On April 17, 2024, Henlius (2696.HK) released its 2023 Environmental, Social and Governance (ESG) report (hereinafter referred to as “ESG report” or “report”). The report comprehensively discloses the Company’s initiatives and achievements in promoting its sustainability management strategies in 2023 from five frontiers, namely product, talent, environment, society and corporate governance. It is the fifth ESG-related report released by Henlius.

Product: 

Affordable and Accessible for Value Creation

With patient-centricity in mind, Henlius focuses on unmet clinical needs, and continuously translates innovative R&D results into clinical applications. It drives social impact by staying committed to making high-quality biologics affordable and accessible to more patients around the world. Currently, 5 products have been launched in China, 2 in global markets, reaching over 40 countries and regions in Asia, Europe, Latin America and Oceania, and benefiting over 580,000 patients. Henlius expands product global footprint by partnering with international first-class biopharmaceutical companies, on 8 products including HANLIKANG (rituximab), HANQUYOU (trastuzumab, trade name in Europe: Zercepac^®) and HANSIZHUANG (serplulimab), to penetrate mainstream markets as well as emerging markets. Its core product HANQUYOU has been approved in countries and regions including China, the United Kingdom, France, Germany, Argentina, Brazil, becoming the Chinese biosimilar with the most approvals for marketing in countries and regions. HANSIZHUANG is the world’s first PD-1 mAb for the treatment of small cell lung cancer (SCLC), which has been approved in China and Indonesia.

Henlius actively explores multi-level medical coverage by means of national health insurance entry, city-customized commercial health insurance, patient assistance program, among others. It actively expands sales channels, covering 31 provinces, municipalities and autonomous regions to advance product affordability and accessibility. Currently, HANQUYOU, HANLIKANG, HANBEITAI (bevacizumab) and HANDAYUAN (adalimumab) have been successively included into China’s National Reimbursement Drug List (NRDL). The innovative product HANSIZHUANG has been included into 80 provincial/city-customized commercial medical insurance (Huiminbao). Meanwhile, Henlius has been providing HANSIZHUANG for free in a patient assistance program, putting the effective therapy within the reach of more patients in a timely manner.

Henlius eyes unmet clinical needs and puts innovative R&D high on priority by establishing a high-quality and diversified pipeline, with over 50 molecules covered. In 2023, Henlius continued advancing R&D agenda, with a total of 11 products making progress in R&D, and more than 30 clinical trials in full swing in China, the U.S., the European Union (EU), Australia and other countries and regions. Moreover, Henlius is actively exploring novel targets and mechanisms, constantly expanding into more disease areas and molecular types, so as to accelerate the development of innovative medicines to address complex diseases. Currently, four orphan drugs and rare disease drugs are in clinical stage for the treatment of indications including SCLC, LCH/ECD, ALS, and idiopathic pulmonary fibrosis.

Henlius continues building a high-quality global supply system. It has established manufacturing sites and quality management systems conforming to the highest quality standards in China, the EU and the U.S. The two sites, Xuhui Facility and Songjiang First Plant, both certificated by China and the EU GMP, have a total commercial capacity of 48,000 liters to ensure stable supply to markets in China, Europe, Southeast Asia and Latin America. In 2023, the Company’s manufacturing sites and quality management systems passed or accepted the on-site GMP inspections by the regulatory authorities from the U.S., the EU, PIC/S members Brazil and Indonesia, laying a solid foundation for the globalization of its products.

Talent: 

Gathering Talents and Growing Together

Henlius is committed to pooling talents and building a development platform that facilitates shared growth with employees. In 2023, Henlius was awarded by HR Asia “Best Companies To Work For In Asia” for two years in a row. By respecting the employees’ legal rights and interests, the Company creates a respectful, open and inclusive working environment. The Company attaches great importance to talent development and has established a multi-dimensional, full-coverage and differentiated systematic employee training system through “Henlius Academy” online learning platform. In 2023, the training investment at Henlius totaled RMB 2.6163 million, with average training hour per employee amounting to 77.61 hours. Meanwhile, the Company carried out talent review and launched “Y Trail” Project to further clarify talent development planning at each stage. Apart from providing the above-mentioned rich internal resources, the Company continued providing assistance for employees in qualification certification and on-the-job continuing education, with 178 employees obtaining qualification certification in 2023. 

Environment: 

Green Development and Building Resilience Together

Henlius has always been adhering to the environmental management guidelines of “preventing environmental pollution and reducing energy consumption”, integrating the concept of green development throughout production and operations processes. The Company invested approximately RMB 6.2421 million in environmental protection in 2023. The Company took an array of strategies and measures to follow and meet four major environmental targets for GHG emission reduction, energy use, water resource use and waste discharge reduction. It called for resources recycling among employees with a focus on “green office concept” and controlled the high energy consumption equipment to facility GHG emission reduction; it enhanced water efficiency in manufacturing operations and optimized technological process for wastewater treatment; it strengthened the management of unorganized emission of exhaust gas and tracked emission of toxic substances; it optimized emission management with a stricter classification for waste management and a vigorous promotion of waste recycling. In addition, the Company regularly evaluates the impact of production and operation on the environment, and reviews and optimizes environmental management initiatives through annual internal and external environmental audits.

Society: 

Staying True to Original Aspiration for a Better Future

As an important part of the eco-value chain, Henlius works hand in hand with upstream and downstream partners to promote the development of the industry and build a better community. Henlius strives to build a sustainable supply chain, continues optimizing supply chain operation mechanism, and strengthens supply chain risk management. In 2023, the Company continued exploring local sourcing and maintained 44 local suppliers of key materials, resulting in a decrease in procurement costs of approximately RMB 24.58 million. It also launched a procurement management system platform in 2023 to facilitate full-process order processing for procurement with higher quality and efficiency.

Henlius is committed to giving back to the community while striving for high-quality sustainable development. In 2023, the overall charity investment of Henlius totaled about RMB 45.185 million. The Company proposes the “patient- centered” public welfare concept and carries out charity projects such as “To Time to the Life– cancer patient care program” and “Rural Medical Care Public Welfare Activity”. These efforts are designated to care for the physical and mental health of cancer patients, raising public awareness on cancers. Since its launching four years ago, “Rural Medical Care Public Welfare Activity” has benefited more than 4,700 patients and 2,200 primary medical staff, and in the program Henlius has made in-kind donation totaled RMB 270,000 to support local village clinics.

Corporate Governance: 

Upholding Corporate Governance Compliance and Shouldering Responsibility

Henlius has established a sound corporate governance structure to continuously enhance the effectiveness of the Board of Directors in the management of the Company's strategies and operating practices, and to effectively exercise its supervisory responsibilities. The Company has established a sound four-tier ESG management structure and formulated an ESG management strategy model in line with the corporate development strategy. The ESG governance mechanism turns maturer and functions well. In daily operation, the Company upholds compliant operations from such aspects as corporate behavior, anti-corruption, responsible advertising and marketing, information security and intellectual property management, and delivers various trainings to embed the concept into the daily work. For example, it delivered anti-corruption training for all of the board members and 101 sessions for all employees in 2023.

In the future, Henlius will continue intensifying ESG management practices based on material issues, pair ESG management strategies with business development, keep the patients in mind, and provide more high-quality therapies for global patients in response to patient needs and clinical values.