Genscript Biotech Corporation ((HK:1548)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
GenScript Biotech Corporation’s recent earnings call conveyed a predominantly positive sentiment, underscored by substantial revenue growth across all segments and the impressive performance of Legend Biotech’s CAR-T product. Despite facing challenges such as net losses and temporary impacts on gross margins, the company’s achievements and growth prospects were highlighted as outweighing these difficulties.
Record Revenue Growth
The Group reported an impressive 81.9% year-over-year revenue increase, reaching approximately USD 519 million. This growth was driven by all three segments, with GenScript Life Science growing by 11.3%, ProBio by an astounding 511%, and Bestzyme by 8.4%.
Successful CAR-T Product Performance
Legend Biotech’s CARVYKTI, a leading CAR-T product, demonstrated remarkable success by treating over 7,500 patients. The net trade sales for this product grew by 136% to USD 439 million in the second quarter, reflecting its strong market performance.
Strong Cash Position
The Group maintained a robust cash position of USD 970 million, which is instrumental in supporting its global expansion, research and development progress, and capacity ramp-up initiatives.
ESG Achievements
GenScript made significant strides in its ESG efforts, earning a silver medal from EcoVadis, an upgrade to an AA rating from MSCI ESG, and inclusion in the FTSE4Good Index series, showcasing its commitment to sustainability and governance.
ProBio’s Return to Growth
After two challenging years, ProBio achieved a return to revenue growth, driven by platform innovation and enhancements in their quality system, marking a significant turnaround for the segment.
Innovation in Life Science
The Life Science segment reported a 52% growth in services revenue, fueled by advancements in the TurboCHO high-throughput platform and CRISPR solutions, highlighting GenScript’s commitment to innovation.
Net Loss Due to Legend Biotech
The Group’s net loss was approximately USD 24.5 million, primarily impacted by Legend Biotech’s current period loss and the amortization impact of a USD 3.2 billion variation increase following its deconsolidation in 2024.
Temporary Gross Margin Impact
The gross profit margin faced temporary pressures due to changes in product mix and global capacity expansion, which are expected to stabilize as the company adjusts.
ProBio’s Capacity Challenges
ProBio encountered challenges with capacity ramp-up, affecting the fee-for-service margin, but efforts are underway to address these issues.
Bestzyme’s Slow First Half
Bestzyme experienced slower growth in the first half due to the holiday season in China, but a strong recovery is anticipated in the second half of the year.
Forward-Looking Guidance
GenScript provided optimistic guidance for the remainder of 2025, projecting continued revenue growth with GenScript Life Science’s full-year revenue expected to increase by 13% to 15%. ProBio is also anticipated to recognize additional milestone payments in the second half. The company remains committed to global expansion, R&D initiatives, and advancing ESG efforts, supported by its strong cash position.
In summary, GenScript Biotech Corporation’s earnings call painted a picture of robust growth and strategic advancements, despite certain financial challenges. The company’s strong revenue performance, innovative product offerings, and commitment to sustainability position it well for future success.