Good morning, welcome to Everest Medicines 2026 earnings call interim, and all the participants are on mute now and we will have a Q&A session later. We have a statement before the moderator speaks up.

This is a pharma CITIC Securities whitelisted meeting. Only invited clients are allowed to attend.

Without written permission of CITIC Securities and the speaker, no one shall disclose the content and relevant information of the meeting in any form. CITIC Securities reserves the right to pursue legal responsibilities in violation.

Dear investors, welcome and good morning. Welcome to the interim earnings call of Everest Medicines 2026.

I'm Chen Zhu and Dr. Zhou are online as well.

We have this heavyweight management team attending the meeting as well, including our Chairman Bill Wu, CEO Rogers Luo, CFO Ian Woo, and all of us are on this call today. We should say that for the first half of the year, we have strong growth in commercialization, under IFRS, non-IFRS, we are turning positive and we have a 97 million profit, and revenue grew by 157% to over 1 billion RMB.

The R&D, BD, commercialization have all seen great achievements. In R&D, on IL-001 we have released the excellent 52-week clinical data.

Moreover, we have reached an BD out-license with Tareferic with a value of 1. 1.14 billion.

Then we have CAR, we have a novel bridge, all these pipelines ongoing forward as we speak. In terms of commercialization, we have integrated Haisco Pharma marketing team and it's going on.

For nephrology and autoimmune categories, those are the strong suit of us and we are adding more categories like cardiovascular and metabolism applications. We have huge potential for commercialization going forward, and we are continuing to build the platform of commercialization in China for novel drugs and we are also going global.

It's one of the few company with so many capabilities in biotech and biopharma. The overall performance for the first half of the year, that's all for me, and I'd like now invite Ian Woo, CFO, to introduce the details to you.

Thank you, Chen Zhu. Welcome investors for attending this earnings call for the first half of the year.

Chen Zhu, thank you for your introduction and the summary. I will report on financial performance of the company, and followed by Mr.

Rogers Luo to introduce the operation summary, including commercialization and the R&D progresses. Finally, we will have Bill Wu, the Chairman, to introduce the strategic progress of the company, and eventually we will have a Q&A session.

Management team will be here to answer the questions from our investors. First half of the year, the revenue reached 1.15 billion RMB, growing by 157% year-on-year.

Benefited from Nefecon for the second year in NRDL, maintaining a fast growth rate. For the first half of the year, Xerava in-market sales also achieved great growth.

Unfortunately, we had some tight supply issue for overseas CDMO, which has some impact on channel and sales. Accumulated loss of shipment value is about 150 million RMB, it means the revenue should be more than 1.3 billion.

The gross margin after eliminating intangible asset amortization is 73.7%. Under IFRS, net profit is a minor loss of 5.94 million, reducing by 244 million over the same period last year.

Under non-IFRS adjustment, we excluded the salary expenses based on shares, intangible assets impairment, and intangible assets amortization, net profit actually reached 97.23 million RMB. Regular operating profit reached 48.12 million.

Between these two numbers, there is a adjustment because we have eliminated the fair value adjustment for Midco investment, and also our subsidiary, Newbridge Pharma's loss attributable to us. The 48.12 million RMB of operating profit reflects the real performance of the company.

This number shows us that our company is entering a phase where we are turning loss into profit. By the end of June this year, cash balance is 1.86 billion RMB.

In July, we have received the EVER001 out-license down payment, which is 770 million RMB, we have a solid cash reserve. Now let's look at the three expenses: sales, R&D, and general and administrative expenses.

For the first half of the year, we expanded the sales team for Nefecon and Velsipity. We are also building capability for commercial platform, sales expenses grow to 458 million RMB, but due to the huge growth of revenue and improvement of operating efficiency, sales expense rate actually reduced to 36.8- 39.86%.

R&D is similar. It gone up from 195 million to 256 million this year, but the ratio actually reduced from 47- 46- 44% to 22.31%.

SG&A gone up from 111 million to 149 million this year, but the ratio reduced from 24.84% to 12.95%. Overall, we are optimizing the expense structure.

The ratio of those expenses have improved by a lot. This is the complete profit and loss statements for the first half of the year.

While we are achieving rapid growth in revenue, we have improved our operating efficiency. Non-IFRS net profit is now turning positive.

Cash balance is abundant and we have shown the numbers already. Now I'd like to invite CEO Rogers Luo to introduce the latest updates of the operation.

Thank you. Like we said earlier, for commercialization, Nefecon is maintaining a great momentum reaching almost 900 million RMB sales, growing by 94%.

Last year is the first year for NRDL inclusion, and this first half of the year, we are maintaining great momentum. Xerava for infection, we can see there's a strong demand.

In-market growth is 28% for the first half of the year. Like I said before, we had some supply chain challenges.

We had a tight supply for over a month. If we had a supply chain stable, I believe there's another sales which is about 150 million.

We have plan for production capacity and which is ongoing according to the plan. The other one is Velsipity, approved this February, and it now is commercially available on the market.

We also started localization for manufacturing, and we have completed the technology transfer. Velsipity is a big novel drug, and we will talk about that later.

For the first half of the year, we also applied for PCSK9 drug, lerodalcibep. For R&D, we have EVER001 going global for nephrology, a very important product for nephrology.

EVER001 BD ops is going to be a milestone event for Everest Medicines, and we reached a 1.14 billion US dollar out-license. We are working with partner, Travere.

We are planning to talk to US FDA hoping to enter clinical trial Phase 3 directly. In China, we have started basket trial already including indications, FSGS, MCD.

Aside from PNH, those are indications without treatment in China. We have enrolled patients already.

The other one is VR-101, which is for ophthalmology. We have started the 2b clinical trial.

For our own R&D, aside from individualized vaccine we reported earlier, we have IR-16, and we had a Phase 1a clinical trial readout and which is reported on AACR meeting in this April. We are hoping to release the data as soon as possible.

The other one is EVM-14, it's a general cancer vaccine. We have enrolled patients in both China and the US.

We also have developed immuno-related vaccine called EVM-15. Now we are doing preclinical studies.

For immuno CAR-Ts, we have EVM-18 and which is in currently in Phase 1. That's for R&D.

For BD cooperation, like we said earlier, we have BD out. For licensing in, we have MT-1013 for Myco, and we have bajecin and we also have licensed in DMX-200 to enrich our nephropathy leadership.

In the meantime, for cardiovascular indications, we have licensed in cardamist, vicagrel, which is a antiplatelet drug to treat ACS. We have some CSO pipelines together with innovative drugs so we can expand our cardiovascular field.

For ophthalmology, we have also licensed in an eye drop for presbyopia. Aside from that, we are going global.

We have acquired Haisco Pharma Asia Pacific business. It's going to be a solid innovative drug commercial platform going forward for Asia Pacific.

Now, I'm going to go deep diving onto the drugs. We talked about Nefecon.

First half of the year, the revenue has been really a highlight. Year-on-year growth reached 194%.

We have a few arrangements. Because we have now more accumulated real-world evidence, these medical evidence, not only from China, but also from European Union and the United States.

On the conferences in Europe and US, we have published the papers and this is very important because it's kind of reshaping the guidance of IgA nephrology. Nefecon is the first-line treatment for IgA nephropathy, and we are maintaining this position because of these studies.

Nefecon is not just a treatment drug, but also we have seen that if treated earlier and longer after 9 months, patients can benefit long term, which is a great opportunity and foundation for long-term growth of Nefecon. We are also reached agreement with Hainan, Haisco, and we are starting prescription in many places in China.

For sales, the growth part of the growth is coming from the strong demand, but also we are expanding the marketing team, sales team from 200 to 300 people, and the hospital network coverage reached 2,500. We believe the second half of the year and next year, we will maintain the continued momentum of growth for Nefecon.

We talked about Velsipity already. This March, it went public, went to market.

Velsipity is a preferential treatment for ulcerative colitis. There are two things going on which are very important.

First is to build our sales team. Secondly, we are working on many evidence-based studies.

In September, we'll attend the NRDL negotiation. The positioning of Velsipity is not only for ulcerative colitis with high healing effect on mucus, it's orally taken, much easier than traditional antibody on the market which has to be injected.

We have high healing effect for the mucus, and we expect to get into NRDL very soon. If we can be successful with NRDL, next year is going to be a huge growth point for us.

We're starting localization manufacturing. Technology transfer has completed.

We believe by the end of 2027 or 2028, we can have local supply of Velsipity, which will reduce the cost of production. We also mentioned earlier about Xerava.

Clinical demand is strong. In-hospital grew by 28%.

Again, we had some CDMO tight supply issues, for almost 2 months we could not get the product. We had zero inventory for that period of time.

We believe if we had a better supply chain, the first half of the year should have another sales of 150 million to 200 million. That's why we are working on localization for manufacturing.

We expect to locally produce it in 2028. Xerava is for the treatment of various drug-resistant bacterial infections, mainly used in ICU and the respiratory departments.

For CSO, we have Haisco Pharma. With other drugs, we have very good synergy, and that's the CSO synergy we have achieved this first half of the year.

In future, we will continue to focus on these areas. Another project this year is that we are going to attend National Medical Insurance Program this year.

If we are successful, Xerava next year will also see huge growth potential. The previous generation of tigecycline has huge volume in China, close to 10 million.

Now it's a out-of-pocket payment, the demand is not high yet, but we expect to see huge growth next year. In March, we had a CSO partnership with Haisco Pharma.

The service revenue is 145 million RMB, and then you can see the number of the profit. We are actually improving the synergy, improving the sales efficiency.

Firstly, we are integrating the resources including compliance and dynamic operations, and also expanding the hospital network from 10,000 to 15,000 hospitals. That's going to help us to scale up for Xerava next year once we are approved for NRDL.

CSO is not only for anti-infection and Rocephin, but also for cardiovascular because we are entering cardiovascular and metabolism area. Cardamist, we expect that maybe by the end of the year we will get approval.

Cardamist is for cardiovascular indication, and Haisco, a product include Peter B, Abecin, those are also in synergy with cardamist. Then we have introduced PCSK9 lerodalcibep, and these two and the Velsipity, a big role.

These are the two products for cardiovascular as well. The CSO service with Haisco Pharma are actually reinforcing our strategy in these two areas.

Going looking into 2028, you can see the Everest Medicines innovative drug, we have a strategy called 3+3+1. The first three means we expect to have three products listed in NRDL, including Nefecon, Xerava, and cardamist.

The other three means in 2027, we will expect to have two new drugs, including this eye drop for presbyopia and lerodalcibep. The other one is that we have a GDL-G1 detection reagent for IgA patients.

It's for their diagnosis and for their long-term follow-up. It's a reagent.

In 2028, we will have nephropathy drug of 1013 going public, going to the market to further enrich our portfolio. We have a objective that every year we should have two or three new innovative drugs in the pipeline to continue enrich our commercialization pipeline and generate cash flow.

Now, I'd like to introduce that in Q3 this year, we expect to get approval for cardamist. The feature of this cardamist, firstly, it's the only drug approved by FDA for the past 30 years for PSVT, paroxysmal supraventricular tachycardia.

For PSVT patient, the heart rate can be very high, and it's a agony feeling with the severe symptoms. They need to be emergent treated in the emergency room.

Cardamist changes the treatment paradigm. In the past you have to go to the ER for treatment.

Now the patient can do their self-help, self-treatment. It's a nasal spray, the patient can administer the drug by themselves in the nose.

In 5 minutes, it's going to kick in. In 17 minutes, the median cardioversion so 17 minutes is the median recovery time.

So 60% of the patient or above could achieve cardioversion, and then that means the disappearance of the symptoms. Again, it changes the treatment pathway, we believe it's a huge opportunity.

Then for PSVT indication, once it's approved this year, we are working with our partner now. We are developing new indications which is Afib-RVR.

Afib incidence is very high. Compared with PSVT, Afib patients could be 100% more than the PSVT patients, so that means huge potential going forward.

Now we're working with partner to get the Phase 3 clinical trials globally. China is part of that, and so in future it will also be approved for China market, and it's a huge growth potential for us.

Next one is the LNZ100. LNZ100 is a consumer type of presbyopia eye drop.

In the morning, you only get one drop, it will maintain a good result for 10 hours. Improves the two-line vision.

By the end of 10 hours, 70% of the patient or 60+ percent of patient can improve the vision by two lines or above. Not only it improves the presbyopia patient, it also helps the older people to engage more socially.

It's a heavyweight drug in the future. We expect to be approved next year.

MT-1013 has been introduced earlier. It's a first-in-class bispecific drug for SHPT.

It's redefining the SHPT treatment paradigm with huge market potential. The significance of this drug is that not only it is highly effective in therapy, it's actually helping us to expand our product pipeline from primary glomerulonephritis to chronic kidney disease.

Glomerulonephritis patient in China is 10 million, but the chronic kidney disease patient is close to 100 million. It's a new field for us.

EVER001 is also significant. We are developing more indications.

It's a pipeline with multiple indications with very good PNA data. A basket trial has started in China.

We have enrolled patients for FSGS. Far, there is no treatment for FSGS.

Then you have PMN, MCD, these are the new indications. Then we are working with our partner, Travere, based on their development capabilities.

Now we're working with them to talk to FDA to get into Phase 3 clinical trial directly, and that's working very well, and the nephrology treatments is improving and they have the capability to bring it into Phase 3 clinical trial. DMX-200 is for FSGS.

It's a CCR2 inhibitor. We are doing some licensing in.

FSGS globally, there is only one drug approved. There's no drug approved in China.

Another big potential for us. Looking at the Phase 2 readout, and we have seen good readouts.

Global Phase 3 trial is ongoing and we expect to be approved in China. That's going to be a groundbreaking drug for FSGS in China, further consolidating our leadership in nephrology.

For nephrology, we have glomerulonephritis treatment, Nefecon. Then we have other primary nephrological nephritis, glomerulonephritis.

For PMD, FSGS, and MCD, we have new treatment indications. We have DMX-200 for FSGS.

We have licensed in a bajecin as a brand new antibody. Then we are also expanding into complement inhibitor and B-cell inhibitors to further enhance our position of leadership in primary glomerulonephritis.

Then for clinical chronic kidney disease, which is a bigger patient audience, it's more than 100 million. We have MT-1013 already.

We are evaluating new opportunities for licensing in like ETA and CKD comorbidity complication management. We are trying to introduce new products to consolidate further our leadership in nephropathy.

Next, let's touch upon R&D. We are a globally leading mRNA platform.

We have end-to-end capability from antigen design algorithm. We have iterated this mRNA system four times, and we have LNP target technology and ADC technology.

We have the IP ourselves as a platform. From this platform, we have developed two types of treatments.

One is vaccine treatment, the other one is mRNA CAR-T treatment. We have individualized vaccine, and the pathway vaccine, and the immunoregulation types: EVM-16, 15, 14.

EVM is still in preclinical phase. The other ones are all in clinical phases.

The other one is immuno CAR-T, EVM-18. We are working on IND application globally for autoimmune indication.

We have developed another bitarget immuno CAR-T, EVM-20. EVM-20 is a double target immuno CAR-T which can deeply clear B cells, which can be used for autoimmune and hematological tumors in future.

Now it's in a PCC stage. EVM-18 is in human test now.

We have reported many times before on the data. IIT is in progress.

A double target CBM, we expect to finish PCC by the end of the year. Next year, we can apply for clinical trial at a proper time.

EVM-14, we got IND from both China and the US. We are starting the clinical trial, enrolled patients for both China and the US.

This is for relapse squamous non-small cell lung cancer and head, neck squamous cancer as well, which is a huge demand as well. Then EVM-16 is individualized treatment plan.

IGM-1A clinical trial has readouts, and the immunogenicity is great with great response. For EUA trial, we have very good clinical effect.

Some patient have seen partial remission with SD, stable disease. We are applying for IND with FDA and NCD by the first half of next year.

That's our overall R&D strategy and commercialization strategy. We have been building capability for the past 2 years.

We have a great A2MS platform trying to achieve the best outcome with the most efficient investment. On this platform, we have the success of Nefecon, success of Xerava, and going forward we will focus on Velsipity.

Then as an CSO, we will introduce some classic drugs and brands. That means we will have full life-cycle capability, and this capability can be easily replicated and evolved so to propel our future new products and enable the team for long-term and stable sales growth.

Now I'd like to invite Bill Wu to introduce the corporate strategy.

Thank you, Rogers. A base update of the strategy.

Luo set has talked about A2MS platform, which is our core competitiveness. Going forward, we will continue to enhance our A2MS platform, and secondly, we are upgrading and escalating A2MS so we are covering the full life cycle of the product and all the channels.

The A2MS model will also be replicated to overseas market. For BD, we are insisting on our plan.

From the beginning of the year, every year we introduce 3 to 5 heavyweight products, that means the peak sales of over 2 billion each. In 2, 3 years' time, we trying to go put them to the market and reaching peak sales in 5, 6 years from introduction.

Currently, we see that we have achieved those objectives. After a year of effort, aside from BD pipeline which is being enriched, in the pipeline we have almost 20 projects by the end of the year.

It's going to be more than 20. By the end of the year, we expect that in China and outside of China, we're going to have 20 pipelines each.

Aside from the product already on market in China, we have 3 5 to 6 projects in Phase 3 clinical trial stage, and 2 or 3 new product will go to market. For BD strategies, we have license-in and license-out at the same time.

Then we have early-stage BD and commercialized BD, these are going hand by hand. To the art chart on the left, we have two positive feedbacks.

We have introduced the study R&D and introduced the study. Once we have cash generated, we can support R&D investment.

We call it the EVER001 model. To the right-hand side, it's the Nefecon model.

We introduce commercialized pipeline with high quality, we can upgrade our commercialization capability which generates sales returns. With higher capability of sales and cash flow, we can continue to enhance the next round of BD assets.

That's the two-way BD, early BD and the commercial BD, for two positive feedbacks. For overseas operation, one is in the Western world, the more developed markets.

We have a 16% of stake at NovaBridge, we have synergy with them for commercialization and development. NovaBridge is responsible for Europe and the US.

Everest is focusing on the resources from China. We have data, we have cost benefits, we can empower NovaBridge global strategy, and we are responsible for China and the emerging markets for commercialization.

In Southeast Asia, we established a new platform for emerging market called EverArc. We have 120 people in the team, and the sales value is more than 80 million US dollars, and we are expanding our capability for overseas self-operated commercialization.

In our milestones envisioned for the first half of the year, we have delivered a few. First is Velsipity, which is approved in China.

The other one is EVER001 for out-license. Lerodalcibep, we have submitted BLA application.

VR-101 is entering Phase 2b clinical trial. In the second half of the year, we will have a further milestones.

First is cardamist. In maybe August, September, it will be approved in China.

Velsipity and Xerava, we are hoping to get some success with the negotiation with NRDL. MT-1013, we will complete the clinical trial and we will apply for application first quarter next year.

Then we have EVM-18 submitting FDA and IND. These are the milestones going forward.

Then the Strategy 2030, again, we aim to achieve a revenue of 15 billion RMB to become a Everest Medicines 3.0. We will become a leading comprehensive biopharma technology company in Asia.

We have N+X portfolio. We have three capabilities, R&D, BD, and the strategic cooperation.

One step at a time, we will deliver all milestone according to the plan to reach our goal. That's pretty much for the presentation.

Thank you, Bill, and thank you for all the managers. I'm Zou Zongyin from CITIC Securities.

Time for Q&A. I'd like to start first.

We've seen that you have created a great pipeline. You're making progress with an N+X strategy.

What is the BD plan for the second half of the year? You said that you all have synergy with NovaBridge.

What are the new focuses going forward in the second half of the year?

For BD, we will continue have two-way BD. For out, on top of the mRNA platform, we will continue to consolidate our capability through global partnership.

We hope to get some success in as soon as possible. We will continue to work with NovaBridge through strategic synergy.

For in, for indications, we are talking about cardiovascular, metabolism, nephrology, ophthalmology, autoimmune, immunotherapy, these are the most of the growth opportunities. For the second half of the year for Phase 3 or beyond stages, we will have 1 or 2 deals in the second half of the year.

Then for the early R&D project, we will have 1 or 2 deals as well. Thirdly, we are enriching our portfolio in Southeast Asia, in the second half of the year we will have 1 or 2 BD deals as well.

That's the basic plan for the year.

Thank you, Bill.

We're looking forward to bigger deals going forward. Now from Guosheng Medicine, you can ask questions.

Thank you. I'm from Guosheng Pharmacy, my name is Hui Yao as a researcher.

For commercialization, this year we looking at your portfolio and we are enriching the coverage of departments and you are enriching the pipeline echelon. The structure is more of higher scale now.

The first half of the year based on your commercialization achievements and going forward every year you will have 2 or 3 new products approved, and then you are going to get NRDL coverage, and for China, maybe you can tell us the commercialization outlook for the year and for next year in China.

Thank you, Hui Yao. For the first half of the year, Nefecon maintained a great momentum of growth.

For IgA nephropathy patient, it's a huge potential because it's more than 1 million patients. Every year, there are newly diagnosed patient of 100,000 for kidney patients.

Nefecon penetration, I think is a huge potential for us to penetrate into the new patients, let alone the IgA patients where the proteinuria is between 0.5 to 1 g, that's the patients that need to be treated. IgA patient need to be treated, Nefecon is for them as a first-line treatment, cornerstone regimen.

We believe the huge potential is still there for Nefecon. We know there are bio agent being approved.

I think they're approaching to be approved, but still in this field, it's very hard to shake the position of Nefecon. For the severe patient with a proteinuria over 3 g, there is still room for combination treatment.

In clinical guidance, there's a clear statement. Aside from Nefecon, we have a CSO service as also another potential for growth for synergy for critical disease, cardiovascular field.

Next year, there will be a NRDL negotiation. If we can include Xerava and Velsipity into NRDL, next year is going to be a year of a scaling up.

In UC field, in ulcerative colitis, the patient being treated, there are already 450,000 of them, and then potential patient can be another 800,000. Then bio agent is treating 100,000 of them, so many of the patients are not treated.

Velsipity is orally taken. It's a very effective, very convenient for the patients, we believe we can enter 4/5 as a patient group.

Aside from these two product getting on to NRDL, by the end of the year we expect the cardamist, like I said earlier, cardamist is a consumer kind of consumer-grade product with huge growth potential and huge demand. Then there are new product to be approved.

Next year, we will see huge potential. Then we have acquired Haisco Pharma Asia Pacific business, which will continue to grow steadily, the revenue scale of the company will continue to expand to become a company with huge revenue scale.

In the meantime, we will continue to expand our echelon and that's the growth momentum of the company and that's the outlook.

Thank you, Rogers, very clear. We wish all the best with your NRDL negotiation.

That's all for me.

Next I'd like to invite from Guolian Minsheng.

Good morning, hello, I'm from Guolian Minsheng, analyst Luo Bi. Thank you for the opportunity.

As you mentioned, in CAR-T you have some products. Maybe you can update immuno CAR-T.

What is the cadence and milestone for the readouts? You have gene, IIT, there are disclosed the risk events for immuno CAR-T.

Is that going to affect your subsequent experiment progress?

For the gene treatment risk events, I think it's not related to us, to my knowledge. It's a AAV lentivirus mechanism, not our mechanism.

Our immuno CAR-T, EVM, we have completed preclinical steps, we are applying for IND with FDA, human IIT is initiated. Now it's for autoimmune indication.

The other one is the double target EVM-20. B cell and the plasma cell are both the part targets.

It can deeply induce the remission and reconstruct the autoimmune system for oncology indications. We expect to complete PCC by the end of the year.

That's the update. Thank you.

Thank you for the updates. That's all for me.

I'd like to now invite from Changjiang.

Morning, I'm from Changjiang Pharma, my name is Wantian Li. Thank you for this opportunity.

I'm happy and thrilled to see that Everest Medicines has very good highlights in this interim results. My question is on oncology vaccine, tumor vaccine.

What is the clinical progress update for tumor vaccine? What is going to be the future cadence readouts, for instance?

As we said earlier, we have three vaccines. Two are in clinical trial.

One is EVM-16, individualized vaccine. On AACR April meeting, we have announced published the result.

In the hospital, it has a IIT. The complete data set will be published on important international conferences.

Now we're working on 1b trial. By the fourth quarter, I think we will have a non-small cell lung cancer maintenance maintenance treatment, the first patient will be enrolled by the end of the year.

We can expanded indication cohort exploration. By the end of the year, we will submit IND to FDA, hoping to get approval next year.

That's individualized tumor cancer. The other one is general vaccine, EVM-14.

US and China are both in clinical trial one, Phase 1. Single dose escalation, monotherapy dose escalation is in the first half of the year to determine the dose.

IIT combination drug, we expect by the end of the year we will enroll the first patient. Second half of next year, we will have a dose escalation completed.

That's the cadence of the trial. The other one is immuno regulation tumor cancer tumor vaccine, which is in P4 stage, PCC stage.

Thank you for the answers. Now I'd like to invite from Northeast Securities.

Thank you for giving me this opportunity. I'm Xidong Ping from Northeast Securities.

I want to ask for Velsipity going forward. What is the sales plan for Velsipity going forward?

Thank you for the question on Velsipity. Like I said earlier, in March, we completed commercialization.

We have a commercial team: sales, marketing, academic, and we are rigorously promoting Velsipity. One thing to mention is that for ulcerative colitis, the patients that are treated, number is 450,000.

Most of them are using 5-ASA. There's no evidence for the healing of mucus.

Then 80,000 to 100,000 patients are treated with bio agents. It's very limited.

Then for Velsipity, it's a three-in-one treatment. Efficacy, safety, and convenience are both available.

Deep mucus healing effect is 51%. We don't have head-to-head study, but it's the best-in-class.

In terms of safety, compared with the bio agents which has secondary infection issues, JAK inhibitor has black box warnings, then convenience, it's orally taken. Another update on that is that Velsipity indication is for moderate to severe indication.

Our partner, Pfizer, expect to apply for mild to moderate UC in the upcoming September. In China, we will also do that.

We expect to submit approval application for mild to moderate ulcerative colitis. That is expanding from severe to mild patients.

Now, this product is not only similar to bio agent for moderate to severe patients, but also for the mild to moderate patients who are currently using 5-ASA. For those patients treated on 5-ASA, there's another 300,000 patients of them.

They can use it as a first-line treatment. If that's the case, you can see the potential can be huge.

Aside from HSM, we expect by the September next year, we will negotiate with NRDL. If it's successful, it is going to give us huge growth momentum.

Thirdly, for Nefecon, Xerava had a shortage in supply, that's why we are doing local manufacturing for Velsipity as well. We have completed the technology transfer, the technology is transferred from US to our factory in Jiashan.

No later than 2028, we will be able to make it locally, we can stabilize the supply chain and reduce the cost. That's the cadence.

We have a HMS team, we have medical insurance negotiation, we have new indications, and expansion of the indications, that is pretty much it, aside from local production.

Thank you. I'd like to invite a colleague from Zhongtai Securities.

I'm Yushan from Zhongtai Securities. We've noticed that your partner, they have a highlight in the semi-annual reports.

Does that help you to accelerate your overseas clinical department? Maybe in future, what is the update on the new various indications?

For zibotentan, we're working with Trevi on zibotentan. As you said, Trevi in Q2, on their earnings call, they disclosed that they're going to start clinical 3, global clinical 3 for membranous nephropathy.

They are judging the clinical 3 possibility for FSGS and MCD. They also disclosed that aside from membranous nephropathy, FSGS, and MCD, they are considering other immunomediated nephropathy potential.

Trevi is using this product as a pipeline in a product for multiple indications, which is also our idea at Everest Medicines. In China, we have started a clinical 2 basket trial, including FSGS and MCD patients and IgA patients.

If the profile of the product has been approved in nephropathy, we know PDK inhibitor could be used for other autoimmune indications aside from kidney. We hope that in future, this product could help more autoimmune patients.

Trevi in nephropathy, they are developing the global market in registration, in commercialization. Trevi has a lot of experiences in nephropathy, working with them together is definitely going to help us on R&D and on commercial opportunities.

Like Bill said earlier, really one of the BD direction going forward for us is to license in early-stage products. Zibotentan is a license in for Everest.

We had a clinical trial to get POC data, and we have used that to accelerate the process of licensing in. This is a success example, and we will continue to try to replicate this success in future at Everest Medicines.

Very clear, no more questions for me.

I'm Yang Yizhong from CICC.

We've seen some more and more generics on the market already, how do you evaluate the impact from the generics for Nefecon? What is your measures that's been taken to handle generics?

Nefecon patents are expanding. Once approved, we will new litigations to counteract with the generics, making sure they cannot go to market.

Like you said, there are generics approved. For BE bioequivalence, they're going to market, but they don't have clinical data.

I hope and I believe the doctors and patients will make the right decisions. Then secondly, we are working with Hainan, Haisco to reach an agreement, settlement on budesonide enteric-coated capsules.

We are responsible for this commercialization in mainland China. The out-of-pocket patient are now expanded.

The third one is the IgA market, which is huge. Aside from the existing 1 million patients, every year there will be another 100,000 patients.

That's going to be the huge driver for long-term growth of Nefecon. Everest currently has only used to have only one blockbuster, but we have more enriched pipelines, that means we are diversifying our top products, including cardamist and Velsipity, which will be included in NRDL.

We are very confident in revenue growth going forward.

Very clear, thank you. Next colleague is from Tianfeng.

Thank you for this opportunity. I'm Li Huiyao from Tianfeng.

You mentioned you have more pipeline for nephropathy. You have introduced a lot of post-stage nephropathy novel drugs.

I'd like to ask about your strategy on sales team, and is that going to change your expenses going forward?

We have new product like Velsipity, cardamist, eye drops, we will build our sales team ourselves because they're specialty drugs. According to our BD strategy, we will continue to introduce more and more drugs.

We have Velsipity for autoimmune, cardamist is cardiovascular, and we have ophthalmology. For all the new areas, we will build our new team for sales.

Secondly, we will control the sales expense rate. As we have introduced at the beginning by Ian Woo, the sales expense rate is relatively low.

At the beginning, it was only 40%. Now we have more products, and we are growing the revenue, the efficiency will continue to improve.

The sales expense rate will continue to drive down from 40% to lower point, maintaining our better profit margin.

Next colleague is from Fangzheng.

Thank you. I want to ask for the early R&D team.

What is the team status? What do we expect to see for new R&D

getting into IND stage next year? As introduced, we have team for mRNA platform, it's a end-to-end platform.

We have tumor vaccine from mRNA platform and immuno CAR-T therapy. For mRNA, we have EVM-18 in vivo CAR-T, double target EVM-20, and EVM-16, 15 for tumor therapy vaccine.

These are going to be the new IND molecules. They have been advanced as we speak.

Secondly, we're looking at new R&D projects. We will introduce new technology platforms to continue to expand R&D pipeline.

To add a little bit, now in China, there are many bio-innovative teams and companies in China. Kangqiao ecosystem has a lot of PCC projects in PCC stage or before IND.

By the end of the year, maybe you will see new target pipelines entering into our early R&D pipeline stage. Thank you.

No more question. Next colleague is from Southwest.

Thank you. I'm Kang Xiangyang from Southwest Securities.

I want to ask about your Southeast Asia business, which is a big strategy for globalization. Thank you.

Bill, you maybe adding a few points.

We have a strategic integration. In Southeast Asia, we are doing license in also for Southeast Asia, including Cedatrenine, bajecin, and vicagrel.

We are expanding our Asia Pacific team capability, and we are introducing new products through license in based on Everest Medicines' capabilities. EverArc, we have acquired them and we're making progress in integration.

The sales team is stable, business is growing steadily. Up to now, by the end of last month, as you see, the number has shown slight growth in revenue.

EverArc business has been very stable.

Thank you. Next colleague is from Huafu.

You hear me?

Yes.

Thank you. I'm Yang Yang from Huafu.

I want to ask about the revenue and profit and gross margin guidance going forward in the next 2 to 3 years. What is the growth rate?

Maybe you can give us some breakdown of the pipelines, the products, and also the guidance on gross margin and the net margin?

Thank you for the question. Now we are accelerating the implementation of new strategies and scaling up.

We are introducing new products. We are seeing the improvement of synergy and the economy of scale of the commercial platform.

We expect to maintain a very good growth in revenue, and in the meantime, we will continue to improve efficiency operation through operating leverage, and the profit will continue to grow with revenue growth. Many of the products are in different stage of commercialization and in the life cycle.

We do not have breakdowns of the long-term growth of individual product. Long-term static objective, our objective is to maintain 70%+ gross margin with a more higher scale and portfolio optimization and improvement of operational efficiency.

We expect to have a more than 30% of EBITDA profit, profit before interest, tax, depreciation, and amortization. In our strategy plan, we mentioned earlier, we have a 2030 plan for revenue of 15 billion, and one step at a time, we will deliver the milestone, and every year we will reach a new level.

Thank you. Wish you all the best.

Thank you. I want to thank the management for the detailed explanation and thank you for your time.

That's the end of the Q&A session. We have seen that the performance of the Everest has been really promising, and you're doing buybacks and you're increasing your stakes in the company, showing your confidence in future development of Everest.

Finally, Bill, maybe you can conclude by sharing the corporate strategy.

Good morning. I want to thank all for you attending this earnings call this year.

With the lack of shipment for Xerava, we still reached a revenue of 1.15 billion with an operating profit of 48 million. We reached the goal for home and abroad.

We have a BD acquisition going on, but we still maintain a very healthy and strong cash margin. We have our stable asset liability level.

We are working with Haisco. We have BD introduction, we are expanding to Southeast Asia, we are doing R&D milestone delivery, competing with Nefecon generic drugs, and the listing of Velsipity.

The team is getting stronger and stronger, and we have 1,000 people in the sales team. A2MS platform is now complete, replicated to overseas market.

We are delivering according to our strategic plan by the beginning of the year. On the interim meeting of the company recently, we stated that we continue to build a valuable, expected, and respected company.

We will see growth in revenue, profit, and cash flow. We will prove ourselves as a valuable company through our R&D and pipeline.

Secondly, we're a company to be expected. We have excellent commercial capability, two-way BD capability, we have organizational capability, we have enterprising culture, and entrepreneurship make sure that we have capability to deliver.

Thirdly, we are trusted company. We are a value-oriented, risk-controlled discipline for investment.

We will maintain and protect our investors. Rest assured, we are a company that's trustworthy.

We are upgrading to Everest 3.0. We are insisting on innovation, long-termism, we are insisting on the fundamentals, we are steadfast, and we will continue to build again a valuable, expected, and trusted Everest Medicines.

I want to thank for supporting and trusting us.

That concludes the meeting today, and wish you all the best. Thank you.

Thank you, everyone.