Annual Report 2023

MANAGEMENT DISCUSSION AND ANALYSIS 12 The United Laboratories International Holdings Limited Annual Report 2023 The veterinary drugs recorded sales revenue of RMB1,180.1 million, representing a significant increase of 48.1% year-on-year. During the year, United Laboratories (Inner Mongolia) Limited smoothly obtained the veterinary drug production license for TylosinTartrate and passed the GMP acceptance. Also, its oral solution production line successively passed the GMP certification. In addition, the veterinary drugs production base of the Group located in Gaolan Port, Zhuhai City, commenced construction in November 2023. The Group actively responds to national policies. This project is an important project to optimize the structure of the veterinary drug industry, enhance the level of intensive development, and promote industry transformation and upgrade. It is of great significance to the development of the Group’s animal healthcare business. In addition, the production base construction of The United Animal Healthcare (Inner Mongolia) Co., Ltd. and Henan Lianmu Veterinary Medicine Co., Ltd. is also progressing steadily. Progress of Pharmaceutical Research and Development During the year, the Group invested a total of RMB808.3 million in pharmaceutical research and development, with a year-on-year increase in R&D of 36.2%, including expensed R&D investment of RMB757.2 million and capitalization R&D investment of RMB51.1 million. The Group had 39 new human drug products under development, of which 19 products are Class 1 new drugs. The Group has established a comprehensive research and development system composed of multiple platforms, including biological research and development, chemical drug research and development, innovative drug research and development, clinical research center, and external cooperation developing in synergy. We focus on endocrine, autoimmune, ophthalmology and high-end anti-infection fields. During the year, the Group made the following major progress in R&D: – In March 2023, Class 1 new drug TUL12101 Eye Drops was approved for clinical trials. TUL12101, a new-generation small-molecule RASP (reactive aldehydes) inhibitor developed by the Group, can relieve inflammatory reactions, break the vicious cycle of inflammation, and achieve the goal of treating dry eye syndrome. Currently, no other products adopting the same mechanism have been marketed in China and abroad. – In April 2023, Insulin Degludec/Liraglutide Injection was approved for clinical trials. The Group is the first enterprise that has obtained the clinical trial approval for this biosimilar drug in China. – In April 2023, the indication of weight management for Semaglutide Injection was approved for clinical trials. In July, the subjects were recruited for the phase III clinical trial treating the diabetes indication. – In August 2023, the registration application of Liraglutide Injection was accepted. Liraglutide, a GLP-1 analog, is used to treat diabetes II of adults, and an injection a day can satisfy the glucose reduction need of patients.