① The company's revenue growth did not increase profit, sales, R&D, and management expenses increased dramatically, investment and fundraising cash flow was negative, and the company's bid for the ninth batch of national drug collection became topics of concern for investors. ② The company said that the decline in performance in the first three quarters of this year was mainly affected by the current complex domestic and international environment. Competition is becoming increasingly fierce, and product prices are under pressure. ③ The company currently does not revise the convertible debt-for-equity conversion price.
Financial News Agency, December 1 (Reporter Wang Bin) At the Huahai Pharmaceutical (600521.SH) performance conference held this afternoon, the company's revenue did not increase profits; sales, R&D, and management expenses increased dramatically; investment and funding cash flow was lost; and the company's bid for the ninth batch of national drug collection became a topic of concern for investors.
Chen Baohua, CEO of Huahai Pharmaceutical, said, “In the first three quarters of 2023, the company achieved net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses of about 769 million yuan, a year-on-year decrease of 8.29%, mainly due to the current complex domestic and international environment. Competition is becoming increasingly intense, and product prices are under pressure.”
As far as cost reduction and efficiency are concerned, Chen Baohua said that the company continues to promote lean management and carry out comprehensive, systematic and in-depth lean improvement and system construction work to help the factory continuously reduce comprehensive costs and effectively improve the company's production guarantee capacity. Huahai Pharmaceutical's visual financial report for the third quarter of 2023 shows that the company's sales, R&D, and management expenses all increased by more than double digits year over year in the first three quarters of this year.
Also, according to Zhu Yonghua, director of Huahai Pharmaceutical, the company's products, celodoxine capsules and olmesartan ester hydrochlorothiazide tablets, are to be selected for the ninth batch of national drug collection, which will help these products quickly open up the domestic sales market, promote the further development of the company's pharmaceutical business, enhance the company's brand influence, and have a positive impact on the company's future operations.
Some investors asked the management of Huahai Pharmaceutical: “The convertible bonds issued by the company will expire in less than three years. Currently, the premium rate is too high. Under what circumstances are you considering a downgrade?” Chen Baohua said that since the “Huahai debt conversion” has not yet expired, and the company's stock price has recently been greatly affected by macroeconomic and market adjustments, etc., it has not accurately reflected the intrinsic value of the company's long-term development. From the perspective of treating all investors fairly, the company is not currently revising the convertible debt-for-equity conversion price for the time being. Subsequent companies will comprehensively consider multiple factors such as the company's basic situation, stock price trends, and market environment.
At the performance conference, Zhu Yonghua mentioned that “the bioinnovative drug business is an important strategic layout for the company.” It said that Shanghai Huaotai Biopharmaceutical Co., Ltd. (“Huaotai”), a subsidiary of Huahai Pharmaceutical, is deeply involved in independent research and development of macromolecular bioinnovative drugs in the fields of autoimmunity and oncology, and has applied for more than 40 domestic and foreign invention patents. Currently, there are more than 20 domestic research projects, 12 of which have entered the clinical stage, including the first self-developed monoclonal antibody HB0034 project targeting IL-36R; the world's leading target of PD-L1/VEGF bispecific fusion protein HB0025, etc. At the same time, Huaotai actively lays out differentiated and innovative early-stage projects such as combined medication and ADC (antibody-conjugated drugs), focusing on unmet clinical needs and benefiting more patients.
Zhu Yonghua also mentioned that since this year, Huahai Pharmaceutical has obtained a total of 7 ANDA approval/provisional approval from the US FDA, namely levomenapram sustained-release capsules, esomeprazole magnesium enteric capsules, bisoprolol fumarate tablets, candesartan ester tablets, levophenetamine dimesylate capsules, dicycloamine hydrochloride capsules, and burepiprazole tablets. Up to now, the company has obtained a total of 85 US ANDA documents (excluding temporary approvals).
Furthermore, in response to the current recovery of the US pharmaceutical business, Chen Baohua said that in the first three quarters, the company's US pharmaceutical business achieved a relatively rapid increase in sales revenue. According to IQVIA statistics (data for August 2023), out of the 56 products included in the statistics sold by the company in the US market, 30 products ranked in the top three in market share. Thirteen of its central vascular pharmaceutical products, including benazepril tablets, fosinopril sodium tablets, valsartan tablets, and olmesartan, ranked first in the US market share.
A financial news agency reporter noticed that on the same day as the results meeting, Huahai Pharmaceutical announced that the company recently received a drug registration certificate for tadalafil tablets approved and issued by the State Drug Administration. According to reports, tadalafil tablets are used to treat erectile dysfunction.