3SBio Unveils 2017 Annual Results: Revenue Soars by 33.5%

Leading Chinese biotechnology company 3SBio (01530.HK) today released its 2017 annual results, showing that the company has been dramatically growing with important progress made in all businesses. Looking to the future, the company intends to reinforce its position as a leading biopharmaceutical company in China by leveraging its integrated R&D, commercial, and manufacturing platforms. The company will also focus on developing leading biologics products that enable it to provide a variety of treatment options for patients.

Financial highlights show that the company's revenue increased by approximately 33. 5% to approximately RMB 3,734.3 million; gross profit rose by approximately 27.7% to approximately RMB 3,058.1 million; EBITDA increased by approximately 29.0% to approximately RMB 1,476.8 million; and net profit attributable to owners of the parent grew by approximately 31.3% to approximately RMB 935.4 million.

Market-Leading Products with Significant Growth Potential

The core products of the company include TPIAO and Yisaipu, as well as recombinant human erythropoietin ("rhEPO") products EPIAO and SEPO. All four products continued to be market leaders in China in 2017. According to IMS data, sales of TPIAO, which is the only commercialized recombinant human thrombopoietin ("rhTPO") product in the world, increased by approximately 27.4%, and its China market share increased to 51.0% for the treatment of thrombocytopenia in 2017. Sales of Yisaipu, a product to treat rheumatoid arthritis, ankylosing spondylitis, and psoriasis, increased by approximately 9.5% with a dominant market share of 60.4% in China in 2017. Sales of the two rhEPO products EPIAO and SEPO rose by approximately 10.7% with a combined market share of 41.6% in 2017.

In addition, diabetes products Byetta (partnering with AstraZeneca) and Humulin (partnering with Lilly) contributed 4.3% and 7.0% to overall revenue growth respectively. The company expects to launch the first once-weekly anti-diabetes drug Bydureon to provide a new treatment option for patients in China.

The latest National Reimbursement Drug List ("NRDL") was released in 2017. Three of the company's products, namely Yisaipu, TPIAO, and Qiming Keli, were included in the updated NRDL. Together with EPIAO, which was included in the 2009 NRDL, the company believes that this development will enhance its penetration into hospitals, and will, in turn, enable the company to satisfy treatment needs by providing affordable and high quality medicines to a wider patient base.

Significant Achievements in Various Businesses

The company made important progress in various businesses in 2017.

With regard to R&D, the company received IND approvals for TPIAO's new indications for hepatic dysfunction patients at risk of thrombocytopenia, and pediatric ITP indication. The company also received IND approval for clinical trials of Pegsiticase for treating arthrolithiasis in China, as well as IND approvals for an anti-VEGF antibody to conduct clinical trials in patients with neovascular AMD.

As of December 31, 2017, amongst the 31 product candidates within the company's active pipeline, 16 were being developed as National Class I New Drugs in China, covering oncology, immunology, nephrology, metabolic diseases, and dermatology.

In addition, the company received marketing authorization from EPIAO in Ukraine, a member country of the PICs. And Yisaipu received the qualified person's declaration equivalence to EU GMP.

In 2017, the company raised EUR300 million via convertible bonds with zero coupon, and announced the acquisition plan of Therapure Biomanufacturing Business with USD290 million. The transaction is subject to the approval of Canadian authorities.

Focusing on Biopharmaceutical Innovation

Looking to the future, the company intends to reinforce its position as a leading biopharmaceutical company in China by leveraging its integrated R&D, commercial, and manufacturing platforms.

The company will focus its R&D efforts on researching and developing innovative biologics products, including NuPIAO (the second-generation rhEPO, to treat anemia), SSS07 (an anti-TNF antibody to treat RA), Pegsiticase (a modified pegylated recombinant uricase from candidautilis to treat refractory gout), 602 (an anti-epidermal growth factor receptor antibody to treatcancer), 601A (an anti-VEGF antibody to treat AMD), prefilled syringe dosage form of Yisaipu, and other mAb products. The company's fully integrated R&D platform is accelerating the development of biologics products, thus enabling the company to provide a variety of treatment options for patients.

With the company's approximately 38,000-liter capacity in mAb facility, as well as mammalian cell-based, bacteria cell-based, and small molecule manufacturing facilities and over 25 years of experience in manufacturing of biologics medicines, the company is able to manufacture high quality pharmaceutical products with scalable manufacturing capacity at competitive costs to deliver on its strategic objective of creating a profitable CDMO business.

The company will continue to pursue selective mergers and acquisitions as well as collaboration opportunities to enrich its existing product portfolio and pipeline so as to provide a long-term growth engine. The company is growing its international sales through the registration of existing products in new markets and the registration of new products through either innovative or biosimilar pathways in highly regulated markets.

Dr. Jing LOU, Chairman of 3Sbio, commented: "With the development over the past 25 years, 3Sbio is committed to our mission, and keeps growing via transformation. We always give priority to innovation, ensure high product quality, while expanding our businesses globally. The company will continue to focus on biopharmaceutical as we strive to become a China-based global leader in biologics."

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