PUBLISHED ONMarch 31, 2023 2:50 AM
RESULTS OF OPERATIONS BY BUSINESS SEGMENT
Liquid and Bioprocess System
During the Reporting Period, through effective management of supply chain and project execution, the Group's revenue from the business segment of Liquid and Bioprocess System increased from 2021 by approximately RMB67.3 million or 7.6% to approximately RMB950.3 million for the Reporting Period. With completion of construction of a production site, this business segment is believed to have upgraded its manufacturing condition, with more space for new product research and development and more optimised production processes, which will definitely improve its competitiveness in terms of cost efficiency and quality standard.
Clean Room and Automation Control and Monitoring System
The Group's revenue from the business segment of Clean Room and Automation Control and Monitoring System increased from 2021 by approximately RMB34.4 million or 7.2% to approximately RMB514.1 million for the Reporting Period. The revenue increased along with that of order-in-take due to ever increasing market potential and recognition of the Group in the market in terms of technology and execution efficiency. The Group has been gaining good market reputation and share, with new technology of integrated space sterilisation system, dust particle online monitoring, floating bacteria monitoring, energy saving control and etc., which provides customers with computerised system confirmation and validation documents, and cost-effective solution. The fast growth of research and development for innovative drugs in mainland China had led to a much larger demand for the business of this segment, with a higher requirement on quality, cost efficiency, and effective project execution. On top of that, with the emerging innovative medical treatment, more capital is pursuing cell therapy commercial production. All these trends constitute a huge business opportunity for the Group, as a knowledge and technology leader in this area.
Powder and Solid System
The Group's revenue from the business segment of Powder and Solid System increased dramatically from 2021 by approximately RMB107.5 million or 77.7% to approximately RMB245.8 million for the Reporting Period. The revenue of this business segment has been increasing constantly, due to enlarged market share of the Group by dedicated investment of new products. The increase in revenue was in line with that of order-in-take and the increased backlog balance at the end of 2021 also contributed to this growth. The Group's adoption of modular design increases the flexibility of products, which was well acknowledged by the market and thus drove the business increase, to a large extent. At the same time, the business potential, in terms of market share and technical advantage, was greatly enlarged with integration of material and formula management system, integrated process equipment, automatic equipment, including automatic transfer equipment, robots and automatic guided vehicles (AGV), and etc.
GMP Compliance Service
The Group's revenue from the business segment of GMP Compliance Service increased significantly from 2021 by approximately RMB28.2 million or 42.7% to RMB94.3 million for the Reporting Period. The business revenue of this segment has been increasing constantly attributable to the new business stimulated by new international standards and other requirements. Along with its business scope extension to the entire life cycle of pharmaceutical production process, GMP Compliance Service is believed to keep pace of a rapid growth in the future.
Life Science Consumables
The Group's revenue from the business segment of Life Science Consumables decreased by approximately RMB32.8 million or 7.8% to approximately RMB388.3 million for the Reporting Period as compared to 2021. The decrease in revenue was caused by the decline from the business related to COVID-19 vaccine production. The Group is investing into the area of sterile chemical drugs and cell therapy, which is believed to be a new business and profit margin generator in the revised long-term business strategy.
Distribution and Agency of Pharmaceutical Equipment
The Group's revenue from the business segment of Distribution and Agency of Pharmaceutical Equipment increased by approximately RMB8.9 million or 33.2% to approximately RMB35.8 million for the Reporting Period as compared to 2021. The Group will continue to engage in the distribution of various types of high-end pharmaceutical equipment together with its joint ventures and overseas business partners providing clients with the most intimate and timely service.
Research and Development, and Production Lines
With regards to the research and development, the Group obtained 384 patents. During the Reporting Period, the Group obtained 76 registered patents, and applications for 83 patents are currently in progress. Based on the SIEMENS software platform, a report system about Utility Automation System and Process Control system was developed in 2022, which improves the automation system functions and shortens the research and development period of projects. The Group developed a data analysis system, through a series of mathematical algorithms to achieve multivariate data analysis and prediction and help clients achieve analysis and prediction in the process of biological reaction, which could be used at both research and commercial manufacturing phases of the client's product lifecycle.
In addition, the Group's stainless-steel bioreactor series entered the stage of large-scale manufacturing and execution in 2022. The inline conditioning system ILC based on process analytical technology (PAT) developed in 2021 has completed the comprehensive upgrade of recipe management and control system and has been trialed by target clients. It is expected to achieve a breakthrough in 2023.
The Group has completed the development of cell preparation isolator and cell culture system at the end of 2022. This development achievement supplemented AUSTAR's ability in cell therapy process system and services, and increased brand recognition in the field of Advanced Therapy Medicinal Products (ATMP).
AUSTAR's management said, "The Group has been developing 12 technology applications in our competence and knowledge model, and individual specific technology application teams have been established step by step over the past years. The Group has set up 12 technology application teams, namely: (1) Pharmaceutical Automation & Digitalization, (2) Cleaning, Sterilization & Disinfection, (3) Clean Utilities, (4) Biopharma Process and Technology, (5) Containment Technology, (6) Clean Room/HVAC/EMS/BMS, (7) Freeze-drying, Filling & Inspection, (8) Biosafety Technology and Facilities, (9) Laboratory Technology & Facilities, (10) Pharmaceutical Formulation Technology, (11) Regulatory Compliance & Operation Excellence, and (12) Analytics Measurement Technologies, where regular workshops were held for the purpose of better unification of the technology capability of individual product lines into comprehensive technology solutions."
Exploring Business Growth Drivers through Acquisitions
During the Reporting Period, the Group continued to seek business growth through acquisitions. In February 2022, the Group successfully acquired the business of an expertise in sterile liquid and powder filling line ("BOSTA Business"), which has further enhanced the Group's business portfolio in the integration of the filling line system and freeze-dryer system and increased the capability of providing integrated solutions for the filling and freeze-drying of aseptic products. In 2022, the Group also successfully completed the acquisition of a minority shareholding of a company which provides complete and high-end solutions used in nanomedicine and inhalation preparations. It is expected that the Group and the said company are able to benefit from this transaction through upcoming strategic business collaboration.
Future Growth Drivers
Looking forward, with the rapid development trend of cell and gene therapy sector, Car-T drugs were approved, which represents that the ATMP products has entered the stage of rapid development. The Group is dedicated to helping clients to build a compliant, lean and flexible cell therapy facilities, providing engineering and process solutions from conceptual design, clean engineering to core cell therapy process equipment, and building traceable cell therapy automation and information solutions. More cell-related equipment and systems in the ATMP sector would be launched in 2023 including some products developed and manufactured by the Company with its own intellectual property rights. Strong pipelines of products and services under development through the corporate level Innovative and Research Centre and through business unit research and development teams can support further growth in the Group's business.
To improve the quality and yield of drugs, API manufacturers are paying more attention to advanced technologies such as continuous-flow micro-reactions, continuous crystallisation and crystal form control, and process analysis in the production process to increase the stability of drugs in order to increase the market share through new technologies. This will further promote the digitalisation transformation of API companies. Our clients' business extension from formulations to API manufacturing, and their business extension from existing API to formulations manufacturing, was one of the key trends of pharmaceutical industry development in China in 2022. Modular design application reduces production cost and improves operation flexibility, which has successfully helped securing orders. This modular technology would be one of the key technologies for API manufacturing in the coming years.
Moreover, the core competence of the Group's Powder and Solid system engineering business would be accelerated by its application of automated devices like robots and AGV integrated by automation control system together with customised production information system. Demand from some emerging countries for establishment of API facilities and chemical compound product technology transfer as supply chain back-up and cost pressure will further drive growth in this business segment.
Due to the release and enforcement of EU GMP new regulations and process requirements of cell and gene therapy, the sterility assurance in the whole manufacturing process become stringent and key considerations in equipment and system engineering. It is believed that with AUSTAR UK, Cape Europe Joint Venture in France and the Group's manufacturing facility for sterile transfer and isolation technology in China working closely with a strategic goal to offer most competitive sterile protection and assurance scheme globally, it will contribute substantial growth in revenue and profit to the Group."
About Austar Lifesciences Limited
Founded in 1991 and headquartered in Shanghai, PRC, AUSTAR is a technology-based pharmaceutical engineering solutions provider with its business covering more than 50 countries and regions, partnering with world-leading pharmaceutical companies to protect and promote human health. AUSTAR employs approximately 2,000 staff in different regions to deliver technically guaranteed pharmaceutical engineering solutions that assist clients to set up drug production facilities and contribute to the world's drug safety and efficacy.
With the full spectrum of pharmaceutical technology knowledge, the company has leading technical application capabilities and high-quality equipment & systems in the areas of Clean Utilities, Pharmaceutical Automation & Digitalization, Pharmaceutical Formulation Technology, Biopharma Process & Technology, Regulatory Compliance & Operation Excellence, Laboratory Technology & Facilities, Biosafety Technology & Facilities, Cleaning, Sterilization & Disinfection, Clean Room/HVAC/EMS/BMS, Quality/Measurement & Analytics, Filling, Freeze-Drying & Inspection, Containment Technology. The Group has a number of leading business and product brands in its portfolio including H+E Pharma, BIOSYSTEC, STERIS-AUSTAR, ROTA-AUSTAR, Pharma LeanTec, Pharma LeanDigital, AUSMILL, Aunity, and Purvita. AUSTAR was listed on the Main Board of the Stock Exchange of Hong Kong Limited on 7 November 2014 (Stock code: 6118).
For more information about AUSTAR, please visit www.austar.com.cn
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