Ascletis Pharma Inc (1672) H2 2022 earnings summary

Executive summary

• FY22 revenue fell 29.6% YoY to RMB54.1m, while net loss widened to RMB314.8m from RMB199.0m, mainly reflecting HCV-related inventory and intangible-asset impairments.

• Excluding HCV product impairments, FY22 loss was RMB211.5m; adjusted gross profit was RMB23.9m, with a 44.1% gross margin.

• Cash and cash equivalents were RMB2,470.8m at year-end, expected to fund R&D and operations through 2027.

Financial highlights

• FY22 revenue was RMB54.1m, down 29.6% YoY; promotion services contributed RMB40.4m, product sales RMB12.5m, collaboration revenue RMB0.03m and other revenue RMB1.2m.

• Gross loss was RMB24.7m versus gross profit of RMB39.2m in FY21; cost of sales rose to RMB78.8m, including RMB48.6m of inventory write-downs.

• Net loss was RMB314.8m versus RMB199.0m in FY21; basic and diluted loss per share was RMB0.2896 versus RMB0.1813.

• Other income and gains rose 70.0% YoY to RMB112.0m, including RMB60.2m FX gain and RMB44.2m bank interest income.

• R&D expense increased 25.2% YoY to RMB267.1m; selling and distribution expenses fell 18.6% to RMB17.0m, while administrative expenses rose 17.5% to RMB35.2m.

Outlook and guidance

• Ritonavir supply agreements with Pfizer China, Simcere and another China pharmaceutical company are expected to contribute significantly to FY23 revenue; revenue sustainability remains subject to COVID-19 and demand uncertainty.

• FY23 priorities include accelerating clinical trials of ASC22, ASC40, ASC41 and ASC10, and exploring licensing opportunities for selected antiviral and NASH candidates.

• Expected 2023 milestones include ASC40 acne Phase II results in Q2; ASC22 expansion-cohort and ASC41 interim results in Q3; and ASC40 NASH results and ASC10 RSV Phase IIa completion in Q4.

• Cash and cash equivalents of RMB2,470.8m were expected to support R&D and operations until 2027.