time, the Group actively explored on innovation and change, and initiated a new model of industrial investment in Chinese Biotech, injecting new momentum for the sustainable development of the Group, building a more proactive and promising "New CMS"."

Initiating the Industrial Investment in Chinese Biotech
Since the second half of 2017, the Group has been investing and deploying overseas innovative products in relatively mature stages due to the fact that overseas biotechnologies have outpaced China’s for many years, so as to shorten the gap between the launching time of innovative medicines at home and abroad, and improve the accessibility of Chinese patients to innovative medicines with real clinical needs. However, in recent years, under the leadership of top scientists, Chinese Biotech have continuously made breakthroughs in innovative biotechnologies via leveraging their talent advantages, flexible R&D strategies, favorable policies and capital supports. Meanwhile, their innovative products that were once in early R&D stage have gradually moved into the commercialization stage. For focusing on their own strengths and improving the efficiency of pharmaceutical industry development, an international mainstream industry ecosystem will be formed in China’s pharmaceutical industry that biotech companies will be responsible for innovation, while big pharmaceutical companies responsible for commercialization. The trend for the Group to become an incubation platform of innovative product for Chinese Biotech has emerged. Following the trend, during the Reporting Period, the Group capitalized on its previous accumulated advantages, such as efficient clinical execution, commercialization capability and capital strength, to initiate the industrial investment in Chinese Biotech, in order to empower the rapid launching of the innovative products in China.

In April 2021, the Group announced that it would make equity investment in and establish a joint venture with Trinomab Biotech Co., Ltd ("Trinomab"). Trinomab will be responsible for drug discovery and preclinical studies, while the Group responsible for clinical development, registration, and commercialization, etc. This collaboration initiated a new model for the Group’s industrial investment in Chinese Biotech.

Innovative Pipeline
The Group will continue to empower the clinical development and commercialization of innovative medicines in China through industrial investment in Chinese Biotech, equity investment in Overseas Biotech, and strategic collaboration with Global Biopharma.

In the first half of 2021, the Group’s innovative pipeline continued to expand. The Group successively reached cooperation with Trinomab on the innovative products developed through its fourth-generation antibody technology platform HitmAb, the Fully Human Anti-SA Hlα Antibody (a natural fully human antibody drug with Hlα neutralizing activity) and Fully Human Anti-HCMV Antibody (a natural fully human antibody drug with HCMV neutralizing activity). Meanwhile, the clinical development of innovative products was accelerated in China. By now, the New Drug Application of 1 blockbuster product (Diazepam Nasal Spray) has been accepted, the bridging trial of 1 blockbuster product (Tildrakizumab Solution for Injection) has met the primary endpoint, and the bridging trials of 4 blockbuster products (Cyclosporine Eye Drops 0.09% and Desidustat Tablets, Methylthioninium Chloride Enteric-coated Sustained-release Tablets, and Methotrexate Injection, Pre-filled Syringe) have been actively moved forward.

Pipeline – Launched Overseas or Under Marketing Application Review

* In July 2021, the New Medicine Application of Diazepam Nasal Spray was accepted by NMPA in China.
** In August 2021, the clinical trial application of Methylthioninium Chloride Enteric-coated Sustained-release Tablets was approved by NMPA in China.
*** In August 2021, the clinical trial application of Methotrexate Injection, Pre-filled Syringe was approved by NMPA in China.

Pipeline – Under Clinical Stages

Dermatology and Medical Aesthetic Business
The Group has been deeply engaged in the dermatology field for many years, and established rich promotion network resources, including the dermatologists and the hospital and retail channel resources. In order to fully utilize the existing advantageous resources and improve the operation efficiency in the dermatology field, the Group split the dermatology line (including the products and teams) for independent operation, so as to achieve comprehensive diseases management in the dermatology field while further expanding its business boundary to the field of medical aesthetics.

During the Reporting Period, the Group acquired Luqa Ventures Co., Limited ("Luqa"), a dermatology and medical aesthetic specialty company, to enrich the dermatological product portfolio and enter the medical aesthetic field that is featured with consumption attributes. The Group acquired Shanghai Carnation Medical Technology Co., Ltd. ("Carnation"), a R&D and manufacturing platform company of medical aesthetic devices with focused ultrasound technology, and obtained FUBA5200 Focused Ultrasound Body Contouring System, which is a non-invasive body shaping and fat reduction device using focused ultrasound technology with independent intellectual property rights. As a R&D platform for energy-based medical aesthetic devices, Carnation will continually provide cutting-edge medical aesthetic devices with focused ultrasound technology for the Group. The Group entered into a strategic collaboration memorandum with EC Healthcare, the largest non-hospital medical service provider in Hong Kong, and both sides would explore to set up a medical aesthetic training and education platform for registered medical aesthetic practitioners in China. The Group entrusted Shandong Chuangxin Pharmaceutical Research and Development Co., LTD. ("Shandong Chuangxin") for development of dermatology and medical aesthetic products, so as to promote the in-depth deployment in the dermatology and medical aesthetic field. As at 30 June 2021, the dermatology and medical aesthetic business system of the Group has been gradually enhanced, and "CMS Aesthetics", a professional dermatology and medical aesthetic company, has taken shape.

Healthcare Business
The Group continued to stringently select functional and quality healthcare products with unique ingredients globally according to medical concept and high standards, via leveraging its strengths accumulated over years, including overseas channel resources, mature product evaluation system and efficient global supply chain system. While continuously launching new products, the Group also created a number trending products. As at 30 June 2021, the Group has collaborated with 14 well-known European and American brands on more than a hundred of products, 88 of which have been launched in "CMS Health Overseas Flagship Store" or "CMS Overseas Flagship Store" on the three mainstream cross-border e-commerce platforms, JD Worldwide, Youzan Mall and Tmall International. At the same time, the Group actively explored the new retailing business mode for the healthcare products, to capitalize on the professional client resources in its promotion channels to provide professional guidance and services to consumers, to help consumers understand and cope with sub-health, and to create better consumer experience, providing consumers with healthy lives.

Commercialization System
The Group has a comprehensive commercialization system and possesses of proven successful experience in sales and promotion, having created professional brand images and good sales records for a number of branded original medicines and exclusive medicines. As a number of the Group’s innovative products are about to enter the commercialization stage, the value of its commercialization platform will be further released.

During the Reporting Period, the Group continued to explore and refine the products’ academic differentiation advantages, and organized and participated in online and offline academic conferences, to deepen the brand building. The Group also actively expanded and optimized the academic promotion network. At the same time, the Group deepened the retail market deployment and increased investment in e-commerce channels to better prepare for the prescription outflow. For medical aesthetic products and dermatology grade skincare products with stronger consumption attributes, the Group actively utilized its mature dermatologist resources as well as academic platforms to analyze the academic value and efficacy of products, built brands influence via new media marketing, and directed customer traffic through online and offline channels to facilitate the rapid growth of sales volume. In addition, the Group also strengthened construction of the compliance system as well as the professional teams, and enhanced the refined team management to facilitate the efficient implementation of marketing strategies.

As at 30 June 2021, the Group’s commercialization network covered about 57,000 hospitals and medical institutions, and more than 200 thousand drugstores nationwide.

Marketed Products
The Group’s marketed products recorded good growth. The marketed products mainly involve products under the cardio-cerebrovascular line (mainly include Plendil, XinHuoSu and Deanxit), digestion line (mainly include Ursofalk, Salofalk, Bioflor and Combizym), ophthalmology line (mainly include Augentropfen Stulln Mono Eye Drops) and dermatology line (mainly include Hirudoid). During the Reporting Period, the products under cardio-cerebrovascular line recorded a revenue of RMB1,789.0 million, an increase of 23.2% compared with the same period last year. In the case that all medicines were directly sold by the Group, the revenue of products under cardio-cerebrovascular line would increase by 29.9% to RMB2,321.1 million compared with the same period last year; the revenue of products under digestion line increased by 25.7% to RMB1,455.2 million compared with the same period last year; the revenue of the product under ophthalmology line increased by 45.9% to RMB166.0 million; the revenue of the product under dermatology line increased by 54.4% to RMB131.6 million.

In addition to the above products, the Group’s major marketed products also included products from the dermatology and medical aesthetic business, such as the prescription medical aesthetic product Aethoxysklerol (the international brand for the treatment of sclerotherapy of varicose veins with years of clinical application); the medical aesthetic products Stratamark (clinically proven topical silicone gel with efficacy and safety to prevent and treat stretch mark), Strataderm (an effective silicone gel indicated for prevention of hyperplasia and improvement of new and old scars for a wide population), Mesoestetic-Mesohyal Series (matching therapies to provide customized medical aesthetic solutions), and Neauvia Hyaluronic Acid Series (based on the cross linker technology SMART and having excellent rheology, high biocompatibility and good integrity); the dermatology grade skincare products Atopic Piel Series (a combination of washing and moisturizing to repair the damaged skin barrier and effectively relieve itching of sensitive skin).

Mr. Lam Kong concluded, "In the future, the Group will continue to invest in quality products of all business segments, improve the commercialization capability and the refined management system, and fully synergize different business segments, to promote the synchronous development of three businesses segments, including the pharmaceutical business, the dermatology and medical aesthetic business, as well as the healthcare business, and to accelerate the enterprise value growth. Meanwhile, the Group will consolidate its strengths to further enhance the abilities in project planning, clinical execution, commercialization, and capital strength, etc., so as to build a professional and efficient incubation platform of innovative medicines for global biotech companies, facilitating more domestic innovative products to produce world-class impacts, and contributing to the Healthy China construction."