In the First Quarter of 2020, Hepalink is to Earn 250 to 300 Million RMB; The Net Profit without Non-recurring Gains and Losses is to Have a Huge Growth Year on Year

2020-04-16

On March 30, Shenzhen Hepalink Pharmaceutical Co., Ltd (hereinafter referred to as “Hepalink”, 002399.SZ) released the performance estimation of the first quarter of 2020. According to the estimation, the net profit that goes to the shareholders of the listed company in the first quarter of 2020 is expected to reach 250 to 300 million RMB.


An analysis of the estimation shows that the first quarter of 2019 witnessed a high total net profit because Hepalink excluded HighTide Therapeutics from the consolidated statement and confirmed a one-time investment income of nearly 574 million RMB. Moreover, non-recurring gains and losses aside, the company earned 10.7105 million RMB of net profit attributable to shareholders of the home company. On this ground, it is expected to see a huge growth of 2,000% year on year in the net profit attributable to shareholders of the home company in the first quarter of 2020. In fact, the first quarter of 2020, driven by the continuous growth of main businesses, delivered a remarkable performance report like the last 4 quarters did. This is an even more difficult achievement amid the Covid-19 breakout in China and the rest of the world in February and March.

In the performance estimation, Hepalink made it clear that as far as the main businesses are concerned, the company has seen obviously more contributions to performance made by the active pharmaceutical ingredients business after adjusting the pricing model with customers and continuously fast-growing sales of the inhibitor business in the first quarter of 2020.

As is known, after more than 20 years of development, Hepalink has realized the vertical integration of the whole heparin industrial chain. Apart from the stably-growing heparin cash flow business, the company also boasts several first-in-class pipeline drugs and fast-growing biomacromolecule CDMO business that can speed up the transformation of new drugs. The synergy between businesses has become increasingly obvious, facilitating the long-term continuous and stable development of the company.

Since the end of the third quarter of 2019, Hepalink has updated the pricing model with its main customers. Thanks to this flexible bargaining mechanism, the price transmission has become more timely, creating significant growth in the price and gross profit margin of the heparin active pharmaceutical ingredients. Meanwhile, as the market share continues to rise in the European Union, the company has further accelerated expanding and covering the global enoxaparin inhibitor market. With the spillover effect of prescriptions gradually revealing itself and further approved access to the United States, China and other emerging markets, the inhibitor business has witnessed simultaneous growth in sales volume and price, which will continue to maintain rapid growth.

In addition, based on Frost & Sullivan’s data, Hepalink has become one of the three largest China-invested biologicals CDMO operators. At present, Hepalink’s CDMO business platforms, Cytovance and SPL, are advancing together and they are expected to maintain rapid growth for better performance.

It is worth mentioning that since 2020, Hepalink has made many achievements in innovation and R&D, with the clinical R&D of several kinds of drugs making ground-breaking progress. Among these drugs, Oregovomab, a company-invested front-line antibody immunotherapy drug for primary ovarian cancer, has shown positive in the Front Line data of the IIb clinical trial. The drug has generated the best clinical effects in the front-line treatment of primary ovarian cancer. At present, its ph3 clinical trial plan has been approved and we are actively preparing for its global ph3 clinical trial. Besides, RVX-208 (Apabetalone), a company-invested drug for cardiovascular and cerebrovascular diseases, has also been recognized by the FDA as a breakthrough therapy. Its subsequent development and evaluation are expected to further accelerate.

We believe that with the continuous and strong momentum of the whole heparin industrial chain, the continuous expansion of the inhibitor business in the global market, the rapid growth of the CDMO business, and the emergence of the first-in-class pipeline drugs, Hepalink will see a new round of fast growth in 2020.

This article is reprinted from China Business Journal

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