Annual Report 2022

MANAGEMENT DISCUSSION AND ANALYSIS 12 The United Laboratories International Holdings Limited Annual Report 2022 Veterinary drugs recorded sales revenue of RMB796.9 million during the year, representing a significant year-on- year increase of 106.1%. In July 2022, The United Animal Healthcare (Inner Mongolia) Co., Ltd. （內蒙古聯邦動保 藥品有限公司） (“United Animal Healthcare”), a wholly-owned subsidiary of the Company, entered into a strategic cooperation with Muyuan Foods Co., Ltd. （牧原食品股份有限公司） (“Muyuan Foods”) to jointly establish Henan Lianmu Veterinary Medicine Co., Ltd. （河南聯牧獸藥有限公司） , which is principally engaged in the production and operation of veterinary drug powder, powder for injection, disinfectants (solid, and liquid), water for injection, tablets and intravenous infusion products. During the year, the joint venture project progressed smoothly, and United Animal Healthcare and Muyuan Foods entered the stage of comprehensive and in-depth cooperation. Progress of Pharmaceutical Research and Development During the year, the Group invested a total of RMB593.6 million in pharmaceutical R&D, with a year-on-year increase in R&D expenses of 27.6%. The Group has 29 new products under development, of which 15 products are class-I new drugs. The Group has established a comprehensive research and development system characterised by collaborative development among multiple platforms such as biological research and development, chemical drug research and development, innovative drug research and development, clinical research centre and external cooperation, focusing on endocrine, autoimmune, ophthalmology and other fields. During the year, the Group made significant progress in various research and development projects. In June 2022, the Group obtained the clinical trial approval for its insulin degludec and insulin aspart injection from National Medical Products Administration (“NMPA”), making the Group the second enterprise in China to obtain the clinical approval of the biosimilar. Such approval marks that United Laboratories gets another head start on research and development of diabetes drugs. In August 2022, the Group received the notice of acceptance of clinical registration application for semaglutide injection and obtained the clinical trial approval in October, which will further enrich the Group’s product portfolio in the field of diabetes treatment. In October 2022, clinical trial approval for TUL01101 Ointment, a class-I new drug, was obtained. TUL01101 Ointment is a topical preparation of Janus Kinase (JAK) inhibitor for the treatment of mild to moderate atopic dermatitis with proven efficacy and fewer side effects. To date, only a few topical JAK inhibitor preparations have been approved for marketing in overseas markets, and no such product has been approved in Chinese market. In October 2022, the application for clinical registration of TUL12101 Eye Drops, a class-I new drug for the treatment of dry eye disease, was accepted. In addition, sodium hyaluronate eye drop (specification: 0.1% (0.4 ml: 0.4 mg)) and sodium hyaluronate eye drop (specification: 0.3% (0.4 ml: 1.2 mg)) were approved for marketing during the year, which further enhanced the Group’s market competitiveness in the field of ophthalmology. In terms of quality and efficacy consistency evaluation of generic drugs, during the year, the Group successively passed the consistency evaluation of biapenem for injection (specification: 0.3g), cefuroxime axetil tablets (specification: 0.125g) and piperacillin sodium and tazobactam sodium for injection (specification: 4.5g). The above- mentioned sodium hyaluronate eye drops (specification: 0.1% (0.4ml: 0.4mg)) and sodium hyaluronate eye drops (specification: 0.3% (0.4ml: 1.2mg)) that have passed the marketing approval have also been deemed to have passed the consistency evaluation. The Group will continue to promote the research and development and the consistency evaluation of new drugs to provide patients with more safe and high-quality drug options.