FAST NEWS: InnoCare inches closer to profitability on strong sales gains
The latest: InnoCare Pharma Ltd. (9969.HK) announced Tuesday its first-quarter revenue jumped 59% year-over-year to 189 million yuan ($27.3 million), while its net loss narrowed 90% to 12.41 million yuan.
Looking up: The company’s core revenue from drug sales rose by 43.5% to 151 million yuan. It also recorded unrealized exchange gains resulting from the lower exchange rate of U.S. dollars against Chinese yuan, with both factors contributing to its significant quarterly results improvement.
Take Note: InnoCare’s R&D expenses rose 8.9% to 141 million yuan during the quarter, while operating activities continued to generate a net cash outflow of 154 million yuan.
Digging Deeper: Founded in 2015 and listed in Hong Kong in 2020, InnoCare’s flagship product, Orelabrutinib, is used to treat lymphoma and autoimmune diseases. The drug has recorded strong revenue growth since being approved by China’s National Medical Products Administration (NMPA) in December 2020. Last year, sales of the drug jumped 164% to 566 million yuan, accounting for 90.6% of the company’s total revenue. However, its R&D costs also rose due to a significant increase in its products entering clinical trials. As a result, InnoCare has never made a profit since its listing, and its loss widened 12.4 times to 893 million yuan last year.
Market Reaction: InnoCare shares rose 3.8% in early trading on Wednesday, but later gave back all of those gains and closed down 1.1% at HK$8.62 by the midday break. It now trades near the lower end of its 52-week range.
Translation by Jony Ho
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