1
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2
Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
3
GenScript’s mission
Our aspiration – to change the world by using breakthrough technologies
• Make research easier for scientists by using gene synthesis technology• Make our life better by using synthetic biology technologies• Provide better cell therapies to the cancer patients
4
GenScript’s business blueprint
• GenScript proprietary technologies
• Core business generating cash flow for future development
• New area of business development generating higher return
Life sciences research andapplication services and products
Gene synthesis
Industrial enzymes CAR T-Cell Immunotherapy
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• GenScript is a well-recognized life sciences research and application service and product provider. As the leader in gene synthesis, GenScript has developed a number of services and products in synthetic biology• Largest provider of gene synthesis services globally • Global provider of life sciences research and application services and products• Well recognized and trusted provider of synthetic biology research and application services and
products
• Founded in 2002 in the U.S.
• GenScript holds multiple IPs and know-how in the area of synthetic biology
• Key locations in New Jersey, Nanjing, Europe, and Japan
• Research and manufacturing facilities globally
• Over 1,500 employees globally1
• 5,000+ customers1 which include global pharmaceutical and biotech companies, colleges and universities, research institutes, government bodies and distributors in over 100 countries
• Renowned Investors which include Kleiner Perkins Caufield & Byers, Shipston Group Limited, China Resource Group and The Balloch Group
GenScript overview
1 Note: as of December 31, 2017
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2002 2004 20082009
2011
2014
GenScript’s history and key milestones
• Introduced Gene Synthesis Service
• Introduced Custom Protein and Antibody Service
• Established presence in Europe
• Selected as the only commercial entity to participate in the Synthetic Yeast Genome Sc2.0 Project
• Established subsidiary in Japan
• Employee headcount reached 1,000
• Founded in New Jersey • Established
research and manufacturing center in Nanjing, China
• KPCB / TBIG Healthcare investment
• New Nanjing research and production facility opened
• Developed GenPlusTM next generation gene synthesis technology
• Developed the industrial-leading composite glucosydase product for starch processing industry
• Developed the half-life extension technology for single domain antibody drugs
• CRO Leadership award
2013
• Launched the industrial synthetic biology product segment
2003
2015
• Listed in HKEX(Stock code:1548)
2016
• Merged NornoonCompany
• Invested in Zhenjiang
• Launched eStainL1,an innovative instrument
• Launched new and stable cell lines
• Achieved breakthrough for CAR T-Cell Immunotherapy
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Senior Management
Venture Capital Investors
GenScript’s management team
Mr. Robin MENG, VP Finance
Manager, Schering-Plough, China, 2000-2004Controller, Saint-Gobain, 2004-2007CFO, Quay Magnesium, 2008-2010VP Finance, GenScript, 2010
Dr. Frank ZHANG, CEO
PhD, Duke University, 1995Schering-Plough, 1995-2002GenScript Co-founder, 2002
Ms. Sally WANG, COO
MS, Wuhan University, 1993Shenzhen Futian, Environmental Protection Surveillance Station, 1993-2000GenScript Co-founder, 2002
Dr. Li ZHU, VP Strategy
VP Research, Cathay Biotech, Inc., 2006-2008VP Strategy, GenScript, 2010
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Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
9
Gene, DNA, protein and antibody
Gene and DNA
• A gene is a molecular unit of heredity of a living organism
• DNA is a polynucleotide formed from covalently linked deoxyribonucleotide units
• There are four types of bases: A, T, C, G. A forms pair with T, and G forms pair with C
• Each chromosome is made up of DNA and the protein called histones. The protein tightly coils the DNA to support the chromosome’s structure
• Human has 23 pairs of chromosome – in particular men have XY chromosome while women have XX chromosome
Protein and antibody
Source: http://29lifescience.wikispaces.com
Source: https://www.smartpatients.com
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Background information:what are gene synthesis and synthetic biology?
Gene synthesis
Synthetic biology
• Synthesize genes from chemicals• Do not rely on natural source for genes• Able to synthesize genes as designed
• The design and construction of novel biological parts, devices, and systems, and the re-design of existing, natural biological systems for purposes of improving usefulness
One of the fundamental techniques in synthetic biology
Using Genes…
to Program Cells to Become
Cellular Factories… to Make High
Value Products
Synthetic Biology
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• A segment of biology that emerged in the 21st century focusing on the artificial design and engineering of biological systems
• Aims to create life molecules with new properties that can be applied to drug discovery, industrial raw materials and fuel substitutes
Background information:Synthetic Biology
Research method
Bottom-up
Top-down
Sources: http://syntheticbiology.org/
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• Basic molecules of life are redesigned, synthesized, assembled, and consolidated through metabolic pathway and network, to systematically construct a brand new biological system
Background information:A) Bottom-up
Oligonucleotide
Individual geneSynthesis
Package
Gene modules Assemble
Metabolic pathway
Consolidate
Metabolic network
Allocate
Functional Bacteria
Complex new systemConstruct
Source: [1] The Making of the Fittest: DNA and the Ultimate Record of Evolution ,W.W. Norton, 2006,[2] http://fdatraining.wifss.ucdavis.edu
13
Background information:
B) Top-down
Sources: Andrianantoandro, et al., Mol Syst Biol, 2006.
Modification and redesign of existing natural biological system to achieve better
performance
Systematically search and modify key cells, pathways, and biochemical reactions layer by layer, down to the most fundamental proteins, DNA, and RNA, in order to achieve target modification
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Artificial
HealthDisease
treatmentAnti-aging
HealthDisease
treatmentAnti-aging
EnergyFuel
Energy cropsIndustrialChemicals
AgricultureBreedingNitrogen fixation
EnvironmentDetection
Bioremediation
Natural
Background information:Synthetic biology: key strategic technology frontier
Mild modificationArtificial cells
Medium modificationArtificial cells Artificial cellsIn-depth modification
Artificial cells
• From the synthesis and manual replacement of molecules to the mathematical model-based design and artificial assembly of complex biological system, synthetic biology has undergone a gradual learning process to the design of a life molecules
15
Background information:Examples of synthetic biology applications
Industry enzyme Oil-eating bacteria CAR T-cell Therapy
Blood from patients
T cell
Modified T cell
Re-introduce to the patients
Virus
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Background information:Examples of synthetic biology applications (cont’d)
Synthetic organs Biofuel
Green chemistry Animal breeding
Antibiotics, amino acids and vitamins Natural products
• To create artificial organs from hybrid animals, instead of transplant
• Artificial cornea or liver can be made from genetic engineered pigs or other animal
• For cornea alone, there are 4mn patients in China
• Synthetic biology technologies are widely used in biofuel generation
• The emergence of advanced conversion pathways and non-food feedstocks could unlock considerable production potential
• Multi-billion dollar market potential
• Many of the chemical processes can be converted into biological processes, using synthetic enzymes as catalyst
• Multi-billion dollar market potential through direct cost savings and avoided liability for environmental and social impacts
• By using synthetic biology, new microbes can be made from de novo, and the most productive microbes can be obtained in record time
• Huge market globally for antibiotics, amino acids and vitamins products
• Synthetic biology are widely used in animal breeding.• Compared with traditional breeding, synthetic biology is much
faster and cost-saving. The total new desired species can be obtained using this method.
• Multi-billion dollar market potential.
• The plant genes and pathway can be moved into bacteria and microbes by synthetic biology technologies to produce taxol, artemisinin, isoprene rubber, saffron, vanillin, and flavor and fragrance
• Multi-billion dollar market potential
17
Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
18
GenScript’s service, product & research overview
• Comprehensive research services in 6 key sub-segments: gene synthesis, oligonucleotide synthesis, DNA sequencing, protein production, peptide synthesis and antibody development
• Widely used in and fundamental to life sciences research and application
• Pre-packaged, ready-to-use, and off-the-shelf products
• Integrated services in 3 key sub-segments: antibody and protein engineering, in vitro pharmacology service, and in vivo pharmacology service
• Applied in disease studies and drug discovery process
• Launched first product series: glucoamylases, pullulanase and amylase
• Fundamental life sciences research• Early stage pharmaceutical
development
• Translational biomedical research• Industry users of industrial enzymes
Life sciences research services
Life sciences research catalog products
Preclinical drug development services
Serv
ices
Prod
ucts
Industrial synthetic biology products
Target customer industry / applications
• Achieved promising results in the research and development in immunotherapy technology for multiple myeloma cure
• Achieved promising results in the joint research and development in design and synthesis of the saccharomyces cerevisiae chromosomes (Project Sc2.0), the relevant paper was published in Science
Cell Therapy Development
Res
earc
h
Other research on biotechnology
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Key service Applications Sample picture
Gene synthesis
Synthesized gene products are used for functional research of genes and protein production for synthetic biology, life science research, and biologics drug discovery
Protein production
Proteins produced are used for functional studies of proteins, such as in vivo and in vitro biochemical and immunological studies, and as antigens for antibody development
Antibody developmentAntibodies developed are used for immunology experiments and assays and preclinical antibody drug lead generation
Peptide synthesis
Synthesized peptides are used for protein structural studies, protein-protein interactions studies, and as antigens for antibody development
GenScript service and product offerings –life sciences research services
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GenScript service and product offerings –industrial synthetic biology products
Industrial synthetic biology products market
New segment with growth potential
• Industrial enzyme can be used in a variety of industries, such as the food processing, feed pharmaceutical, and chemical industries
• Industrial enzyme market globally totals approx. US$4.5bn by 2014, estimated US$6.0bn by 2016
• Launched in 2013
• Growing from the leverage over the technical expertise and experience in gene synthesis and synthetic biology
• Successfully created a series of industrial enzyme products to meet the wide demands and stringent requirements in the starch processing industry
GenScript’s launched products and pipelines
• Blended glucoamylases: HighDEX series
• Advanced Thermo / acid-stable alpha-amylase: 2nd generation is expected to launch in mid-2016
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GenScript has multiple breakthrough IPs and know-how in the area of synthetic biology
OptimumGeneTM gene design system, which optimizes gene sequences to achieve increased levels of production in subsequent protein expression
1 :as of the Latest Practicable Date
19 registered patents and 43 pending patent applications in the U.S. and the PRC1
CloneEZ® cloning system, which provides a quick and efficient DNA cloning system including techniques and reagent kits
GENE-ON-DEMAND® gene synthesis technology, which is used for high-through put gene synthesis
GenPlusTM next generation technology, which synthesizes genes using chip-based oligos
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Developed services and products
• MonoexpressTM antibody production
• GenPlusTM gene synthesis services
• eStain® protein staining related products
• eBlot® protein transfer related products
• ExpressPlus PAGE gel
• Monoaffinity Protein A resins
• Antibodies, cytokines, etc.
Ongoing R&D projects
• Microbial knock-out and knock-in technology
• Next-generation high-throughput gene synthesis
• Industrial microbial strain generation and process development
• CAR T-Cell Immunotherapy
Continue to invest in R&DIn-house R&D efforts
• More than 140 R&D staff as of Dec. 31, 2016
• Over 13% of our R&D staff possess doctoral degrees in life sciences- related disciplines in biology, molecular biology, genetics, biological engineering, immunology, etc.
• 4 R&D teams serving four business segments including Biotechnology Research Institute and Molecular Biology Research Institute
R&D teams
R&D investment
6.1 5.67.1
9.5
2013 2014 2015 20160
2
4
6
8
10
R&D expenses ($mm)
• As of Dec. 31, 2016, over 22,610 international peer-reviewed journal articles had cited the use of GenScript’s life sciences research and application services and products
• In March 2017, GenScript published promoting result on Science regarding the joint research and development in the Synthetic Yeast Genome Sc2.0 Project
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Europe
Direct SalesAustriaBosnia HerzegovinaBelgiumBulgariaSwitzerlandCzechGermanyDenmarkEstoniaSpainFinlandFranceUnited KingdomGibraltar
GreeceCroatiaHungaryIrelandIcelandItalyLithuaniaLuxembourgLatviaMonacoMoldovaMaltaNetherlandsNorwayPolandPortugalRomaniaScotland
SwedenSloveniaSlovakia
DistributorsBelgiumCzech RepublicDenmarkFranceGermanyHungaryItalyPolandSpainSwitzerlandThe NetherlandsUK
Asia
Direct SalesThe United Arab EmiratesArmeniaBangladeshBahrainPalestineBrunei DarussalamChinaCyprusGeorgiaHong KongIndonesiaIsrael
IndiaJordanJapanCambodiaSouth KoreaKuwaitKazakhstanSri LankaMalaysiaNepalOmanPhilippinesPakistanQatarSaudi ArabiaSingaporeThailand
TurkeyTaiwanVietnam
DistributorsBangladeshChinaIndiaIndonesiaIsraelJapanKoreaMalaysiaPakistanSingaporeTaiwanTurkey
Africa
Direct SalesBeninBotswanaCameroonEthiopia
GaboneseGambiaKenyaMoroccoNamibiaNigeriaSenegal
SwazilandTunisiaUgandaSouth AfricaZambia Australia
Direct SalesAmerican SamoaAustraliaNorthern Mariana Islands
New ZealandFrench Polynesia
DistributorsAustraliaNew Zealand
South America
Direct SalesArgentinaBoliviaBrazilChileColombia
EcuadorFrench GuianaPeruUruguayVenezuela
DistributorsBrazil
North America
Direct SalesBermudaCanadaCosta RicaCubaMexico
Trinidad & TobagoUnited StatesPuerto RicoThe United States Virgin Islands
DistributorsCanadaUSA
The locations of our major operating subsidiaries and representative office
Nanjing, ChinaHong Kong
New Jersey, USTokyo, Japan
Amsterdam, Netherland
Subsidiaries
Representativeoffice
Global presence
• Original founded in New Jersey in the U.S. in 2002
• Major operating subsidiaries and representative office in PRC, Hong Kong, U.S. Japan and the Netherlands
• Established on extensive direct sales network, reaching over 100 countries in North America, Europe, the PRC, Asia Pacific excluding the PRC and Japan, and Japan
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Strong sales and marketing team
Well trained sales and marketing specialists
Interactive online ordering system
• Our success is attributed to our sales and marketing teams on the ground in U.S. and the PRC
• Nearly 90% of our U.S. sales and marketing team have doctoral or master’s degrees in life sciences- related discipline
• Customers navigate directly to our websites to browse online information of most of our services and products
• Our system allows for specification and customization of each order through the option to choose features and components from an online menu
Purchase order data
On the ground52.6%
Online47.4%
No. of purchase orders as of Dec. 31, 2016
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Diverse and global customer base
Customer breakdown by customer category1
Pharmaceutical and biotech co.
59.7%
Colleges and universities
19.8%
Research institutes12.8%
Government bodies2.9%
Distributors and others
4.8%
1 :for the six months ended Dec. 31, 20162 :as of Dec. 31, 2016
Customer breakdown by region2
5,000+ customers2 which include global pharmaceutical and biotech companies, colleges and universities, research institutes, government bodies and distributors in over 100 countries
North America53.5%
Europe15.9%
APAC (excl. PRC & Japan)
18.9%
PRC6.9%
Japan3.4%
Others1.4%
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2016 Financial Results Overview
Achieved strong net profit YoY growth of 51.4%.
Achieved gross margin YoY increase of 0.6 percent.
Core services (life sciences research services) maintained market leadership and growth momentum.
Revenue of life sciences research services amounted to US$91.2 million, representing an increase of 18.6%.
Gross profit margin varied from 66.4% for the same period last year to 65.8% this year, and maintained at a stable level.
Exerted considerable effort in simplifying the internal workflow of gene synthesis to shorten the turnaround time, enabled to maintain leadership position in gene synthesis.
Revenue of industrial synthetic biology products increased by 400.0% to US$7.0 million. We have also been actively developing new products in the field of special enzymes.
Continued to strengthen online ordering system. A new and upgraded online ordering system has been launched to improve the online ordering experience.
Key Highlights of 2016 Results 2016(US$MM)
2015(US$MM) Change
Revenue 114.7 86.7 32.3%
Gross Profit 76.2 57.1 33.5%
Gross Margin 66.4% 65.8% 0.6
Net Profit 26.5 17.5 51.4%
Net Profit Margin
23.1% 20.01% 3.19
Adjusted EBITDA*
39.5 28.1 40.6%
Adjusted Net Profit*
26.5 14.3 85.3%
Adjusted Net Profit Margin
23.1% 16.5% 6.6
*Note: Adjusted EBITDA=EBITDA + IPO cost - one-off net gainsAdjusted net profit= Net profit + IPO cost - one-off net gains
27
12.8 16.328.1 39.5
21.3% 23.3%
32.4%34.4%
Adjusted EBITDA (US$mm)Adjusted EBITDA margin
6.4 9.518.9
28.410.7%13.5%
21.8%24.7%
Adjusted net profit (US$mm)Adjusted net profit margin
60.1 70.0 86.7114.7
2013 2014 2015 2016
38.3 44.157.1
76.2
63.7% 63.0%65.8%
66.4%
2013 2014 2015 2016
Gross profit (US$mm)Gross margin
Financial highlights
Gross profit and gross marginRevenue
US$mmUS$mm
Adjusted net profit and adjusted net profit marginAdjusted EBITDA and adjusted EBITDA margin
• Dropping of adjusted EBITDA and adjusted net profit from 2013 to 2014/2015 mainly due to effect of increased operation size and hence increased administrative and other expenses
Note: Adjusted EBITDA=EBITDA + share-based payment + IPO cost - one-off net gainsAdjusted net profit= Net profit + share-based payment + IPO cost - one-off net gains
2013 2014 2015 2016 2013 2014 2015 2016
28
Financial highlights – segment revenue
Preclinical drug development servicesLife sciences research services
55.4 63.2 76.9 91.2
2013 2014 2015 2016
US$mm
Industrial synthetic biology products1Life sciences research catalog products
1 Note: this segment was launched in 2013 and started sales in 2014
3.2 4.4 6.0
11.2
2013 2014 2015 2016
US$mm
1.5 2.0 2.5
5.3
2013 2014 2015 2016
US$mm
0.0 0.3 1.4
7.0
2013 2014 2015 2016
US$mm
–
29
Financial highlights – segment gross profit and gross margin
Preclinical drug development services
35.4 39.951.5
63.2
64.0% 63.2%67.0%
69.3%
2013 2014 2015 2016
US$mm
Life sciences research services
0.9 1.4 1.6
3.5
58.3% 66.5% 64.4% 66.0%
2013 2014 2015 2016
Life sciences research catalog products
US$mm
0 0 0.074
2.019
5.5%28.8%
2013 2014 2015 2016
Industrial synthetic biology products1
US$mm
1 Note: this segment was launched in 2013 and started sales in 2014
1.9 2.8 3.9
7.560.2%
63.8%65.2%
67.2%
0.560.58
0.60.620.640.660.68
2013 2014 2015 2016
US$mm
30
Financial highlights – key ratios
30 33 33 35
2013 2014 2015 2016
Average trade receivablesturnover days
22 22 2635
2013 2014 2015 2016
Average trade payablesturnover days Average inventory turnover days
13.3%16.5% 17.9% 17.0%
2013 2014 2015 2016
8.1%10.7%
13.8% 13.9%
2013 2014 2015 2016
Adjusted ROE1 Adjusted ROA2
1 Adjusted ROE was calculated based on adjusted net profit for the respective periods divided by the average total equity for the same periods and multiplied by 100%2 Adjusted ROA was calculated based on adjusted net profit for the respective periods divided by the average total assets for the same periods and multiplied by 100%
56 60 6561
2013 2014 2015 2016
31
Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
32
Strategies and development direction
1812555-001
Increase investment in research and development projects like cell therapy and other applications to expand our research and application service and product portfolio;
Enhance production capacity to capitalize on the strong demand for our life sciences research and application services and products;
Pursue strategic acquisitions and cooperation against the cutting-edge techniques to complement organic growth.
Increase penetration into the overseas and PRC markets by expanding and strengthening our sales and marketing team.
Strategic development
33
Investment in Zhenjiang
1812555-001
• Choose Zhenjiang New District as new production base after the careful evaluation.
• The investment agreement. was signed on June 20,2016.
• Investment and registered capital: US$30 million (in two phases).
• Zhenjiang will be one of our major production base in the future while Nanjing will play the role of R&D base.
• Transfer part of the life sciences research services business.
34
Acquisition of 51% equity interests in Nornoon
• Approx. 140 Employees
• The investment fund will be used to enhance Nornon’scapacity in order to support the rapid growth of its sales on the future.
• FY2015:Revenue:CNY37.6M,Net profit : CNY4.7M
Nornoon’s plant Nornoon’s facility
• The Investment and Cooperation Agreement was signed on April 6, 2016.
• Acquired 51% of the equity on June 30,2016
• The Consideration payable is CNY53M (equivalent to approximately US$8M).
35
Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
36
Legend global leading status in multiple myeloma cure
1812555-001
The sixth MM patient
The 18th day after treatmentBefore treatment The 83rd day after treatment
37
Achievement on the Synthetic Yeast Genome Sc2.0 Project
The Group has achieved promising results in the joint research and
development effort with various international research and development
institutions in the field of synthetic genomics with the aim to newly design and
synthesize all 16 saccharomyces cerevisiae chromosomes, at the total length
of 12 million base pair (Project Sc2.0).
Under the Joint Research and Development Project, scientists from the Group
and various international institutions have completed the design, assembling
and synthesis of five chromosomes, of which the Group has been involved in
the synthesis of the number six chromosome. The Board is pleased to
announce that the Joint Research and Development Project yields promising
results, which has been published in Science, a leading international science
journal, entitled “Synthesis, Debugging, and Effects of Synthetic Chromosome
Consolidation: synVI and Beyond”, on March 10, 2017.
1812555-001
38
Background of the Industry
Business and Finance
Future Strategies
Company Overview
Research Progress
Investment Highlights
39
Investment highlights
• We have achieved world market leadership in the global gene synthesis service market with recognized stature in synthetic biology, and we offer a broad and integrated life sciences research and application service and product portfolio
• We are a well-known and trusted brand underpinned by our high quality life sciences research and application services and products
• We maintain a strong sales and marketing team and operate an interactive online quotation and ordering platform to support our global sales
• We possess strong research and development capabilities, with a proven track record and a robust service and product pipeline
• We have an experienced and professional management team supported by a strong talent base
We have a complete and mature enzyme production line to serve the broad industrial market
• We have achieved innovative breakthrough for CAR T-Cell Immunotherapy in clinical trial