Financial Highlights

Full Year Results for the Year Ended December 31, 2018 (U.S. GAAP)

March 11, 2019

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.


in-line with our most recent guidance

  • Group revenue of $214.1 million (2017: $241.2m).
  • Net loss attributable to Chi‑Med of $74.8 million (2017: net loss $26.7m).
  • Adjusted Group net cash flow (non-GAAP) was -$57.3 million in 2018. Cash from our Commercial Platform, as well as payments received from our multi-national partners, offset more than half of our research and development (“R&D”)
  • Cash resources of $420.3 million at Group level as of December 31, 2018 ($479.6m as of December 31, 2017), including cash and cash equivalents, short-term investments and unutilized bank facilities.


increased investment in R&D driven by expansion of our operations and progress on our clinical development pipeline

  • Consolidated revenue was $2 million (2017: $36.0m) mainly from service fee payments from AstraZeneca AB (publ) (“AstraZeneca”), Lilly and Nutrition Science Partners Limited (“NSP”), our 50/50 joint venture with Nestlé Health Science S.A., and $13.5m in milestone payments from Lilly following fruquintinib approval. Following fruquintinib’s launch, under the brand name Elunate®, we recorded revenue of $3.3m and royalty income of $0.3m during the last five weeks of 2018.
  • R&D expenses on an as adjusted (non-GAAP) basis increased to $142.2 million (2017: $88.0m), primarily driven by the progress in the development of our eight clinical drug candidates, five of which are now in development outside China; investment in the establishment of small molecule manufacturing operations in China; and expansion of U.S. and international clinical and regulatory operations.
  • Net loss from our Innovation Platform attributable to Chi-Med of $4 million (2017: net loss of $51.9m).


continued solid net income growth amid shift in revenue model and over-the-counter (“OTC”) logistics divestment

  • Total consolidated sales fell 16% to $172.9 million (2017: $205.2m) because of the implementation of the Two-Invoice System in China, a new government policy that led to a shift in our revenue recognition for certain third-party drugs from gross sales consolidation to a fee-for-service revenue model. This new Two-Invoice System policy did not affect our total consolidated net income in 2018.
  • Total sales of non-consolidated joint ventures, on an as adjusted (non-GAAP) basis excluding the effects of the divestment of certain non-core operations, up 13% to $491.5 million (2017: $433.3m) driven by strong growth across major product categories.
  • Total consolidated net income from our Commercial Platform attributable to Chi-Med up 10% to $41.4 million (2017: $37.5m), on an as adjusted (non-GAAP) basis excluding one-time gains in 2017.

FY 2018 Group Results

(US$ millions)201620172018
Group Consolidated Revenues216.1241.2214.1
Unconsolidated JV Revenues (excluding divested business Guanbao - Non-GAAP)446.5472.0491.5
Segment Net (Loss)/Income attributable to Chi-Med
Innovation Platform(40.7)(51.9)(102.4)
Commercial Platform29.937.541.4
Prescription Drugs Business120.726.532.1
Consumer Health Business9.211.09.3
Group Costs(17.9)(14.8)(13.8)
Land Compensation & Subsidies40.42.5-
Group Net Income/(Loss) attributable to Chi-Med11.7(26.7)(74.8)
EPS Attrib. to Ord. S-H (Basic) (US$)0.20(0.43)(1.13)



(US$ millions)

Net Income/(Loss) [1]

(US$ millions)

For more details, please review our Final Results for the Year Ended December 31, 2018.