On August 15, 2023 YS Biopharma Co., Ltd. (NASDAQ: YS) ("YS Biopharma" 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 financial results for the first quarter of the fiscal year ended March 31, 2024 (the "first quarter of fiscal year 2024") (Press release, Yisheng Biopharma, AUG 15, 2023, View Source [SID1234634437]).

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Dr. David Shao, Director, President, and CEO of YS Biopharma, commented, "During the first quarter of fiscal year 2024, our top-line came under pressure from tight inventory levels of finished products available for sale, caused by the lingering impacts of COVID-related disruptions at our YSJA rabies vaccine manufacturing facilities. While these disruptions occurred in late 2022 and early 2023, the long and complex nature of the vaccine manufacturing process means that we are experiencing the impact at present. In the first quarter, we took several steps to enhance our operations and ensure future stability, including boosting manufacturing productivity, building out our sales network, and streamlining research and development efforts. Demand for our YSJA rabies vaccine remains robust, and we continue to bring our pipeline of promising product candidates, including our next generation PIKA rabies vaccine, towards commercialization. We are confident that we will overcome the near-term difficulties we have faced, and we believe we are well-positioned for sustainable, long-term success."

Ms. Brenda Wu, CFO of YS Biopharma, added, "In the first quarter of fiscal year 2024, our total revenues were RMB176.3 million, as we continued to deal with the fallout of COVID-related disruptions on our supply chains and manufacturing operations. Our gross profit for the quarter was RMB141.6 million, and we recorded a solid gross profit margin of 80.3%. As of the end of the first quarter, our balance sheet remains strong, and we plan to diligently monitor our expenses in order to create a stable foundation for our long-term growth. We are confident in our business model and excited for the opportunities the future holds."

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 June 30, 2023, YS Biopharma had sold more than 22.2 million doses of YSJA rabies vaccines to approximately 1,725 CDC customers, which represents over 60% of CDC customers in China.

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, and PIKA YS-ON-001.

PIKA Rabies Vaccine

As of June 1, 2023, the Company had been granted approval by regulatory bodies in the Philippines, Singapore, and Pakistan to undertake Phase III clinical trials of the vaccine. This multi-country Phase III study is a registration trial and will evaluate the vaccine’s ability to induce an immune response and its safety profile.
The Company intends to include a total of 4,500 participants in the Phase III trial, with the recruitment process projected to commence in the fourth quarter of 2023. The Company aims to obtain interim results by early 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 the findings from the Phase III clinical trials will be released before the end of 2023.
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 enrollment of cancer patients for the Phase I clinical trial of PIKA YS-ON-001 in China. The Company expects the Phase I clinical trial will be completed by December 31, 2023.
First Quarter of Fiscal Year 2024 Financial Results

Total Revenues

Total revenues were RMB176.3 million (US$24.4 million) in the first quarter of fiscal year 2024, compared to RMB205.5 million in the same period of fiscal year 2023, representing a change of 14.2%. This was primarily due to COVID-related disruptions affecting raw material supply chains, manufacturing operations, and production output at the Company’s YSJA rabies vaccine production facilities, which negatively impacted batch approvals and doses available for sale.

Gross Profit

Gross profit was RMB141.6 million (US$19.6 million), representing an 80.3% gross margin, compared to RMB154.3 million, or a 75.1% gross margin, in the same period of fiscal year 2023.

Selling and Marketing Expenses

Selling and marketing expenses in the first quarter of fiscal year 2024 were RMB79.2 million (US$11.0 million), compared to RMB70.5 million in the same period of fiscal year 2023. The increase in selling and marketing expenses reflects the Company’s ongoing long-term strategies to enhance promotional and marketing services in order to expand and strengthen its distribution network of district- and county-level CDCs and hospitals. This targeted expansion aligns with the Company’s commitment to driving growth in key markets.

General and Administrative Expenses

General and administrative expenses in the first quarter of fiscal year 2024 were RMB31.8 million (US$4.4 million), compared to RMB25.5 million in the same period of 2023. This change was primarily attributable to higher professional service fees associated with the Company’s status as a publicly-listed entity.

Research and Development Expenses

Research and development expenses were RMB100.6 million (US$13.9 million) in the first quarter of fiscal year 2024, compared to RMB70.3 million in the same period of 2023. The change was primarily driven by an increase in preclinical and clinical development costs associated with the Company’s rabies vaccine pipeline. This increase reflects the Company’s targeted allocation of resources to advance its promising rabies vaccine candidates through various stages of development, in line with the Company’s commitment to innovation and addressing unmet medical needs.

Net Loss

Net loss for the first quarter of fiscal year 2024 was RMB69.5 million (US$9.6 million), compared with RMB19.6 million in the same period of 2023.

Balance Sheet

As of June 30, 2023, the Company had cash and cash equivalents of RMB311.8 million (US$43.1 million), compared with RMB370.4 million as of March 31, 2023.

Corporate Update

As part of its strategy to unlock the commercial potential of its vaccine franchise in underserved markets in Southeast Asia, the Company recently set up a new subsidiary in the Philippines to focus on clinical and regulatory efforts and product commercialization.

Conference Call Information

The Company’s management will hold an earnings conference call on Tuesday, August 15, 2023 at 8:00 P.M. Eastern Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

United States Toll Free: 1-888-346-8982
International: 1-412-902-4272
Mainland China Toll Free: 4001-201203
Canada Toll Free: 1-855-669-9657
Hong Kong: 852-301-84992

The replay will be accessible through August 22, 2023 by dialing the following numbers:

United States Toll Free: 1-877-344-7529
International: 1-412-317-0088
Canada Toll Free: 855-669-9658
Access Code: 8167733

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at View Source