New Stock News | Biopharmaceutical Company Jiuyuan Genetics Holds a Hearing at the Hong Kong Stock Exchange to Continue Obtaining Stable Sources of Income from Bone Optimize.

According to the disclosure by the Hong Kong Stock Exchange on November 13th, Hangzhou Jiuyuan Genetic Engineering Co., Ltd. (hereinafter referred to as "Jiuyuan Genetics") underwent a hearing through the Hong Kong Stock Exchange. According to the prospectus, Jiuyuan Genetics was founded in 1993 and is a SINO BIOPHARM company headquartered in Zhejiang Province, with over 30 years of experience in the research and development, production, and commercialization of biopharmaceuticals and medical devices. The company focuses on four rapidly growing therapeutic areas: orthopedics, metabolism diseases, tumors, and blood disorders. According to data from Zhuisi Consulting, these four therapeutic areas are expected to account for 51.5% of China's total drug sales by 2023, outperforming the overall performance of the China Meheco Group industry from 2018 to 2023, with this trend expected to continue in the near future. In 2023, the utilization rates of the company's manufacturing base for small molecule injections, large molecule injections, and drug-device combination production lines were 42%, 81%, and 50% respectively. As of the last practicable date, Jiuyuan Genetics has established a diversified product portfolio around these therapeutic areas, including eight marketed products (including China's first recombinant human bone morphogenetic protein-2 (rhBMP-2) bone repair material) and over 10 pipeline products (including China's first IND-approved and NDA-submitted semaglutide biosimilar JY29-2). According to Zhuisi Consulting's data, it is the first company in China to be approved to sell rhBMP-2 bone repair materials, ranking first in terms of sales revenue in the Chinese bone repair materials market in 2023. The company recognized the significant potential of Bone Graft and acquired it from Hangzhou Huadong Medicine Group Co., Ltd. in 2010, with a large portion of its historical revenue derived from this product. For the years ended December 31, 2021, 2022, and 2023, and the six months ended June 30, 2024, revenues generated from all marketed products of Jiuyuan Genetics amounted to 87.6%, 93.8%, 91.5%, and 87.9% of total revenue respectively. In terms of financials, revenues of Jiuyuan Genetics for the years ended 2021, 2022, 2023, and the six months ended June 30, 2024 were approximately RMB 1.307 billion, RMB 1.125 billion, RMB 1.287 billion, and RMB 702 million, with net profits of approximately RMB 119 million, RMB 59.867 million, RMB 120 million, and RMB 105 million respectively. It is reported that Jiuyuan Genetics' gross profit increased by 2.1% from RMB 530 million for the six months ended June 30, 2023 to RMB 541 million for the six months ended June 30, 2024, and the gross profit margin decreased from 79.8% to 77.0% during the same period mainly due to a price decline after being included in the national VBP program. Furthermore, Jiuyuan Genetics stated in the prospectus that it continues to receive stable income from Bone Graft. The company expects sales volume and revenue of Bone Graft to continue to grow after the historical period. According to Zhuisi Consulting's data, the market size of rhBMP-2 bone repair materials increased from RMB 103 million in 2018 to RMB 829 million in 2023, with a compound annual growth rate of 51.8%. It is expected to further increase to RMB 4.905 billion by 2032, with a compound annual growth rate of 21.8% from 2023 to 2032. Despite the growing demand, the number of commercially available rhBMP-2 bone repair products in China is limited. The main reason for the supply-demand gap is the relatively high technological barriers to developing such products, as developing BMP-2 products requires strong research and manufacturing capabilities in both pharmaceuticals and medical devices. Therefore, as of the last practicable date, there are only four commercialized rhBMP-2 products in the Chinese market, with Bone Graft being the earliest to market and holding the largest market share in 2023 at 85.5%. According to Zhuisi Consulting's data, the rhBMP-2 product market in China is still in a rapid development stage with relatively few industry participants. Therefore, the Chinese rhBMP-2 product market is still far from reaching market maturity or beginning to shrink. Consequently, Jiuyuan Genetics expects the sales volume of Bone Graft to continue to grow after the historical period.