Everest Medicines Announces Interim Results For First Half Of 2024

“Our total revenue for the first half of 2024 reached RMB 301.5 million, a significant growth of 158% compared to the second half of 2023, while operating expenses as a percentage of revenue[1] declined by 249%, reflecting significant improvement on operating efficiency,” commented Rogers Yongqing Luo, CEO of Everest Medicines.“Notably, our non-IFRS loss narrowed by 35%, and our gross margin excluding non-cash items was 83%. For the first time in Company history, we have achieved commercial level profitability[2].
Our cash balance of RMB1.93 billion remains strong and provides significant flexibility to fund the continued growth of our business. In the first half of 2024, we accomplished multiple commercialization milestones. NEFECON®, our lead product in the renal portfolio and the first-in-disease treatment for adults with primary IgAN, was commercially launched in mainland China and Singapore, and approved in Hong Kong. XERAVA®, our first commercialized product in China and a first-in-class fluorocycline antibiotic, continues to show robust sales growth. In the autoimmune disease space, our lead product etrasimod was approved in Macau.”

“We will continue to drive revenue growth through our dual-engine strategy. First, we seek to license in products that can leverage the current commercial platform to maximize synergies, and continuously boost revenue, operational efficiency and profits through our efficient and focused commercialization model. We believe this will lead to stable and healthy revenue growth. Second, we look to unlock partnering and value creation opportunities with our mRNA discovery pipeline and our products with global rights . We recently announced the launch of the first-in-human Investigator-Initiated Clinical Trial (IIT) for EVM16, a personalized mRNA cancer vaccine program. We also anticipate submitting investigational new drug applications in the United States and China in 2025 for EVM14, a Tumor-Associated Antigens (TAA) cancer vaccine program. In the second half of 2024, we intend to continue to expand our market presence, revenue base and operational efficiency, by continuing to carry out our efficient and focused commercialization model, with“improvement, integration, and transformation” as our motto. We will continue to grow NEFECON® sales and actively engage in China's National Reimbursement Drug List (NRDL) negotiations to enhance affordability and accessibility. By deepening penetration at our core hospitals and ramping up CSO collaborations, we aim to boost XERAVA® sales. Finally, we expect to launch etrasimod in Macau and access patients in China through preferential policies in the Greater Bay Area, and therefore we expect to have three commercialized products by the end of 2024. We maintain our revenue guidance of RMB 700 million for this year and remain confident in achieving our goal of cash flow breakeven by the end of 2025,” Mr. Luo concluded.

Recent Key Product Highlights and Anticipated Milestones

RENAL PRODUCTS PORTFOLIO

NEFECON®

- In March 2024, Singapore Health Sciences Authority approved NEFEGAN® for the treatment of primary IgAN in adults at risk of disease progression. NEFEGAN®, known in other Everest's territories as NEFECON®, was the first ever treatment for IgAN fully approved by the U.S. Food and Drug Administration, and Singapore marks the third region in Everest's territories that received New Drug Application (“NDA”) approval after Macau and mainland China. The product has been launched in Singapore following its approval.

- In March 2024, our partner Calliditas Therapeutics AB (“Calliditas”) announced that the FDA has granted an orphan drug exclusivity period of seven years for TARPEYO® (the U.S. trade name for NEFECON®), expiring in December 2030 based on when the company obtained full approval with a new indication for this drug product.

- In April 2024, our partner Calliditas announced additional data analyses from the 2-year Phase 3 NeflgArd trial evaluating NEFECON® in patients with IgAN were presented at the ISN World Congress of Nephrology. The data showed the treatment effect of NEFECON® on the risk of kidney function decline was consistent regardless of baseline UPCR and there were no meaningful differences in any quality of life (“QoL”) domains between NEFECON® and placebo groups after 9 months of treatment.

- In April 2024, our partner Calliditas announced positive results of the global Open Label Extension (“OLE”) study to the Phase 3 NefIgArd study. The OLE study was designed to provide 9 months of treatment with NEFECON® for all patients who completed the NefIgArd study and who at that time had > 1g/g of proteinuria over 24h and>30 ml/min of estimated glomerular filtration rate (“eGFR”). Topline data from the OLE study showed that the treatment response was consistent with the NefIgArd study's findings regarding the endpoints of UPCR and eGFR at 9 months across all patients, irrespective of whether they had previously been treated with NEFECON® or with placebo. The safety data after 9 months of treatment or retreatment with NEFECON® in patients who completed the NefIgArd study were consistent with previously reported safety data.

- In April 2024, the Hong Kong Department of Health approved NEFECON® for the treatment of primary IgAN in adults at risk of disease progression. Hong Kong marks the fourth region in Everest territories that NEFECON® received NDA approval after Singapore, Macau and mainland China.

- In May 2024, NEFECON® was successfully launched in mainland China. The official launch of NEFECON® marks the inception of better patient care in mainland China, heralding a new era in the treatment of IgAN. The first prescription of NEFECON® was issued through an internet hospital, enhancing speed and convenience of delivering medication to patients and improving their accessibility. As part of the pre-launch preparation, Everest had initiated an early access program in the Hainan Boao pilot zone in 2023. Approximately 700 patients registered for this program. Following the NDA approval of NEFECON® in Macau in December 2023, a few hundred patients from mainland China received prescription of the medication in Macau. In addition, over 23,000 Chinese patients have registered in an IgAN patient program. These initiatives highlight the urgent and unmet medical needs for NEFECON® in IgAN patients, and provide a foundation for the rapid adoption in mainland China.

- In May 2024, our partner Calliditas disclosed Asahi Kasei Corporation's (“Asahi Kasei”) public cash offer to acquire all shares in Calliditas for SEK 208 in cash per Share (the“Offer”). The Offer will also include a concurrent offer by Asahi Kasei to acquire all American Depositary Shares (“ADS”), each representing two Shares in Calliditas, for SEK 416 in cash per ADS, which will be conducted pursuant to the securities rules of the United States. The total value of the Offer corresponds to SEK 11,164 million.

- In June 2024, our partner Calliditas announced an analysis of the treatment benefits of of NEFECON® compared with sparsentan in IgAN at the 61st European Renal Association Congress (ERA 2024). The presented analysis showed that treatment with NEFECON® 16 mg/day for 9 months was associated with eGFR benefit compared with continuous treatment with sparsentan 400 mg/day over 2 years.

· Post-Reporting Period achievements and expected milestones:

- In July 2024, China's National Medical Products Administration accepted the submission of a supplemental New Drug Application (sNDA) seeking full approval of NEFECON® based on the complete clinical data from the global Phase 3 NeflgArd study. NEFECON® is expected to become the first-in-disease IgA nephropathy (IgAN) treatment to receive full approval by the NMPA.

- In July 2024, our partner Calliditas announced that the European Commission has granted a full marketing authorization for Kinpeygo (the European trade name for NEFECON®) for the treatment of adults with primary IgAN.

- We expect to report topline results from our open label study of NEFECON® in China in the second half of 2024.

- We expect to receive NEFECON® NDA approval in South Korea in the second half of 2024.

- We expect to commercially launch NEFECON® in Hong Kong in the second half of 2024.

- We expect inclusion of NEFECON® in the Kidney Disease: Improving Global Outcomes (“KDIGO”) 2024 guidelines as well as in the first Chinese guideline for IgAN in the second half of 2024.

Zetomipzomib is a novel, first-in-class, selective immunoproteasome inhibitor currently being evaluated for a range of immune-mediated disorders, including lupus nephritis (“LN”). It was licensed from Kezar Life Sciences (“Kezar”) in September 2023 for development and commercialization in Greater China, South Korea and Southeast Asia.

- In February 2024, the Center for Drug Evaluation (CDE) of NMPA approved Kezar's IND application of zetomipzomib for initiation of the Phase 2b PALIZADE trial in China in patients with active LN. LN is the most common secondary immune-mediated glomerular disease, which may gradually lead to kidney failure. There are an estimated 400,000-600,000 LN patients in China.

- In July 2024, the first Chinese patient has been dosed in the global Phase 2b PALIZADE trial for the treatment of active LN. Leveraging the company's strengths in clinical development, regulatory filing, and commercialization, we will accelerate the development of zetomipzomib to benefit patients in China as soon as possible.

EVER001 (previously known as XNW1011) , is the next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor in development globally for the treatment of renal diseases.

- We expect to report topline results from EVER001 Phase 1b study in membranous nephropathy in the second half of 2024.

INFECTIOUS DISEASE PORTFOLIO

XERAVA® (eravacycline)

- In January 2024, eravacycline's clinical breakpoint was officially approved by Expert Committee of the National Health Commission on Antimicrobial Susceptibility Testing and Standard Research (ChinaCAST), so that the drug can be used more accurately in clinical practice in China.

- In August 2024, the Expert Committee on Clinical Application and Resistance Evaluation of Antimicrobial Drugs of the National Health Commission published positive interim results from the "Comprehensive Evaluation Project on the Clinical Application of Eravacycline”. The results showed that the overall efficacy rate of eravacycline was 89.0% at the end of treatment, and incidence of adverse effect was only 2.9%.

Taniborbactam is a beta-lactamase inhibitor (“BLI”) that, in combination with cefepime, may offer a potential treatment option for patients with serious bacterial infections caused by difficult-to-treat resistant gram-negative bacteria, most notably carbapenem- resistant Enterobacterales (“CRE”) and carbapenem-resistant Pseudomonas aeruginosa (“CRPA”).

- In February 2024, our partner Venatorx Pharmaceuticals announced that The New England Journal of Medicine (NEJM) published the results of the CERTAIN-1 Phase 3 clinical study of 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 cUTI that included acute pyelonephritis, with a similar safety profile to meropenem.

- We expect to submit NDA of cefepime-taniborbactam for the cUTI indication in mainland Chinain 2025.

AUTOIMMUNE DISEASE PORTFOLIO

VELSIPITY® (etrasimod)

- In Feb. 2024, partner Pfizer Inc. announced that the European Commission has granted marketing authorization for VELSIPITY® (etrasimod) in the European Union to treat patients 16 years of age and older with moderately to severely active ulcerative colitis (UC) who have had an inadequate response, lost response, or were intolerant to either conventional therapy, or a biological agent.

- In March 2024, Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China, accepted Everest's NDA for VELSIPITY® (etrasimod) for the treatment of moderately to severely active ulcerative colitis.

- In April2024, Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China approved the NDA for VELSIPITY® (etrasimod) for the treatment of adult patients with moderately to severely active UC. It marks the first approval of VELSIPITY® in Everest territories. The number of UC patients in China is projected to double from 2019 to 2030 to approximately one million by 2030, highlighting the urgent need for novel treatments. Leveraging the preferential policies in the Greater Bay Area in China, we're poised to accelerate drug accessibility for mainland China following the Macau approval.

- In May 2024, Singapore Health Sciences Authority approved VELSIPITY (etrasimod) for adults with moderately to severely active ulcerative colitis (UC).

· Post-Reporting Period achievements and expected milestones:

- In July 2024, Everest announced positive topline data results of the maintenance period from a multi-center Phase 3 clinical trial of etrasimod in Asia for the treatment of subjects with moderately-to-severely active UC. This is the largest Phase 3 trial of moderately-to-severely active UC in Asia completed to date, with 340 eligible subjects randomized to treatment with etrasimod or placebo. The data of maintenance period confirmed that, after 40 weeks of treatment, etrasimod demonstrated significant clinical and statistical improvements over placebo in the primary and all key secondary endpoints (p<0.0001), and other secondary endpoints (including mucosal healing and endoscopic normalization, both p<0.0001). The safety profile of etrasimod was consistent with previous studies, with no new safety signals observed.

- We expect to commercially launch VELSIPITY® (etrasimod) in Macau and take advantage of the preferential policies in the Greater Bay Area of China to accelerate drug accessibility to patients in China in the second half of 2024.

- We expect to submit NDA for VELSIPITY® (etrasimod) to China's NMPA for approval in the second half of 2024.

- We expect to submit NDA for VELSIPITY® (etrasimod) in Hong Kong in the second half of 2024.

mRNA PLATFORM

The clinically-validated mRNA platform is a core part of our discovery efforts and the Company made an important strategic transformation in 2024 by terminating the collaboration and license agreement with Providence Therapeutics Holdings Inc. Everest has shifted our focus to mRNA cancer therapeutic vaccine, to which we have full intellectual property rights and global rights. We currently have four mRNA cancer therapeutic vaccine programs under development for various solid tumor indications. We have deprioritized the development of the COVID19 vaccines due to declining economic and social benefits. We believe our therapeutic cancer vaccines under development hold great potential to address significant unmet medical needs globally.

- In Feb. 2024, Everest announced the termination of the collaboration and license agreements with Providence Therapeutics Holdings Inc. Everest continues to develop its own therapeutic vaccine products utilizing the mRNA platform.

- In August 2024, Everest announced the launch of an Investigator-Initiated Clinical Trial (IIT) for a personalized mRNA cancer vaccine, EVM16, under the study EVM16CX01, at the Peking University Cancer Hospital and Fudan University's Cancer Hospital. This trial is designed to assess the safety, tolerability, immunogenicity, and preliminary efficacy of EVM16 injection as a monotherapy and in combination with PD-1 antibody for patients with advanced or recurrent solid tumors. EVM16CX01 is the first-in-human (FIH) trial for EVM16.

- We expect to submit investigational new drug applications for the Tumor-Associated Antigens (TAA) cancer vaccine in 2025.

Commercialization

We have made significant commercial progress and meaningfully advanced both of our marketed products in the first half of 2024.

For NEFECON®, the leading drug in our renal portfolio, we have successfully launched the product utilizing a combination oftraditional hospitals detailing and innovative online prescribing, to meet the urgent and significant unmet needs of an estimated 5 million IgAN patients. So far this year, we have completed the build-out of the NEFECON® sales force to more than 100 representatives. This team will cover400-600 core hospitals which represent more than 60% of the addressable IgAN population. Additionally, over 23,000 patients have registered pre-product launch in an IgAN patient program, which underscores the significant unmet needs for this first-in-disease medicine. Earlier this year, we also started working with partners to establish an innovative ecosystem for kidney disease diagnostics and treatment, with the aim to provide IgAN patients a tool to enhance disease diagnosis and track disease progression without biopsy.

XERAVA® (eravacycline), our first commercialized product in China and a first-in-class fluorocycline antibiotic, is in its first full year of sales and growth remains robust. To further increase the availability of XERAVA® and expand our reach to more patients in need, we have started partnering with Contract Sales Organizations (“CSO”) to benefit patients outside of our 300 covered core hospitals. This will contribute to product revenue growth, but the vast majority of our product revenue will still be generated by our in-house commercial team. Eravacycline's clinical breakpoint was officially approved by the Expert Committee of the National Health Commission on Antimicrobial Susceptibility Testing and Standard Research (ChinaCAST) for clinical use in China. With the new breakpoint, eravacycline can be recognized by more physicians and patients as the preferred treatment in clinical practice across the country and over 100 hospitals in China have already adopted the new breakpoint. In addition, inclusion of eravacycline in the Catalogue of Hierarchical Management of Clinical Application of Antimicrobial Drugs in Shanghai, Beijing and Guangdong underscores recognition of the drug's clinical benefits by China's key opinion leaders. This year, eravacycline was newly included into The Surgical Infection Society Guidelines on the Management of Intra-Abdominal Infection: 2024 Update and China's Clinical Diagnosis and Treatment Guidelines for Multidrug-resistant Bacterial Infections in Renal Transplantation, and was published in the following medical publications:

We will continue to grow and strengthen our commercial portfolio in the second half of 2024 through persistent efforts and innovative approaches. We maintain full year sales guidance
of RMB700 million from the combined sales of NEFECON® and XERAVA®.

Multiple initiatives are expected to accelerate growth of NEFECON® sales. First, we anticipate inclusion of NEFECON® in the 2024 revised Kidney Disease Improving Global Outcomes (KDIGO) guidelines as well as the first Chinese guideline for IgAN as a first-line treatment for IgAN patients with risk of disease progression. We also plan to actively participate in China's National Reimbursement Drug List (NDRL) negotiations in the second half of 2024, to make the drug more affordable in order to achieve wide penetration of the large IgAN population of approximately 5 million patients in China. Those initiatives are expected to drive higher sales volumes along with the expansion of sales force to around 150 representatives. In parallel, we are working to enhance physician and patient education on the benefits of early treatment with NEFECON® to further improve kidney function protection. Our team is also launching several real-world studies on NEFECON® usage to provide physicians with additional clinical use guidance. Furthermore, later in 2024 we intend to expand availability of this first-in-disease medication to more IgAN patients in Asian regions including Singapore and Hong Kong.

We will continue to grow the sales of XERAVA® through deeper penetration of our covered core hospitals such as expanding usage scenarios. With over a year of XERAVA® clinical experience in China, we expect to publish real world data on eravacycline usage in different types of patients in the second half of this year. We expect this will help guide hospitals and physicians on potentially wider treatment scope. We also anticipate XERAVA® to be included in additional treatment guidelines for anti-infectives and further strengthen its position as a foundational empirical treatment of multidrug-resistant infections.

We will have three commercialized products in the second half of this year with the expected commercial launch of etrasimod in Macau. We will also take advantage of the preferential policies in the Greater Bay area of China to accelerate drug accessibility to patients in mainland China this year.

Discovery

Internal discovery is a key growth driver for the company's value creation. In about three years, Everest has successfully localized a clinically validated mRNA platform and built end-to-end capabilities in house to develop and manufacture mRNA therapeutics.
Our internal discovery team in Shanghai consists of over 30 scientists developing multiple mRNA cancer therapeutics based on our fully integrated and clinically validated platform. We continue to innovate the platform by developing next generation delivery system and improving our mRNA sequence algorism. Everest also established a Good Manufacturing Practices (GMP) compliant manufacturing facility capable of producing clinical and commercial scale mRNA products

In February 2024, the Company agreed to terminate the collaboration and license agreements with Providence and will continue to develop our own mRNA products with full intellectual property and global commercial rights Therapeutic cancer vaccines is currently the core focus area of Everest's discovery efforts as this area holds great potential to address unmet medical needs globally. An Investigator-Initiated Clinical Trial (IIT) for a personalized mRNA cancer vaccine, EVM16, was launched in August 2024. EVM16 is the first therapeutic vaccine independently developed by Everest utilizing the mRNA platform. In the pipeline are various other cancer vaccine programs including a Tumor-Associated Antigens (TAA) cancer vaccine and an immune-modulatory cancer vaccine. In addition, we are also working on mRNA-based in vivo CAR-Tprograms which can be used for cancer and autoimmune diseases.

Business Development

In 2024 our business development strategy remains focused on first-in-class or best-in-class assets in less crowded, high value therapeutic areas such as renal diseases, autoimmune disorders, and anti-infective categories. Given our established strong commercial presence, we are increasing our attention on commercial-stage assets where we can leverage our experienced and effective sales organization to create operational synergies and build scale.
We believe that we can continue to solidify our leadership position across these therapeutic categories through effective pipeline buildup to drive growth of commercial cash flows for the Company and advance our profitability targets outward partnerships, ourcutting-edge cancer vaccine programs based on our mRNA technology platform with full intellectual property rights could potentially bring global partnership opportunities starting at early stage and expand value creation for our shareholders.

Key Corporate Developments

We are working with partners to establish an innovative ecosystem for kidney disease diagnostics and treatment, with the aim to provide IgAN patients with a tool to enhance disease diagnosis and track disease progression without biopsy.

Financial Highlights

IFRS Numbers:

. Revenue increased by RMB 292.6 million from RMB 8.9 million for the six months ended 30 June 2023 to RMB 301.5 million for the six months ended 30 June 2024, primarily due to the combined effect of continued expansion of XERAVA® sales in mainland China and Hong Kong, the launch of NEFECON® in mainland China and Singapore, and NEFECON® sales in other territories under our license.

. Gross profit margin increased from 62.7% for the six months ended 30 June 2023 to 76.6% for the six months ended 30 June 2024, and gross profit margin excluding intangible assets amortization increased from 62.7% for the six months ended 30 June 2023 to 83.0% for the six months ended 30 June 2024, primarily due to the launch of new products.

. Research and development (“R&D”) expenses decreased by RMB 35.3 million from RMB 288.5 million for the six months ended 30 June 2023 to RMB 253.2 million for the six months ended 30 June 2024, primarily due to (i) lower expenditure on clinical trials; and (ii) continued investment in new products from our discovery platform which remained stable.

. General and administrative expenses were mostly stable at RMB 87.0 million for the six months ended 30 June 2024 in comparison to the six months ended 30 June 2023.

. Distribution and selling expenses increased by RMB 136.3 million from RMB 64.1 million for the six months ended 30 June 2023 to RMB 200.4 million for the six months ended 30 June 2024, primarily due to the expansion of the commercial team and increased commercial activities to support the launch of new products and the growth of existing product sales. Commercialization expense-to-sales ratio decreased as we continue to build a more efficient and focused commercialization model.

. Net loss for the period increased by RMB 208.8 million from RMB 423.6 million for the six months ended 30 June 2023 to RMB 632.4 million for the six months ended 30 June 2024, primarily attributable to the one-time, non-recurring impairment loss from an intangible asset related to mRNA COVID-19 Vaccines.

Net loss excluding impairment loss of an intangible asset for the period decreased by RMB 95.5 million from RMB 371.6 million for the six months ended 30 June 2023 to RMB 276.1 million for the six months ended 30 June 2024.

. Cash and cash equivalents and bank deposits amounted to RMB 1,925.5 million as of 30 June 2024.

Non-IFRS Measure:

. Adjusted loss for the period decreased by RMB 114.3 million from RMB 326.9 million for the six months ended 30 June 2023 to RMB 212.6 million for the six months ended 30 June 2024, primarily adjusting for expenses of share-based compensation, loss on impairment of an intangible asset and amortization of intangible assets.

Conference Call Information

The English session of the conference call will be held at 9:00 AM on August 28, 2024 Beijing Time (9:00 PM U.S. Eastern Time on August 27, 2024), and the Mandarin session of the conference call will be held at 10:30 AM Beijing Time on the same day (10:30 PM U.S. Eastern Time on August 27, 2024).

The conference calls can be accessed by the following links:

For English Session:

Time: 9:00 AM Beijing Time, Wednesday, August 28, 2024 (9:00 PM U.S. Eastern Time, Tuesday, August 27, 2024)

Pre-Registration Link:

Webcast Link:

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

For Mandarin Session:

Time: 10:30 AM Beijing Time, Wednesday, August 28, 2024 (10:30 PM U.S. Eastern Time, Tuesday, August 27, 2024)

Webcast Link :

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

The replay of English session will be available shortly after the call and can be accessed by visiting the Company's website at

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 potentially global first-in-class or best-in-class molecules in the company's core therapeutic areas of renal diseases, infectious diseases and autoimmune disorders. For more information, please visit its website at

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.

[1]
Operating expenses as a percentage of revenue = (general and administrative expenses + research and development expenses + distribution and selling expenses)/revenue.
[2]
Commercial profit = Gross margin – distribution and selling expenses.

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