on the evening of April 8, maiwei biology (688062.SH) released its 2023 annual report. Although the operating income increased by more than 3.6 times, it still could not stop the huge loss of 1.053 billion yuan. The main reason is that the company's two new drugs have been on the market for a short time, and the company has been investing in research and development for many years.

titanium media App noted that last year, Maiwei biological research and development investment was 0.836 billion yuan. on the basis of an increase of more than 10% in research and development investment, the company's research and development team shrank by nearly 30% and the number of research and development personnel decreased by 170. In addition, due to changes in the market competition pattern, the company had two new drugs that had been developed for three years suffered "returns" last year, thus reducing net profit by 0.11 billion yuan.

Net loss continues to widen

In 2023, Maiwei Bio achieved operating income of approximately 0.128 billion yuan, an increase of 361.03 year-on-year; the corresponding attributable net profit was approximately -1.053 billion yuan, an increase in losses year-on-year.

Net profit performance, source: Wind

Maiwei Bio said that as of the end of the reporting period, although the company's product Junmaikang®With Miley Shu®It has been approved for listing in March 2022 and March 2023, respectively, but the company has not yet made a profit and has accumulated uncompensated losses, mainly due to Junmaikang.®With Miley Shu®The time to market is short, and the company has maintained a high level of research and development investment since its inception.

according to the annual report, Maiwei biological research and development investment in 2023 was 0.836 billion yuan, an increase of 10.17 over the same period last year. In 2021 and 2022, the company's research and development costs were 0.623 billion yuan and 0.759 billion yuan, respectively.

As of the disclosure date of the report, the company has 14 varieties in the clinical or market stage, including 10 innovative drugs and 4 biosimilars, covering multiple therapeutic areas such as autoimmunity, oncology, metabolism, ophthalmology, and infection. Among them, 3 varieties have been listed, 1 variety in the marketing license review stage, 3 varieties in the key registration clinical stage of Phase III, and 7 varieties in other different clinical stages.

Quarterly, in the fourth quarter of 2023, the company achieved operating income of 28.3242 million yuan, a year-on-year increase of 287.79; the net profit attributable to the owner of the parent company was -0.38 billion yuan, and the net profit for the same period last year was -0.263 billion yuan. Continuous losses and losses expanded.

Public information shows that Maiwei Bio is an innovative biopharmaceutical company with a full industry chain layout, focusing on tumor-related and age-related diseases. Its main products are antibodies and recombinant protein drugs.

The company was established in 2017 and listed on the Shanghai Stock Exchange's Kechuang Board in January 2022, raising net funds of more than 3.3 billion yuan. The company has continued to lose money since its establishment, with a cumulative loss of about 4.677 billion yuan in 7 years.

Maiwei Bio said frankly that the company's working capital mainly depends on external financing. If the expenses required for business development exceed the available external financing, it will cause the company's cash flow from operating activities to be tight, which will further affect the company's product research and development investment, talent introduction, and team stability.

New drug was returned,

R & D Team Shrinks

170

People

As an innovative biomedical company, the importance of R & D strength to Maiwei Bio is self-evident. Although the company continued to increase R & D investment, the number of R & D personnel decreased significantly compared with the previous year.

As of December 31, 2023, the Company had 1491 employees, of which 398 were technical research and development personnel, accounting for 26.69 percent, 51 of the Company's employees had doctoral degrees, 254 had master's degrees, and 20.46 percent had master's degrees or above.

According to previous annual reports, the company has 1,052 employees in 2022, of which 568 are technical research and development personnel, accounting for 53.99 percent. This means that in one year, Maiwei biological research and development personnel have been reduced by 170 people, and the research and development team has shrunk by nearly 30%.

As we all know, the research and development of innovative drugs has the characteristics of long cycle, large investment and high risk. It usually takes about ten years for a new drug to be approved for listing. The main risks of innovative drug research and development include: the risk of target selection in the project process, the risk of identification of innovative molecules in the discovery process, the risk of data not reaching expectations in the development process, and the risk of not being approved for listing in the approval process.

Just in February this year, Maiwei Biology announced that the company and its wholly-owned subsidiary Jiangsu Taikang Biology and Yangzijiang's wholly-owned subsidiary Haibo Biology (formerly known as "Shengsen Biology") signed a "Negotiated Dissolution Agreement" to recover all the rights and interests of the two tumor drug projects. It is estimated that the company's pre-tax profit in 2023 will be reduced by about 0.11 billion yuan.

it is reported that the two drugs are 9MW1111 (recombinant humanized anti-PD-1 monoclonal antibody injection) and 8MW0511 (recombinant (yeast secreted) human serum albumin-human granulocyte colony stimulating factor (I) fusion protein for injection). The collaboration on both products began in March 2021.

Regarding the reasons for the "return" of new drugs, Maiwei Biology said that the main reason is that during the cooperation period, the market competition pattern of PD-1 products and G-CSF products has changed greatly, and the market prices of products have been adjusted significantly.

(this article starts with titanium media App, by Ma Qiong)