Everest Medicines Ltd

HKEX:1952

Earnings Call Analysis

Company Achieves Strong Revenue Growth and Profitability

In the first half of 2024, Everest Medicines reported a 158% increase in revenue, reaching RMB 301.5 million, driven by strong sales from XERAVA and the launch of Nefecon in May. The company's cash gross margin was 83%, maintaining operational efficiency while reducing operating expenses as a percentage of revenue by 29%. Everest achieved profitability at a commercial level for the first time and expects to meet their full-year revenue guidance of RMB 700 million. With RMB 1.93 billion in cash, they are well-positioned to continue their growth strategy, including advancing their mRNA therapeutic vaccine program.

Strong Revenue Growth Q1-Q2 2024

In the first half of 2024, Everest Medicines reported remarkable revenue growth, achieving RMB 301.5 million, a substantial 158% increase compared to the second half of 2023. This strong performance is largely attributed to the successful sales ramp-up of its antimicrobial product, XERAVA, and the recent launch of Nefecon, which collectively contributed significantly to the revenue.

Operating Efficiency and Profitability

The company has seen a 29% reduction in operating expense as a percentage of revenue, thanks to an efficient commercial model. For the first time in corporate history, Everest Medicines achieved profitability at a commercial level, reflecting a healthy gross margin of 83%, which is inclusive of royalty obligations. This profitability stems from a solid operational strategy that prioritized cost control while driving growth.

Future Guidance and Expectations

Looking ahead, Everest Medicines is set to exceed its full-year revenue guidance of RMB 700 million. Management expects continued success driven by the full six months of sales from XERAVA and increasing contributions from Nefecon as it strengthens its market position. The company aims to reach cash flow breakeven by 2025, demonstrating a commitment to sustainable growth.

Regulatory Approvals and Strategic Partnerships

The company has made significant strides in securing regulatory approvals, with Nefecon receiving full approval in key markets such as China, Singapore, and Hong Kong. Additionally, Everest is focused on establishing strategic partnerships and healthcare networks to optimize the reach of its products. It aims to penetrate over 300 target hospitals in China while working closely with external sales organizations to increase market access.

Investment in Development Pipeline

Everest is committed to advancing its innovative research pipeline, particularly with its mRNA therapeutic vaccines. The company announced the beginning of clinical trials for personalized mRNA cancer vaccine programs, which marks an important step for future growth. Moreover, they plan to submit applications for new drug approvals for several promising products, including EVM-001 and EVM-14.

Focus on Cancer and Autoimmune Diseases

The pipeline boasts multiple candidates targeting high unmet medical needs in cancer and autoimmune diseases. Management highlighted the significance of their mRNA discovery strategy, aiming to support the development of these innovative therapies. The company's focus on conditions like progressive kidney diseases illustrates its potential to capture substantial market share in vital therapeutic areas.

Addressing Market Dynamics: Antibiotics Segment

In the anti-infective market, Everest is addressing the urgent need for effective solutions against multi-drug resistant infections via its portfolio. XERAVA has shown strong efficacy with an 80% effectiveness rate in clinical evaluations, positioning it well amidst rising antibiotic resistance rates in China. The potential for further market penetration is substantial, enhancing overall company value.

Long-term Vision: Leading Biopharma in Asia

With a strategic vision aimed at becoming a leading biopharmaceutical company in Asia by 2030, Everest Medicines is well positioned. By advancing its portfolio, optimizing operations, and focusing on innovative research, the company is set to create significant long-term shareholder value, particularly in its targeted therapeutic areas.

Earnings Call Transcript 2024-Q2

[Operator]

Good morning or good evening. Welcome to Everest Medicines 2024 Midyear Financial Results Conference call. [Operator Instructions] And finally, I would like to hand the conference over to your speaker today, Ms. Liu. Please go ahead.

[Leah Liu, executive]

Good morning, everyone. I'm Leah Liu from Everest Medicines. Thank you, operator, and everyone, welcome to our 2024 first half year financial results conference call. Joining us today are Mr. Rogers Luo, our Chief Executive Officer; Mr. Ying Woo, President and CFO; Dr. Jennifer Yang, our Chief Scientific Officer; Sandra Zeng, our Chief Medical Officer; and our Chief Product Officer.

Before we get started, I'd like to remind you that the speakers on this conference call will make statements as to 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 conditions of the company, which can be identified by terminologies such as will, expect, anticipate, future, intend, plans, believes, estimates, confident and similar terms. Such forward-looking statements are not guarantees of performance and involve risks and uncertainties and actual results can be found those in the forward-looking statements as a result of various factors and assumptions. Company or any of its affiliate directors, officers, advisers, representatives have no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call as except as required by law.

And now I will turn over the call to Ying Woo to provide you with more details on our business update and 2024 full year results.

[Ian Ying Woo, executive]

Thank you, Liu. So thanks, everybody, for joining this call. We are very pleased with what we achieved in the first half of 2024, with strong revenue growth as well as operational efficiency improvements. With the first full 6 months of XERAVA sales and the launch of Nefecon in mid-May, we have seen the rapid buildup of our commercial platform that supported a 158% revenue increase compared to the second half of 2023 when we launched XERAVA in July of last year.

Our overall cash gross margin remains at more than 80%, rather 83%. This is inclusive of our royalty obligations to our partners and -- but it does back out noncash amortized on capitalized expense, which we think is a better reflection of the true picture of operations. As a reminder, [ 8% ] is our long-term guidance for cash gross margin across our commercial business.

While our efficient and focused commercial models led to a 29% reduction in operating expense as a percentage of revenue as we deliver strong growth with much more modest increases expense, lower R&D spending and stable G&A expense. For the first time in our corporate history, we achieved profitability at a commercial level.

As a result of increasing top line healthy gross margin and increasing operating our non-IFRS loss narrowed by 35% in the first half of 2021 compared to the first half of 2023. We have consistently provided non-IFRS disclosure, which backed out onetime lines and noncash charges and believe that this is the best measure of the company's Our cash balance of RMB 1.93 billion remains strong and provides significant flexibility to fund the continued growth of markets. Together, this combination of high revenue growth, optimized operating efficiencies and strong cash position put us in a strong position to execute our new growth strategy.

And this strategy is coming to On the one hand, we will continue to drive stable and healthy revenue growth from our existing late-stage portfolio of products, while leveraging our commercial platform to bring in assets that drive scale and efficiency. On the other hand, our platform which we started building 3 years ago is starting to bear group with the initiation of clinical development of first MRNA therapeutic vaccine program. Everest owns global rights to the candidates which creates optionality for global value creation.

Let's take a closer look at our revenue growth. Our total product revenue grew to RMB 301.5 million in the first half of 2024. Again, this is a 158% growth over the second half '23. That is how we only launched in May of this year, delivered RMB 167.3 million. And XERAVA, which launched last year, continued its strong brand contributed RMB 134.2 million. With a full 6 months of sales from in the second half of 2024, we are well on track to deliver on our full year revenue guidance up RMB 700 million.

Next, I'll give you through some major operational achievements that we made in the first 6 months. First, on Nefecon. We secured regulatory approvals in both Singapore and Hong Kong, and our supplemental NDA application, giving full approval of Nefecon China by the NMPA.

Our partner, secured full regulatory approval in Europe through its EU partner also reported positive results from the open-label expansion trial, which showed a treatment response consistent with the Nefecon study across endpoints of TTR and EGFR after repeat treatment of 9 months across all IgN patients. These results supported the study's thesis as a response to retreatment was unaffected by previous treatment cycle, providing a solid scientific foundation for the potential lock-in treatment with Nefecon.

Moving on to XERAVA for eravacycline. Earlier in the year, eravacycline rate 1 was officially approved in China to support precise use of eravacycline in clinical practice in China based on drug sensitivity. Then there was the announcement of positive interim results on the largest real-world evaluation of eravacycline today. By the expert committee on clinical use of antimicrobials and evaluation of antimicrobial, this is actually a part of the administrative health, so it's quite well respected within the China medical community. So this study shows strong efficacy and of eravacycline in China integration across IEI and other infections. The results show the overall efficiency of eravacycline with 80%, and the incidence of adverse expense was only 2.9%. XERAVA was also included in multiple treatment pipelines and with of multiple metro journal applications.

For or etrasimod, we're proud to have secure regulatory approval in Macau and therefore which marked its first approval in average Additionally, we announced positive top line data, the mix period from a multicenter Phase III clinical trial etrasimod Asia for treatment of moderately to severely active Before 4 weeks of treatment, etrasimod demonstrated significant clinical and statistical improvement over placebo in all primary and secondary endpoints.

Our most recently licensing product from Life Sciences. we built the first Chinese patients in the global base to based trial for the treatment of active Other than the late-stage product that we just discussed, we continue to make progress on assets where we have global rights. Our first therapeutic MRNA acting program, personal lines of MRNA anti-vaccine has started an investigator-initiated trial in 2 top cancer hospitals in Beijing, in Shanghai.

Personalized mRNA cancer vaccine program from Moderna and BioPak have demonstrated clinical proof concept and increases our confidence in this therapeutic approach. We intend to leverage our proprietary mRNA environment on the platform to advance multiple additional programs into clinical trials.

We also continue to enroll patients for EVER-001 reversible BTK inhibitor. In a Phase Ib trial to membrane we expect to report preliminary results from this program in the second half of 2024. Sandra Zeng, our Chief Medical Officer; and Dr. Jennifer Yang, our Chief Scientific Officer, will describe the events in more detail later in the presentation.

So on this slide, let us delve a little bit deeper into the Nefecon opportunity in China and why we believe the product is a such significant growth driver for whatever. is a disease where there is a large base of a possibly final location and significant unmet medical need in China. Diagnosis rates are still low, and biopsies generally required, but we estimate that there are approximately 1 million biopsy diagnosed patients in China and approximately 100,000 newly diagnosed IgM patients each year. What is remarkable about this disease is that it impacts people in the prime of their life. Most are diagnosed under the age of 45 when they are at their prime working age and making families. These patients are both more urgent needs and also higher willingness for treatment based on the research and as we have seen in our old clinical trials that disease progression in Chinese patients is more rapid than global patients left untreated.

Nefecon is the only approved therapy in China and is only fully approved treatment globally. Current treatments, which are on label, such as inhibitors or SGLT2 are not targeted and do not alter disease progression. In Phase III clinical trials, Nefecon demonstrated 66% less deterioration of kidney function over 2 years, 9 months of treatment was 6 months follow-up, which could translate into calculated delaying reduce progression to anti-renal disease by 12.8 years.

Let us look at the launch of Nefecon, which happened in May of this year in China. So we have developed struggle with the launch of Nefecon deploying significant commercial efforts and innovative sales and marketing tactics towards the launch. We combined traditional approaches of in-person detailing and hospitals approaches of online platforms to make the medicine more quickly and broadly accessible to patients. We have completed build-out of the Nefecon sales force at around 120 plus regional and district manager. This team will cover around 504 hospitals and represent about 60% of the addressable patients in China.

The commercialization platform also innovative programs such as patient early access and assistance programs. Our medical affairs team is working to build physician awareness, including through medical publications, such as the inclusion of Nefecon in IgA treatment guidelines. We expect inclusion of Nefecon in 2024 as well as in the first Chinese guideline second half of this year.

Equally important, we improve market access and affordability through hospital listing and negotiation. And negotiations this year will be for Nefecon revenue growth next year. We expect both of NRDL listing to be announced in November, followed by the price announcement in January of next year.

We're also working to establish an innovative ecosystem for kidney disease diagnosis and treatment with the aim of providing IgM patient pools to enhance disease diagnosis and track disease progression.

So let's look at the anti-infective therapeutic area. The similar thing we see As you can see in China, antibiotic resistance is a major issue with 80% of ethanolamines resistant tenants and a significant number of cases showing symptoms as well. Additionally, the detection rate with in carbapenem-resistant ecoli is alarmingly high at 94% and 23% in strong demand for new applications and safe treatment options.

Prior to the launch of XERAVA, the main treatment for MDR infection includes priced at RMB 4,000 which is priced at about RMB 3,000. However, each of these have their downside. Eravacycline has low concentration and with comes with the FDA. does not cover levelaximasis and has very high incidence of toxicity. XERAVA is a novel first-in-class antibody with strong spectrum coverage of positive to negative pathogen and atypical. Given the interior efficacy and safety, it is priced at approximately [ RMB 500 ] per day. Since launching the product in July of 2023, XERAVA has achieved aggregate revenue of RMB 233.2 million.

So as a first in class offer new solutions or [indiscernible] we have been actively even in the penetration of the product into our [ 300 ] with our wholesale around 120 reps. This year, we have added 2 TSO partners to expand the coverage in non-core markets. We are generating highly encouraging results with a 300% increase in the number of treated and a 75% increase in the number of hospital listings since the second half of '23. XERAVA has also been included in 3 treatment guidelines as well as published in 5 medical journals and continue to build awareness of this important medicine in these communities.

So turning now to etrasimod, the third product in our portfolio. Etrasimod for the treatment of moderate-to-severely active kidney disease. Etrasimod is effective, safe and orally available convenient UC treatment, well suited for first line users. We're preparing to commercialize this product in Macau and making the medicines accessible to increase some of the 19 medical institutions in the Greater Bay Area in the second half of 2014 by leveraging preferential policies in the region. By increasing physician and patient awareness, we will take away the full launch of the product to China, which we expect in the -- towards the end of 2025.

The commercial infrastructure necessary in ulcerative colitis for in China is relatively limited as patients are concentrated approximately 100 IBD centers across. As we have entered our fully commercial or near commercial products and their progress, you can see that we are well on our way to achieving our vision of funding and leading biopharma in Asia by 2030. We're focused on 3 core therapeutic areas with 4 on-market or near-market aggregate key sales potential of over [ RMB 10 billion ]. We have 3 clinical stage products, including global Phase III trial -- Phase-IIIb trial in nephritis, data expected in 2026 and ever 001, BTK inhibitor in a Phase Ib in All of these candidates diseases where there is currently no approved standard of care, and we will continue to advance the summary of therapeutic mRNA vaccine for long-term value creation.

As we mentioned on the last slide, we have 4 products that are expected to drive revenue growth for the next few years. We achieved a revenue of RMB 126 million in 2026 from just 5 months of XERAVA sales as well as Nefecon in Macau. For '24, we are confident in achieving our guidance of RMB 700 million. Looking ahead in 2025 and beyond, we'll have 4 products on the market with etrasimod and cefepime-taniborbactam joining the lineup, driving strong revenue growth eventually reach combined details of RMB 10 million.

So let's talk a little bit about our investments in 2 of our 4 therapeutic areas. The retail disease is one of these. Aside from Nefecon, we have a pipeline of other promising drug candidates with a total addressable patient population over 10 billion. The most advanced of these is which is in a global Phase IIb trial in provided with data expected in 2026. is a potential candidate for other autoimmune diseases, and Phase IIa study evaluating autoimmune hepatitis.

We talked about EVER001 already and Sandra will talk about nephritis in more detail later. We think potentially a pipeline will be a product as well, even though our first indication is MN, it has potential for other renal diseases also. Next slide.

So let's talk a little bit about our investments in the infectious disease space. So MDR infection is a key area of focus for us and we have a portfolio of antibiotics that offer differentiated and complementary activities. XERAVA offers broad spectrum coverage with strong activity against [indiscernible] is a best-in-class beta-lactamase inhibitor with strong coverage of pseudomonas infection. EVER206 in the earlier stage in our pipeline, but it's designed to reduce which is an expected antibiotic with this use limited by significant renal tox. We intend to position these products and foundation for incurable treatment for MDI infection and expect to be able to leverage our existing hospital anti-infective sales organization to commercialize and create significant synergies.

While we have a robust pipeline, we continue to go full way to further bolster our product portfolio for future growth and value creation of the company. Our dual engine approach is focused on in licensing of attractive late-stage development or commercial stage assets in our 4 therapeutic areas, where we have an existing sales force. We are, therefore, to create commercial and clinical strategies and build scale for our entire.

The second approach is our proprietary discovery platform. We are using our mRNA platforms to develop therapeutic vaccine and other programs will be globalize that can create more value for the company and potentially unlock global partnerships. pipeline of assets where we have globalized. This is increasingly an important part of the Everest story as these programs advance through clinical and preclinical development.

In addition to EVER001 in nephritis with mRNA therapeutic acting programs under development for various solid tumor indications and diseases. The for our personalized cancer vaccine was launched last week. This is the first therapeutic product independently developed product based on our mRNA technology platform to enter into clinical development.

Other cancer vaccine programs, including a tumor-associated antigen vaccine, we aim to submit a U.S. -- submit for U.S. and China NDA in 2025 and an immuno modular vaccine that we plan for IND filing in 2022. We are also expecting preclinical data in our in vivo program in hopefully before the end of this year. This can be developed both cancer and diseases. We will take a EVER into the pipeline product.

I will hand over to Sandra to EVER001 first.

[Sandra Zeng, executive]

Thanks, Ian. So EVER001 is our new pipeline, which have a global right for the new indication. As Ian had just mentioned, the first condition [indiscernible]. And actually, as you know, the [indiscernible] is the most common cause for clinical and non-clinical worldwide. In China, this is highly prevalent with approximately 2 to 3 remediation and the wide USA [indiscernible] 80,000 to 100,000 patients.

In terms of current available treatment, more than 30% patients in to the standard of care. With the patient that achieved a vision to be around 30% patients we have in addition, the current trend are associated with substantial side effects. Therefore, there is a high unmet medical need new therapies, which are more applications and So EVER001 is a lower and unique BDK inhibitors and selectively and reverse funding with [indiscernible]. We differentiated EVER001 from [indiscernible] on the market.

The ensures [indiscernible] while the reversability present prolonged individual, which would compromise the new response. Therefore, the BTK EVER001 has unique features of highly selective what target funding and all that are off-targeted possibility.

As you may be aware, BDK inhibitor has demonstrated a clinical benefit in BDK is the essential component for receptor signaling pathway production of which have normally activated the pathway and transform to carefully activate responsible for the autoimmune renal disease, such as PMA. PMA occurs where introduce technical on antibodies against entire targeting tumor, and then therefore, the BDK inhibitor activation, differentiation and proliferation of to review the antibody [indiscernible]. So that's why we are developing the EVER001 as the first indication is to so first of EVER001 conduct actually is in the half subject.

The data already published in the journal EVER001, we have formulated there is no serious adverse events antibody. The most frequently reported adverse events actually increased from the triglycerides and the decrease on which account and decrease leucocyte count. And also from perspective, EVER001 inhibitor dose proportional increase in Tmax and curve, going in the multiple growth at.

And regarding BDK receptor the multiple of 400 milligrams and 600 milligrams the receptor occupancy remaining above [ 64%, ] which suggests a sufficient magnesium support in renal disease. But actually, they are very exciting about this study which completed in patients with antibody.

The designed with different dose cohorts. The coal black starting with dose [indiscernible] was followed up by [indiscernible]. The cohort 2 actually is 400 milligrams. The primary end goal is [indiscernible] andagility and of course, the second endpoints are the efficacy, increased baseline of proteinuria [indiscernible]. We are expecting the preliminary results from Phase Ib study in the second half of 2024.

We are planning to initiate the Phase II study trial in early 2025. So right now, I will turn to Jennifer to talk about.

[Wei Yang, executive]

Thank you, Sandra. So we are very proud that we have established a fully integrated and clinically validated mRNA platform with capabilities across whole chain of this platform. We believe using this platform fully able to help us discover and develop more novel drug candidates, which value for our shareholders.

Many of the capabilities platform stem from internally stimulation. So we have a proprietary active design algorithms that can ensure high expression of target antigens or target proteins. We are also developing next-generation LNP delivery system to further enhance the units. Our CMP is capable of developing robust assets to ensure high-quality mRNA production. Last but not least, manufacturing [indiscernible] attributable to support clinical trials with full of our commercial scale material down the road.

Next, please. Based on this platform, we build products therapeutic cancer in pipeline. The most program is EVM-16. This is a first line vaccine. As you probably know, personalized cancer vaccine and Moderna have shown promising clinical results through early trials. And the matter of fact, Moderna has already partnered Merck initiated trials, including 2 Phase III trials. But just saying that this modality can be benefit to patients.

Back to our EVM-16, a tumor uptake next year, sequencing will be carried out to identify mutations. And then our using prediction algorithms will further identify those high potential in [indiscernible] vaccine cost. When this vaccine is delivered, it will be given back to patient PD-1 [indiscernible] launched in several patients. First of all, increased level model, is able to identify low that previously reported tumor entity. [indiscernible] are posed to be highly in now. And our efforts on superior in several multiples independent studies. Preclinical data also demonstrated synergistic impact of combining EVM-16 with checkpoint inhibitors, which supports application in the upcoming clinical setting.

This month launched an IT study in 2 top 10 hospitals in China [indiscernible] as well as hospital. In this Phase Ib trial, we're evaluating Stage III tolerability, immunogenicity as well as preliminary efficacy of EVM-16. And in Phase Ib, we 5 EVM-16 for testing multiple tumor [indiscernible] high unmet medical need, including for pancreatic cancer.

Our clinical results will become available starting from 2025. Next slide, the second program from our pipeline EVM-14, this is an off-the-shelf tumor associated PA vaccine. vaccine has advantages, while maintaining good tumor because PAs are highly tumor whereas no impression of very limited expression in the tissue. I'm going to can cover more detail across and there is any selection option. So this type of vaccine can we applied to a broader patient population. Due to the off-the-shelf nature, this type of vaccine, EVM-14, can be applied to more preclinical studies, especially well suited for advance stage disease.

Compared to vaccine, it also has reduced manufacturing costs and has a potential to applicable to multiple cancer indications. Last month, has positive top line Phase II results of their vaccine, indicating vaccine can bring benefit to patient. Currently, our EVM-14 and enabling that are ongoing, we anticipate signing in early 2025.

With that, I'm going to hand over to Ian to talk about our financial numbers.

[Ian Ying Woo, executive]

Thanks, Jennifer. So let's take a look at our financial summary. I think the most important takeaway I would like to highlight our ability to substantially increase operating while driving rapid revenue growth.

First half 2024 revenue was RMB 301.5 million, a significant increase over the approximately [ RMB 9 million ] in the first half of '23 and RMB 126 million in the second half of 2023. This is mainly contributed by the sales ramp-up of XERAVA and the successful launch of Nefecon.

The cost of revenue was RMB 70.4 million, excluding noncash items, our margin was 83%. This is inclusive of royalty obligation from IgG partners. G&A expenses was mostly stable at RMB 87 million, which means that we were able to support our growing operations and revenue base without substantially increasing our corporate expense.

R&D expense decreased by 4% to RMB 253 million in the first half of 2024. This is due lower clinical expenses in our programs. However, we continue to invest into our wholly owned discovery programs and those costs were steady.

Distribution and selling expenses increased RMB 136 million to RMB 200 million. The expenses in the first half of 2023 occurred higher launch in China. The first product commercialized in China was launched in the second half of last year. And this year, we launched Nefecon.

We expanded our commericial activity to support both products. However, if you look at commercial expense to revenue ratio which represents the efficiency with which we generate our revenue, it decreased significantly both year-over-year by [indiscernible] 54% and over second half of 2023 by 76%, showing that we are able to generate more revenue with less [indiscernible]. This leads to our non-IFRS net loss for the period, narrowing by RMB 114.3 million or 35% to RMB 212.6 million. To amount IFRS net loss number, we back out noncash and onetime items from IFRS measure. The most significant of which is a one-time nonrecurring intangible asset impairment loss of the mRNA COVID-19 vaccine program, which we have deprioritized due to declining on it and social benefit.

I would likely just add here that creating when we platform towards the end of 2021, we intended to develop project mRNA vaccine. We also wanted to leverage the platform value of mRNA with other wholly owned mRNA programs. And you can see the early outcome that we have been also achieved in that Jennifer has talked about earlier today.

So at the same time, as our losses narrow, we maintained a healthy balance of RMB 1.93 billion in cash and cash equivalents as of June 30, 2024. We believe this provides sufficient amount of money for the company to support current growth, our goal for to get to the cash flow breakeven in 2025.

So we're extremely proud of what we have been able to achieve in the first half and laser focused on executing a number of people for the second half of the year. So for Nefecon, we're certainly in the early days of our launch and are building sales momentum with our newly onboard sales team and setting up medical to raise awareness of Nefecon among our physicians and patients. The top priority for the second half of 2024 is the NRDL negotiation, which we spent tremendous efforts now.

Lastly, we expect to have Nefecon in the new legal treatment guideline and the Chinese entry on guidelines to further raise awareness in the medical community. With the launch, we continue to focus on commercial execution, deepening our penetration of our [ 300 to 400 ] target hospitals as well as leveraging our partnership with CSOs to expand into regions beyond our own sales coverage.

For or etrasimod, we look forward to beginning our commercial efforts in the Greater Bay area as well as submitting for an NDA approval in China. Clinically, we will continue to advance multiple cancer vaccine programs towards IND filing in '25 and intend to make significant preclinical trials with our programs as well. We also expect to read out results from multiple important trials in real-world studies, including Phase Ib data from membrane nephritis, data from an open-label trial of Nefecon patients and real-world evidence study from both Nefecon and XERAVA, including Nefecon for the access program.

On this slide and say that we're off to a very good start in the first half of the quarter, but we'll continue to be focused on revenue growth and operating efficiencies in the second half of this year and beyond. We hope to deliver on our full year revenue guidance of RMB 700 million and build a solid foundation for 2025, including turning cash flow positive by year.

So with that, let me ask the operator to start the Q&A session.

[Operator]

[Operator Instructions] The first question comes from Goldman Sachs.

[Ziyi Chen, analyst]

I have 2 questions regarding Nefecon. The one is congratulations that we achieved encouraging early ramp-up within 2 months of selling. And now at the end of August, we have accumulated around 4 months of selling. Can you share a bit more color on the real-world usage of Nefecon, I'm particularly interested on the patient pros, how many patients have have we treated? And among the patients, what are the percentage that have kidney biopsy tested? And what is the average DOT that has been observed so far? And also interested on any breakdown on offline prescription trends? That's the first question.

And the second question is, I know that most recently, Novo Nordisk filed for semaglutide for chronic kidney disease in China, how do you see potential impact from in CKD?

[Unknown Executive]

So probably I can answer your question. First of all, the performance of the first several months of headcount meet our expectations as we forecast option of this year's and the guidance. With regards, the patients who have been using Nefecon, I think several patient types. Of course, [ 5% ] of them are being diagnosed with biopsy in the clinic, some of them -- they say some of them old patients who have been diagnosed for many years and seeking for treatment, which can either delay the progression of ESRD. And some of them are -- of course, some of our new diagnosed patients who are seeking innovative treatments with indication and manage on their renal function preservation. So that's -- those are the 2 types of patients, 100% of them are diagnosed by. So with regard to the speed of online/offline, at the early age, most of the patients, I would say, are patients, we have EAP programs since last April from and Macau. At that time, some patients are and Macau who have that treatment. And the products, some of them are warehouse patients. As we disclosed before, more than [ 20,000 ] patients for the PAP and pre-consultation services in China, some are from those warehouse patients and those patients are at early stage are online more than off-line.

And in a later stage, currently it's about, I would say, most are from off-line, so from the hospitals and pharmacies patients are coming forward. I think in the future, probably more and more patients get back in hospital rather online platform because online have to -- the patient has to be in the hospital prescription and with that prescription in that online, so that's a change.

Looking forward, on next year, if we can get a reverse impact in both of patients were from their office channel. So that's the seasonal breakdown around online and offline for delivery.

And with regard, you asked a question about the I think they are immuno -- autoimmune disease. So we don't see any evidence of TLP1 detected in those patient groups. Of course, we can see of those kind of as being used in the patient group, but without label, off label and so this defined as [indiscernible] It's not treating the origin of this disease, which is renal disorders. So I don't see at least now we're going to see any impact for those kind of form.

[Operator]

[Operator Instructions]

[Unknown Executive]

So while we are looking at the questions from the audience, I have a couple of questions on the call that I'd like read and ask the management for their answers. So the first question is that we're better to the average risk mRNA vaccine going into clinical development, when do you plan to release the first results? And are you under discussion with Global Partners?

[Rogers Yongqing Luo, executive]

I'll turn to [indiscernible].

[Wei Yang, executive]

Thank you for the question. If we just disclosed the first case a program first line just enter clinical trials this year, we do with a more clinical results coming out next year, because this Phase Ia remains for us to evaluate the safety tolerability in New York City as well as include advocacy of this product. So we do expect next year, which would be able to obtain some data. And then we're going to launch Ib later on. And we are also -- we'll be keeping our potential collaboration opportunities for the novel therapeutic vaccine.

[Ian Ying Woo, executive]

I think our Discovery strategy is we want to advance globally initiated competitive program. So clearly, for us, when we think about Discovery pipeline products, we just the Chinese market in line. We want to eventually to create value and benefit more patients. Second, at the moment, we have very limited infrastructure outside of China. So exactly how we realize the global value, we think that partnership is probably something that we will explore to maximize that, but exactly when and what it is, is something that we are evaluating. What we can -- disclose is that both Jennifer as well as Sandra as well as business development team have been working to make sure that the key players globally are aware of what we're doing so that they can start to monitor us and at a time, we can unlock the potential partnership.

[Unknown Executive]

And the other question that I have received online is that, what is the outlook for your expenses, with the push for the topical mRNA platform? Are you planning to sell more online?

[Ian Ying Woo, executive]

Yes. Thanks for the question. I think we -- as you have seen with our first half '24 financial results, we have reduced the spending on the clinical front as a lot of our late-stage products exit into commercialization, whereas our spending on the remain stable, right? So clearly, we are committed to investing into this area, which we see as a -- in this area for potential shareholders value creation. However, we approach R&D expense the same way as we approach G&A expense and commercial expense. We also in a highly effective edition and focused way. And so we do not look for R&D expense to increase significantly, but we do intend to continue to invest into the space.

[Unknown Executive]

Operator, can I ask them if there's any more questions on line?

[Operator]

[Operator Instructions] There are no more questions online.

[Leah Liu, executive]

Okay. Thank you, operator. I think we are at time, actually. So I'd like to ask Rogers to give a few words to conclude this call. Roger?

[Rogers Yongqing Luo, executive]

Okay. Thank you. Thank you, everyone, for attaining our 2024 full half year results conference call. I think we're very pleased that the half of -- the first half of this year achieved strong revenue growth at the same time of our operation efficiency and a very strong cash balance. At the same time, I think we start to have -- see the early results of our in-house innovation. So we started the first MI has PE trial this year when I would be doing well in our inhibitor So I think this is very consistent with our growth strategy. And with good results or result of the first half year, the community delivered [ RMB 300 ] sales this year and with other key milestone mix. So we are very confident. And thank you for all your support. Thank you.

[Operator]

Thanks, everyone, for your attendance. This concludes today's conference call.