We are a leading, technology-driven CDMO providing comprehensive solutions throughout the drug development and manufacturing process. According to Frost & Sullivan, we were the fifth largest drug substance CDMO globally, with a market share of 1.5%, and the largest China-based commercial stage chemical drug CDMO, with a market share of 22.0%, in each case as measured by revenue in 2020. With over two decades of industry experience, we provide process development and manufacturing services for small molecule drugs throughout the pre-clinical, clinical and commercial stages, and we have become an integral part of the global value chain for innovative drugs. Leveraging our deep industry insights, established R&D and manufacturing capabilities, and premium reputation among customers, we have expanded our CDMO capabilities to include new drug modalities, such as polypeptides, oligonucleotides, monoclonal antibodies (mAbs), antibody-drug conjugates (ADCs) and messenger RNA (mRNA), and broadened our service scope to include drug product solutions, biosynthesis solutions and clinical CRO solutions, collectively referred to as our Emerging Services.
CDMO services include process development, scale-up and commercial manufacturing services. These services are critical in the R&D process of new drugs and have a direct impact on a drug’s probability of clinical and commercial success. An experienced CDMO like us possesses the high-level expertise needed to solve novel, complex technical challenges faced by its customers and to swiftly scale up manufacturing to accelerate drug innovation. We and other CDMOs with extensive know-how and proprietary, advanced technologies can effectively improve the drug manufacturing process and enhance the drug’s post-market price competitiveness. According to Frost & Sullivan, in the context of rapidly growing new drug development costs, increasingly complex development processes, and ever more intense competition, multinational pharmaceutical and biotechnology companies have continued to increase outsourcing to CDMOs, while small and medium-sized firms have developed even greater reliance on CDMO services. In addition, what has become a prevailing trend in the CDMO market is a growing preference for CDMOs like us that provide full-service offerings, as using a single CDMO for multiple services allows a drug developer to reduce the complexity of technology transfer and the time needed for its drugs to reach the market. In the meantime, for smaller CDMOs, to build comprehensive platform and acquire the necessary technologies and industry know-how require considerable investments of time and resources. Today, the global CDMO market is highly fragmented, which implies significant potential for consolidation. With integrated capabilities in technology innovation, process development, scale-up and commercial manufacturing, quality assurance, and project management, we believe that we enjoy an enormous competitive advantage and are well positioned to capture the massive opportunities presented by the fast-evolving industry.
We go above and beyond offering traditional contract manufacturing services and, in the past decade, have set ourselves apart with a strategic focus on, and continuous optimization of, our “D” capabilities, which in “CDMO” stands for “development.” We join forces with our customers to design an optimized drug manufacturing process that expediently solves complex process challenges in pharmaceutical manufacturing and achieves swift deployment, safe scale-up and cost efficiencies. Our “M” capabilities, which in “CDMO” stands for “manufacturing,” underpin our high-quality, stable supply during the commercial stage, supported by a rigorous cGMP quality system and a first-class EHS and QA system.
We possess a leading CDMO technology platform. Backed by scalable knowledge and experience accumulated over two decades, we are capable of solving a broad array of complex technical challenges in the development and manufacturing of small molecule drugs. Our R&D expenditure was one of the highest across the global CDMO industry, according to Frost & Sullivan. Two of our core technologies, flow and continuous technology and biosynthesis technology, are cutting-edge technology solutions in the manufacturing of small molecule drugs. According to Frost & Sullivan, we are one of the few organizations in the world to successfully deploy flow and continuous technology in tonne-scale drug manufacturing. Our biosynthesis technology uses enzyme engineering to realize greener manufacturing as compared to traditional methods, and has been successfully applied in the manufacturing of small molecule and other drug modalities. Our leading-edge core technologies and comprehensive R&D platforms have been an engine for our customer-focused technology innovation, which propel us to continuously improve process efficiency, lower manufacturing costs and reduce environmental impact for our customers. Our successes in implementing leading green chemistry innovations set us apart from our competitors and create significant momentum to secure as many service engagements as our capacity allows.
Since our inception, we have upheld a customer-centric business philosophy. With over two decades of experience serving multinational customers with stringent requirements, we have established a first-class operating system encompassing R&D, manufacturing, quality control and project management, which meets the highest global industry standards. Our strong execution capabilities and efficient operating system allows us to seamlessly respond to the needs of our large customers throughout the various stages of a project. Meanwhile, leveraging our extensive experience accumulated in serving large customers, we empower small and medium-sized customers with limited in-house R&D resources and manufacturing capacity. Through years of collaboration and successful track record, we have earned our customers’ long-lasting trust and loyalty and cultivated a high-quality, stable and growing customer base.
We are the partner of choice for blue-chip customers such as multinational pharmaceutical companies and leading biotechnology firms. As of the Latest Practicable Date, we had worked with 15 out of the 20 largest pharmaceutical companies in the world in terms of sales in 2020, among which eight had done business with us for more than ten consecutive years. Leveraging our extensive experience accumulated in serving multinational pharmaceutical companies, we also work with many leading biotechnology firms and a broad range of small- and medium sized pharmaceutical companies, such as Mirati Therapeutics, Mersana Therapeutics, Zai Lab, Betta Pharmaceuticals, HUTCHMED, Innovent Biologics and Jacobio Pharmaceuticals. During the Track Record Period, our revenue generated from small and medium-sized customers had seen solid growth. We have an extensive pipeline of projects at various stages, creating a broad funnel through which projects advance from clinical to commercial stage and bring larger contract value. During the Track Record Period, our late-stage Clinical Stage Projects and Commercial Stage Projects continued to increase, which substantially improved the stability and predictability of our revenue growth. As of September 30, 2021, we were servicing a number of blockbuster drugs with annual sales of US$1 billion or more and some drug candidates of our other projects hold great promise to become blockbuster drugs in the future. Driven by technological innovation and exceptional execution, we help our customers achieve substantial cost efficiencies and improve the market competitiveness of their innovative drugs.
Under the leadership of our Chairman and CEO, Dr. Hao Hong, and our core management team with an average industry experience of 20 years, we have built a diversified talent pool with global vision, advanced technical knowledge, local experience and a strong sense of ownership. With the support of a talented and dedicated workforce, we continue to upgrade our technical platform and optimize our business operations to empower drug innovation and to improve availability and accessibility of medicines.
The overall spending on pharmaceutical development and manufacturing globally has been increasing steadily, and the pharmaceutical market in China has experienced rapid growth, which create a favorable market environment for our business. Riding the positive market trend, we achieved robust growth during the Track Record Period. Our revenue increased from RMB1,822.8 million in 2018 to RMB2,445.8 million in 2019 and further to RMB3,136.7 million in 2020, representing a CAGR of 31.2%. Further, our revenue increased by 39.7% from RMB1,256.8 million in the six months ended June 30, 2020 to RMB1,755.6 million in the six months ended June 30, 2021. During the Track Record Period, our revenue generally increased as we obtained new projects from existing customers, expanded our customer base and increased our manufacturing capacity by establishing new and upgrading facilities in Tianjin and Dunhua. While small molecule CDMO solutions contributed to a substantial majority of our revenue during the Track Record Period, revenue generated from Emerging Services and their percentage of total revenue continued to increase as a result of our strategic investments in CDMO solutions for new drug modalities. Our profit for the year increased from RMB406.4 million in 2018 to RMB551.6 million in 2019 and further to RMB719.7 million in 2020, representing a CAGR of 33.1%. According to Frost & Sullivan, we had the highest gross profit margin among all publicly listed CDMO players and CDMO players which are subsidiaries of publicly listed companies in the world in each of 2018, 2019 and 2020. Further, our profit for the period increased by 36.6% from RMB314.3 million in the six months ended June 30, 2020 to RMB429.3 million in the six months ended June 30, 2021. We have been replicating our success in small molecule drugs to other drug modalities and service types and have achieved rapid growth in these Emerging Services. With our leading technologies and comprehensive services, we are confident in advancing our position as the partner of choice for pharmaceutical and biotechnology companies around the world and contributing to the sustainable growth of the global pharmaceutical development and manufacturing industry.
Our A Shares have been listed on the Shenzhen Stock Exchange (stock code: 002821.SZ) since November 2016.
Source: Asymchem Lab (06821) Prospectus (IPO Date : 2021/11/30) |