Genscript Biotech (1548) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 34.2% to $839.5m; adjusted net loss was $298.2m as cell therapy growth and Life Science Group gains offset weaker biologics CDMO results.

• Management was cautiously optimistic about industry recovery, citing Q4 2023 and the first two months of 2024.

Financial highlights

• Group revenue was $839.5m, up 34.2% YoY; adjusted net loss was $298.2m.

• Life Science Group generated $404.5m revenue, up 15.6% reported and 16.4% in constant currency; adjusted gross profit was $224.5m and adjusted operating profit $78.3m.

• Probio revenue was $106.7m, down 11.2% YoY; adjusted gross profit was $19.8m and adjusted EBITDA $1.3m.

• Bestzyme revenue was $42.9m, up 12.2% reported; adjusted operating profit was $2.0m, with enzyme portfolio revenue growth of 22.6% in constant currency.

• Legend Biotech revenue reached $285.0m, up 144.2% YoY; adjusted operating loss was $394.5m.

Outlook and guidance

• Life Science Group targets 15%–20% revenue growth, adjusted gross margin of ~55% (±1%), and operating profit growth faster than revenue in 2024.

• Probio expects flat 2024 revenue, with investment to prepare for renewed order growth; Bestzyme targets 20%–30% constant-currency growth, ~39% adjusted gross margin (±1%), and 4%–5% adjusted operating margin.

• CARVYKTI guidance includes potential FDA approval for 1–3 prior-line MM by the April 5, 2024 PDUFA date, anticipated EMA approval in 1Q24, and annual production capacity of 10,000 doses by end-2025.

• Natural sweetener launch is expected in 2024; lactoferrin commercial launch is expected in 2025.