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Favorable policies for the innovative drug industry have been frequently introduced this year.

From the full-chain support plan and the optimized notification for clinical trial review and approval to the pilot programs in Beijing and Shanghai, it signifies that China's innovative drug industry is transitioning from R&D investment to value realization. However, before the policy dividends are realized, how to achieve stable operation during the industry adjustment phase is also a major challenge that innovative pharmaceutical companies need to carefully consider. HealthGen has submitted an answer based on “innovation” and “stability”.

On the evening of August 23, HealthGen (SH.600380), a domestic innovative pharmaceutical company, disclosed its 2024 semi-annual performance report. Faced with a complex and changing market environment, HealthGen, relying on its profound R&D innovation capabilities and understanding of new productive forces, achieved stable operation during the industry adjustment period.

During the reporting period, HealthGen achieved total operating revenue of 8.235 billion yuan, and net profit remained at a high level, reaching 776 million yuan. Among them, the sales revenue of gonadotropin products in the key area of chemical preparations made a significant contribution to the company's overall revenue, achieving sales revenue of 1.549 billion yuan in the first half of the year, a year-on-year increase of 12.51%.

Since its establishment in 1992, HealthGen has always been deeply involved in the field of pharmaceutical and health innovation. In 2013, the company established Shanghai Fanyu and entered the inhalation preparation market. With innovative products and technological breakthroughs, HealthGen's market share in China quickly rose to the first echelon, second only to international giants AstraZeneca and GSK, successfully breaking the long-term monopoly of overseas pharmaceutical companies and establishing the company's leading position in the domestic inhalation preparation field.

Since 2019, HealthGen has expanded its layout to high-end complex preparation technology platforms and accelerated the R&D of innovative drugs. Currently, its products cover multiple fields such as respiratory, analgesia, digestion, cardiovascular, and mental health, and have developed into a diversified innovative pharmaceutical company.

Increasing R&D to improve quality and efficiency The new anti-influenza drug TG-1000 has been submitted for listing.

In recent years, HealthGen has focused on the R&D of innovative drugs and high-barrier complex preparations, implemented a differentiated R&D layout, promoted the development of new products, and promoted the company's high-quality development through technological breakthroughs and innovation of production factors. In the first half of 2024, the company's R&D investment was 781 million yuan, a year-on-year increase of approximately 4.66%, accounting for 9.48% of total revenue.

Behind such a large-scale R&D investment is the solid financial foundation and abundant cash flow of HealthGen as solid support. According to the performance report, the company's net cash flow from operating activities in the first half of 2024 was 1.737 billion yuan, a year-on-year increase of 38.19%, providing strong financial support for the company's subsequent R&D innovation and market expansion.

In terms of R&D progress, HealthGen has frequently reported good news, with multiple innovative drugs accelerating their way to market this year. Among them, the innovative potassium-competitive acid blocker ( P-CAB) of its holding subsidiary, Lizhu Group, successfully obtained a clinical trial approval document in February this year and is currently steadily advancing clinical trials.

In addition, TG-1000 capsules, developed in cooperation with Taijing Company and used to inhibit influenza A and B viruses, reached the primary endpoint in Phase III clinical trials in April and was submitted for production in August; Semaglutide injection of the holding subsidiary Lizhu Group was also accepted for registration application by the National Medical Products Administration in June, and its listing is imminent. In the future, with the successive listing of these key products, HealthGen is expected to usher in broader development space and opportunities for performance growth.

While accelerating the R&D of existing products, HealthGen is also actively expanding its cooperation boundaries and working hand in hand with top domestic and foreign scientific research institutions and enterprises, In the first half of 2024, the company further accelerated the layout of the BD field, especially in the field of inhalation preparations.

In January, HealthGen reached product authorization cooperation agreements with Quansin Bio and Boan Bio, respectively, obtaining the relevant rights to two products: anti-TSLP monoclonal antibody and anti-IL-4Ra monoclonal antibody. Both products are used to treat respiratory diseases such as asthma and chronic obstructive pulmonary disease (COPD).

Following this, in March, HealthGen took an important step in international cooperation, signing an exclusive license agreement with global pharmaceutical giant Bayer for a small molecule inhibitor, covering the development, commercialization, and production of the drug in China. This is the first time HealthGen has introduced an innovative drug pipeline in the respiratory field from a leading multinational company.

Continuous R&D innovation and the introduction of excellent drugs BD continuously promotes the accelerated development of the company's new productive forces and has brought significant results to HealthGen. To date, HealthGen has successfully launched 10 products in the respiratory field and has more than 20 products under development, comprehensively covering various categories of inhalation treatment drugs for asthma and chronic obstructive pulmonary disease (COPD), achieving a full-range layout from existing products to future potential products.

Maintaining a balance between financial health and shareholder returns Cumulative distribution of 3.6 billion yuan in cash dividends

On the solid foundation of ensuring the company's financial health and achieving sustainable development, HealthGen deeply practices the “investor-centric” philosophy, through the implementation of cash dividends, share buybacks, and other diversified return mechanisms, is committed to sharing the fruitful results of enterprise development with a wide range of investors.

In 2023, HealthGen achieved a net profit attributable to the parent company of 1.443 billion yuan. While ensuring the company's stable cash flow, in July this year, it distributed cash dividends of RMB 1.80 per 10 shares (including tax) to shareholders, totaling 337 million yuan in cash dividends. Adding the 475 million yuan repurchase in 2023, HealthGen's total cash dividend amounted to 56.22% of the net profit attributable to the parent company in the consolidated financial statements for the reporting period.

To date, HealthGen has distributed cash dividends to shareholders 20 times, with a cumulative dividend amount exceeding 3.6 billion yuan, demonstrating good dividend stability. At the same time, HealthGen has also actively implemented multiple share repurchase plans in the secondary market, with a cumulative investment of more than 2 billion yuan, and the vast majority of repurchased shares have been successfully cancelled, demonstrating the company's emphasis on shareholder interests and management's confidence in the company's intrinsic value and future development.

In addition, HealthGen stated in the “Improving Quality and Efficiency, Emphasizing Returns” action plan that the company will firmly establish an investor-centric philosophy and fully utilize measures such as cash dividends to share the dividends of the company's development with all shareholders. Under this premise, HealthGen will prioritize the sustainable innovative development and stable growth of the company's performance.

In the second half of the year, HealthGen will further implement its dual-drive strategy of innovative drugs and high-barrier complex preparations, led by new productivity, to accelerate the progress of innovative R&D and the commercialization of new products, optimize asset structure and industrial layout, and comprehensively enhance the company's overall R&D strength, innovation capabilities, and competitive advantages.

With the increasing maturity of the innovative drug industry and the continuous release of policy dividends, HealthGen is expected to usher in a broader development space and growth opportunities, creating greater value returns for shareholders.

This article is from: Cailian Press