Innovative pharmaceutical companies on the STAR Market see a "turn to profitability" in net profits for the first quarter.

As of April 30th, except for the two red-chip companies BeiGene and Innovent, the first-quarter reports of 29 innovative pharmaceutical companies on the STAR Market have been fully disclosed. Data shows that the 29 innovative pharmaceutical companies on the STAR Market have achieved a total operating income of over 11 billion yuan, a year-on-year increase of more than 40%; the net profit attributable to the parent company is nearly 4 billion yuan, turning from a loss to a profit year-on-year.

Among them, Baili Tianheng (688506.SH) achieved a turnaround from loss to profit in the first quarter of 2024 after three consecutive years of losses, with a net profit of over 5 billion yuan. The company stated that the turnaround was due to the receipt of an advance payment from BMS (Bristol-Myers Squibb Company).

According to the company's announcement in December 2023, Baili Tianheng and BMS reached an exclusive licensing and cooperation agreement for its independently developed EGFR×HER3 bispecific ADC drug BL-B01D1, and the two parties will jointly promote the development and commercialization of the product. After the cooperation agreement takes effect, BMS will pay an advance payment of 800 million US dollars and up to 500 million US dollars in near-term contingent payments to Baili Tianheng; after achieving development, registration, and sales milestones, the company will receive additional payments of up to 7.1 billion US dollars.

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Shenzhou Cell (688520.SH) also achieved a turnaround from loss to profit. In the first quarter of 2024, Shenzhou Cell achieved an operating income of 613 million yuan, a year-on-year increase of 86.30%, and a net profit attributable to the parent company of 74.1974 million yuan.

"Compared to the same period last year, the main reason for the turnaround from loss to profit is the continuous and stable growth of the company's product sales revenue, as well as cost reduction and efficiency improvement by controlling operating costs and improving R&D efficiency," said Shenzhou Cell.

Some innovative pharmaceutical companies have also seen changes in performance due to product commercialization. DiZhe Pharmaceutical (688192.SH)'s first-quarter report for 2024 shows that the period achieved a revenue of 81.3186 million yuan. "In August 2023, the company's new product Shuwozhe® was approved and started to have product sales revenue, while there were no products on the market in the same period of the previous year," said DiZhe Pharmaceutical.

It is reported that Shuwo Titinib is currently the only innovative drug in the world that has been recognized by the FDA as a breakthrough therapy for the treatment of EGFR exon20ins mutation-type NSCLC, and it was approved for marketing in September 2023.

Junshi Biosciences (688180.SH) achieved an operating income of 381 million yuan in the first quarter of 2024, a year-on-year increase of 49.24%, and a net loss attributable to the parent company of 283 million yuan, a year-on-year reduction of 47.92%. The company stated that the main reason was the increase in the company's commercial drug sales revenue compared to the same period last year, while strengthening cost control and optimizing resource allocation, leading to a reduction in losses.

Some innovative pharmaceutical companies on the STAR Market have also introduced dividend plans. Among them, Elysium (688578.SH) introduced a cash dividend plan for the first time in 2023, becoming the second company to pay cash dividends after Shanghai Yi Zhong, following the fifth set of standards for STAR Market companies. According to the profit distribution plan, the company intends to distribute a cash dividend of 4 yuan per 10 shares to all shareholders, with a total cash dividend of about 180 million yuan.At the same time, the company further mentioned the mid-term dividend issue in the "2024 Annual 'Quality Improvement, Efficiency Enhancement, and Focus on Returns' Action Plan". If the company is profitable in the first half of the year and meets the cash dividend conditions, it plans to distribute a mid-term dividend.

Tebiao Bio (688278.SH), a leader in long-acting biologics, plans to distribute a cash dividend of 4.10 yuan per 10 shares in 2023, totaling approximately 167 million yuan, an increase of 92.49% compared to the previous year.

Currently, the STAR Market has gathered more than 30 innovative pharmaceutical companies, focusing on the treatment of cancer, AIDS, hepatitis B, hepatitis C, and other therapeutic areas, and has become a major listing place for biopharmaceutical companies outside the United States and Hong Kong, China.

Some industry insiders say that the biopharmaceutical industry is now facing a transformation of new quality productivity. In the past five years, a total of 142 domestically produced innovative drugs have been launched in the domestic market, with a significant acceleration in the review and approval of new drugs. Beijing, Guangzhou, Zhuhai, and other places have successively issued policies to support the high-quality development of innovative drugs. The expected support measures cover the "whole chain" of innovative drug development, including clinical development, review and approval, clinical application and payment, import and export, investment and financing, etc.