On January 22, 2024 YS Biopharma Co., Ltd. (NASDAQ: YS) ("YS Biopharma") along with its subsidiaries ("YS Group" or the "Company"), a global biopharmaceutical company dedicated to discovering, developing, manufacturing, and delivering new generations of vaccines and therapeutic biologics for infectious diseases and cancer, reported its unaudited consolidated financial results for the first half of the fiscal year ended March 31, 2024 (the "first half of fiscal year 2024") (Press release, Yisheng Biopharma, JAN 22, 2024, View Source [SID1234639417]).

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Dr. David Shao, Director, President, and CEO of the Company, commented, "During the first half of fiscal year 2024, though we continued to experience the lingering impact of inventory issues from previous COVID-related disruptions at our YSJA rabies vaccine manufacturing facilities, we executed various operational enhancements to overcome past setbacks. By improving our raw material supply, refining our inventory management, and optimizing the production throughput, our vaccine production operation has returned to normal, and our inventory situation is improving. With higher production throughput and a healthier inventory level of finished products, we expect that the second quarter of our fiscal year 2024 will be the last to be impacted by the previously incurred production delays. Meanwhile, we expect YSJA rabies vaccine revenues in the third quarter, ended December 31, 2023, to increase approximately 50% sequentially from the second quarter, ended September 30, 2023. Our promising array of product candidates are advancing in the development, and we are optimistic about the potential of our PIKA rabies vaccine to provide us with an important new advantage."

"At the same time, we are fortifying our corporate governance and streamlining our decision-making process to bolster our foundation for long-term and sustainable growth," Dr. Shao continued. "We have taken steps to diversify our Board composition with the addition of global pharmaceutical industry leadership and US capital market expertise to our company, a move which has thus far been lauded by our shareholders. Under the stewardship of our board of directors, we will continue to innovate and capitalize on resurgent demand from the market."

Ms. Brenda Wu, CFO of the Company, added, "For the first half of fiscal year 2024, our revenues were RMB273.1 million, mainly due to COVID-related disruptions affecting raw material supply chains, manufacturing operations, and production output at our YSJA rabies vaccine production facilities. Our gross profit for the period was RMB220.9 million, and we expanded our gross profit margin by 4.3 percentage points to 80.9%. Our cash and cash equivalents totaled RMB259.9 million at the end of the period. Looking ahead, we will continue to strategically enhance our business and capitalize on growth opportunities as we strive to deliver long-term value for our shareholders."

Business Updates

YSJA Rabies Vaccine

YS Biopharma’s marketed vaccine product, YSJA rabies vaccine, was the first aluminum-free lyophilized rabies vaccine launched in China. Since the Company commenced production at its current GMP-compliant facilities in February 2020, and, since it commenced the product’s commercialization in late 2020, market intake of the Company’s YSJA rabies vaccine has been consistent and strong. As of September 30, 2023, YS Biopharma had sold more than 23.5 million doses of YSJA rabies vaccines to approximately 1,718 Chinese Center(s) for Disease Control and Prevention ("CDC") customers, which represents over 59.6% of CDC customers in China since October 2020.

Clinical Pipeline

YS Biopharma continues to advance its portfolio of innovative product candidates under various clinical development stages, including PIKA rabies vaccine, PIKA recombinant COVID-19 vaccine, PIKA YS-ON-001, and PIKA YS-HBV-002.

PIKA Rabies Vaccine

On October 31, 2023, the Company announced that it had completed the enrollment of subjects in its Phase III clinical trial of the PIKA rabies vaccine. The trial includes a total of 4,500 participants from Pakistan and the Philippines, and will assess the safety, immunogenicity, and lot-to-lot consistency of the PIKA rabies vaccine. Interim results are expected in the first half of 2024.
PIKA Recombinant COVID-19 Vaccine

In March 2023, the Company reported positive interim safety and immunogenicity data for the PIKA recombinant COVID-19 vaccine from Phase II of the Phase II/III clinical studies which were completed in the Philippines and the UAE. The safety and efficacy of the Company’s PIKA adjuvant technology was validated in the Phase II/III trial, which involved roughly 6,000 participants. The Company anticipates that the results from the Phase III clinical trials will be released during the first half of 2024.
The Company will continue to monitor the evolving global situation surrounding COVID-19, and will utilize appropriate commercialization strategies for the PIKA recombinant COVID-19 vaccine accordingly.
PIKA YS-ON-001

PIKA YS-ON-001 is designed as an immunological therapeutical agent against cancers. The Company has completed the Phase I clinical trial of PIKA YS-ON-001 in China.
PIKA YS-HBV-002

On September 15, 2023, the Company announced that the United States Patent and Trademark Office had issued it a patent covering its PIKA YS-HBV-002, an immunotherapeutic vaccine designed to treat patients suffering from chronic hepatitis B virus (HBV) infection.
The Company expects to complete an Investigational New Drug (IND) application and commence the clinical development of PIKA YS-HBV-002 as a novel immunotherapy for the treatment of chronic HBV infection in 2024.
First Half of Fiscal Year 2024 Financial Results

Total Revenues

Total revenues were RMB273.1 million (US$38.0 million) in the first half of fiscal year 2024, compared to RMB399.5 million in the same period of fiscal year 2023, representing a decrease of 31.6%. This was primarily due to COVID-related disruptions affecting the Company’s manufacturing operations and production, which reduced batch approvals and doses available for sale; offset by the increases in product price by approximately RMB3.0 per dose.

Gross Profit

Gross profit was RMB220.9 million (US$30.8 million), representing an 80.9% gross margin, compared to RMB305.8 million, or a 76.5% gross margin, in the same period of fiscal year 2023.

Selling and Marketing Expenses

Selling and marketing expenses in the first half of fiscal year 2024 were RMB157.7 million (US$22.0 million), compared to RMB150.2 million in the same period of fiscal year 2023. This increase was primarily attributable to an increase in promotional and marketing services fees as the Company continued to promote its YSJA rabies vaccine.

General and Administrative Expenses

General and administrative expenses in the first half of fiscal year 2024 were RMB67.6 million (US$9.4 million), compared to RMB49.6 million in the same period of fiscal 2023. This change was primarily attributable to increases in 1) professional service fees, due to the Company’s status as a publicly-listed entity, 2) management salaries, and 3) provision for trade receivables and inventories.

Research and Development Expenses

Research and development expenses were RMB178.9 million (US$24.9 million) in the first half of fiscal year 2024, compared to RMB123.9 million in the same period of fiscal 2023. The increase was primarily driven by an increase in testing and clinical trial fees associated with the Company’s COVID-19 vaccine, PIKA rabies vaccine, and hepatitis B vaccines.

Net Loss

Net loss for the first half of fiscal year 2024 was RMB174.5 million (US$24.3 million), compared with RMB11.1 million in the same period of 2023.

Balance Sheet

As of September 30, 2023, the Company had cash and cash equivalents of RMB259.9 million (US$36.2 million), compared with RMB370.4 million as of March 31, 2023.