Financial Highlights // Chi-Med
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Financial Highlights

Full Year Results for the Year Ended December 31, 2017 (U.S. GAAP)

March 12, 2018

Consolidated financial results of the Group are reported under U.S. generally accepted accounting principles (“U.S. GAAP”) and in U.S. dollar currency unless otherwise stated. Chi-Med also conducts its business through three non-consolidated joint ventures, which are accounted for under the equity accounting method as non-consolidated entities in our consolidated financial statements. Within this announcement, certain financial results reported by such non-consolidated joint ventures are referred to, which are based on figures reported in their respective consolidated financial statements prepared pursuant to International Financial Reporting Standards (as issued by the International Accounting Standards Board). Unless otherwise indicated, references to “subsidiaries” mean the consolidated subsidiaries and joint ventures (excluding non-consolidated joint ventures) of Chi-Med.

Group Results

Year of major progress; results in line with guidance

  • Group revenue up 12% to $241.2 million (2016: $216.1m).
  • Net loss attributable to Chi-Med $26.7 million (2016: Net profit $11.7m), including $88.0 million in research and development expenses on an adjusted (non-GAAP) basis (2016: $76.1m).

Innovation Platform

A deep, broad, and risk-balanced global oncology/immunology pipeline

  • Consolidated revenue from our Innovation Platform was $36.0 million (2016: $35.2m) from milestone payments from Lilly (fruquintinib NDA filing) and AstraZeneca (savolitinib Phase III initiation) and service fee payments from Lilly, AstraZeneca and Nutrition Science Partners Limited.
  • Net loss attributable to Chi-Med from our Innovation Platform of $51.9 million (2016: -$40.7m) primarily driven by $75.5 million (2016: $66.9m) in research and development expenses, or $88.0 million (2016: $76.1m) on an adjusted (non-GAAP) basis, spent on our active or completing clinical trials in 36 TPPs.

Commercial Platform

A deeply established, cash-generative, pharmaceutical business in China – an established platform to commercialize our Innovation Platform drug candidates

  • Total consolidated sales up 13% to $205.2 million (2016: $180.9m).
  • Total sales of non-consolidated joint ventures up 6% to $472.0 million (2016: $446.5m).
  • Total consolidated net income attributable to Chi-Med up 25% to $37.5 million (2016: $29.9m) on an adjusted (non-GAAP) basis which excludes one-time gains.

FY 2017 Group Results

(US$ millions)201520162017
Group Consolidated Revenues178.2216.1241.2
      Unconsolidated JV Revenues392.7446.5472.0
Net (Loss)/Income [1]
      Innovation Platform(3.8)(40.7)(51.9)
           Base HMP Operations(0.0)(36.5)(47.4)
           50% share of Nestlé JV (NSP) [2](3.8)(4.2)(4.5)
      Commercial Platform25.229.937.5
           Prescription Drugs Business15.920.726.5
           Consumer Health Business9.39.211.0
      Group Costs(13.4)(17.9)(14.8)
           Administrative Expenses(10.9)(12.6)(11.3)
           Interest/Tax(2.5)(5.3)(3.5)
      Land Compensation & Subsidies-40.42.5
Net Income/(Loss) Attrib. to Chi-Med8.011.7(26.7)
      Accretion on redeemable NCI [3](43.0)--
Net (Loss)/Income Attrib. to Ord. S-H(35.0)11.7(26.7)
      EPS Attrib. to Ord. S-H (Basic) (US$) [4](0.64)0.20(0.43)

[1] Net Income/(Loss) = Net Income/(Loss) attributable to Chi-Med; [2] NSP = Nutrition Science Partners Limited; [3] Non-cash accretion relates to Mitsui’s share in Innovation Platform, which was exchanged for Chi-Med shares in July 2015; [4] Includes adjustment for accretion on redeemable non-controlling interests.

Revenues

(US$ millions)

Net Income/(Loss) [1]

(US$ millions)

For more details, please review our Final Results for the Year Ended December 31, 2017.