Annual Report 2018 CORPORATE INFORMATION
Total Page:16
File Type:pdf, Size:1020Kb
2018 ANNUAL REPORT Genscript Biotech Corporation (the “Company” or “Genscript”, together with its subsidiaries referred to as the “Group”) is a well-established global biotech company, which has consolidated its leading position in the gene synthesis service market with recognized stature in synthetic biology application areas . The Company’s mission is to “Make the Human and Nature Healthier through Biotechnology” by establishing a leading innovative protein and antibody engineering platform and striving for opportune breakthroughs in the fields of cell and gene therapies and industrial enzymes for the benefit of mankind. The Group is a well-recognised life sciences research and application service and product provider that applies its proprietary technology to various fields from basic life sciences research to translational biomedical development, industrial synthetic products, and cell therapeutic solutions. The broad and integrated life sciences research and application service and product portfolio comprises four segments that are all incubated internally, deeply rooted in our proprietary gene synthesis technology and strongly supported by our advanced protein and antibody engineering competence, namely, (i) bio-science services and products, (ii) biologics development services, (iii) industrial synthetic biology products, and (iv) cell therapy. The bio-science services and products are primarily used by scientists and researchers for conducting fundamental life sciences research, translational biomedical research, and early stage pharmaceutical development. Its biologics development services are used by biopharmaceutical and biotech companies for the development of therapeutic antibodies, and gene or cell therapy products with an integrated platform. Its synthetic biology products are used by industry users of industrial enzymes, such as those in the food and feed industries. Its cell therapy products are used to treat refractory diseases including cancer and inflammatory diseases. Since synthetic biology is backed by gene synthesis and editing technology, it falls under the Group’s professional expertise. The Group has made significant progress in its synthetic biology research and application areas, which mainly materialised into its innovative chimeric antigen receptor (“CAR”) T-cell (“CAR-T”) therapy and industrial enzyme businesses. With a strong sales and marketing team and strong research and development capabilities, the Company maintains a stable and sustainable growth. CONTENTS Corporate Profile 2 Corporate Information 3 Financial Highlight 5 Five-year Financial Summary 6 Chairman’s Statement 7 Management’s Discussion and Analysis 11 Directors and Senior Management 23 Report of the Directors 31 Corporate Governance Report 63 Environmental, Social and Governance Report 78 Independent Auditor’s Report 126 Consolidated Statement of Profit or Loss 131 Consolidated Statement of Comprehensive Income 132 Consolidated Statement of Financial Position 133 Consolidated Statement of Changes in Equity 135 Consolidated Statement of Cash Flows 137 Notes to Financial Statements 139 CORPORATE PROFILE GenScript Biotech Corporation (the “Company” or “GenScript”, together with its subsidiaries, the “Group”) is a well-recognised life sciences research and application service and product provider that applies its proprietary technology to various fields from basic life sciences research to translational biomedical development, biologics development services, industrial synthetic products, and cell therapeutic solutions. We maintain our world market leadership in the global gene synthesis service market with recognised stature in synthetic biology. Our broad and integrated life sciences research and application service and product portfolio comprises four segments, namely, (i) bio-science services and products, (ii) biologics development services, (iii) industrial synthetic biology products, and (iv) cell therapy. For the year ended December 31, 2018, we had generated approximately US$141.0 million, US$20.7 million, US$17.7 million, and US$51.6 million from our four segments, representing approximately 61.0%, 9.0%, 7.7%, and 22.3% of our total revenue, respectively. With a strong sales and marketing team and strong research and development capabilities, the Company maintains a stable and sustainable growth. Through 16 years of effort since we were originally founded in New Jersey, the United States in 2002, “GenScript” is now recognised as a well-known and trusted brand underpinned by its high quality life sciences research and application services and products and its synthetic biology application fields in cell therapeutical solutions and its industrial enzyme products. (i) Our bioscience services and products are primarily provided to scientists and researchers for conducting fundamental life sciences research to “Make Research Easy”; (ii) our biologics development services are provided to biotech and biopharma companies to “Speed Up Drug Discovery and Development Process” by utilizing our proprietary platform technology. Both of these two type of services business are operated under the brand “GenScript” that has become well-recognized by the global customer community; (iii) our synthetic biology products are consumed by industry users. Currently, we concentrate on providing high quality industrial enzymes products to customers in the food and feed industries under the brand “Bestzyme” that has gained its reputation in the market resulted from its capability to “Make the Best Enzymes”; and (iv) our cell therapy business is “Pursuing A Cure” to malicious cancers and infectious diseases operated under the brand “Legend Biotech” that has become well known due to its CAR-T cell therapy product “LCAR-B38M” that provides a potential curable solution to refractory multiple myeloma. As of December 31, 2018, we had engendered the trust and confidence of a broad and diverse customer base, including pharmaceutical and biotech companies, colleges and universities, research institutes, government bodies (including government testing and diagnostic centres), and distributors. As of December 31, 2018, over 35,200 international peer-reviewed journal articles had cited the use of our life sciences research and application services and products, among which many leading scientists and researchers in life sciences research industries were indicated to be frequent users of our services and products. For the year ended December 31, 2018, our sales to such categories of customers generated approximately 71.6%, 14.7%, 5.9%, 3.7%, and 4.1% of our total revenue, respectively. We have established an extensive direct sales network, reaching over 100 countries in North America, Europe, the PRC, Japan, and the other Asia Pacific regions. We primarily sell our life sciences research and application services and products through our own direct sales force to our customers worldwide, while we also sell our services and products through independent third-party distributors to expand our market presence and facilitate communication with end users. For the year ended December 31, 2018, we had generated approximately US$132.7 million, US$48.0 million, US$18.5 million, US$12.9 million, US$4.4 million, and US$14.5 million from our sales to customers in North America, the PRC, Europe, Asia Pacific (excluding the PRC and Japan), Japan, and others, representing approximately 57.4%, 20.8%, 8.0%, 5.6%, 1.9%, and 6.3% of our total revenue, respectively. 2 Genscript Biotech Corporation Annual Report 2018 CORPORATE INFORMATION BOARD OF DIRECTORS SANCTIONS RISK CONTROL COMMITTEE Executive Directors Dr. Zhang Fangliang (Chairman) Ms. Wang Ye Dr. Zhang Fangliang (Chairman and Mr. Meng Jiange Chief Executive Officer) Mr. Eric Wang Ms. Wang Ye (President) Mr. Shawn Wu Mr. Meng Jiange (Vice President of Investor Relations) COMPANY SECRETARY Non-Executive Directors Ms. Wong Wai Ling Dr. Wang Luquan Mr. Pan Yuexin AUTHORISED REPRESENTATIVES Ms. Wang Jiafen Dr. Zhang Fangliang Independent Non-Executive Directors Mr. Meng Jiange Mr. Guo Hongxin HONG KONG LEGAL ADVISERS Mr. Dai Zumian Mr. Pan Jiuan Jones Day 31/F Edinburgh Tower AUDIT COMMITTEE The Landmark 15 Queen’s Road Central Mr. Dai Zumian (Chairman) Hong Kong Mr. Pan Jiuan Mr. Guo Hongxin AUDITOR REMUNERATION COMMITTEE Ernst & Young Certified Public Accountants Mr. Guo Hongxin (Chairman) 22/F, CITIC Tower Ms. Wang Ye 1 Tim Mei Avenue Mr. Dai Zumian Central NOMINATION COMMITTEE Hong Kong Dr. Zhang Fangliang (Chairman) REGISTERED OFFICE IN THE CAYMAN Mr. Pan Jiuan ISLANDS Mr. Dai Zumian 4th Floor, Harbour Place 103 South Church Street, George Town P.O. Box 10240, Grand Cayman KY1-1002 Cayman Islands Genscript Biotech Corporation Annual Report 2018 3 CORPORATE INFORMATION HEADQUARTERS AND PRINCIPAL PLACE OF PRINCIPAL BANKS BUSINESS IN THE PRC Bank of America, N.A. Hong Kong Branch No. 28, Yongxi Road 20th Floor, Tower 2 Jiangning Science Park Kowloon Commerce Centre Nanjing 51 Kwai Cheong Road Jiangsu Province Kwai Chung PRC Hong Kong PRINCIPAL PLACE OF BUSINESS IN Bank of America Scotch Plains Office HONG KONG 336 Park Avenue 40th Floor, Sunlight Tower Scotch Plains No. 248 Queen’s Road East NJ 07076 Wanchai USA Hong Kong Yueyahu Branch of China Merchant Bank PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE No. 88, Mu Xu Yuan Street Nanjing Harneys Services (Cayman) Limited PRC 4th Floor, Harbour Place 103 South Church Street, George Town COMPANY WEBSITES P.O. Box 10240, Grand Cayman KY1-1002 Cayman Islands www.genscript.com