Everest Medicines Announces Financial Results for Full Year Ended December 31, 2023

Shanghai, China — March 28, 2024 — Everest Medicines (HKEX 1952.HK, “Everest”, or the “Company”), a biopharmaceutical company focused on the discovery, clinical development, manufacturing and commercialization of innovative medicines and vaccines, today announced its financial results for the full year ended December 31, 2023, along with a corporate update.

“2023 was an exciting year for Everest as we transformed into a fully integrated biopharmaceutical company with full value chain of capabilities,” commented Rogers Yongqing Luo, CEO of Everest Medicines. “We have taken a lean and focused approach to commercialization, and built an effective commercial organization around the launch of our first product, Xerava®, in the Chinese market at the end of July. Nefecon®, the first-in-disease treatment for adults with primary IgAN and our blockbuster product in the renal portfolio, was also approved in mainland China and commercially launched in Macau in December 2023. The successful sales of these two products resulted in the ninefold increase in revenue last year to RMB125.9 million, significantly exceeding our guidance in mid-2023. Nefecon® will be launching in mainland China soon and our anchor product in the autoimmune space etrasimod is expected to receive approval in Macau and start commercialization in the Greater Bay area this year, so Everest will have three commercialized products before end of 2024. With these product launches and several other drugs advancing through clinical and regulatory approval stages, we have paved the way for even more substantial growth in 2024 and set a revenue guidance of RMB700 million. ”

“We also head into 2024 with an upgraded dual-engine approach to our pipeline growth strategy, which is in-house discovery plus in-licensing. As we terminated the collaboration and licensing agreements with Providence, we will develop our own discovery products utilizing this mRNA platform, but now hold full intellectual property rights and global rights. We have developed cancer vaccines from this platform which will enter clinical stage this year. Meanwhile, we will continue our in-licensing efforts, focused on our carefully chosen, less-crowded therapeutic areas of renal disease, infectious disease and autoimmune disease. This dual-engine approach will enable us to further capitalize on our commercial organization’s capabilities to maximize synergies in our core product areas, while developing those products we have full intellectual property rights and global rights,” Mr. Luo concluded.
*Recent **Key **Product Highlights and Anticipated Milestones***

*RENAL PRODUCTS PORTFOLIO*

*Nefecon® *

*2023*

⎯        In February 2023, South Korea’s Ministry of Food and Drug Safety (MFDS) granted Global Innovative product on Fast Track (GIFT) designation to Nefecon® for the treatment of primary IgAN.

⎯        In March 2023, partner Calliditas reported positive topline results from the global, randomized, double-blind, placebo-controlled Phase 3 clinical trial NefIgArd, which investigated the effect of Nefecon® versus placebo in patients with primary IgAN over 2 years. The trial met its primary endpoint with Nefecon® demonstrating a highly statistically significant benefit over placebo (p value < 0.0001) in estimated glomerular filtration rate (eGFR) over the two-year period of 9-months of treatment with Nefecon® or placebo and 15-months of follow-up off drug. The key primary endpoint, eGFR over 2 years, was on average 5.05 mL/min/1.73 m^2 higher with Nefecon® compared to placebo (p<0.0001). A treatment benefit on eGFR was apparent across baseline urine protein creatinine ratio (UPCR) subgroups, and sustained proteinuria effects and long lasting eGFR treatment benefit were observed even 15 months after discontinuation, supporting disease modification. The results also indicate that Nefecon® was generally well-tolerated.

⎯        In April 2023, the Company launched Nefecon® for clinical use in Shanghai Ruijin Hospital’s Hainan Bo’ao subsidiary through an early-access program. The launch of this early-access program in Hainan marked the beginning of a new treatment era for IgA nephropathy in China.

⎯        In June 2023, our partner Calliditas presented data from the NeflgArd Phase 3 Study at the European Renal Association — European Dialysis and Transplant Association Congress (ERA-EDTA). The presentations showed data and analyses from the NefIgArd Phase 3 clinical trial evaluating Nefecon® in patients with IgAN. In addition to data disclosed in March, at 24 months, eGFR was reduced by 6.11 mL/min/1.73 m2 from baseline in the Nefecon® arm compared with 12.00 mL/min/1.73 m2 reduction in the placebo arm, demonstrating 50% less loss of kidney function.

⎯        In August 2023, the Company announced the completion of patient enrollment for the China open-label extension (cOLE) of the Phase 3 NefIgArd study. The cOLE study offers an additional 9 months of treatment with Nefecon® to all qualifying patients who have completed the NefIgArd study and evaluates the efficacy and safety of extended and repeated Nefecon® treatment in patients with IgAN. We hope this will provide more insight into Nefecon future clinical use. 

⎯        In October 2023, our partner Calliditas presented new biomarker and subgroup analyses from Nefecon®’s Phase 3 NefIgArd study in both posters and oral presentations at the 17th International Symposium on IgA Nephropathy.  Investigation of the effect of Nefecon® on circulating levels of IgA-IC in the Part A population of the NefIgArd clinical trial showed that patients treated with Nefecon® 16mg/day exhibited a statistically significant decrease in IgA-IC levels compared to patients who received placebo when evaluated at the 3-, 6- and 9-months post randomization. Suppression by treatment with Nefecon® of both IgA-IC formation and galactose-deficient IgA1 as previously reported offers an unprecedented opportunity to target the fundamental immune abnormalities that drive IgA deposition in the kidney and development of IgAN.

⎯        In October 2023, the Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China, approved the New Drug Application (NDA) for Nefecon® for the treatment of IgAN in adults at risk of disease progression.

⎯        In November 2023, the Company made a late-breaking poster presentation at the American Society of Nephrology (ASN) Kidney Week 2023 on Chinese patients enrolled from mainland China. Clinical results from the global Phase 3 trials of Nefecon® demonstrated even stronger results in the subpopulation of patients from mainland China. At 24 months, the eGFR in the Chinese patients was 66% less deteriorated compared to 50% in the global population. The mean percent reduction in UPCR was 31% greater at 9 months vs. placebo in Chinese patients and 43% greater than placebo at 24 months. Lastly, the percent of Chinese patients without microhematuria during the observational follow-up period increased to 57.5% from 26.9% at baseline, while it was maintained at 14.3% in the placebo group. These data demonstrate Chinese patients show faster disease progression compared to the global population.

⎯        In November 2023, China's National Medical Products Administration (NMPA) approved Nefecon® for the treatment of primary IgAN in adults at risk of disease progression. China has the highest prevalence of primary glomerular diseases in the world with an estimated five million IgAN patients.

⎯        In November 2023, the Nefecon® NDA was accepted for review by South Korea’s Ministry of Food and Drug Safety (MFDS) for the treatment of primary IgAN in adult patients.

⎯        In December 2023, partner Calliditas announced that the U.S. Food and Drug Administration (FDA) had fully approved Nefecon® delayed release capsules to reduce the loss of kidney function in adults with IgAN at risk for disease progression, irrespective of proteinuria levels.

⎯        In December 2023, Nefecon® issued its first prescription at Kiang Wu Hospital in Macau, marking the official start of the company’s first-in-disease drug to patients across Asia, opening a new era of treatment for IgA nephropathy patients in the region. At the same time, a PAP program was officially launched at the Kiang Wu Hospital, which will provide financial assistance to Chinese mainland citizens who prescribe Nefecon® in Macau.


⎯        In December 2023 the New Drug Application (NDA) for Nefecon® was accepted for review by the Taiwan Food and Drug Administration (TFDA) for the treatment of primary IgAN in adult patients.

*2024*

—      In March 2024, Singapore Health Sciences Authority (HSA) approved NEFEGAN® for the treatment of primary IgAN in adults at risk of disease progression. The NDA for NEFEGAN®, known in other Everest’s territories as Nefecon®, was accepted by HSA in April 2023.

—      We expect Nefecon® to be commercially launched in mainland China, Hong Kong and Singapore in 2024

—      We anticipate receiving Nefecon® NDA approvals in Taiwan and South Korea in 2024.

—       We expect to report Nefecon® China open label study results in 3Q 2024.


*INFECTIOUS DISEASE PORTFOLIO*

*XERAVA® (eravacycline)*

*2023*

—       In March 2023, the NMPA of China approved the NDA for XERAVA® (eravacycline) for the treatment of complicated intra-abdominal infections (cIAI) in adult patients. The Company launched XERAVA® in July 2023 in mainland China.

—       In April 2023, the Company signed a Memorandum of Understanding for a strategic partnership with a subsidiary of Shanghai Pharma, SPH Keyuan Xinhua Pharmaceutical Co., Ltd. to promote import and channel distribution of XERAVA® (eravacycline) in China.

—       In July 2023, the Company launched XERAVA® (eravacycline) in China with its first prescription issued at Huashan Hospital affiliated to Fudan University. The commercialization of XERAVA® in China marks Everest’s transformation into a commercial- stage innovative biopharmaceutical company.

—       In September 2023, the TFDA approved the NDA for XERAVA® (eravacycline) for the treatment of complicated intra-abdominal infections (cIAI) in adult patients in Taiwan.

—       In 2024, eravacycline’s clinical breakpoint was officially approved by ECAST, so that the drug can be used more accurately in clinical practice.

*C**efepime-taniborbactam *

*2023*

—       In September 2023, the Center for Drug Evaluation of the China NMPA recommended Priority Review for cefepime-taniborbactam for the treatment of complicated urinary tract infections (cUTI), including pyelonephritis, based on the criteria of “innovative drugs for the prevention and treatment of major infectious diseases and rare diseases that meet urgent clinical needs.”

*2024*

—       In February 2024, partner Venatorx Pharmaceuticals announced that The New England Journal of Medicine (NEJM) published the results of the CERTAIN-1 Phase 3 clinical study of the investigational agent cefepime-taniborbactam for the treatment of adult patients with complicated urinary tract infections (cUTI), including acute pyelonephritis. The results showed that cefepime-taniborbactam was superior to meropenem for the treatment of complicated UTI that included acute pyelonephritis, with a similar safety profile to meropenem.

—       We expect to submit NDA of the cUTI indication in China in 2024.

* *

*AUTOIMMUNE DISEASE PORTFOLIO*

*Etrasimod (VELSIPITY™) *

*2023*

—       In October 2023, licensing partner Pfizer Inc. received FDA approval for VELSIPITY™ (etrasimod) for adults with moderately to severely active ulcerative colitis (UC).

—       In November 2023, the Company reported positive topline data results from a multi-center Phase 3 clinical trial of etrasimod in Asia for the treatment of moderate-to-severe active ulcerative colitis (UC). Etrasimod treatment resulted in a clinically meaningful and statistically significant improvement in the primary endpoint and all key secondary and other secondary endpoints (including mucosal healing, symptomatic remission and endoscopic normalization) after the 12-week induction treatment period. The safety profile was consistent with previous etrasimod studies and no new safety findings were observed.

*2024*

—       In March 2024, Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China, accepted Everest’s NDA for etrasimod for the treatment of moderately to severely active ulcerative colitis. Macau is expected to be the first of Everest’s Asian territories to get etrasimod regulatory approval.

—       We expect to report etrasimod topline results from the Phase 3 Asian clinical trial maintenance period in 2H 2024.

—       We expect to submit NDA for etrasimod to the China NMPA in 2H 2024.

*Zetomipzomib*

*2023*

—       In September 2023, Everest entered into a collaboration and license agreement with Kezar Life Sciences to develop and commercialize Kezar’s lead drug candidate zetomipzomib, a novel, first-in-class, selective inhibitor of the immunoproteasome for a range of autoimmune diseases including lupus nephritis, in Greater China, South Korea and some Southeast Asian countries.

*2024*

—       In February 2024, China’s NMPA approved Kezar’s IND application for initiation of the Phase 2b PALIZADE trial in China of zetomipzomib in patients with lupus nephritis (LN). Everest plans to join its partner, Kezar Life Sciences, in PALIZADE, a global, placebo-controlled Phase 2b clinical trial evaluating the efficacy and safety of two dose-levels of zetomipzomib in patients with active lupus nephritis.


*Commercialization*

We achieved RMB125.9 million in revenue in 2023, substantially above the previous guidance of RMB70-100 million.


In 2023, the Company launched two products, developed a focused commercialization model driven by product clinical value, and built a 200-member lean and efficient commercial platform. This team worked on a concentrated strategy and managed to promote Xerava® in around 300 core tertiary hospitals in just five months, laying a solid foundation for our future commercial success. Xerava® has been recommended by multiple treatment guidelines in China and globally for multidrug-resistant bacterial infections.


Nefecon® received NDA approvals in Macau and mainland China in Oct. 2023 and Nov. 2023, respectively and Everest plans to make the product available to an estimated five million patients in mainland China in 2024. The Company prepared for this launch by initiating an early access program in the Hainan Boao pilot zone. This program demonstrated significant demand for Nefecon®, with approximately 700 patients signed up. In addition, approximately 20,000 Chinese patients have registered in an IgAN patient program funded through a charity foundation, which underscores the significant unmet needs for this first-in-disease medicine and these patients will be a part of our patient base when Nefecon® is officially launched in mainland China.


By the end of 2024, we expect to have three commercialized products in our core therapeutic areas. We will focus on successfully commercializing Nefecon® in China, continuing to grow the sales of Xerava®, while starting to commercialize etrasimod in the Greater Bay area. We expect to achieve a revenue target of RMB700 million in 2024 from the combined sales of Xerava® and Nefecon®. With our strong balance sheet and expected substantial increases in revenue, the Company has set a goal of reaching cash breakeven by the end of 2025.

We will continue to increase patient access through patients registered for our charity program for Nefecon®, and gradually establish a second sales team of up to 120 nephrology-focused representatives commercializing Nefecon® across 600 hospitals, which covers approximately 60% of the IgAN patient population in China. We also plan to engage in National Reimbursement Drug List (NRDL) negotiations in 2024 for Nefecon®, with the goal to be included in 2025 so more patients can enjoy the benefits of the medicine. We plan to expand Nefecon approvals to additional territories, including Hong Kong, Taiwan and South Korea this year.

* *

*Discovery*

Everest will develop its own products utilizing the mRNA platform, of which it now has full intellectual property rights and full global rights. Based on this clinically-validated mRNA platform, therapeutic vaccines such as cancer vaccines will be the focus of research and discovery activities at Everest. Everest plans to announce new mRNA pipeline products that are entering clinical stage in 2024.


*Business Development*

Our business development efforts centered around renal diseases and autoimmune disorders in 2023. We continue to bolster our leadership position in these areas by expanding our pipeline. In September 2023, the Company entered into a collaboration and license agreement with Kezar Life Sciences to develop and commercialize zetomipzomib in lupis nephritis and other potential autoimmune diseases. The in-licensing of zetomipzomib added another mid-to-late stage autoimmune asset to our pipeline. Going forward, we will continue to pursue first-in-class or best-in-class assets in our focused therapeutic areas, including commercial-stage products that could utilize our established commercial capabilities and complement our pipeline.

In February 2024, Everest terminated the collaboration and license agreements with Providence Therapeutics Holdings Inc. Everest will continue to develop its own products utilizing the mRNA platform, and will own full intellectual property rights and full global rights of those products going forward, with no obligation to pay milestone or royalty fees for products it develops in the future, except for if we develop the rabies or shingles vaccines which were developed in collaboration with Providence.


*KEY CORPORATE DEVELOPMENTS***

In March 2023, the Company received full upfront payment of $280 million from Immunomedics, Inc., a wholly-owned subsidiary of Gilead Sciences, Inc., for Trodelvy® rights in certain Asian territories.

We will work with partners to establish an innovative ecosystem for kidney disease diagnostics and treatment, with the aim to provide IgAN patients with a tool to diagnose the disease and show disease progression without biopsy.

* *

*Financial Highlights*

*IFRS Numbers:*

•         Revenue increased by RMB113.1 million or 884% to RMB125.9 million for the year ended 31 December 2023, from sales growth of Xerava® in Singapore, the launch of Xerava® in mainland China and Hong Kong, the launch of Nefecon® in Macau and sales of Trodelvy® during the transition period with Gilead in Singapore.

•        Our general and administrative expenses decreased by RMB111.3 million or 40.3% to RMB165.2 million for the year ended 31 December 2023. The decrease was primarily attributable to optimization and rationalization of the organizational structure.

Research and development (the “R&D”) expenses decreased by RMB269.6 million or 33.3% to RMB540.1 million. The decrease was primarily attributable to a number of our drug candidates having completed clinical trials and advanced to the registration phase or commercial stages.

•   Our distribution and selling expenses decreased by RMB95.3 million or 29.2% to RMB231.4 million for the year ended 31 December 2023. The decrease was primarily attributable to the building of a more efficient and leaner commercial team for optimal value creation.

•     Net loss for the year increased by RMB597.2 million to RMB844.5 million for the year ended 31 December 2023, primarily attributable to gain from Trodelvy® transaction in 2022, which was a one-time item. Adjusted for one-time gain from Trodelvy transaction, net loss for the year declined by RMB725.1 million due to growth of product sales and optimization of the organizational structure.

•    Cash and cash equivalents and term deposits amounted to RMB2,349.7 million as of 31 December 2023.


*Non-IFRS Measure:***

•        Adjusted loss for the year was RMB713.6 million for the year ended 31 December 2023, representing an increase of RMB696.2 million, primarily due to increased IFRS loss. Adjusted for one-time gain from Trodelvy transaction in 2022, loss for the year declined by RMB626.2million due to growth of product sales and optimization of the organizational structure. **

* *

•       *— **Financial Table **—*

•         
  *     **Years Ended December **31 *

*RMB’000*

  *2023*

*2022*

Revenue

  125,932

12,792

Cost of revenue

  (34,414)

(4,645)

*Gross profit*

  91,518

8,147

General and administrative expenses

  (165,155)

(276,547)

Research and development expenses

  (540,054)

(809,736)

Distribution and selling expenses

  (231,419)

(326,687)

Other income

  13,175

4,624

Other (losses)/gains - net

  (100,803)

1,143,399

*Operating loss *

  (932,738)

(256,800)

Finance income – net

  84,608

32,887

Fair value change in financial assets at fair value through profit or loss (“FVPL”)

  848

(21,748)

Fair value change in financial instruments issued to investors

  2,819

(1,614)

*Loss before income tax*

  (844,463)

(247,275)

Income tax expense

  -

(8)

*Loss for the year (IFRS measure)*

  (844,463)

(247,283)

Adjustments to Non-IFRS measure

     
*Loss for the year (Non-IFRS measure)*

  (713,614)

(17,426)

*Loss for the year (Non-IFRS adjusted for Trodelvy one-time transaction gain)*

  *(713,614)*

*(1,339,733)*
       

* *

* *

* *

*Conference Call Information*

* *

The English session of the conference call will be held at 9:00 AM on March 28, 2024 Beijing Time (9:00 PM U.S. Eastern Time on March 27, 2024) and the Mandarin session of the conference call will be held at 11:00 AM Beijing Time on the same day (11:00 PM U.S. Eastern Time on March 27, 2024).

The conference calls can be accessed by the following links: 

*For English Session: *

Time:* *9:00 AM Beijing Time, Thursday, March 28, 2024

Pre-Registration Link: https://www.acecamptech.com/eventDetail/60505757

Webcast Link: https://www.acecamptech.com/meeting_live/70507680/12318?event_id=60505757

Alternatively, participants may dial in to the conference call using below dial-in information:

United States:

+1-646-2543594 (EN)

 

Chinese Mainland:

+86-10-58084166 (EN)
+86-10-58084199 (CN)

Hong Kong, China:

+852-30051313 (EN)

+852-30051355 (CN)

United Kingdom:

International:

+44-20-76600166 (EN)

+1-866-6363243 (EN)

Password:

886892

 

* *

*For Mandarin Session: *

Time: 11:00 AM Beijing Time, Thursday, March 28, 2024

Webcast Link: https://s.comein.cn/AkXE8

Alternatively, participants may dial into the conference call using below dial-in information: 

United States:

+1-202-5524791

 

Chinese Mainland:

+86-400-188-8938
+86-10-53827720

+86-10-53560182

Hong Kong, China:

Taiwan, China:

+852-57006920

+886-277031747

Singapore:

+65-31586120

United Kingdom:

+44-2034816288

Password:

726461

 


The replay of English session will be available shortly after the call and can be accessed by visiting the Company’s website at http://www.everestmedicines.com. 

* *

*About Everest Medicines*

Everest Medicines is a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing transformative pharmaceutical products and vaccines that address critical unmet medical needs for patients in Asian markets. The management team of Everest Medicines has deep expertise and an extensive track record from both leading global pharmaceutical companies and local Chinese pharmaceutical companies in high-quality discovery, clinical development, regulatory affairs, CMC, business development and operations. Everest Medicines has built a portfolio of first-in-disease or best-in-class products in the Company’s therapeutic areas of interest including renal diseases, infectious diseases, autoimmune disorders and mRNA platform. For more information, please visit its website at www.everestmedicines.com.

*Forward-Looking Statements:*

This news release may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the business operations and financial condition of the Company, which can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, or other factors, some of which are beyond the control of the Company and are unforeseeable. Therefore, the actual results may differ from those in the forward-looking statements as a result of various factors and assumptions, such as future changes and developments in our business, competitive environment, political, economic, legal and social conditions. The Company or any of its affiliates, directors, officers, advisors or representatives has no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this news release, except as required by law.