LakeShore Biopharma Co., Ltd

For the first nine months of fiscal 2024, YS Biopharma reported revenue of RMB 438.1 million, down 24.6% year over year versus RMB 581.2 million in the comparable period of 2023. Gross profit was RMB 351.7 million versus RMB 449.0 million last year, and gross margin improved to 80.3% from 77.0% (up 3 percentage points). The company reported a net loss of RMB 252.3 million, versus RMB 64.2 million a year earlier, while the CEO cited a net loss of RMB 260 million in prepared remarks. Cash and cash equivalents were RMB 222.6 million at December 31, 2023, versus RMB 370.4 million at March 31, 2023. Looking ahead, management expects product revenue in fiscal 2025, starting April 1, 2024, to increase at a double-digit rate compared with fiscal 2024, but gave no specific quarterly revenue or EPS guidance.

Dr. David Shao framed the quarter as a recovery story after lingering inventory and supply-chain disruptions at the rabies vaccine facility. He said production has returned to normal, the company is improving inventory management, and it is continuing broad operational changes, including board and management changes, tighter internal controls, and cost discipline across manufacturing, sales, marketing, and administration. He was upbeat about the rabies franchise, saying the company has maintained market leadership and expects to strengthen its position further as production normalizes and PIKA rabies advances.

Brenda Wu focused on the financial drag from manufacturing disruptions and the resulting decline in product availability. She said revenue fell to RMB 438.1 million from RMB 581.2 million, gross profit declined to RMB 351.7 million, and gross margin improved to 80.3%; she also noted selling and marketing expense rose to RMB 229.2 million, G&A increased to RMB 142.8 million due largely to inventory impairment and trade receivable provisions, and R&D rose to RMB 244.7 million due to testing and clinical trial costs. She said cash and equivalents were RMB 222.6 million and reiterated that the company will work to prudently manage spending and improve the bottom line through fiscal 2025.

Analysts focused on the timeline to register and commercialize PIKA rabies after the positive Phase III interim readout. Management said the final interim report is expected next week, the study should finish by the end of December, final study reports should follow in Q1 next year, and market authorization could take about one to two years depending on the country; they also said they are discussing conditional approvals and rolling submissions with regulators. On the pipeline, management said the chronic hepatitis B Phase 1 study is expected to start in May or June in the Philippines, where they can test directly in chronic HBV patients rather than healthy volunteers, and they also mentioned possible future work on an adjuvanted flu vaccine but said that is not yet confirmed.