Akeso (9926) H2 2024 earnings summary

Executive summary

• Achieved three new drug approvals and five supplemental NDAs for new indications in 2024, with major progress in bispecific antibody therapies for oncology and autoimmune diseases; Cadonilimab and Ivonescimab included in China's NRDL for 2025 after strategic price reductions.

• Commercial sales reached RMB 2.0 billion in 2024, up 25% year-over-year, despite a 53% decline in total revenue to RMB 2,123.94 million due to lower license income.

• Maintained a strong balance sheet with RMB 7.3 billion in cash and equivalents after equity raises totaling RMB 2.8 billion in 2024.

• Expanded clinical pipeline with 16 first/best-in-class antibodies, 24 clinical-stage candidates, 11 new Phase III trials, and five new drug candidates entering clinical stage.

• Expanded commercial team and hospital coverage, aiming to double hospital reach to 2,000 by end of 2025.

Financial highlights

• Gross profit was RMB 1,834.9 million, with commercial sales gross profit up 16.5% to RMB 1,713.33 million; gross margin declined to 85.56% due to price cuts.

• R&D expense decreased 5.3% to RMB 1,187.7 million, while sales and marketing expense increased 12.5% to RMB 1,001.8 million.

• Reported annual operating loss of RMB 501.09 million and EBITDA loss of RMB 225 million; adjusted operating loss improved by 16.69% to RMB 656.63 million.

• License income dropped sharply to RMB 121.6 million from RMB 2,922.8 million in 2023.

• Cash, cash equivalents, and financial products totaled RMB 7,343.9 million at year-end.

Outlook and guidance

• No specific 2025 guidance provided due to ongoing hospital expansion and recent NRDL inclusion, but management expects significant volume growth and multiple Phase III/global studies to yield data in 2025.

• Focus on rapid commercialization and global expansion of Cadonilimab and Ivonescimab, leveraging NRDL inclusion and new indications.