Lee's Pharmaceutical Announces 2013 Third Quarterly Results

Turnover and Net Profit Surged 32.0% and 30.3% Respectively

HONG KONG, Nov. 28, 2013 /PRNewswire/ --

Lee's Pharmaceutical Holdings Limited ("Lee's Pharmaceutical" or the "Group", Stock Code: 950), an integrated research-driven and market-oriented pharmaceutical group in China, yesterday announced its third quarterly results for the nine months ended 30 September 2013 (the "period under review").

For the nine months ended 30 September 2013, the turnover of Lee's Pharmaceutical increased by 32% to HK$512,176,000 over the same period last year. Newer product like Zanidip^® continued to lead the pack with a leap of 108% over the same period last year while main driver such as Carnitene^® recorded with a year-on-year sales growth of 46%. Other major products Ferplex^®, Yallaferon^® and Livaracine^® also performed well with a year-on-year sales increase of 38%, 36% and 27% respectively. Gross profit increased by 32.7% to approximately HK$367,240,000 over the same period last year. Meanwhile, the selling expense to turnover ratio remained at a reduced level of 31.3%, a 3.1 percentage points improvement over the same period last year. During the period under review, net profit attributable to shareholders of the Group for the nine months period attained 30.3% increase and reached the level of HK$111,602,000.

In the manufacturing front, the Group has submitted application to CFDA for GMP inspection and certification of its new site in Hefei for all existing formulations and products. The application has been accepted and field audit by the CFDA GMP inspectors is expected in mid-December 2013. The completion of the new facility in time is a testimony of team work and demonstrates the Group's commitment to product quality and sustainable growth. Meanwhile, the completion of the new facility in Nansha, Guangzhou is also on schedule and will be put into use starting in 2014.

The group has received a fruitful return in research and development during this quarter. Studies unveil new findings in the mechanism of action of Anfibatide, the Group's proprietary anti-platelet agent in phase II study, providing new evidence for its potential clinical application. The paper "Anfibatide, a novel GP1b complex antagonist, inhibit platelet adhesion and thrombus formation in Vitro and in Vivo in Murine model of thrombosis" has been accepted in August and published in "Thrombosis and Haemostasis", one of the highly regarded research journal for thrombosis. The abstract titled "The First in Vitro and in Vivo Assessment of Anfibatide, a Novel Glycoprotein 1b antagonist in Mice and in a Phase I Human Clinical Trial" has been selected into press program of this year's American Society of Hematology Conference in the U.S. under the category of Novel Therapies.

In August 2013, the Group has successfully submitted the application to the CFDA for conducting a phase III clinical study for Gimatecan on ovarian cancer in China. The clinical study application was submitted with the fast-track designation, and has been accepted for review by the CFDA. The registration-enabling phase III pivotal clinical trials is to test oral Gimatecan versus Topotecan in refactory patients with advanced epithelial ovarian, fallopian or peritoneal cancer, resistant or partial sensitive to Platinum.

At the same time, clinical trial application to conduct Phase III APEX study of Betrixaban in China was accepted for review by CFDA. The clinical study application was submitted with the fast-track designation. Betrixaban is a novel, oral small molecule that directly inhibits the activity of Factor Xa, an important validated target in the blood coagulation pathway.

In October 2013, the results of China registration-enabling study of Trazodone for depression was made available and show that the primary efficacy endpoint of the study has been met. Trazodone (Trittico^®) is a product licensed from Angelini of Italy and the registration-enabling study is to evaluate the efficacy and safety of Trazodone for treatment of depression in Chinese population. The successful conclusion of the study will enable the Group to submit application for Import Drug License in the fourth quarter.

In the same month, the first patient for Istaroxime's global phase IIb clinical study has been enrolled in Italy. Istaroxime is a first-in-class luso-inotropic agent under development for the treatment of acute decompensated heart failure. This is an important milestone of Istaroxime is expected to be followed by initiation of Chinese arm in the first half of next year.

The Group also achieved major milestone in corporate development and partnership. The Group entered into a partnership in August with the School of Continuing Education, Tsinghua University in China. The Group will work together with the School of Continuing Education, Tsinghua University to expand the executive training programme on hospital directors and other responsible personnel, providing opportunity to improve managerial and administrative skill for hospital executives.

In September 2013, the Group's subsidiary CVie Therapeutics Company Limited ("CVie"), allotted shares to other shareholders for US$10,000,000 and the Group's shareholding interest in CVie reduced from 70.98% to 56.26%. The capital fund received will be used for the development of two licensed-in drugs Rostafuroxin and Istaroxime. The unrealized gain of HK$31,680,000 on partial disposal of CVie is recognized directly to the equity attributable to the shareholders of the Group.

On the other hand, in November 2013, the Group's associated company Powder Pharmaceuticals Incorporated ("PPI") entered into an exclusive distribution agreement with Marathon Pharmaceuticals, LLC, a U.S. based pharmaceutical company for marketing and selling of its product Zingo^® in the U.S. market. This signing is an affirmation of Zingo^®'s market potential and made PPI the first company in the greater China area that produces and exports original pharmaceutical product into the U.S. market.

In sales and marketing, the Group kept up its restructuring effort to enhance effectiveness. New commercial unit has been established during the period under review to focus on tender, pricing and distributor relationship. The compartmentisation of functions with dedicated team is going to streamline the selling process, to strengthen price stability and to better leverage partnership with distributors.

Dr. Benjamin Li, Chief Executive Officer of the Group,said, "Looking to next quarter and beyond, along with the upcoming launching of proprietary product Remodulin^®, and the successful conclusion of Carnitene^® in heart failure study will create new revenue stream from those products. The Group's investment in proprietary product and in clinical study will certainly be advantageous in today's new evidence-based medicine environment in China, giving it the necessary competitive edge in the market place in future to come, propelling the growth of the Group into new height and bring satisfactory returns to its shareholders."