Wuxi Biologics (cayman) Inc. · HKEX:2269
Wuxi Biologics (cayman) — H1 2024 Earnings Presentation
55 slides from Wuxi Biologics (cayman)'s earnings presentation, Aug 21, 2024
Slide 1: Inside Information - 2024 Interim Results Presentation
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in relia
Slide 2: Announcement notice and board statement
Further, to ensure that all shareholders and investors have equal and timely access to such information, the Company has included in this announcement the full copy of the Presentation. Shareholders and investors are reminded that the Presentation may contain forward-looking statements, which are, b
Slide 3: Global Premier CRDMO: Enabling Global Partners and Delivering Sustainable Growth
Global Premier CRDMO: Enabling Global Partners and Delivering Sustainable Growth 2024 Interim Results August 2024 Stock Code: 2269.HK
Slide 4: Forward-Looking Statements; Use of Adjusted Financial Measures
Forward-Looking Statements This presentation may contain certain “forward-looking statements” which are not historical facts, but instead are predictions about future events based on our beliefs as well as assumptions made by and information currently available to our management. Although we believe
Slide 5: Contents
CONTENTS 01 1H 2024 Interim Results 02 1H 2024 Financials Review Technology Platforms Underpin Our Confidence for 03 Operations & Other Key Updates 04 Future Growth WBS & ESG as Key Components 05 of Business Strategy 06 Summary 07 3
Slide 6: 1H 2024 Interim Results
1H 2024 Interim Results 01
Slide 7: 1H 2024 Key Highlights
613 → 742 8.49 → 8.57 21.0% 1.0% Integrated Projects YoY Revenue (RMB Bn) YoY 7.7% 2.93 → 2.54 -13.0% Non-COVID Revenue Growth (YoY) Adj Net Profit (RMB Bn) YoY 61 44.4% New Projects Added Adj Gross Profit Margin 14 → 16 14.3% 29.7% Adj Net Profit Margin Commercial Projects YoY (exclude COVID) 20.1
Slide 8: Base Revenue has Consistently Grown over the Past Decade
Base Revenue has Consistently Grown over the Past Decade Non-COVID Revenue Delivered Sustainable Growth over the Past Decade 17,034.3 528.3 15,268.7 non-COVID COVID 3,283.4 10,290.1 2,928.4 16,506.0 5,612.4 11,985.3 3,983.7 1,129.5 2,534.5 7,361.7 1,618.8 3,983.7 4,482.9 989.0 2,534.5 331.9 557.0 1,
Slide 9: Base Business Grew YoY in both Pre-IND and Late-phase/M
Base Business Grew YoY in both Pre-IND and Late-phase/M Non-COVID Revenue Grew by HSD YoY By Project Phase RMB (mm) 8,574.2 RMB 8,492.0 8,574.2 8,492.0 (mm) 128.3 178.8 528.3 3,603.3 3,434.4 +7.7% 8,574.2 -2.9% YoY 1,893.0 7,963.7 1,949.7 2,810.7 3,068.0 1H 2023 1H 2024 1H 2023 1H 2024 Non-COVID COV
Slide 10: Revenue by Geography
Revenue by Geography North EU China (1) America -27.0% YoY ROW +High Single Digit -20.9% YoY +28.9% YoY +27.5% YoY excluding COVID & Discovery Service deal 58.4% of Revenue 21.7% of Revenue 16.6% of Revenue 3.3% of Revenue • North America: Solid revenue growth of 27.5% YoY amid a dynamic geopolitica
Slide 11: 61 New Projects Added in 1H 2024
61 New Projects Added in 1H 2024 Demonstrating Consistent Recovery of Global Biotech (vs 46 in 1H 2023) • Leveraging its robust R&D capabilities and WuXiBodyTM OMT Platform ADC Platform SDArBodYTM strong execution, the Company continued to enable customers and is advancing our “Follow and Win the Mo
Slide 12: Win-the-Molecule Augments Growth from Follow the Molecule
“Win-the-Molecule” Augments Growth from “Follow the Molecule” “Win-the-Molecule” Projects (cumulative) • Total 78 projects at different stages (Phase I, II and III + CMO) transferred from global CDMOs or big pharma to WuXi Biologics since 2018. 78 • 33 phase III & CMO wins drive significant mid-term
Slide 13: Backlog Remains at High Level to Support Future Growth
Backlog Remains at High Level to Support Future Growth Service Backlog • As of June 30, 2024, total backlog Upcoming Potential Milestone Fees (1) reached US$20.1 bn, of which US$13.0 Backlog within 3 Years bn was service backlog. 20.57 20.59 20.11 20.11 (US$ bn) Conclusion of COVID projects contri
Slide 14: Rich Pipeline across All Biologics Modalities
Rich Pipeline across All Biologics Modalities Total Integrated 742 (1) 613 21.0% • One of the largest portfolios of complex biologics, consisting of mAbs, bispecifics & mAb 316 278 13.7% multispecifics, Antibody Drug Conjugates (ADCs), fusion proteins and vaccines, etc. BsAb & 123 Multispecifics (2)
Slide 15: Significant Growth of Commercial Projects in the Medium Term
Significant Growth of Commercial Projects in the Medium Term Eight manufacturing projects Ten manufacturing projects that Eight manufacturing projects that could potentially generate could potentially generate that could potentially generate US$200 mm+ peak revenue per US$100-200 mm peak revenue US$
Slide 16: 1H 2024 Financials Review
1H 2024 Financials Review 02
Slide 17: Financial Performance in 1H 2024
Financial Performance in 1H 2024 Total Revenue 17,034.3 IFRS Gross Profit RMB mm 37.7% 34.6% 41.8% 43.3% 44.1% 45.6% 48.8% 50.6% 50.0% 45.3% 47.0% 44.4% 15,268.7 37.1% 32.4% 39.3% 40.8% 40.2% 41.6% 45.1% 46.9% 44.0% 40.1% 41.9% 39.1% 6,724.0 6,827.9 RMB mm 10,290.1 8,574.2 4,828.9 8,492.0 5,612.4 3,
Slide 18: Key Profit Metrics
Key Profit Metrics IFRS Net Profit IFRS Net Profit Attributable to Owners of the Company RMB mm RMB mm 4,549.9 4,420.3 3,508.6 3,570.6 3,388.5 3,399.7 2,337.9 2,266.7 1,692.7 1,780.3 1,688.9 1,499.10 1,010.3 1,013.8 630.5 630.6 42.0 44.5 141.1 252.6 42.0 44.5 141.1 252.6 2014 2015 2016 2017 2018 201
Slide 19: Gross Profit and Breakdown of Cost of Sales
Gross Profit and Breakdown of Cost of Sales Cost of Services as % of Revenue Adj. GM (%) 34.6% 41.8% 43.3% 44.1% 45.6% 48.8% 50.6% 50.0% 45.3% 47.0% 44.4% IFRS GM (%) 32.4% 39.3% 40.8% 40.2% 41.6% 45.1% 46.9% 44.0% 40.1% 41.9% 39.1% 67.6% 60.7% 59.8% 59.9% 60.9% 59.2% 58.4% 58.1% 54.9% 56.0% 21.8% 5
Slide 20: 1H 2024 IFRS Net Profit Walk from 1H 2023
1H 2024 IFRS Net Profit Walk from 1H 2023 RMB (Bn) 27.5% -2.2% -2.1% -2.4% 20.8% 1H 2023 Act GP Decline SG&A Increase FX Gain/(Loss) 1H 2024 Act IFRS NP IFRS NP Management Notes • Gross Profit Compression of RMB0.2 bn • SG&A … Increase by RMB0.2 bn, due to standalone capabilities at XDC, global BD c
Slide 21: Liquidity
Liquidity • Available funds approx. RMB9.5 bn as of June 30, 2024 AVAILABLE FUNDS • Gearing Ratio 4.8%, expect to have sufficient funds to sustain our growth • 1H 2024 CAPEX approx. RMB1.9 bn, mainly for capacity increase in the CAPEX U.S. and for the planned expansion in XDC facilities in Singapore
Slide 22: Operations & Other Key Updates
Operations & Other Key Updates 03
Slide 23: BIOSECURE Act Update
BIOSECURE Act Update - Our Commitment to Serving Our Clients in the Healthcare Community & Patients Worldwide The BIOSECURE Act could become law either as a standalone bill or as part of a larger bill (e.g. the National 01 Defense Authorization Act, NDAA). Both paths would require negotiation be
Slide 24: How We Navigate Geopolitical Uncertainties for Our Clients
How We Navigate Geopolitical Uncertainties for Our Clients Expansion of global sites and capabilities Unified Quality system across all sites Global workforce cross training & support Global reputation with health agencies: 37 reg. Global platforms for manufacturing & tech inspections, 67
Slide 25: Global CRDMO: 3 R centers 8 D centers 9 M centers
Parallel End-to-End Capabilities Established in China/US/Singapore & EU to Provide Integrated R, D & M Services Global CRDMO: 3 R centers 8 D centers 9 M centers R: Shanghai WGQ, Shanghai FX, Boston D: Shanghai WGQ, Wuxi, Shanghai FX, Chengdu, Hangzhou, Suzhou, Cranbury NJ and Singapore M: Wuxi, Heb
Slide 26: Global Operations: Key New Investments
Global Operations: Key New Investments • Almost fully booked in • 30+ active iCMC and • Three sets of 5,000L • Construction work for • DP2 and DP5 are 2025 standalone projects on single-use bioreactors site-wide infrastructure commercial vial and going have been successfully has commenced, first to
Slide 27: Exciting Progress in R: CN201
Exciting Progress in R: CN201 with WuXi CD3/WuXiBodyTM /WuXiUPTM Has the Potential to be a Best-In-Class CD3xCD19 By combining WuXi Bio’s unique low-affinity anti- CD3 mAb, which binds & dissociates rapidly, with Our client’s molecule its industry leading WuXiBodyTM bsAb platform, the was acquired
Slide 28: Our Proven Track Record in INDs Has Been Enabling Clients' Success
Our Proven Track Record in INDs Has Been Enabling Clients’ Success Track Enabled a total of 552 INDs as of Q2 2024 123 INDs filed in 2023 Record Capacity for 150 INDs and 12 BLAs/MAAs per year Numbers of INDs Filed (By Year) 123 123 Q1 Q2 Q3 Q4 100 25 21 39 36 39 65 59 38 37 22 31 35 29 20 65
Slide 29: Scheduled PPQs Underpin Future CMO Growth
Scheduled PPQs Underpin Future CMO Growth # DS PPQs (cumulative) 52% 20%+ • Solid growth in drug substance (DS) and drug 49 54 product (DP) PPQs, 35 42 14 23 particularly at China 4 9 2019 2020 2021 2022 2023 2024E 2025E 2026E facilities. Total • PPQs scheduled for 2025E & 2026E provide visibility.
Slide 30: Reliable Quality Proven - Key to Clients' Success
Reliable Quality Proven - Key to Clients’ Success: 100% Success on BLA Meeting or Exceeding Global Regulatory Standards 21 total inspections from EMA and FDA Regulatory Inspections & License Approvals 100% successfully passed PAI 5 on-site inspections from both EMA and FDA since 2023 1Q’24 EMA ins
Slide 31: Quality is One of our Key Competitive Advantages
QUALITY is One of our Key Competitive Advantages Number of Regulatory Inspections Completed: 37 Number of License Approvals: 67 (87 by Facility) 37 34 FDA, 8 FDA, 7 27 22 FDA, 6 EMA, 13 EMA, 11 FDA, 5 EMA, 10 EMA, 7 NMPA, 7 NMPA, 7 NMPA, 5 6 NMPA, 5 5 FDA, 2 Others, 9 Others, 9 FDA, 2 Others, 6 1 EM
Slide 32: Leading Indicators of Quality: Favorable Results during Client Audits
Leading Indicators of Quality/Regulatory Inspections: Continue to See Favorable Results during Client Audits Major Findings per Audit 90 Critical+ Major Findings Received audit reports 80 Major finding Rate 70 65 65 64 63 63 61 56 58 60 55 55 50 48 50 1.45 45 41 38 36 37 36 40 35 29 0.84 29 29 30 27
Slide 33: Building a Strong Leadership for Decades to Come
Building a Strong Leadership for Decades to Come: All Leaders Homegrown CTO Transition CMO Transition • With the retirement of Dr. Weichang Zhou, 7-year • With the retirement of Mr. Peter Shen, 10-year WuXi veteran Dr. Sherry Gu is appointed as CTO WuXi veteran Dr. Wei Guo is appointed as Head of •
Slide 34: Case Study on Execution Excellence: DP11
Case Study on Execution Excellence: DP11, Acquired from Tier 2 CDMO CMAB in 2021, Became a World-class Facility in 2024 ~$460K USD REVENUE PER PERSON WITH 60% GPM Revenue ($M) DP11 GPM% 60.0% 50.2% 26.0 42.0% 18.3 15.5 2021 2022 2023 2024 Predicted 1.3 -198% 2021 Actual 2022 Actual 2023 Actual 2024
Slide 35: Lean Philosophy: Standard Work / Agile Org. / Automation
Lean Philosophy: Standard Work/ Agile Org. /Automation E2E In-factory Off-factory Agile Org. Automation Standard Work Standard Work +40% +20% +30% +10% 8 Department Kaizens: Run a CEO Kaizen: • SME level up • Automatic labelling • Grade B & C process • Training Standard Work • Operator skill diversi
Slide 36: Our Biotech Customers Bought by Large Pharma = Win-Win
Our Biotech Customers Bought by Large Pharma = Win-Win as New Owners Continue to Utilize our Services & Issue Additional Contracts Bio-Partnering Program Total 66 non-COVID Assets Post Acquisition • The international market has fully validated Chinese innovative drugs. 11 • International capital mar
Slide 37: XDC Projects Represent a Significant & Expanding Component of Our Funnel
XDC Projects Represent a Significant & Expanding Component of Our Funnel Number of Projects Through “Enable – Follow – Win” Strategy “R” "Research”: Enable discovery to PCC 538 Discovery(1) 41 projects advanced from discovery to iCMC stage (1) 91 Preclinical "Development": Fastest route to IND 47 Ph
Slide 38: Technology Platforms Underpin Our Confidence for Future Growth
Technology Platforms Underpin Our Confidence for Future Growth 04
Slide 39: Potential Best-in-Class CD3 Platform Accepted by Two MNCs
Potential Best-in-Class CD3 Platform accepted by two MNCs for 5 programs: significant downstream revenue and royalties per CRDMO Proprietary Clinical Stage CD3 MAb Empowered Discovery of Best-in-Class T Cell Engagers (TCEs) with Potent Tumor Killing & Minimal Cytokine Release • Unique binding epitop
Slide 40: Bispecifics as a Key Growth Driver - WuXiBody
Bispecifics as a Key Growth Driver – WuXiBodyTM WuXiBodyTM Projects (cumulative) WuXiBodyTM Development Cutting-Edge 47 Progress 45 47 Technology 39 35 35 31 29 Discover best or first-in- 27 23 class molecules 17 19 3 5 4 2020 2021 2022 2023 1H 2024 Total Drug PCC CMC Phase I Discovery Customer # Pr
Slide 41: Cutting-edge Conjugation and Payload-Linker Technologies
Enable Customers With Cutting-edge Conjugation and Payload-Linker Technologies: Innovation by In-house and External Partnerships Enable Customer’s In-house Proprietary External Partnerships Technologies in CMC Conjugation Technology Development and MFG 10+ • iGDC (intelligent Glycotransferase
Slide 42: WuXiUI Increases Titer by 3-6x
WuXiUITM, Our Next-gen Manufacturing Process, Increases Titer by 3-6x with Culture Time Comparable to Traditional Fed-batch (tFB) Processes Productivity Comparison WuXiUITM Ultra-Intensified FB Bioprocessing Strategy WuXiUITM vs. TFB Titer Folds of Increase 30 516% 6 503% • 3~6 x of tFB productivity
Slide 43: Disposable Bioreactors Able to Deliver Comparable or Lower COGS
Disposable Bioreactors Able to Deliver Comparable or Even Lower COGS vs Stainless Steel at 6000L-12000L proven by 100+ batches in China/Ireland Scale of Disposable Scale of Stainless Manufacturing Experience at Cost Difference Bioreactors Steel Bioreactors WuXi Biologics 2,000L 12,000L Disposable ~3
Slide 44: WBS and ESG as Key Components of Business Strategy
WBS and ESG as Key Components of Business Strategy 05
Slide 45: WBS Achievements in 1H 24
WBS (Our Lean System Launched in 2021) Achievements in 1H 2024 Realized Benefit in 2024 Completed Kaizen Projects 59+ Revenue Increase Improvement to GPM% Labor Efficiency Improvement Inventory Reduction 100 bps 837k hr 18 mm 51 mm Inventory reduced from Completed Kaizen projects Labor hours Kaizen
Slide 46: Green CRDMO End-to-End Solutions Driven by Innovation
Green CRDMO End-to-End Solutions Driven by Innovation Green Research Green Development Green Manufacturing (R) (D) (M) Single-Use Technology (SUT) Scale-Out Biomanufacturing Continuous Manufacturing Process Lean Manufacturing by WBS WuXiBody™ Proprietary Universal WuXiUI™ Ultra-Intensified WuXiUP™ U
Slide 47: Trustworthy Partner with Strong Sustainability Commitment
Trustworthy Partner with Strong Sustainability Commitment Dow Jones Sustainability World Index MSCI AAA ESG Rating Dow Jones Sustainability Emerging Markets Index MSCI ESG Leaders Indexes Constituent • Ranked Global Top 1% and identified as a global • MSCI’s ESG Ratings range from AAA sustainability
Slide 48: Summary
Summary 06
Slide 49: We Remain Firm Believers that the CRDMO Business Model is the Most Efficient
We Remain Firm Believers that the CRDMO Business Model is the Most Efficient for Our Industry Our Three Long-Term Growth Curves transforms innovative biotech concepts R from across the globe into reality R+D+M D accelerates project progress through our D+M execution excellence & swift delivery D M p
Slide 50: Eight Elements Underpin Our Confidence: Better, Faster, Cheaper
EIGHT Elements Underpin Our Confidence in Overcoming Challenges Technology Execution Quality People Speed Strategy Flexibility Vision BETTER FASTER CHEAPER 48
Slide 51: 2024 Outlook
2024 Outlook • 1H 2024 non-COVID revenue up 7.7% YoY • Adjusted net profit down 13% YoY, driven by services mix (lack of large discovery services deal in 1H 2024), investment for future growth (global footprint and BD coverage) and XDC standalone capabilities • Only 1 project indicated intention to
Slide 52: Appendix
Appendix
Slide 53: 1H 2024 Financial Summary
1H 2024 Financial Summary (RMB million) 1H 2024 1H 2023 Change Revenue 8,574.2 8,492.0 1.0% Cost of Sales (5,224.3) (4,931.4) Gross Profit 3,350.0 3,560.6 -5.9% Other Income 338.7 198.0 Impairment Losses under ECL Model, Net of Reversal (190.2) (131.8) Other Gains and Losses (81.9) 114.8 Selling and
Slide 54: Reconciliation for Adjusted Net Profit and Adjusted EBITDA
Reconciliation for Adjusted Net Profit and Adjusted EBITDA (RMB million) 1H 2024 1H 2023 Change Adjusted Net Profit Reconciliation Net Profit 1,780.3 2,337.9 Share-based Compensation Expense 674.7 632.4 Foreign Exchange Loss (Gain) 126.1 (107.5) (Gain) Loss from Equity Investments (36.3) 55.4 Listin
Slide 55: WuXi Bio Vision
WuXi Bio Vision “Every drug can be made and every disease can be treated” by building an open-access platform with the most comprehensive capabilities and technologies in the global biologics industry 53 53
WuXi Biologics (Cayman) — H1 2024 Earnings Presentation on 6ix