Genscript Biotech Corporation (1548) Earnings Call Transcript & Summary

Good day, everyone, and thank you for standing by. Welcome to 2021 Genscript Biotech Annual Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Mr. Shiniu Wei. Please go ahead.

Thank you, operator. Good morning, everyone. Welcome. I'm Shiniu Wei, CFO at GenScript. We also have the following management team members attending today's call: Mr. Robin Meng, Chairman of the Board; Dr. Patrick Liu, rotating CEO of GenScript; Dr. Ying Huang, CEO and CFO of Legend Biotech; Dr. Brian Min, CEO of GenScript Probio; Dr. Ray Chen, President of GenScript Life Science Group; and Dr. [ Ashi bai ], General Manager of Bestzyme. Before we begin, I'd like to remind everyone that on today's call, we will be making forward-looking statements about future expectations, plans and prospects as well as any other statements regarding matters that are not historical facts, which may constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements such as results of various important risk factors and changing market conditions. We do not undertake any obligation to publicly update any forward-looking statements. In today's conference call, Patrick will give an opening remark and present business updates. Then I will walk you through the company's financial performance. Then Patrick will outline our company's future strategies. Our Chairman, Robin, will give a summary, followed by the Q&A session at the end. Now I will invite Dr. Liu to highlight our business achievements in 2021.

Good morning, good evening, everyone, depending where you are. Before we get started, on behalf of the Board, the management team and all GenScript employees, I would like to thank all shareholders, investors and analysts for your long-term support and recognition. We witnessed the COVID spikes, arising globalization and marketing turmoil over the past few months. Despite that, we are glad to see our fellow shareholders, investors and analysts remain confident and supportive to GenScript. I believe efforts of the -- all of our employees, our strong business performance are the cornerstone of this confidence. Over the past few years, GenScript has established a presence in biologics CDMO, synthetic biology and the cell therapy business. As our business line grew, we are excited to see our business thrive and our strategy. Now I would like to walk you through our highlights in different business segments. So life science. As a foundation of the group, the life science business continues to generate considerable revenue and profit. In 2021, the growth rate of our gene synthesis business far outpaced the industry average, while our oligo, protein, antibody and peptide business grew only double-digit base. So revenue from life science business reached a historical high, surpassing $300 million for the first time and grew at 26.4% year-over-year. Revenue from emerging markets like China and Asia Pacific region grew about 30% with very strong growth momentum. We expect higher growth potential in those 2 regions in the near future. Due to strong demand from customers on nonviral payload and CRISPR-related GCT business, our oligo business continued to grow rapidly in the second half of 2021, and revenue grew over 90% year-over-year. Leveraging our life science platform for new medical material development, we launched a nonviral payload for GCT applications in 2021. While offering single-stranded DNA, sgRNA and CRISPR-related materials, we continued to upgrade our production capacity to ensure safety, efficacy and compliance required for those products and established medium-scale GMP production lines. We also optimized our automation and digitalized the production platforms for our molecular biology business. Our automation platform for gene and oligo business in Zhenjiang, Nanjing and the U.S. are fully operational, and we expect to further expand and upgrade those production lines in the next few years. By the end of 2021, we have more than 60% of the genes synthesized from our automated production lines. This also significantly increased our labor efficiency. Over the last few years, the company has expanded our life science business capacity in China, Singapore and the U.S. In the U.S., we launched a fully automated gene synthesis production line covering 5,000 square meter. This supports our local rapid gene synthesis services in the U.S. In Singapore, we built an automated facility covering over 3,000 square meter with highly automated protein production and gene synthesis equipment. In Shanghai, we commissioned a production center covering about 1,700 square meter, which is for in vivo/in vitro cell modeling, viral vector preparation and development and so on. So for our biologics CDMO business, Probio achieved very impressive results in 2021. Probio's revenue grew over 101%. Backlog grew over 108%. On antibody CDMO business, we delivered 24 CMC projects, up by 71% year-over-year. Our downstream process delivery capability are improving rapidly. With the accumulation of experience, we intend to attract more customers and further improve customer loyalty. We helped our customers with 8 R&D approvals in China and in the U.S. Probio is on the way to become a top-tier antibody CDMO in China. On GCT CDMO business, thanks to our strategic investment in early years, we have become the #1 plasmid supplier in China. We offer a wide range of plasmid from preclinical to commercial stage and offer solutions for R&D filings and clinical development. We helped our customers with 6 R&D approval in China, Japan and South Korea. Probio received $150 million Series A financing in 2021. The capital intensity of biologics CDMO industry, so it's very essential to obtain sufficient resources for capacity expansion. For our industrial synthetic biologic business, and 2021 is a turning point for Bestzyme's business. Over the past several years, we optimized our enzyme business portfolio, improved R&D efficiency and implemented key account development strategy. All those efforts helped Bestzyme reach breakeven in 2021. Bestzyme revenue grew over 33% year-over-year, ranking on the top in the industry. Our labor efficiency and energy utilization and efficiency grew at 20% and 17%, respectively. We constantly optimized our strength so that we could upgrade our enzyme product to meet very diverse demand from our customers. We are also seeking new opportunities in synthetic biology areas. Leveraging our synthetic biology technology, we will develop new functional proteins and high-value small molecules to help our customers address challenges in food health, home care and chemical process substitution fields. So last segment, cell therapy. In December 2021 at the ASH annual meeting, Legend presented the updated clinical data from CARTITUDE-1 and CARTITUDE-2 study for cilta-cel treating multiple myeloma, which is the best-in-class drug candidate on the market. Legend and J&J have submitted an MAA and NDA for cilta-cel in Europe and Japan, respectively. Considerable resources we will need for early line clinical trials and R&D investment in other pipelines. Sufficient R&D funding is essential for Legend's long-term success. In 2021, Legend raised a total amount of $645 million financing. We believe that adequate R&D funding will help us accelerate the cilta-cel early-line clinical trials and push forward other pipelines as well. So in late February this year, Legend received the commercial approval of China's first proprietary CAR-T product, cilta-cel, with a commercial name CARVYKTI in the U.S. And this is a solid proof of our international recognition on China's innovative drug industry. And 2021 is a year of innovation for GenScript business lines. On life science, we developed our gene and oligo automation capability by combining industry-leading SOPs accumulated over decades with our know-how and automation technology, which resulted in a revolutionary automation platform. Over the past few years, genes synthesized through our automation platform increased by 10% year-over-year. As I just mentioned, we have more than 60% of genes synthesized from our automated production lines. Our leverage efficiency on gene synthesis business line also improved by more than 20% year-over-year. In response to market demand for gene and cell therapy materials, we launched new GCT-related products and received a very positive feedback. Genes will provide HPLC-grade SafeEdit sgRNA with more than 90% purity or 100% accuracy for all sequences and a low toxicity. This product is essential for GCT and preclinical R&D validation stages. Also, by leveraging our proprietary high-throughput synthesis platform technology, genes will provide the academic community with EasyEdit sgRNA synthesis services featuring 100% accuracy for all sequencing and 100% guaranteed quantity. It also features low-toxicity, high-stability and high-editing efficiency. It's an optimal choice for basic CRISPR/Cas9 gene editing research. To meet the industry demand for efficient and accurate gene editing during gene insertion, replacement and modification in CRISPR experiments, we launched a precise and low cytotoxicity GenExact single-stranded DNA synthesis service as a way to fulfill [indiscernible] to make research easy. In 2021, revenue of our nonviral vector therapy grew over 150%, and our CRISPR-related sgRNA business grew over 80%. We believe that sgRNA and single-stranded DNA GMP capacity expansion in the next few years will further drive our business growth. On GCT-related instrument and consumables, we launched CytoSinct cell isolation platform to address high cost of the cell isolation process. CytoSinct's platform consists of CytoSinct Nanobeads, Columns and magnetic separator. CytoSinct Nanobeads are coupled with highly specific monoclonal antibodies, which are paramagnetic, biodegradable, easy to use and enable highly efficient cell isolation. We rolled out IL beads on the market, and we will build GMP beads manufacturing facility in Zhenjiang to meet the customer needs for industry-grade beads. On the protein business line, we upgrade our proprietary next-generation CHO transient expression systems for recombinant protein and antibody production. This system significantly increases the yield and shorten the production time. It also enables microgram to kilogram level protein production, which has greater significance for our future industry-grade capacity scaling. So capacity expansion is essential for our growth in the life science business segment in the next 3 to 5 years. In 2021, we expanded our capacity in the U.S., Singapore and China, which fueled the growth of our gene, protein, peptide and oligo business. We will continue to expand the production capacity. In the U.S., we will launch an automated molecular biology facility and nonviral vector manufacturing facility to address the local customer needs for molecular biology and GCT-related business. In Singapore, we will build a gene and plasmid manufacturing facility covering 500 square meters. In Zhenjiang, we plan to extend the molecular biology business line to increase our gene and oligo throughput. Having built our life sciences building covering over 34,000 square meter in the 250 [ Zhenjiang ] site, we will fulfill the production lines of our peptide, sgRNA, single-stranded DNA and GMP beads in this building over the next few years. Turning to Probio. We've continued to optimize the plasmid production process. Probio has become a leading GMP-grade linearized plasmid provider for mRNA vaccine in China. In addition to those products, we also offer one-stop solution to help our customers with R&D filing. In terms of project experience, we helped our customers get 5 mRNA-related R&D approvals, and we are also China's first city CDMO with GMP-grade commercial plasmid production capability. We will have a 500-liter fermentation tank this year to further meet different capacity needs of customers. In terms of efficiency, our clinical sample manufacturing site has shortened from 10 weeks to 7 weeks. We believe that as our project experience and technology platform continuously upgrade, our plasmid platform will have a more competitive edge. In terms of platform innovation, with our proprietary AAV suspension cell line, PowerS-293 platform and a triple transfection system, we are able to produce different AAV cell types to meet the customer needs for AAV vectors. Now our platform can offer 30% to 50% higher crude titer than commercial cell lines, demonstrating our strong commercialization [ capabilities ]. We believe that with more customers choosing AAV vectors for gene and cell therapy R&D, we could have more opportunities lying ahead. So our strategic investment in biologics CDMO will focus on capacity and infrastructure build-out within the next 3 years. On gene and cell therapy business, in 2021, we commissioned 6,400 square meter GMP plasmid facility in Zhenjiang to meet exclusive customer demand for gene and cell therapy. This facility increases the total area of Probio's plasmid manufacturing facility to over 10,000 square meters. In 2022, we will launch a GMP plasmid facility of the same size. We expect to expand our plasmid and virus manufacturing facility to over 70,000 square meters by 2024. In addition, we are also building a plasmid and virus manufacturing facility in the U.S. to address local demand in U.S. And in the future, we will invest in CDMO business in 2 ways. On the antibody CDMO business, our focus will be on 2 areas: First, capacity expansion for antibody discovery, developing CMC. We plan to build a new R&D building in Nanjing, of which over 10,000 square meters will be dedicated to antibody discovery and process development. This will improve our capacity to handle orders of upstream business. Secondly, our biologics fill and finish line will be ready in the second half of this year. On antibody CDMO commercial manufacturing area, we adjusted our commercial capacity plant in Zhenjiang and increased the plant capacity from to 12,000 liters to 1,600 liters (sic) [ 16,000 liters ] to further meet customer needs. Turning to Bestzyme. With years of development in gene editing tools, directed evolution and high-throughput screening platforms, Bestzyme has built its own component library and enzyme molecule library as well as ready-to-use grade -- industry-grade platform. Those efforts significantly aimed for R&D efficiency. On enzyme product innovation, in 2021, Bestzyme launched a series of new products. LiqFINE, which is an amylase for food processing, features high activity, acid resistance and thermal stability. This product can help our customers with less chemical use, improved process stability and a lower production cost. In the feeding processing industry, our product ProMax can adapt to the pH level of the digestive system in animals and improve feeding efficiency and the economic benefits of breeding in animal feeding experiments. Our BesCell VRE is a high-efficiency mixed viscosity-reducing enzyme, which is designed to address excessive viscosity in wheat processing. This product can significantly reduce the viscosity of wheat slurry in early processing, improve production efficiency, reduce energy consumption and improve purity and quality of the further processed wheat product. Bestzyme is leveraging its robust innovation capability and enzyme platform to achieve commercial success and fulfill our commitment to make the best enzymes. So for cell therapy in 2022, Legend and its partner, J&J, received last-line commercial approval of the lead product cilta-cel for treating multiple myeloma from the U.S. FDA. Cilta-cel was also reviewed by health authorities in Japan and Europe. Cilta-cel has the potential to address the worldwide challenges of multiple myeloma treatment, also a potential best-in-class CAR-T cell therapy, which received FDA approval. Cilta-cel has the solid encouragement of China's innovative drug to seek global commercialization. Legend's cost of success will also serve as an ideal reference for the entire Chinese innovative drug industry. So following the commercial approval, capacity expansion will be one of Legend's key priorities. For clinical sample supply, we have a built a GMP supply site for CAR-T products in Somerset, New Jersey, U.S. and Nanjing, China as well. In addition, with the launch of cilta-cel, our commercial GMP facility in Raritan, New Jersey has been put into operation. On global business presence, we are also building commercial sites in Ghent, Belgium and Nanjing, China to meet future commercial demand. We believe that Legend is able to build commercial capacity as scheduled to meet the patients' urgent need for cilta-cel. On other pipelines, we have initiated different R& plans and studies for blood tumors, solid tumors and infectious diseases. Candidate drugs in our pipeline have shown greater promise in multiple areas such as gastric cancer. Now I think I can conclude temporarily, and I will turn it back to Shiniu to cover the financial results.

Thank you, Patrick. Now let's turn to Page 13. GenScript continued its strong financial performance in 2021. Group external revenue grew 31% year-over-year to about $510 million. Group gross profit reached about $310 million, 18% higher year-over-year. Gross margin was about 60%. Group consolidated net loss was about $500 million, and adjusted net loss was about $310 million. Non-cell therapy business continued its rapid growth in 2021. External revenue grew 34.8% to $425 million. Non-cell therapy revenue benefited from new products launched, stronger business development capabilities and capacity expansion in 3 business units. Non-cell therapy gross profit was about $223 million before elimination, 18% higher year-over-year. The adjusted net profit for non-cell therapy was about $50.2 million, 18% higher year-over-year. Our COVID-related business declined by 36% year-over-year, while non-cell therapy business revenue growth ex COVID was 45%. As COVID-related business generally had higher gross margins, this affected the overall profit for non-cell therapy business. As reported by Legend earlier, cell therapy external revenue was $86.4 million, 14% higher year-over-year. This represents continued recognition of the upfront and milestone payments from J&J collaboration. Net loss for cell therapy was about $390 million. Adjusted net loss for cell therapy business was about $350 million, mainly driven by increased clinical studies for cilta-cel and other R&D activities. Please also note that cell therapy profit loss figures reported at the group level may deviate slightly from Legend's own reported numbers due to intercompany elimination. Now on next page, our R&D expense significantly grew year-over-year. Our total R&D in 2021 was about $360 million, up 36.1% year-over-year, making us one of the top biotech/biopharma companies in China in terms of R&D spending. Cell therapy R&D was about $310 million, up 35% year-over-year. The majority of Legend's R&D expense is on cilta-cel program. In 2021, we also increased R&D investments in non-cell therapy business from 10% of revenue to 12% of revenue. With increased investments in gene and cell therapy-enabling technology and services, R&D investment is expected to rise further. Capital expenditure for 2021 was about $140 million. Major areas of CapEx outlays included GMP manufacturing facilities to support current clinical trials and future commercial demand as well as GMP facilities in Nanjing and Zhenjiang to support our CDMO business growth and infrastructure expansion for the life science business and other back-office expenditures. The group has a strong balance sheet. As of the end of 2021, total cash position, including cash and cash equivalents, time deposits and wealth management products, stood at $1.37 billion. Legend has a cash position of almost $900 million, while non-cell therapy business cash stood at about $510 million. Next, I will review the financial performance of each unit. On Page 15, life science products and services. In 2021, on top of our high achievement from last year, our life science business continued its rapid growth. Revenue rose to about -- above $315 million, up 26.4% year-over-year. In addition to market share gains in gene synthesis, our protein, oligo, peptide business all contributed to revenue growth. Life science gross profit reached $183 million in 2021. Increased shipping costs and unfavorable currency fluctuations had a negative impact on gross margin rate. Most of our business lines had stable or improving gross margin in life science. Particularly thanks to our investment in GCT-enabling technologies, our oligo revenue and gross margin rate almost doubled. In 2021, life science business continued its strong investments in R&D while maintaining strong profitability. Adjusted operating profit reached over $100 million in 2021. Next page on biologics CDMO. In 2021, our biologic CDMO business, GenScript Probio, grew explosively. Probio's revenue grew over 100% year-over-year to $81.4 million. Revenue growth was attributed to successful delivery of ongoing CDMO projects and fast growth of gene and cell therapy market demand. Within Probio, gene and cell therapy CDMO service revenue grew the most, up over 203% year-over-year. Revenue from antibody and protein drug CDMO grew 77.6%. Thanks to high quality standards and global business development capabilities, we also saw exciting growth from both domestic and international markets. Revenue from China-based customers grew 78%, while international customer revenue grew 117%. Our China-based and international customer revenues are about 50% and 50% for Probio's business. Based on our existing backlog, we expect Probio to continue robust growth and maintain a CAGR of 50% to 60% in the next 3 years. At the end of 2021, total backlog stood at $190 million, up 108% year-over-year. Significant backlog buildup results from rapid increase in project numbers and project size. We expect to convert backlog into revenue in the next 1 to 2 years. As Probio grew its revenue and backlog, gross profit also grew 158% to $25.6 million. Probio's overall gross margin grew from 24.5% last year to 31.4% in 2021, driven by higher capacity utilization, substitution with domestic raw materials, R&D platform optimization and higher labor efficiency. To enhance our business development capabilities and market competitiveness, we invested a lot of resources on domestic and overseas marketing activities. In addition, we launched an ESOP program for Probio to retain and incentivize talent. After adjusting for share-based compensation, operating loss was about $0.2 million for Probio. We expect Probio's profitability to continue to improve in 2021. Next page. In terms of track record, GenScript Probio continues to build a solid customer experience. In antibody-drug CDMO business, Probio added 390 antibody discovery projects, 80 pre-CMC projects, 24 CMC projects and 2 SMAB co-development projects. Probio also helps customers get 8 IND approvals, 4 from U.S. and 4 from China, which is an impressive breakthrough this year. As we presented at the first half 2021 conference, Probio is capable of delivering challenging projects. Bispecific antibodies and recombinant protein projects now took up the majority of customer projects, which reflects Probio's strong R&D capabilities. The ability to take on challenging molecule projects certainly gives us a competitive edge in this market. In gene and cell therapy CDMO services, Probio is a leading player. In 2021, Probio added 170 preclinical projects, 80 CMC and 128 clinical projects and helped customers get 6 IND approvals, both from China and overseas. Cumulatively speaking, since we established Probio in 2019, on the plasmid side, we have helped customers get 9 IND approvals, and there are also more than 70 plasmid CMC projects in the process of filing for IND. We helped see customers complete 100 clinical plasmid manufacturing batches. On viral vector side, we helped customers to get 3 IND approvals and completed more than 20 clinical viral vector manufacturing batches. More than 20 GMP batches are under clinical manufacturing process as well. Turning to industrial synthetic biology products on Page 18. Bestzyme's revenue grew 33.6% year-over-year to $38.6 million, driven by the launch of a number of new products and continued implementation of key account development strategy. Our top 10 key customers contributed a great deal of orders. We saw significant order growth in 9 out of 10 key accounts. In terms of the business line performance, thanks to new product launches and key account selling strategy, Bestzyme's industrial enzyme business grew 36.3%, and animal health care enzyme business grew 32.8%. In terms of profitability, Bestzyme's gross profit grew 31.4% year-over-year to $11.3 million. The increase in selling expense is due to sales capability improvements on key account development and aggressive promotion of new products. As promised, Bestzyme reached breakeven at the end of 2021 after years of efforts. We expect continued profitability improvement in this segment as well. Now last but not least, Legend Biotech. Legend's external revenue was $86.4 million, reflecting amortization of upfront and milestone payments Legend received from the collaboration with J&J. R&D expenses reached -- increased to $310 million in 2021. R&D expenses at Legend include costs for conducting clinical trials in the U.S. and China for cilta-cel program, which about -- which was about $200 million. R&D expenses for other pipelines was $110 million. As Legend just launched CARVYKTI, due to its heavy R&D investment, adjusted net loss was about $350 million. At the end of 2021, Legend has a cash position of $887 million. We have just received 2 additional milestones totaling $50 million in the first quarter 2022. This will help Legend accelerate cilta-cel into earlier lines of clinical trials and support our investment in other pipelines. Now I'll stop here and hand it back to Patrick to share the company's strategy.

Thank you, Shiniu. As you can see from today's presentation, since our current business portfolio is shifting its business focus to higher value-adding industry value chain, in our life science business, in response to the needs of industry-grade products and services, we are scaling up capacity to meet higher demand from the life science community. We also rolled out our proprietary instrumented equipment to help address high cost in the GCT industry. Probio has developed a one-stop capability and transformed from CDO to CDMO, offering higher value-added services. On Legend, after receiving commercial approval of cilta-cel in 2022, we will soon launch marketing activities together with Janssen's commercial team. This pivotal moment marks Legend's transition from a biotech company to a biopharma company. So in terms of our industry strategy, we will prioritize our presence in the GCT industry and synthetic biology industry in the future. On GCT, our life science services business line will focus on addressing pain points of nonviral vectors and gene editing in clinical or preclinical phases. Probio will develop one-stop service capabilities for virus and the plasmid business and offer a full range of solutions from manufacture, R&D filing of customers. Legend will focus on R&D, manufacture and commercialization of cell therapy products. On synthetic biology, GenScript Life Sciences Group will remain dedicated to gene synthesis, gene editing and protein antibody engineering services for domestic and international top-tier synthetic biology companies. Bestzyme will expand its capability and expertise into synthetic biology product R&D and manufacturing services by leveraging its advantage in strain development, metabolic pathway engineering and industry-grade manufacturing. So COVID-19 has been around for 2 years since 2020 and has a profound impact on many aspects of our society and the entire biotech industry as well. As a biotech company which has a presence across the industry value chain, GenScript will be accelerating the development of biotech industry with our commitment to innovation. So we believe that with the efforts of our employees, we will fulfill our mission to make people naturally healthier through -- by technology. So next, for different business lines, we will implement different strategies. Our life science business, we will continue to develop global business and push ahead with our globalization strategy. Over the past 2 years, European division and Asia Pacific division have paved the way for expanding our presence in Europe and Asia Pacific. In the future, those 2 divisions will take on more manufacturing, logistics and commercial functions. To improve efficiency and reduce costs, we will implement our automation technology in different product lines. Last but most importantly, GCT will be on the rise in the next industry revolution. As we see strong market demand for GCT-related single-stranded DNA and sgRNA for gene therapy and nonviral vector therapy, we will prioritize this business in the next few years. In terms of revenue structure, customer service are still dominant for now. However, in the next few years, in line with the transformation of the GCT industry, we will launch our instrument and consumables for the GCT industry. So I believe the instrument and consumables could potentially create more returns in the long run. On biologics CDMO business segment, our CDMO business is growing very fast. Our antibody drug CDMO, we will leverage our early-stage drug discovery advantages. Probio, now as an innovation entity, we will invest in capacity expansion more aggressively to capture more market opportunities. On GCT business, our plasmid business remains #1 in China with a sufficient number of orders and a strong customer demand. Our viral vector business is also growing very rapidly. We do have confidence that we will become a top-tier gene and cell therapy CDMO globally. Our industry synthetic biology products. Our efforts to focus on the key accounts and optimize the production lines led to our business improvement. Now that Bestzyme has reached breakeven this year, we will continue our strategy to improve profitability over time. In the upcoming years, we will combine Bestzyme's expertise in industry fermentation, metabolic pathway engineering and industry-grade manufacturing with gene switching, editing expertise to further expand into new synthetic biology field. On Legend, Legend Bio has obtained commercial approval for its first drug. Our next priority will be healthy in-house manufacturing and commercial skill capability for this drug. Thanks to all Legend and the GenScript team for your effort in this momentous process. On other pipelines, Legend will focus on products targeting solid tumor, blood tumor and infectious disease, continuing to fight against cancers. Now I turn to our Chairman, Mr. Robin Meng, to give a summary. Thank you.

Thanks, Patrick. Good morning, and good evening to those U.S.-based participants. Thanks to all the shareholders, investors and analysts for your continuous caring and support to our company. And thanks to all our employees for their strong commitment and innovation, which have enabled us to maintain strong momentum in 2021. We have committed to keep and to keep deliver solid and sound performance. And thus, we have gained widespread recognition from the domestic and international institutional investors. Over the past 2 decades, GenScript has established the global #1 gene synthesis technology platform, and we successfully incubated Legend Biotech through the proprietary CAR-T product just received the commercial approval from FDA. Our subsidiary, Probio, has established its leadership in the gene and cell therapy CDMO business. Bestzyme, that engaged in the synthetic biology industry, has reached breakeven through its R&D and product innovation. Stepping into the future, we are aware that the rising geopolitical tensions, changes in the industry and the regulatory environment will pose challenges to our business. However, the gene of innovation is embedded in our company culture, and our incubation mechanism has been proven and well recognized by the market over the years of the company's growth. All GenScript employees will stick to our vision to make people and the nature healthier through biotechnology and will shape GenScript as the most trustworthy biotech company in the world. Thanks again, and best wishes to all the participants of today's conference. Thanks for your time and your support to our company. Now Shiniu, let's open up for Q&A section.

Thank you, Robin. Operator, we are ready for Q&A.

[Operator Instructions] First question will come from the line of [ Carol Do ] from UOB.

Congratulations for these great results. I have 2 questions. My first question is regarding the cilta-cel. What is our commercialization strategy for this product and any sales target in the next few years, for example, from 2022 to 2024? And my second question is, what is the growth target for each of the segments in 2022?

[ Carol ], thank you for attending the call. Your first question on cilta-cel, I would like to invite Ying to answer that. Ying? It seems like there's a little bit of a technical difficulty, but I will answer the second question first and while connecting Ying back online. So [ Carol ], on your second question in terms of growth expectations for all the segments in 2022, I think we now face a rapidly changing and very dynamic market. And with all the uncertainties across the globe, we want to be prudent in terms of giving guidance at this time of the year, yet we are very confident with our business potential. On the life science side, we expect to grow revenue at 20% to 25% year-over-year in 2022. And with our CDMO business, GenScript Probio, we expect to continue to deliver strong growth over 70% year-over-year. And in terms of our Bestzyme business, we think we can continue to outpace the industry and grow 20% to 30% year-over-year. And collectively, on the non-cell therapy business, we will continue a very strong revenue growth north of 30% year-over-year. And then I'll hand it to Ying for your first question on cilta-cel. Ying?

Hello, can you hear me now?

Yes. We can hear you.

So the FDA-approved indication is in the minimum of full-line prior therapy. So that's what we're focusing on in our commercial efforts. And in terms of the effort between our partner Janssen and Legend, we're using the divide-and-conquer strategy. So the sales force from Janssen Pharmaceuticals will focus on the community-based physicians, and they will ask the physicians to refer patients who are eligible on CARVYKTI label to the hospitals or centers that are within that same region. And then the sales force from Legend will focus on the hospital market. So we'll focus on up to 80 treatment centers and hospitals in the U.S., and that's the divide-and-conquer strategy. And then if you look at our future commercial strategy, right now, we have also a Phase III trial ongoing called CARTITUDE-4. We're evaluating cilta-cel in patients who have been treated with 1 to 3 prior lines of therapy. So assuming a positive outcome, we are potentially looking forward to a top line release from that trial. And once that happens, we'll submit to FDA for label expansion. So that's our near-future commercial strategy, to expand from our first indication in late line. And if you look at the addressable market, we have said before that if you focus on the 3 major markets, including U.S., Europe and Japan, the first indication for CARVYKTI, it is about 22,000 patients per year in those 3 major markets. However, once we expand the label indication to second line and beyond in those 3 major markets, now we're looking at an addressable market size of roughly 80,000 patients in U.S., Europe and Japan. So that will be our future growth driver in the next few years.

Next question comes from the line of Jay Lee from Morningstar.

Congratulations on these excellent results. I think investors should be happy to see the continued strong growth these past few years. I have 2 questions. First, in the life science segment, reported gross profit margin has been on a downward trajectory this year. Shiniu, I think you mentioned that this was due to currency fluctuation and shipping costs. And I just want to get a sense of whether we think we might see this continue in 2022. And my second question is regarding Bestzyme business. As noted in the presentation, the business has been growing, while SG&A has been coming down. And I would like to get some comments on the future trend of this growth and the margin. In particular, I want to know whether the growth is coming from a fixed customer base or whether it's from an expanding customer base, which would require greater sales coverage.

Okay. Thank you, Jay. And for your first question on life science business, I'd like to invite our President of Life Science Group, Dr. Ray Chen, to take that. Ray?

Yes. Thank you for your question, and this is Ray. And the overall gross profit margin for GenScript Life Science Group will be stable for the year of 2022 and in coming years as well. We will further improve our efficiency and productivity and for our more established and mature portfolios and platforms and through automation. And we have been optimizing our international logistics to be more efficient and reliable. And we will further balance our investment and global expansions in new products and offerings with lower gross profit margin as well. So more importantly, that we will further improve the value of our products and the services that are more innovative and more application-driven. So we are confident that our gross profit margin will remain stable.

Okay. Great. Thank you, Ray. And Jay, in terms of your second question on Bestzyme, we also have Dr. [indiscernible], our new General Manager from Bestzyme, on the call. So I'd like to invite him to answer that.

Thank you, Wei. I think our P&L will be stable or down slightly going forward because our operational efficiency is constantly improving. And we expect our gross profit margin to increase by about 5 percentage points in 2022. Thank you.

At this time, there are no more questions from the line. May I hand the call back to the management for closing.

Okay. Thank you, everybody, and thank you, operator. I would like to conclude the call now.

Certainly. Ladies and gentlemen, that does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.