CanSino CEO on China's Pharma Outlook

We’re very thankful to be joined by the Cansino Founder and Chairman and CEO, USA Fung. Thanks so much. Thank you to give me the opportunity to speak to the audience. Yeah, thank you for for coming out of that meeting that speech again, your results were just out as well. We do know that you had a bit of a blip upwards in 2021 because of the COVID vaccine, but you you’re mired in losses again, you had full year net loss of CN¥1.48 billion revenue has also missed expectations. Can you explain why you’re back into the red right now and what is the pipeline to get you out of the red? Yeah, if you read our annual report, we did have her significant loss last year. But if we look at the breakdowns over 900 million UMB Yuan is based on, it’s actually caused by the COVID-19 vaccine write offs depreciation and you know all those are COVID-19 vaccine related. And we have for over 600 million spending on the R&D side. If we look at that side, we actually had a good year in terms of pipeline advance. We had over 10 on the filings and initiate over six more than six clinical trials some in the late stage phase three and we have her PCV 13 vaccine finished the phase three and the file for NDA and we had a very good progress on the Pentasis based DTCP combo vaccine. As you know the Chinese CDC number in the past two months the pertussis disease case has increased dramatically. This word that or this country definitely need a a a new vaccine to really to preventing the disease spread. Yeah. So that leads to the next question, how is this pipeline shaping up to fill your, your basic prediction you gave Bloomberg News a year ago that you would likely return to at least break even or profitability by next year 2025. Is that still possible or what? It’s still possible and we hope you know we actually achieve that even you know before the end of the year 2025, but it’s still on our target to get the the break even results next year. You also had a deal I believe in the middle of last year with AstraZeneca. I spoke to Pascal, the CEO of AstraZeneca yesterday. Essentially you talked a little bit about the deal, but we don’t have a lot of clarity on what kind of vaccinations the mRNA deal that you’re going to have with AstraZeneca is going to come out of that. What, what are we talking, it’s COVID is in the past but how are you going to use mRNA which hasn’t really didn’t really pick up obviously during wasn’t adopted during the pandemic. No, yes, we actually had a you know up to phase two clinical trial stage for COVID vaccine on MRA side. But certainly our collaboration with Asazenica is much more strategic. Excuse me, I cannot disclose you know more details but you know we do have a good relationship with Asazenica not just you know for one single product. We are actually had a meeting in the past months and I’m going to meet probably today with Pascal again and we will have her further discussion in terms of general you know other potential opportunities and then what opportunities are there to sell your vaccines abroad. I know you had a deal for meningitis vaccine in Saudi Arabia, you had one that didn’t pan out too well in Brazil as well. I believe there’s a lot, there’s pending litigation there with that company in Brazil that’s something separate from Saudi Arabia. But what are the biggest challenges and what are your expectations to sell into the international market, Well, international market actually we had a good experience in the past few years especially during the COVID-19 pandemic time. We build up our relationship with our partners in many countries. I think that give us opportunity to for this post pandemic era to expand our you know product to the other countries based on our well established network and partnerships like where where in the developing world mostly or developing world. But we are working with certain like case Foundation potentially for the broad you know world market for some innovative vaccines. Yeah. What does the Bio SECURE Act in the United States due to the collaborative nature of the Pharmaceutical industry, I mean that’s a big threat if they’re going to be essentially potentially if it passes through Congress and the laws adopted. Any federal money cannot go to companies that do business with pharmaceuticals in China that are of concern. I’m not alluding that Cansino is of concern, but again it’s a further bifurcation of US and China. Yeah it’s we are closely monitoring the situation and it’s a concern from the industry perspective. I think from both side. I actually involved in the like the what we call the track two dialogues on the public health and that means in the you know non government settings, NGO settings economic settings. We you know once we get together discuss our common you know interest and and how we work together. I think from my conversation with our partners in US or you know the the we are quite agree each other we need to collaboration not really separation because many of the public health issue issue is a global issue. It’s not any single country can deal with. I mean we have experienced in the past just few years if we don’t control in the global scale, the disease will never you know will stop, right. Have you found that collaboration increased or decreased through the pandemic? Well, the collaboration from our experience, so we had a good collaboration in many countries. Certainly there might be other you know issues that you know raise up during the collaboration, but I think that the intent is always trying to be on the good side. You talked about a healthy pipeline, but investors are a little bit wary right now. The stock is down 65% over the last year. What are you going to do to restore investor confidence now that you’ve had several straight years of of net losses? Well, I I believe you know to deal with any you know challenges we have to take actions right. And in our pipeline we you know develop vaccine is not overnight thing. We need to build up our technology platforms. We need to focus on the key product that will drive the future you know growth of the company. So we that’s why we need to stay focused and we are working towards that and there will be certainly to really make our organization more focused, more efficient. And unfortunately in the past few years due to the pandemic situation we have to really deal with the you know the the, the outbreaks that we in the way we were you know I guess grow a bit too fast. But we are now really to re examine how we can really stay focused, get our pipeline in the, you know, to the product to the market as early as we can. We talked about messenger RNA vaccines earlier. We do know that that did help control the pandemic, spread of the pandemic in the Western world. China did not have an approved MRNRA vaccine during the pandemic. What is kept, you know, a vaccine maker like yourselves from developing its own mRNA? Well, you know, MRI technology actually is one of the platform technology. We have spent up to now seven years working on it. It is some new technology. We need to work out all the details to make sure the technology will fit for the use. Even for now, I see there’s still challenges in dealing with MRI. You know, with with broad application temperature of storage is 1 exactly temperature. You know, the storage, the stability of the product. If you look at the vaccines you need to put into the field at least two years of shelf life, MRMA certainly has not reached to that point. Certainly. You know, the advantages for MRA is you can produce really fast and in the large scale and that’s especially beneficial for dealing with pandemics like we have experienced. Do you do you feel, I mean, from my interview with AstraZeneca yesterday, I really got a sense that China’s become a fundamental player in the global supply chain and development of new drugs. Do you feel you have the right backing under this government essentially new productive forces, the new 3IN science and technology is biopharmaceuticals under that umbrella. Are you going to get the support you need? I think you know China has such a high educated population and we have for pretty much good infrastructure to support biotech development even for ourselves. We have the three global innovative products in the pipeline or already like in the in the in the use for example our inhaled vaccine for COVID-19 is the world first you know immune causal delivery through inhalation and that actually but that hasn’t gone very far. That’s the inhalation through the you know breathing. Yeah well we had almost like a 10 million people use it already but not adopted outside of China. Well, if you look at the what currently the H is doing, they are funding the research to look into it. If you look at double HO position paper, it has been highly emphasized on the mucosal immunization. Yeah, which is based on what we have discovered. Shafan, Yeah, thanks so much for your time. Thank you. Thank you about that.