Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Everest Medicines Ltd (HKSE:01952, Financial) achieved a 158% revenue increase in the first half of 2024 compared to the second half of 2023.
- The company maintained a strong cash gross margin of 83%, reflecting operational efficiency.
- For the first time in its corporate history, Everest Medicines Ltd (HKSE:01952) achieved profitability at a commercial level.
- The company's cash balance remains robust at RMB1.93 billion, providing significant flexibility for future growth.
- Everest Medicines Ltd (HKSE:01952) secured regulatory approvals for Nefecon in Singapore and Hong Kong, and its supplemental NDA application in China was accepted.
Negative Points
- Despite revenue growth, Everest Medicines Ltd (HKSE:01952) still reported a non-IFRS net loss of RMB212.6 million for the first half of 2024.
- R&D expenses, although decreased by 12%, still amounted to RMB253 million, indicating high ongoing costs.
- Distribution and selling expenses increased significantly to RMB200 million, reflecting higher costs associated with product launches.
- The company faces challenges in market penetration and awareness-building for new products like Nefecon and XERAVA.
- Everest Medicines Ltd (HKSE:01952) de-prioritized its mRNA COVID-19 vaccine program, resulting in a one-time non-recurring intangible asset impairment loss.
Q & A Highlights
Q: Can you share more details on the real-world usage of Nefecon, including patient profiles and prescription trends?
A: Ian Woo, President and CFO: The performance of Nefecon in the first few months has met our expectations. Patients using Nefecon include those diagnosed with biopsy in clinics and those seeking treatment to delay ESRD progression. Initially, most patients were from online platforms, but now the majority are from offline channels. We expect this trend to continue, especially after NRDL listing next year.
Q: How do you see the potential impact of Novo Nordisk's semaglutide for chronic kidney disease on Nefecon?
A: Ian Woo, President and CFO: We don't see any significant impact from semaglutide on Nefecon. Semaglutide is not targeting the origin of IgAN, which is renal disorders, so it doesn't directly compete with Nefecon.
Q: When do you plan to release the first results from your mRNA vaccine program, and are you in discussions with global partners?
A: Jennifer Yang, Chief Scientific Officer: We expect to obtain some data next year from our Phase Ia trial, which evaluates safety, tolerability, and preliminary efficacy. We are also exploring potential collaboration opportunities for our novel therapeutic vaccine.
Q: What is the outlook for your expenses with the push for the mRNA platform?
A: Ian Woo, President and CFO: We have reduced clinical spending as our late-stage products move to commercialization, but our investment in Discovery remains stable. We approach R&D expenses with a focus on efficiency and do not expect significant increases.
Q: Can you provide more details on the early ramp-up of Nefecon sales?
A: Ian Woo, President and CFO: Nefecon's early ramp-up has been encouraging, with a mix of newly diagnosed patients and those seeking innovative treatments. The majority of patients are now coming from offline channels, and we expect this trend to continue.
Q: What are your plans for commercializing etrasimod in China?
A: Ian Woo, President and CFO: We are preparing to commercialize etrasimod in the Greater Bay Area in the second half of 2024 and plan to submit for NDA approval in China. We aim to leverage preferential policies in the region to increase physician and patient awareness.
Q: How are you planning to improve market access and affordability for Nefecon?
A: Ian Woo, President and CFO: We are working on hospital listings and NRDL negotiations to improve market access and affordability. We expect NRDL listing to be announced in November, followed by price announcements in January next year.
Q: What are the key milestones for the second half of 2024?
A: Ian Woo, President and CFO: Key milestones include NRDL negotiations for Nefecon, deepening penetration of target hospitals for XERAVA, and advancing multiple cancer vaccine programs towards IND filing in 2025. We also expect to read out results from multiple important trials and real-world studies.
Q: How do you plan to leverage your mRNA platform for future growth?
A: Jennifer Yang, Chief Scientific Officer: We have established a fully integrated and clinically validated mRNA platform. We plan to use this platform to develop more novel drug candidates, including therapeutic cancer vaccines and other programs, to create long-term value for the company.
Q: What is the financial outlook for Everest Medicines?
A: Ian Woo, President and CFO: We achieved strong revenue growth in the first half of 2024 and expect to deliver on our full-year revenue guidance of RMB700 million. We aim to turn cash flow positive by the end of 2025, supported by our strong cash balance and operational efficiencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
