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YS Biopharma Co., Ltd.
7/26/2023
Ladies and gentlemen, thank you for standing by and welcome to YS Biopharma's fiscal year 2023 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note that this event is being recorded. Now I'd like to hand the conference over to your speaker host today, Ms. Alyssa Lee, the company's investor relations director. Please go ahead, ma'am.
Thank you very much. To begin today, I would like to hand the call over to our founder and chairman, Mr. Yi Zhang, who will give some brief remarks in Chinese. I will then translate these remarks into English. Mr. Yi Zhang, please speak.
Hello, everyone, and thank you for joining us today.
Welcome to 1S Biopharmers Physical Year 2023 Earnings Conference Call. During today's call, our management team will provide our business and financial results. We will be happy to answer your questions at the end of the call. That concludes my translation of Mr. Zhang's remarks. Today, you will hear from our President and CEO, Dr. David Hsiao. who will provide an overview of our business development during the past year and share some of our plans for the future. Our CMO, Dr. Zineda Mohairud, will then share more details on our product pipeline. Our CFO, Ms. Brenda Wu, will then provide a closer look into our financials. After the management team has given their prepared remarks, we will open up the call for questions. You can refer to our fiscal year 2023 financial results on our IR website at investor.ysbiopharm.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I would like to refer you to our safe harbor statement in our earnings price release. which also applies to this call, as we will be making forward-looking statements. Please also note that all numbers stated in the following prepared remarks by management are in RMB terms. With that, I'm now pleased to turn the call over to Dr. David Shaw, our President and CEO.
Hello, everyone, and thank you for joining us today. Welcome to YS Biopharma's fiscal year 2023 earnings conference call, our inaugural earning call and our first as an asset listed company. Before we get into the details of our performance in the past year, I'd like to briefly introduce our business and give you an overview of our accomplishments to date and our mission as a company. We founded YS Biopharma with the mission to develop transformative vaccines and therapeutic biologics. We have dedicated ourselves to innovating technologies that can improve health outcomes around the world. Our flagship product is our YSGA rabies vaccine, China's first aluminum-free, love-like rabies vaccine. The YSGA rabies vaccine is the first-generation product in our rabies vaccine franchise. To date, about 980 million doses have been administered, and we have been one of the top rabies vaccine producers and suppliers in China for a number of years. This product provides important organic cash flow to support our business operation and the business growth going forward. Leveraging our experience, our R&D capability, we are currently advancing several product candidates powered by our PICA immunomodulating technology platform through clinical development. These include our second-generation rabies vaccine, which we call Pica Revis vaccine. Clinical results of this product have been promising, and our Pica portfolio represents a significant step forward in the fight against a number of infectious disease and medical conditions. In fiscal year 2023, we recorded significant year-over-year revenue growth, maintained a stable growth margin, and further strengthened our balance sheet. This success comes as YSGA rabies vaccine steadily gained market share during fiscal year 2023, while demand for rabies vaccine in China persisted. We are one of the leading rabies vaccine producers and suppliers in China, and we expect that the market demand for rabies vaccine will remain robust going forward. Meanwhile, we continue to make progress towards the commercialization of our product portfolio, which consists of eight innovative product candidates. Four of these product candidates are on the various clinical development states, including our picaribis vaccine, which was recently approved for phase three clinical trials by regulatory authorities in Singapore, the Philippines, and Pakistan. we have been granted about 70 patents across more than 30 countries and regions relating to our PICA immunomodulation technology and the prophylactic and the therapeutic product innovations. These product candidates targeted disease, including COVID-19, hepatitis B, influenza, and cancer. Dr. Zaneda Mahara, our CMO, will provide more details on the clinical progress later on in the call. Now let's get into the details of our results for fiscal year 2023. Continued demand for our YSGA rabies vaccine helped us grow our total revenues by 36.6% year-over-year to RMB 687.2 million. Our gross margin grew by 38.3% year-over-year, and we reached gross profit to RMB 533.80 million, representing a gross margin of 77.7%. This represents a slight improvement in our gross margin from 76.7% for the prior fiscal year. For the fiscal year 2023, we recorded a net loss of RMB 145.5 million, mainly driven by increasing sales and marketing expense and R&D expense. particularly clinical costs related to our peak COVID-19 vaccine project. During the past three years, we have sold almost 20 million doses of YSJ-Ribbis vaccine to approximately 1,687 county level CDCs in China, which represent over 60% of CDC customers in China. Our success connecting with these CDCs is a significant achievement on the part of ourselves and the marketing team. Thanks to their efforts, YS become one of the leading risk vaccine players in the marketplace. Revenue growth in the fiscal year was driven by external tailwinds and the successful execution of our own initiative. Demand for risk vaccine in China remains strong and we expect to continue growing Based on Frost and Sullivan Market Risk Report, China's human risk vaccine market production value is forecast to double from R&B 9.4 billion in 2021 to R&B 22.1 billion in 2025, at a CAGR of 23.8%. This veterinary vaccination rate, coupled with a growing pet and street dog population in China, has resulted in a large number of dogs that are potential carriers for rabies. Meanwhile, the penetration rate of human rabies vaccine remains insufficient. The regulation imposed by the Chinese government over the past few years has set a stringent standard for human rabies vaccine production. These factors have led demand for rabies vaccine in the countries to outpace supply. For fiscal year 2023, we are one of the leading human rabies vaccine manufacturers in China. Going forward, we aim to pursue partnerships and licensing opportunities in order to introduce our rabies vaccine franchise to countries throughout Asia, the Middle East, America, and Europe. As we advance our mission of providing innovative and efficacious vaccine in the fight against the rabies, we are proud to be able to share the significant progress we have made in the development of our premium next generation Pika rabies vaccine. The vaccine candidate is powered by our proprietary Pika adjuvant technology. has the potential to elevate the standard of care in human rabies prevention and the treatment paradigm. The PicaRibis vaccine is designed to provide the broad protection against the multiple virus strain and the significantly accelerated seroconversion or the generation of immunity from 14 days to seven days. The accelerated onset of immunoresponse allows the vaccine to be administered over a three-visit, one-week regimen. This product candidate has the potential to become the best in class and lift the standard of care of RIVS infection globally because it's superior to the currently available vaccine, which will require five visits one month or three visits three weeks regimen. Most importantly, the accelerated cell conversion will help patients achieve immunity more quickly, reducing fidelity rate and improving survivability for those who contract the rabies. Given the significant potential advantage of the Pika rabies vaccine over conventional rabies vaccine, we intend to formulate a premium pricing strategy to differentiate it from a competing product. human rabies occurred in more than 150 countries worldwide. It is a significant public health concern in developing countries. An estimated 59,000 people die of rabies annually, and approximately 30% of whom are children. 95% of cases occurred in Asia and Africa. And with no cure, the disease carried a 100% fidelity rate when left untreated. As part of a strategy to unlock the commercial potential of our rabies vaccine franchise and our new generation of Pika hepatitis B vaccine in underserved market in Southeast Asia country and other countries, we recently set up a new subsidiary in the Philippines. to focus on the clinical and regulatory efforts and product commercialization. We have also entered into a global health agreement with a healthcare-focused investment firm to expand the commercialization of the vaccine in less developed countries. With our PicaRibis vaccine entering B3 clinical development, we are also exploring potential partnerships to jointly commercialize the product in a number of nations. Upon successful completion of phase three trial, we plan to submit new drug applications or biological license applications for the PicaRibis vaccine to regulatory authorities in countries throughout Asia, Africa, Middle East, Europe, and America. In addition to our PicaRibis vaccine, we are also leveraging our Pica immunomodulated technology platform to develop pipelines of other innovative product candidates. The increase in our R&D expense for fiscal year 2023 was mainly driven by our allocation of more resources to accelerate the clinical trials of our PICA COVID vaccine. Given that COVID-19 has transitioned from pandemic to endemic disease over the last year, we are assessing the commercialization potential of this vaccine, and we are considering how to allocate our resources regarding R&D accordingly. As such, we expect that our R&D effort for fiscal year 2024 will be focused on phase 3 clinical development of P. caribbean vaccine. In summary, YS BioPharma currently finds itself on the turning point of a new era of innovation and success. Over the past several years, we have established ourselves as a major player in China's human rabies vaccine market. We have also successfully demonstrated our ability to effectively develop and commercialize our product. Our YSJ rabies vaccine continues to offer competitive advantages and take market share, while our PK rabies vaccine has performed well in clinical trials and represents a significant advance in the global fight against rabies. We are incredibly proud of our team of unwavering commitment to our mission, and we are eager to witness the impact of our product on global health in the years to come. With expertise, dedication, and a solid foundation to work from, we are well positioned to generate sustainable growth and create a positive health outcome for patients around the world. I'll now turn the call over to our CMO, Dr. Zineda Maharis, to discuss our product candidates in more detail. Zineda, please go ahead.
Thank you, David. Now, our clinical and regulatory teams are working in advancing our innovative pipeline that includes four product candidates under various clinical development stages. These are the PICA RAVIS vaccine, as mentioned, our PICA recombinant COVID-19 vaccine, a PICA YSON001 cancer treatment vaccine, and PICA YSHBV001 hepatitis B vaccine. We also currently have four preclinical stage product candidates targeting hepatitis B virus, influenza, rabies, cancer, and other indications. We constantly review the progress of each product candidate and prioritize our research and development efforts based on this evaluation, on our financial condition, on global healthcare needs, and the market dynamics. Now, our core technology Behind all the pipelines is our proprietary PICA immunomodulating technology platform. PICA stimulates both humoral and cell-mediated immunity by targeting toll-like receptor 3, the TLR3, retinoic acid-inducible gene 1, or what we call RIG1, and Melanoma Differentiation Associated Protein 5, in short, the MDA5. We have already completed the Phase 1 and Phase 2 trials of the Precaravis vaccine in Singapore. Another Phase 1 trial was also conducted in China to confirm the optimum dose and regimen to be used. and we intend to liaise with China's National Medical Products Administration to launch more advanced trials in the country within the next coming years. Importantly, we have already received approval, as mentioned by David, to conduct our Phase III picaridase vaccine clinical trials from regulatory authorities in the Philippines, Singapore, and Pakistan. These trials will commence, actually, in September of this year. Now, the PicaRavis Vaccine Phase 3 is a randomized, comparator-controlled, double-blind, multicenter study. Its intent is to evaluate lot-to-lot consistency of three different lots of picaridin vaccine that has been manufactured, along with the vaccine's immunogenicity and safety in healthy adults using a post-exposure prophylaxis schedule. Key secondary endpoints include non-inferiority to the comparator that will be used And superiority, as David mentioned, we gained immunity on day seven instead of day 14 of our pica rabies vaccine. Now, in the study, a total of 4,500 subjects will be enrolled, randomized at two is to one, with 3,000 subjects allocated to pica rabies vaccine and 1,500 allocated to receive the comparator rabies vaccine. There will be two study groups. Twenty percent will compose group one, and around 80 percent will be under group two. We are planning to start enrolling 4,500 subjects in the three countries in September. and target to obtain the interim analysis results in early 2024. Using the results of interim analysis, we will then initiate the NDA or BLA application in various countries accordingly. In addition to our pica rabies vaccine, We are also leveraging on our PICA immunomodulating technology platform to develop a pipeline of other innovative product candidates. Our PICA recombinant COVID-19 vaccine completed phase one trial in the UAE in the first half of 2022, with preliminary results showing the vaccine can induce the production of high-level antibodies. We also obtained an IND clearance for this vaccine from the US FDA. As of today, we have completed phase two and three studies of our PICA COVID vaccine in the Philippines and the UAE. Results of the phase three study are expected to be available within the year. In March of this year, we reported positive interim Phase II safety and immunogenicity data for our pica recombinant COVID-19 vaccine. The interim data was from the Phase II part of the Phase II-III head-to-head clinical study to evaluate the vaccine versus an inactivated COVID-19 vaccine. Interim data analysis of phase two demonstrated that the trial met both the primary and secondary endpoints. These were measured by geometric mean titers of neutralizing antibody against Omicron variant of the COVID-19 and by zero conversion rates on day seven and day 14 post the booster shot of the vaccine. It is also important to note that based on the clinical data we have obtained so far, our PICA COVID-19 vaccine has presented no significant safety issues. We are currently evaluating the evolution of the COVID-19 pandemic and monitoring global health trends, and we will make appropriate decisions regarding the commercialization strategies for our Pica recombinant COVID-19 vaccine. Our next product candidate at the clinical development stage SPICA YSON-001. This is a phase one stage pipeline product targeting multiple indications of solid tumors. The product can reduce immunosuppressive effects of the tumor microenvironment and enhance the immune system's ability to target the tumor cells. it has been granted two ODBs for the treatment of pancreatic cancer and hepatocellular cancer by US FDA. We commence the cancer patient enrollment for the Phase 1 study in China in December of 2021, focusing on the safety study on late-stage breast cancer, lung cancer, liver cancer, and melanoma subjects. We expect to complete the phase one study also within the year. Finally, we are also working on a new generation of hepatitis B vaccine. This product candidate is targeting chronic hepatitis B infection therapy. instead of conventional prophylaxis hepatitis B vaccine. We are expecting this new and exciting product candidate to enter phase one clinical study within 2024. I will now turn the call over to our CFO, Ms. Brenda Wu, to discuss our financial results in more detail. Brenda, kindly go ahead, please.
Thank you, Zunita. Now I will provide a close look into our financials. Please know that all numbers are in R&B terms, that the reporting period is fiscal year 2023 versus comparable period in fiscal year 2022. And all comparations are on a year-over-year basis, unless otherwise stated. For the fiscal year 2023, we grew our revenue by 36.6% to $687.2 million from $500 and $2.9 million. The increase was mainly due to the growth in sales value of our YFJ-Vivis vaccine and the approximate RMB2 per dose price increase for the vaccine. Gross profit was $533.8 million compared to $385.9 million in the previous year. World growth margin improved by one percentage point to 77.7%. Now, to our operating expense. Fitting expense was $272.9 million. compared to 186 million in the same period of 2022. The changes were primarily driving bad growth in promotion and marketing service expenditure as we experienced commercial sales operations by increasing our access to districts and county level CDCs and hospitals. The general administrative expense decreased to 81.6 million compared to 107.6 million in the same period of 2022. This was mainly due to the reduction in our expenditure on financial service fees. Research and development expense was $318.7 million compared to $211.2 million in the same period of 2022. The change was primarily driving by continuing to advance our PEP for clinical and clinical PEP plan program for our COVID-19 and the rabies vaccine. In upcoming year, our primarily focused will be on advising the development of our PicaRuby vaccine. The net loss was $145.5 million compared to $106 million in the same period of 2022. Turning to our balance sheet, we ended the fiscal year with $370.4 million in cash and cash equivalents compared to $271.1 million as of March 31. First, 2022. Finally, I would like to provide some more communication on our financial outlook toward the end of fiscal year 2023. COVID-related disruptions impact the manufacturing operation and production output of our YFJ-AIDS vaccine production facilities. Because of this month-long vaccine production and approval process, we expect the inventory impact of this disruption to with our sales in fiscal year 2024. Based on our current and preliminary estimate, our inventory level available for sales in the, in separate to meet the market demand during the first quarter of fiscal year 2024. This situation may extend into the near term. Therefore, we currently anticipate that our four-year revenue for fiscal year 2024 could be lower than the fiscal year 2023 revenue. As we continue to rebuild our inventory level, we plan to diligently manage our operating expense during the remainder of the fiscal year, and we remain confident in the long-term outlook of our business. Please note that This guidance reflects our current and preliminary review on the market and operational conditions, which are subject to change. Looking ahead, we will continue with our optimization efforts so as to capture the significant unneeded demand for rabies vaccine in China and Southeast Asia. At the same time, we will strategically advance development of our robust pipeline and product companies will optimize our cost structure. We are confident that we are well positioned to generate long-term business growth and shareholders' value. Let's conduct our prepared remarks for today. Operator, we are now ready to take questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. Once again, that was star, then 1 to ask a question. In addition, I'd like to remind you to please mute yourself after asking your question. Please wait while we assemble the roster at this time. Thank you. And our first question will come from Greg Arand of Noble Capital Markets. Please go ahead.
Thank you for taking my call. I hope you can hear me. And congratulations on your first public company earnings call. It's quite a milestone. Can you hear me okay? Yes. Greg. Thank you. Thank you so much. Appreciate it. Thanks for taking the question. The question I have is in terms of the comments on your financial outlook regarding production and not being able to meet demand, how should we look at selling expenses for fiscal 2024 since they're growing a little bit faster than current revenue growth? and as you make further inroads into CDCs in the regional areas of China.
Thank you, Greg. Thank you for your question. Indeed, we have been managing our sales and marketing expense very diligently. Actually, we review our sales and the marketing efforts on weekly basis, on monthly basis. So, we are managing expense on this part very, very carefully. On the other hand, we also realize that even we could have short-term inventory challenges. However, we look at the business in the really long term. We think we can overcome the inventory low-level situation. And we think we can continue to focus on our growth strategy here. We didn't mention that actually over the last year or so, we have built up 25 satellite warehouse outside of centralized warehouse in our manufacturing facility. So basically, we try to set up satellite warehouse in 25 locations to help the delivery of the product to our end user. So we really look at the expense in total entity point of view. Definitely we will manage our sales and marketing expense very, very diligently. I hope I answered your question.
Yes, thank you. That was appreciated. I appreciate the insight. I have a follow-up question, if you don't mind. In terms of the phase one study for PICO-ISO-N01, the study is completed by the end of the year. When do you expect data to be available, and then when do you expect to go to phase two, three after that? Do you have a timeline in mind there that you can sort of, like, give me a broad range on?
Zuneda, can you comment on that? I can make some word after you.
Right, yeah. Thank you, thank you. Yeah, the YS-ON-001 is ongoing and currently we are finalizing the study because enrollment has been completed. It might take around three to four months to come out with the final clinical study report, and then right after that, if the results are okay, then we proceed immediately to the Phase 2 study and then going to Phase 3. So this might happen within next year, approximately.
Greg, just to give you additional color about this oncology project, in our 20F filing we did today, we include quite an amount of our previous research results around the YSOM001. From our findings today, you can see a lot of information about different kinds of studies, like in combination with PD-1, with PD-L1, with chemo, with targeted therapy regimen. You can see this particular product does demonstrate a very broad advantage in oncology field. That's why we had high hope on this project as well. Like what Anita said, currently the FIS-1 study just evaluated the safety profile of the product at the advanced stage cancer patient. Hopefully at FIS-2 or more advanced clinical study, we would be able to see more efficacy. We can get more color about the efficacy product.
Understood. That's appreciated. Thank you very much for the response.
The next question comes from Hunter Diamond of Diamond Equity Research. Please go ahead.
Firstly, congratulations on the results. My question relates to whatever you can discuss related to the details of your pricing approach for your pipeline candidates. particularly the pica rabies vaccine and the pica recombinant COVID-19 vaccine, and then any additional clarity you can provide on the development timelines of those candidates.
Thank you, Hunter. That's an excellent question regarding our pica rabies vaccine. As we just briefly discussed, the pica rabies vaccine from Phase II and other trials demonstrates that It can accelerate the immune response from like three, four weeks into one week. And we are able to achieve much higher seroconversion rate. And the overall profile of this product positioned very well. It could become best in class. Given this kind of advantage in clinical setting, we plan to price this product as a premium price strategy. We are targeting like four or five times higher than our existing rabies vaccine, even at four or five times higher than the existing one. Overall cost as a rabies vaccine, still very affordable among those patients. But on the other hand, even with the same market share or same percentage of penetration rate, definitely our revenue from this new generation of RIVS vaccine will provide significant growth on our top line and the bottom line. So we plan to price this product at least four or five times higher than our existing YSGA RIVS vaccine.
Yeah, that makes perfect sense. And I guess the follow-up question in terms of collaborations and partnerships, just what are your thoughts, I guess, high level on other partnerships for regulatory approval or distribution?
Indeed, as you know, that we are entering phase three clinical study, like what the NASA said in September. So next year is going to be a very important year for product registration and form the strategic partnership around this project. We're looking at the partners who have experience in the vaccine field, who have a strong and broad distribution channel and experience in vaccine field. Our main focus could be China and Southeast Asia countries, but definitely we look at the partnerships who can bring the expertise and the market expansion opportunities in other market territory. That's what we're looking at, this type of collaboration opportunities.
Can I add something to that?
Thank you for taking my questions. It was a fairly comprehensive call, so that's it for me. I'll open the line. But congratulations on the strong results.
Thank you, Hunter. Danita, you can make your comment. Sorry.
Yeah, thank you for that. Yeah, because the question was on regulatory approval. Now, as I've mentioned in my remarks, We intend to start the study this September and the interim results will be coming out sometime December or January of 2024. And I've been starting to discuss initially with the regulators in the Philippines and Pakistan where the vaccine is most needed. for provisional approval. Now, if we will be successful on that, we'll expand to other Southeast Asian countries, also to Africa and Latin America.
Thank you, Zuneda. We can move to next question.
The next question comes from Sid Rajeev of Fundamental Research Corp. Please go ahead.
Hey, congratulations on the strong revenue growth. Just to follow up on the previous question, so Phase III initial results coming out early next year. My question is really on, you know, in an ideal scenario, if the products or vaccines get approved, in Singapore and the Philippines, when can you potentially launch? Are you looking at later next year or 2025?
Actually, all right, the study will run, the phase three will run for around 12 months. So if we have the interim sometime in January and... The launch, because the study could be finished within next year, launching can be within 2024, not 2025. So the company is really looking forward to this vaccine and everybody's hands-on. I've assigned so many people to look into safety so that there will be no issues.
Got it. How much capital are you allocated for all the studies in the next 12 months? The question is more related to is the $50 million cash you have now sufficient? It looks like you might have to raise money.
I can provide some color about the cost of this clinical trial. Danila, you can make a comment first.
No, no, no. When it's about money, go ahead.
Okay. Thank you. That's an excellent question. Actually, we do have the budget for this particular phase three clinical trial of PicaRibs vaccine. Our estimate for phase three trial from the beginning to the end is somewhere between $15 to $20 million. So I think we have the financial strength and the capability to finish this trial without existing financial resources.
Sounds good. And just a quick question on the revenue line. I'm not sure if you disclosed unit sales. I was wondering what percent of the revenue growth came from unit sales versus price increases?
Brenda, can you comment on that?
Well, most likely our increase was due to the unit sales, you know, the number of those we sold out. The price is just a little bit, I think, well, we didn't count the percentage, but I think the percentage related to the price will be low for this fiscal year, 2023.
Got it. Just one final question on that. So that vaccine, you know, you're on 60% of CDCs in China. How should we look at the upside potential and unit sales of the vaccine in China? Is it fair to say that you have hit 60% of the products or the vaccine's potential?
Actually, Sid, even right now, we have sales coverage for 60% of China CDC customers. We are just one of the players in the entire market. If you ask the market share or percentage-wise, we don't have a specific number, but based on our experience from our sales and marketing team's feedback, we are still like a 10% of the market shift. You know, this, uh, don't quote me on this because it's very difficult in China to get a third party certified or verified market share number. But based on our first line sales and marketing effort, our estimate is somewhere around 10% of the entire market at this moment from our sales and marketing effort. So we still believe we have significant of significant growth potential for our product. As you can see that over the last three years, our sales volume continued growing. Like Brenda said, the selling price gradually increasing over the years. So that's some good thing to have. However, that's not a significant driver for our top-line growth.
Thank you, David and Brenda. Looking forward to updates on your drug candidates.
Thank you, Sid.
The next question comes from Howard Halpern of Tagledge Brothers. Please go ahead.
Hi, guys. I just have one question regarding the phase three and the approvals that are likely to occur and the launches that are likely to occur in Singapore and other places. How is the manufacturing going to fit into those approvals? Will you have the capability in China to manufacture to meet the demand, or will you partner in the different Southeast Asian countries?
Yeah, Howard, thank you for this question. It's very important for us to provide sufficient production capacity for the new product launch in different territories. Currently, our manufacturing facility in China has been manufacturing ribs vaccines for a number of years. Given that the Pika rabies vaccine is our new generation of rabies vaccine, we only need probably a quarter or one-third of antigen quantity per dose compared to our existing YSJ rabies vaccine. So within our current production plant in China, that can provide sufficient supply for our initial commercialization of Pika rabies vaccine in China and outside China. On the other hand, we have operation in Singapore. We have been planning to have a manufacturing facility expansion in Singapore as well. So at the right time stage, we do consider to construct a manufacturing facility in Singapore because Singapore is also one of the largest bioengineering centers in terms of vaccine and biologics production. So definitely we are considering if the market demand for our product succeeding our current production capacity, we do have a plan to expanding our manufacturing function outside China.
Okay. Thanks. That's very helpful. Thank you.
Thank you, Howard.
This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Okay.
Thank you again for joining our call today. If you have any further questions, please feel free to contact us or submit a request through our IR website. We look forward to speaking with everyone during our next call. Have a good day.
Thank you. That concludes the call for today. Thank you, everyone, for attending, and you may now disconnect.