WuXi Biologics Reports Solid 2023 Annual Results

Revenue Increased by 11.6% Y-o-Y to RMB17,034.3 Million

Gross Profit Rose by 1.5% to RMB6,827.9 Million

Non-COVID Revenue Achieved 37.7% Y-o-Y Growth, Strong Momentum Sustained

Non-COVID Late-Phase and Commercial Manufacturing Revenue Grew by 101.7% Y-o-Y

"R" in CRDMO Thrived with Extended Partnerships, Milestone and Research Services Revenue Exceeded US$87 Million

132 New Integrated Projects Set an All-Time High (Excluding COVID Projects)

Free Cash Flow Reached RMB0.6 Billion to Underpin Sustainable Growth

Total Backlog Amounted to US$20,592 Million

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CRDMO Business Model Enabled Sustainable Long-Term Growth

"Follow and Win the Molecule" Strategies Delivered Solid Revenue Increases

698 Total Integrated Projects, including 51 Phase III Projects and 24 Commercial Manufacturing (CMO) Projects with Potential for Further Growth

"Win-the-Molecule" Strategy Contributed 18 External Projects and Accelerated Growth

Late-Phase & Commercial Manufacturing Revenue Increased to RMB7,731.5 Million, Accounting for 45.4% of Total Revenue

Global Presence and Talent Pool Enhanced to Support Business Momentum

Non-COVID Growth Trend Sustained Across Various Geographic Markets,

Especially in Europe and Rest of Asia

Microbial and New Modalities Emerged as New Drivers of Future Growth

Premier Quality System with 33 Successful Global Regulatory Inspections

Continued WBS (WuXi Biologics Business System) Initiatives Executed to Improve Operational Efficiencies

Sufficient Capacity to Start Any Project within 4 Weeks

HONG KONG, March 26, 2024 /PRNewswire/ -- WuXi Biologics (Cayman) Inc. ("WuXi Biologics" or "the Group", stock code: 2269.HK), a leading global Contract Research, Development and Manufacturing Organization (CRDMO) service company offering end-to-end solutions for biologics discovery, development and manufacturing, is pleased to announce its audited annual results for the year ended December 31, 2023 ("Reporting Period").

2023 Financial Highlights

• Revenue: The Group's revenue increased to RMB17,034.3 million with an increase of 11.6% y-o-y. The increase was primarily attributed to: (i) the successful execution of the Group's "Follow and Win the Molecule" strategies, coupled with the leading technology platform, best-in-industry timeline and excellent execution track record, contributing to the growth of the Group's revenue; (ii) enlarged spectrum of services offered to the biologics industry, fast-growing technology platforms including ADCs and bispecific antibodies, contributing to the Group's revenue stream; (iii) the growth of research services revenue generated from the Group's various cutting-edge technologies; and (iv) the utilization of existing and newly expanded capacities, including ramp-up of the manufacturing sites in Europe and the U.S..
  
  
• Gross Profit and Gross Profit Margin: The Group's gross profit increased by 1.5% to RMB6,827.9 million, with a gross profit margin of 40.1%. The decrease of gross profit margin was mainly due to the expected ramp-up impact of new manufacturing facilities in Ireland, Germany, and the U.S., which was partially offset by the efficiency achieved from WBS and other continuous improvement initiatives.
  
  
• Net Profit & Net Profit Attributable to Owners of the Company: Net profit and net profit attributable to owners of the Company for the Reporting Period amounted to RMB3,570.6 million and RMB3,399.7 million respectively, representing a 21.5% and 23.1% decrease compared to the same period last year. The decreases were mainly due to: (i) a decrease in gross profit margin due to the ramp-up impacts; (ii) a decrease in investment gains and losses due to the downturn in the capital market; (iii) a decrease in foreign exchange gains; (iv) increases in selling and marketing expenses, administration expenses and R&D expenses; and (v) the listing expenses associated with the separate listing of WuXi XDC.
  
  
• Adjusted Net Profit: Excluding non-recurring investment gains and losses, foreign exchange impact, share-based compensation, and the WuXi XDC listing expenses, the Adjusted Net Profit for the period decreased by 2.0% y-o-y to RMB4,950.4 million. Margin of adjusted net profit was 29.1%.
  
  
• Basic Earnings Per Share (EPS): Basic EPS and adjusted basic EPS were RMB0.82 and RMB1.13, respectively.
  
  
• In 2023, the Group's Free Cash Flow reached RMB0.6 billion, solidifying a strong financial foundation to support the Group's ongoing capacity enhancement, globalization efforts, and continuous investment in cutting-edge technologies.

2023 Business Highlights

• Amid a challenging macroeconomic environment post COVID-19, the Group maintained its stable growth trajectory, underpinned by its unique CRDMO business model and the successful execution of its "Follow and Win the Molecule" strategies.
  
  
• The total number of integrated projects rose to a new height of 698 with 132 new integrated projects added to the pipeline, setting a historic record for non-COVID project additions within a fiscal year. 51 late-phase projects and 24 commercial manufacturing projects provided a solid foundation for the Group's continued revenue growth.
  
  
• The "Win-the-Molecule" strategy further propelled the growth of the project pipeline by contributing 18 external projects, including a record high of 9 late-phase and commercial manufacturing projects, which will boost near-term revenue growth and elevate long-term growth prospects.
  
  
• As of Dec 31, 2023, the Group's total backlog, which includes Services and Milestones, reached US$20,592 million. Of this total, Services accounted for US$13,398 million and Milestones contributed US$7,194 million, ensuring sustainable growth in both the short and long term.
  
  
• Bolstered by a robust non-COVID pipeline, the Group's non-COVID business maintained strong growth momentum with a notable 37.7% y-o-y revenue increase, reinforcing the Group's outlook for sustained long-term growth.
  
  
• Late-phase and commercial manufacturing revenue increased to RMB7,731.5 million, accounting for 45.4% of the total revenue in 2023, driven by the accelerated momentum of the Group's late-stage and commercial manufacturing businesses. Excluding COVID-19 projects, revenue from late-phase and commercial manufacturing grew substantially by 101.7% y-o-y, showcasing the Group's continued growth momentum in the post-COVID era.
  
  
• Leveraging industry-leading technology platforms, the Group's research business has flourished, establishing numerous drug discovery collaborations with a wide range of clients. Notable examples include a research service agreement with GSK plc (LSE/NYSE: GSK) for multiple novel bi- & multi-specific TCEs antibodies, and a research service agreement with BioNTech SE (NASDAQ: BNTX) for the discovery of investigational monoclonal antibodies (mAbs). These partnerships underscore the Group's strong research capabilities – the "R" in its CRDMO business model.
  
  
• The Group is devoted to providing a full range of CRDMO services through its industry-leading and globally accessible proprietary technology platforms. By the end of 2023, the Group boasted a diverse portfolio with 114 bispecific projects, including 45 WuXiBody^TM projects, 143 ADC projects, and 25 vaccine projects on its integrated platforms. These advanced platforms not only underpin the Group's integrated CRDMO business model but are also pivotal in driving the Group's ongoing growth.
  
  
• To address burgeoning capacity demands and fulfill its "Global Dual Sourcing" strategy, the Group is enhancing its global footprint through capacity increases in Ireland, Germany, the U.S., and Singapore. With diversified manufacturing facilities in China, the U.S., Ireland, Germany, and Singapore, the Group offers a versatile and robust global supply chain network, ensuring it can meet the needs of its clients and partners around the world.
  
  
• To maximize its business potential, the Group's subsidiary, WuXi XDC Cayman Inc., a leading global CRDMO focused on ADC and the broader bioconjugate market, was listed on the Main Board of the Hong Kong Stock Exchange on November 17, 2023 (stock code: 2268.HK), embarking on a new chapter of growth and opportunity.
  
  
• Excluding COVID-19 projects, the combined revenue from the North American and European markets grew strongly by 52.5% y-o-y. Furthermore, non-COVID revenue from Europe saw a significant surge of 172.4%, fueled by ongoing business momentum and enhanced global outreach.
  
  
• The Group has consistently advanced its WBS initiatives, implementing over 370 WBS projects in 2023 and achieving cost savings exceeding RMB245 million across materials, capital expenditure, and operating expenses. Moreover, these initiatives have resulted in a significant reduction in inventory, equivalent to RMB270 million. The Group is committed to further developing WBS as a management system to drive continuous improvement and create value for its clients and partners.
  
  
• The Group continues to adhere to the highest quality standards, and has completed 33 regulatory inspections conducted by the U.S. FDA, EU EMA, China NMPA and other global regulatory agencies since 2017.
  
  
• As of Dec 31, 2023, the Group's total staff reached 12,740, with a top-tier biologics development team of 4,432 scientists. The Group's international hiring has been fruitful. Talent retention has remained robust, with a key talent retention rate of approximately 97%, surpassing the industry average.
  
  
• The Group has incorporated Environmental, Social and Governance (ESG) as an essential part of its sustainable business growth strategies. The Group's ESG performance has been evaluated by major ESG rating agencies and institutional investors, resulting in recognitions that include: listing on the Dow Jones Sustainability™ World Index and Emerging Markets Index; an MSCI AAA Rating; the EcoVadis Platinum Medal; ranking as a Sustainalytics Industry and Regional Top-Rated Company; and scoring a CDP "A" rating for water security and "A-" for climate change.

Amidst an increasingly dynamic macroeconomic environment in 2023, the Group maintained its growth momentum supported by strong execution, advanced technologies, flexible manufacturing capacities, a premier quality system, and a persistent pursuit of operational excellence. Adhering to its "Follow and Win the Molecule" strategies and capitalizing on its distinctive CRDMO business model, the Group will continue to build momentum around its long-term growth and accelerate the empowerment of global partners for the benefit of patients worldwide.

Solid Business Performance Sustained Despite Macroeconomic Uncertainties

Throughout 2023, the Group adeptly navigated the global biopharmaceutical industry's evolving dynamics and maintained strong business momentum by executing its "Follow and Win the Molecule" strategies and leveraging its unique CRDMO business model. The Group added 132 new integrated projects, reaching an all-time high (excluding COVID-19 projects) since its inception, which brought the total number of integrated projects to 698. In addition, 51 late-phase projects and 24 commercial manufacturing projects laid a solid foundation for the Group's enduring revenue growth.

The Group's revenue exceeded RMB17.0 billion in 2023, marking a 11.6% increase from 2022. This growth was propelled by a robust non-COVID pipeline, which resulted in a 37.7% y-o-y increase in non-COVID revenue. The booming development of the non-COVID business more than offset the sales decline in the COVID sector.

As of Dec 31, 2023, total backlog, service backlog and milestone backlog reached US$20,592 million, US$13,398 million and US$7,194 million respectively, providing high visibility of the Group's sustainable growth. Backlog within three years increased to US$3,850 million, reinforcing stable short-term growth.

Even with the strong backlog and a record number of projects, the Group is still able to start any new project within four weeks, supported by its strong capabilities and ample capacity.

Late-Phase and Commercial Manufacturing Projects Drive Future Growth

With the execution of its proven "Follow and Win the Molecule" strategies, the Group accelerated business momentum in late-stage and commercial manufacturing projects. By the end of the Reporting Period, the number of late-phase and commercial manufacturing projects had increased to 51 and 24 respectively. Late-phase and commercial manufacturing revenue increased by 12.8% y-o-y to RMB7,731.5 million, accounting for 45.4% of the total revenue in 2023. Excluding COVID-19 projects, late-phase and commercial manufacturing revenue saw a remarkable 101.7% y-o-y increase, indicating strong future growth potential.

During the Reporting Period, one of the Group's strategic partners, Amicus Therapeutics, Inc. (NASDAQ: FOLD), received the U.S. FDA, the U.K. MHRA and the European Commission's approval for Pombiliti™, a long-term enzyme replacement therapy used in combination with miglustat therapy for adults with late-onset Pompe disease. Pombiliti™ was initiated within the Group in 2012, starting from a mere concept and has since achieved commercialization. This success was made possible through the Group's proprietary integrated technology platform and extensive manufacturing capabilities. Such an achievement truly attests to the effectiveness of the Group's long-standing "Follow the Molecule" strategy, which turns concepts into commercialized biologics therapeutics. 

Leveraging its track record of reliable execution, swift timelines and cutting-edge technology, the Group has forged an outstanding reputation for its capabilities and scale in commercial manufacturing, garnering widespread recognition from global customers. During the Reporting Period, the Group's "Win-the-Molecule" strategy continued to accelerate pipeline expansion by adding 18 external projects, including a record-breaking 9 late-phase and commercial manufacturing projects. This strategy will continue to spur the rise of late-phase and commercial revenues and contribute to the Group's long-term growth.

 CRDMO Platform – Research (R):
Thriving Research Business Achieved Remarkable Success

The Group continuously focuses on enhancing its capabilities in innovative biologics generation and optimization, as well as enriching and optimizing its existing technological platforms. These efforts are integral to its CRDMO business model and have fostered the prosperous development of its research business.

In addition to the partnership with GSK plc (LSE/NYSE: GSK), the Group's research capability was further showcased through a research service agreement with BioNTech SE (NASDAQ: BNTX), where the Group used its proprietary antibody discovery platforms to discover two undisclosed targets for BioNTech's preclinical investigational monoclonal antibodies. In return, the Group received a US$20 million upfront payment from BioNTech for exclusive rights to these antibodies, and will receive potential additional payments for research, development, regulatory, and commercial milestones, plus tiered royalties.

During the Reporting Period, the Group also opened its Boston Research Service Center in the United States. The facility is the Group's third research service center globally and the first in the U.S. to offer discovery services to clients of all sizes, complementing the full range of services the Group offers within the U.S. and around the world. 

CRDMO Platform – Development (D):
New Premier Technology Platform Launched to Boost Development Strength

With the goal of enabling its global partners to bring more high-quality and affordable biologics to patients worldwide, the Group's industry-leading biologics development team strives for innovation with the mission of "Turning Ideas into Life-Improving Biologics and Vaccines". During the Reporting Period, the Group enabled 110 INDs and provided research and development services for over 670 different molecules.

As part of its drive to foster innovation, the Group launched a new advanced technology platform during the Reporting Period -- WuXiUI™, a novel proprietary bioprocessing platform that significantly boosts productivity and quality for various cell lines and product modalities. This ultra-intensified fed-batch solution aims to revolutionize upstream processing by enhancing productivity by 3-6 times and reducing manufacturing costs substantially compared to traditional processes. WuXiUI™ offers exceptional flexibility and competitiveness in meeting different commercial market supply and manufacturing needs. The Group's continual launch of new technology platforms empowers its clients to embrace the wave of next-generation innovative drugs, while achieving a balance of quality, speed, and cost.

CRDMO Platform – Manufacturing (M):
Expanding Capacities to Strengthen Manufacturing Capabilities

To accommodate the ever-changing needs of its worldwide customers, the Group is continuously enhancing its "Global Dual Sourcing" strategy and increasing its global capacity to ensure supply chain resilience.

During the Reporting Period, the Group's manufacturing facility in Dundalk, Ireland, received the 2023 Facility of the Year Award ("FOYA") in the Operations category from the International Society for Pharmaceutical Engineering ("ISPE"). The Ireland facility has been ramping up rapidly and efficiently since its GMP release in Q4 2022, supported by substantial commercial manufacturing demand from global clients.

The Group plans to enhance its manufacturing presence in Germany, installing a new drug product fill-and-finish line at its Leverkusen site and doubling the Wuppertal site's capacity from 12,000L to 24,000L. These enhancements, along with the drug product facility in Leverkusen, will boost the Group's clinical and commercial manufacturing capacities in Europe.

In response to rising contract manufacturing demand, the Group will also increase its Worcester, Massachusetts facility's capacity to 36,000L, up from the initially planned 24,000L. With the Worcester facility's commencement, the Group will be well positioned to provide full-spectrum integrated services in the U.S., encompassing biologics discovery, development, and both clinical and commercial manufacturing.

The Group's Singapore CRDMO Center Project is also gaining momentum. In coordination with local authorities, land acquisition has been completed and the Group is making progress with various applications. Groundbreaking has recently taken place and the design and construction of the site are progressing as planned. Furthermore, the Group has entered into a strategic partnership with Pharmadule Morimatsu to provide modular facilities for two production facilities at the Singapore site.

With these developments, the Group reinforces its global presence in China, the U.S., Ireland, Germany, and Singapore, enabling it to offer enhanced service to its global customers with greater proximity and agility.

Microbial and New Modalities to Be Next Growth Engines

The Group has strategically leveraged its capabilities and capacity to establish integrated platforms for various new modalities. These platforms have seen rapid success and expansion, significantly broadening the Group's service spectrum, and emerging as key drivers for future growth.

With its extensive antibody development knowledge and skilled scientific team, the Group had accumulated 114 bispecific projects with different formats by the end of the Reporting Period. The Group's proprietary bispecific antibody platform, WuXiBody^TM, known for its flexibility and capability to combine almost any mAb pair, continued to earn global recognition, with rights to 45 projects granted to external partners. WuXi XDC achieved remarkable progress as well, securing 143 integrated projects for ADCs and other bioconjugates globally, with 21 in phase II/III, which further reinforced its leading position in the global ADC and broader bioconjugates outsourcing services market. During the Reporting Period, WuXi Vaccines also experienced consistent growth and prosperity, with the number of projects increasing to 59, including 25 integrated projects. This underscores its superior technical and quality strengths, CMC, and regulatory capabilities, alongside its growing reputation in the industry.

Additionally, the Group has established comprehensive capabilities to provide end-to-end services for next-generation biological products that are based on microbial fermentation technologies. The incorporation of the use of microbial expression systems such as E. coli and yeast into the Group's integrated technology platforms allows faster, more efficient and cost-effective production across multiple modalities, including enzymes, antibody fragments, recombinant proteins, and virus-like particles (VLP).

Successful Listing of WuXi XDC on the Hong Kong Stock Exchange

In July 2023, the Group announced the spin-off and separate Hong Kong Stock Exchange listing of its subsidiary, WuXi XDC Cayman Inc., which was successfully listed on the Main Board of HKEX on November 17, 2023, under the stock code 2268.HK. WuXi XDC remains a subsidiary of the Group, ensuring full consolidation. The separate listing allows WuXi XDC to develop as a unique global leading CRDMO, focusing initially on ADCs and expanding to all bioconjugates, and bring a more defined business focus and strategy to support the growth of the Group. This, in turn, will lead to a more organized and efficient allocation of capital and resources for the Group as a whole, and benefit the Group through continued consolidation of financials, as well as improved governance, market communication, and operational and financial transparency, thereby creating value for the Group and its shareholders.

World-Class Quality System Underpins Future Growth

The Group remains dedicated to meeting the highest industry quality standards. With its world-class quality system, the Group has completed 33 regulatory inspections conducted by the U.S. FDA, EU EMA, China NMPA, and other global regulatory agencies since 2017 with no critical issues identified and zero data integrity findings, which distinguishes the Group as the first and only biologics company certified by these regulatory agencies for commercial manufacturing in China. The Group has completed more than 1,200 GMP audits by global clients, and more than 120 audits by EU Qualified Persons. These audits and certifications demonstrate to clients that the Group's quality system adheres to global standards, ensuring the provision of the highest quality biologics to patients worldwide.

Seasoned Talent Team

The Group emphasizes workforce development, implementing a strategic human resources strategy to attract, train, and retain global talent. As of Dec 31, 2023, the Group's total employee count had reached 12,740, including a top-tier biologics development team with 4,432 scientists. The Group's global recruitment efforts have successfully enhanced its operations and competencies at all of its facilities, enabling the Group to maintain a solid growth trajectory and efficiently meet its project commitments. Furthermore, the Group's talent retention remained strong, with a key talent retention rate of approximately 97%, which is markedly higher than the average in the sector.

ESG as a Long-Term Business Strategy

The Group regards sustainability as the cornerstone of its business development strategy, aligning it with its vision and mission to drive long-term success. It embraces social, environmental and governance responsibilities, actively working to maintain a strong ESG performance for the benefit of all stakeholders and the broader good of society. During the Reporting Period, the Group's ESG targets and metrics were prioritized and monitored in the focus areas, including Diversity, Equity and Inclusion ("DEI"), climate change and energy saving, and resource efficiency.

Also during the Reporting Period, the Group committed to the Science-Based Targets initiative ("SBTi"), established a dedicated DEI Committee, and became a signatory to the United Nations Global Compact. With its many ESG initiatives and achievements, the Group has received recognition from various major ESG rating agencies and institutional investors, including: a listing on the Dow Jones Sustainability™ World Index and Emerging Markets Index; an MSCI AAA Rating; the EcoVadis Platinum Medal; ranking as a Sustainalytics Industry and Regional Top-Rated Company; and scoring a CDP "A" rating for water security and "A-" for climate change.

Management Comment

Dr. Chris Chen, CEO of WuXi Biologics, said, "Despite challenges from an uncertain macroenvironment, our unique CRDMO business model and the successful implementation of 'Follow and Win the Molecule' strategies led to new opportunities and stable growth in 2023. With a notable recovery in the second half, 132 new integrated projects were added during the year, including a record increase in non-COVID projects. The total number of integrated projects grew to 698, featuring 51 in late-phase and 24 in commercial manufacturing, underscoring our continued strong growth momentum. The 'Win-the-Molecule' strategy introduced 18 external projects, including a record 9 late-phase and commercial manufacturing projects, reflecting increased recognition from global customers. Powered by a robust pipeline, the non-COVID sector remained a pivotal growth driver, with overall non-COVID revenue increasing by 37.7% y-o-y and revenue from non-COVID late-phase and commercial manufacturing surging by 101.7% y-o-y. With active business development and enhanced global presence, non-COVID revenue from North America and Europe witnessed a rapid 52.5% y-o-y growth, fueled by deeper collaboration and strong industry trust."

Dr. Chris Chen added, "In 2023, we achieved positive advancements across our Research, Development, and Manufacturing segments. In Research, we secured service agreements with GSK and BioNTech, demonstrating the capabilities of our integrated discovery platforms in enabling global partners to develop new modalities. In Development, we facilitated 110 INDs for global clients, and launched new technology platforms such as WuXiUI^TM and WuXiHigh^TM. We will continue to invest in cutting-edge technologies and enhance our R&D capabilities to maintain our position at the technological forefront, ensuring the delivery of high-quality results to our customers. In Manufacturing, with 24 ongoing projects and an expected rise in commercial projects and potential blockbusters, we anticipate a bright future for growth. To support this accelerated momentum, we have furthered our 'Global Dual Sourcing' strategy and increased global capacity with solid free cash flow, laying the groundwork for a comprehensive global biomanufacturing network with major operations in China, the U.S., Ireland, Germany, and Singapore. 

In the face of uncertainties, we are dedicated to finding certainty and stability through our strategic initiatives. Looking ahead to 2024, we are committed to serving and contributing to the global healthcare community, adhering to the highest standards of compliance and the legal requirements of all jurisdictions where we operate. In our pursuit to deepen trust with our customers and enhance collaboration, we will continue to improve operational efficiency through additional WBS efforts, while steadfastly upholding global ESG and quality standards. Our ongoing investments in capabilities, capacity, and innovative technology platforms will drive the acceleration and transformation of biologics discovery, development, and manufacturing processes worldwide, benefiting global partners and patients alike."

Dr. Ge Li, Chairman of WuXi Biologics, concluded, "WuXi Biologics continued to achieve consistent and steady business growth, driven by our distinctive CRDMO business model and a steadfast commitment to meeting our customers' needs. Looking ahead, we will adhere to our end-to-end CRDMO model, further improve our execution capabilities, enhance our global footprint, and strive for operational excellence, all while maintaining a customer-centric approach. We remain dedicated to delivering groundbreaking therapies to patients and fulfilling our vision that 'every drug can be made and every disease can be treated'."

Key Financial Ratios

(For the Twelve Months Ended Dec 31)

About WuXi Biologics

WuXi Biologics (stock code: 2269.HK) is a leading global Contract Research, Development and Manufacturing Organization (CRDMO) offering end-to-end solutions that enable partners to discover, develop and manufacture biologics – from concept to commercialization – for the benefit of patients worldwide.

With over 12,000 skilled employees in China, the United States, Ireland, Germany and Singapore, WuXi Biologics leverages its technologies and expertise to provide customers with efficient and cost-effective biologics discovery, development and manufacturing solutions. As of December 31, 2023, WuXi Biologics is supporting 698 integrated client projects, including 24 in commercial manufacturing.

WuXi Biologics views Environmental, Social, and Governance (ESG) responsibilities as an integral component of our ethos and business strategy, and we aim to become an ESG leader in the biologics CRDMO sector. Our facilities use next-generation biomanufacturing technologies and clean-energy sources. We have also established an ESG committee led by our CEO to steer the comprehensive ESG strategy and its implementation, enhancing our commitment to sustainability.

For more information about WuXi Biologics, please visit: www.wuxibiologics.com 

Forward-Looking Statements

This announcement may contain certain "forward-looking statements" that are not historical facts, but instead are predictions about future events based on our expectations as well as assumptions made by and information currently available to our management. Although we believe that our predictions are reasonable, future events are inherently uncertain and our forward-looking statements may turn out to be incorrect. Our forward-looking statements are subject to risks relating to, among other things, the ability of our service offerings to compete effectively, our ability to meet timelines for the expansion of our service offerings, and our ability to protect our clients' intellectual property. Our forward-looking statements in this announcement speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements except as required by applicable law or listing rules. Accordingly, you are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. All forward-looking statements contained herein are qualified by reference to the cautionary statements set forth in this section.

Non-IFRS Measures  

To supplement the Group's condensed consolidated financial statements which are presented in accordance with the IFRS, the Company has provided adjusted net profit, adjusted net profit margin, adjusted EBITDA, adjusted EBITDA margin and adjusted basic and diluted earnings per share as additional financial measures, which are not required by, or presented in accordance with, the IFRS.

The Company believes that the adjusted financial measures are useful for understanding and assessing underlying business performance and operating trends, and that the Company's management and investors may benefit from referring to these adjusted financial measures in assessing the Group's financial performance by eliminating the impact of certain unusual, non-recurring, non-cash and/or non-operating items that the Group does not consider indicative of the performance of the Group's core business. These non-IFRS financial measures, as the management of the Group believes, are widely accepted and adopted in the industry in which the Group is operating. However, the presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the IFRS. Shareholders of the Company and potential investors should not view the adjusted results on a stand-alone basis or as a substitute for results under IFRS. And these non-IFRS financial measures may not be comparable to similarly-titled measures represented by other companies.