GenScript Bio (01548) issued a profit warning, expecting a loss of approximately 506 to 586 million US dollars in the year 2025 compared to a profit in the same period.

GenScript Bio (01548) announced that, (1) for the financial year ending December 31, 2025 (reporting period), the Group expects to achieve an adjusted net profit of approximately 207 million to 242 million US dollars, compared to approximately 59.8 million US dollars in the previous financial year ending December 31, 2024 (previous period), representing an increase ranging from 246.5% to 304.3%. The increase in adjusted net profit is mainly due to the growth in licensing revenue. The Group expects to generate licensing revenue of approximately 256 million to 299 million US dollars, compared to about 2.4 million US dollars in the previous period. The increase in licensing revenue is mainly attributed to the sub-licensing revenue brought in by Lee's Pharmaceutical Holdings Limited (Lee's). (2) Investment in cell therapy business: The Group expects to incur an equity share of non-cash loss from Legend Biotech Corporation (Legend or Legend Group) of approximately 304 million to 352 million US dollars, as well as impairment of investment in Legend of about 3.782 million to 4.38 million US dollars. Legend (whose shares are listed on the Nasdaq Global Select Market) was deconsolidated from the Group on October 18, 2024 and reclassified as a significant associate of the Company. Following the deconsolidation date, the Company accounts for its share of profit or loss in Legend using the equity method. The price of Legend's American Depositary Shares as of December 31, 2025 has significantly declined compared to the deconsolidation date. In accordance with Hong Kong Accounting Standard 28 "Investments in Associates and Joint Ventures" and Hong Kong Accounting Standard 36 "Impairment of Assets", this decline is considered an impairment indicator, thus triggering an impairment assessment of the Group's investment in Legend. As of the date of this announcement, the Company expects to incur impairment losses of approximately 378 million to 438 million US dollars in its annual financial results for the reporting period. This potential impairment loss is a non-cash accounting item and has no significant adverse impact on the Group's cash position and liquidity for the reporting period. (3) The Group expects to incur a loss of approximately 506 million to 586 million US dollars in the reporting period, compared to a profit of about 2.9 billion US dollars in the previous period. The expected shift from profit to loss is mainly due to a high base effect from the previous period, including approximately 3.2 billion US dollars of one-time unrealized gains from the deconsolidation. Excluding the impact of this one-time gain from the previous period and the information disclosed in items (1) and (2) above, the Group's profitability remains strong. Legend's adjusted net loss in the reporting period narrowed from 189 million US dollars in the previous period to 33.1 million US dollars.