Essex Bio-Technology's interim results for 2026: Revenue declined by 10.5% to HK$785 million and profit fell by 32.2% to HK$111 million, impacted by changes in the regulatory environment. An interim dividend of HK$0.05 per share has been declared.

Hong Kong, August 5, 2026

Essex Bio-Technology Limited ("Essex Bio" and its subsidiaries, collectively the "Group"; stock code: 1061.HK), a leading biopharmaceutical company specializing in the research and development, manufacturing, and marketing of recombinant bovine basic fibroblast growth factor ("rb-bFGF"), a genetically engineered pharmaceutical, announced its interim results for the six months ended June 30, 2026.

Key Regulatory Challenges in 2026

Taxation and Cost Pressures:The value-added tax (VAT) rate on biotech pharmaceuticals has increased to 13%, and centralized procurement has led to price reductions. This combined effect is pressuring gross margins for innovative drugs.

Medical Representative (MR) Compliance Reforms:New regulations have been introduced by national authorities regarding the registration, activity tracking, and training of medical representatives. Companies are now required to log all interactions with healthcare professionals (HCPs) in a traceable system.

Anti-Corruption Campaign by Five Government Departments:Joint inspections are currently being conducted by the National Health Commission (NHC), the State Administration for Market Regulation (SAMR), the Ministry of Public Security (MPS), the National Medical Products Administration (NMPA), and the State Taxation Administration. Key focus areas include speaker fees, conferences, donations, and third-party vendors. Penalties currently include corporate fines and individual liability.

Procurement Environment:Volume-based procurement has expanded to include more biologics and innovative drugs; however, 'pay-for-performance' mechanisms and hospital budget caps have constrained access to hospital formularies.

Business Performance

Amid challenges arising from changes in the regulatory environment, the Group’s revenue for the six months ended June 30, 2026, declined by 10.5% year-over-year to HK$785 million, while profit decreased by 32.2% to HK$111 million. Approximately one-quarter of the profit decline was attributable to a reduction of approximately HK$12.1 million in foreign exchange gains.

The Group operates 47 regional sales offices across China and maintains a strategic hub in Singapore to accelerate its entry into Southeast Asian markets. Leveraging an extensive distribution network, the Group’s therapeutic products are prescribed at over 14,900 hospitals and healthcare institutions and approximately 9,900 pharmacies nationwide, covering major cities, provinces, and counties throughout China. Its products have also gained recognition and are available in more than 1,100 pharmaceutical/healthcare institutions and around 155 over-the-counter (OTC) retail and online platforms across Singapore, Malaysia, and Indonesia.

The Group’s revenue is primarily derived from its Ophthalmology, Surgical (encompassing wound care and repair), and Healthcare & Partner Services segments. Core products currently driving growth within each segment include:

1. Ophthalmology: Befushu® series (Befushu® eye drops, Befushu® ophthalmic gel, and Befushu® single-dose eye drops), Tobramycin Eye Drops, Levofloxacin Eye Drops, Sodium Hyaluronate Eye Drops, Moxifloxacin Hydrochloride Eye Drops, Diquafosol Sodium Eye Drops, Shilishun® Iodine Complex Capsules, soft hydrophilic contact lenses, and other medical devices for myopia control such as accommodative training lamps and Siwen defocus-customized eyeglasses;

2. Surgical (encompassing wound care and repair): Beifuzhi® series (Beifuzhi® liquid formulation, Beifuzhi® lyophilized powder, and Beifuxin® gel), Carisolv® caries gel, ultraviolet phototherapy devices, Pinaike absorbable dressings, Shikejian bilayer artificial dermal repair material, and Osteopore’s bioresorbable dental implants in Singapore (Osteomesh® and Osteoplug®);

3. Healthcare and Partner Services: Yadian Doctor® oral care products, online and offline healthcare services and products, contract manufacturing organization ("CMO")/contract development and manufacturing organization ("CDMO") services, and trading of equipment and components.

Revenue from the Ophthalmology, Surgical, and Healthcare and Partner Services segments accounted for approximately 46.8%, 43.5%, and 9.7% of the Group’s total revenue, respectively.

Combined revenue from the Group’s flagship biopharmaceutical products—Beifushu® Series and Beifuji® Series (bFGF-based biologics)—accounted for approximately 78.2% of the Group’s total revenue, with the Beifushu® Series and Beifuji® Series contributing 37.2% and 41.0% of total revenue, respectively. The remaining 21.8% of the Group’s revenue primarily came from the combined contributions of tobramycin eye drops, levofloxacin eye drops, sodium hyaluronate eye drops, moxifloxacin hydrochloride eye drops, Shilishun® iodine complex capsules, Carisolv® caries gel, Yadian Doctor® oral care products, Pinaike absorbable dressings, Shikejian bilayer artificial dermal repair material, online and offline healthcare services and products, CMO/CDMO services, and equipment and component trading.

The composition of the Group’s revenue for the six months ended June 30, 2026 is shown in the table below:

For the six months ended June 30, 2026, the Ophthalmology segment contributed approximately HK$367 million to the Group’s revenue, a decrease of 12.0% compared to the same period last year; the Surgical segment recorded total revenue of approximately HK$341 million, down 24.0% year-over-year; and Healthcare and Partner Services generated total revenue of approximately HK$76 million, representing a significant increase of 648% compared to the same period last year.

Distribution and sales expenses for the reporting period amounted to approximately HK$397 million, a decrease of 15.9% from approximately HK$472 million for the same period last year. These expenses primarily included salaries, advertising costs, travel expenses, product training, and marketing-related expenditures. This reduction aligns with the decline in revenue for the six months ended June 30, 2026.

Administrative expenses for the reporting period were approximately HK$127 million, compared to approximately HK$100 million for the same period last year. The increase in administrative expenses was primarily attributable to: (i) a decrease in foreign exchange gains of approximately HK$12.1 million; (ii) higher costs associated with business expansion in the United States and Singapore and the online medical consultation platform amounting to approximately HK$4.4 million; and (iii) an increase in R&D expenses of approximately HK$4.1 million.

Total R&D expenses incurred during the reporting period (including acquired intangible assets) amounted to approximately HK$51 million (HK$66.5 million for the six months ended June 30, 2025), representing 6.5% of revenue (7.6% for the six months ended June 30, 2025), of which approximately HK$25.2 million (HK$44.8 million for the six months ended June 30, 2025) was capitalized.

As of June 30, 2026, the Group held cash and cash equivalents of approximately HK$807 million (HK$783 million as of June 30, 2025).

Research and Development

During the review period, the Group had a total of 15 R&D programs spanning from preclinical to clinical stages, several of which in ophthalmology are in clinical development, as detailed in the table below. Notably, EB12-20145P has successfully completed its Phase III clinical trial with the U.S. Food and Drug Administration (FDA), met its primary endpoint, and has submitted a Biologics License Application (BLA) to China’s National Medical Products Administration (NMPA).

The Group holds a total of 132 patents or patent authorizations, including 101 invention patents, 15 utility model patents, and 16 design patents.

The Group has established multiple R&D centers in Zhuhai (China), Boston (U.S.), London (U.K.), and Singapore, which support our efforts in developing novel therapies and attracting global talent.

Honors and Awards Received in 2026

Zhuhai Essex Bio-Pharmaceutical Co., Ltd., a wholly owned subsidiary of the Group, was awarded the title of '2026 Zhuhai Public Welfare Enterprise for Pharmaceutical Safety.'

The Group’s products Beifushu® and Beifuxin® have been included in the 'Guangdong Provincial Key Trademark Protection List.'

In addition, the Group received the 'China Excellence in IR – Outstanding Digital Investor Relations Award.'

Interim Dividend

On August 5, 2026, the Board resolved to declare an interim dividend of HK$0.05 per ordinary share for the six months ended June 30, 2026 (compared to HK$0.07 per ordinary share for the six months ended June 30, 2025), payable in cash on Wednesday, September 2, 2026. The interim dividend will be paid to shareholders whose names appear on the Company’s register of members at the close of business on Monday, August 24, 2026.

Forward-looking Outlook

In light of the critical regulatory challenges faced in China, the Group has prioritized compliance, digital application, and differentiated innovation as key drivers for efficient growth. This integrated strategy will better position the Group to address these adverse factors and the long-term trend of increasingly stringent compliance requirements for innovative pharmaceutical companies, driven by ongoing healthcare reforms in China.

About Essex Bio-Pharma (Stock Code: 1061.HK)

Essex Bio-Pharma is a biopharmaceutical company focused on the research and development, manufacturing, and commercialization of the genetically engineered drug FGF-2. The company markets six genetically engineered drugs in China, including Beifushu®, Beifuji®, and Beifuxin®. Additionally, it offers a diversified portfolio of products, including a range of preservative-free single-dose eye drops and Shilishun® Iodine Lecithin Complex Capsules, primarily used in ophthalmology and dermatology for wound healing and disease treatment.

These products are marketed and sold in over 14,900 hospitals across China, supported by the company's network of 47 regional offices. Leveraging its proprietary R&D platforms in growth factor and antibody technologies, Essex Bio-Pharma maintains a robust pipeline of clinical-stage programs spanning a broad range of therapeutic areas and indications.

5322 Views