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Chairman's Statement

 


FINANCIAL PERFORMANCE

Amid major medical and pharmaceutical industry-related policy and regulatory changes introduced in 2017, the Group was able to overcome the challenges resulted from regulatory changes and deliver yet another year of good performance.

 

For the year ended 31 December 2017, the Group achieved a consolidated turnover of approximately HK$899.6 million,  representing  an increase of  16.0%  over previous year. Correspondingly, the  Group’s consolidated profits for the year rose to approximately HK$167.3 million for the year ended 31 December 2017 from approximately HK$136.3 million last year, representing an increase of 22.8%.

 

The Group’s revenue is mainly derived from its two flagship bio-pharmaceutical products, namely, (i) Beifushu series for ocular surface treatment;  and (ii) Beifuji series for surface wounds  healing and treatment,  which accounted for  33.5%  and 47.0%  of  the  Group’s total  revenue, respectively. The combination  of  the  two product series represented 80.5% of the Group’s total revenue for the year ended 31 December 2017.

 

Revenue from  the sale and distribution  of third party products and the provision of marketing services to such third party products accounted for a total of 19.5% of the Group’s total revenue for the year ended 31 December 2017.

 

The Group’s major third party products include (i) Xalatan eye drops and Xalacom eye drops for lowering raised pressure within  the eye; (ii) 適 麗 順 (Iodized Lecithin Capsules) for treating central serous chorioretinopathy, central exudative chorioretinopathy, vitreous haemorrhage, vitreous opacities and central retinal vein occlusion, etc.;  (iii)  伊 血 安 顆 粒  (Yi  Xue An Granules)  for  treating  postpartum  lochiorrhea and bleeding or spotting  of uterus after induced abortion; and (iv) Carisolv products for treating dental caries by using minimally invasive techniques.

 

Combining the Group’s two flagship bio-pharmaceutical products and third party products, the overall revenue contributions from the two  main therapeutic areas represented 48.7% and 51.3% of the ophthalmology and surgical segments, respectively.

 

THE ENRICHMENT PROGRAMME

In 2015, the Group initiated and implementean enrichment programme (the Enrichment Programme) for enhancing its research and development pipeline and expanding its products portfoliowith  an objective of enabling the Group to scale further heights in the years to come.

Under the Enrichment Programme, the Group proactively seeks to invest in and forge strategic alliance with companies, in the Peoples Republic of China (the PRC)  and overseas, which are having first-in-class and novel pharmaceutical projects at various stages of their respective research and development and clinical programmes, primarily focusing on ophthalmology, dermatology, oncology and neurology. As at the date of this report, a total of approximately US$27.8 million has been invested in a total of 7 entities, details of which are outlined in the Report of the Directors.

A summary  of  the  Groups investments  and collaboration arrangements made during the  year ended 31 December 2017 and up to the date of this report is outlined as follows:



 


SALES AND DISTRIBUTION NETWORK

As at 31 December 2017, the Group maintains 39 regional sales offices (the RSOs) and a total number of about 1,410 sales and marketing representatives, out of which approximately 770 people are full-time  staff and approximately 640 people are being hired on contract basis or engaged from appointed agents.

The RSOs and sales and marketing representatives are deployed across major cities and provinces in the PRC, which are tasked with the function of promoting the Groups products to pharmaceutical companies and hospitals, and providing training to medical practitioners on clinical applications of the Groups products. In addition, these RSOs serve another vital role to the Group in gathering market intelligence and feedback for the Groups research and development planning and clinical studies.


During  the  year under  review,  the  Groups  pharmaceutical products  are being  prescribed  in  over  5,400 hospitals in the PRC, which are mainly located in the major cities and provinces. The Group has expansion plan for its products to reach out to major county cities in the PRC in 2018.


RESEARCH AND DEVELOPMENT
he Groups key research and development platforms comprise growth factor, novel antibody, drug formulation and Blow-Fill-Seal (BFS) platform. Growth factor, novel antibody, and drug formulation are technology platforms for the development of therapeutic drugs, whereas BFS platform is state-of-the-art manufacturing plant for producing preservative-free single-dose drugs, in particular for the ophthalmic drugs.

During the year under review,  the Group has obtained an approval from 國 家 食 品 藥 品 監 督 管 理 總 局 (China Food and Drug Administration (the CFDA))  for the commercialisation of the preservative-free single-dose Tobramycin Eye Drops, which is one of the 10 single-dose drug projects being developed or applied for CFDA approval.

To strengthen its research and development capabilities, the Group has entered into the research collaboration agreement with ACI on 19 May 2017 to undertake the pre-clinical and clinical co-development of a novel biological therapeutic for the treatment of neurodegenerative diseases and neuroinflammation.

The Group has submitted  five  invention  patent applications in 2017. Two of  them  were  filed  under Patent Cooperation Treaty, two of them were filed in the PRC and the remaining one was filed in Australia.

The Group has obtained seven patent certificates or authorisation letters from The State Intellectual Property Office of the PRC in 2017. The Group currently has fourteen patent certificates or authorisation letters in total, including eleven 發 明 專 利 (invention patents) and three 實 用 新 型 專 利 (utility model patents) as at the date of this report.


OUTLOOK AND PROSPECTS
Barring unforeseen  circumstances,  the  Group ioptimistic  about the  continued  growth  i201from  its flagship bio-pharmaceutical products, the Beifushu and Beifuji series, as well  as from  third party products under the distribution agreements.

The Group will continue to implement its Enrichment Programme to seek further investment opportunities in the PRC and overseas, while fostering closer development and business relationship with existing investees.

 

DIVIDEND
The Directors have declared during the year an interim dividend of HK$0.025 (2016: Nil) per ordinary share, totalling  HK$14,055,525 (2016:  Nil),  which  was  paid on  20  October  2017. The Board is  proposing  a final dividend of  HK$0.025 per ordinary share to  be approved at the  upcominannual general meeting  of  the Company.


APPRECIATION
I would like to take this opportunity to express my sincere gratitude to all stakeholders, business associates, valued customers and each and every member of the Group for the trust, support and cooperation accorded to us in developing the Company as a leading pharmaceutical company.

 

Ngiam Mia Je Patrick

Chairman

Hong Kong
15 March 2018