Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility

Social Achievements

• Donated RMB 1 million to the Beijing Red Cross Society for COVID-19 prevention and control.
• Participated in poverty alleviation projects in Hubei province.
• Purchased RMB 130,500 of materials from poverty alleviation units for targeted poverty alleviation.
• Awarded "Annual Social Responsibility Contribution Enterprise" by CSR Pioneer Forum and "Most Socially Responsible Listed Company" by China Securities.

Governance Achievements

• Established a corporate governance structure with checks and balances among the general meeting of shareholders, the Board of Directors, the Board of Supervisors, and the senior management team.

Climate Goals & Targets

Environmental Challenges

• Impact of the COVID-19 pandemic and the expansion of volume procurement.

Mitigation Strategies

• Adjusted academic promotion strategies, strengthened after-sales service, and developed the primary market.
• Optimized sales personnel organizational structure, and improved knowledge and skills.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Annual Social Responsibility Contribution Enterprise
• Most Socially Responsible Listed Company

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Expanded the enrollment of nearly 1,000 professional academic representatives in the first half of 2022.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Short-term pain to the company's performance due to the price decline in the volume-based procurement (VBP) of insulin, which cannot be offset by the increase in product sales in the short term.
• Decrease in international orders and international sales revenue due to the global epidemic and changes in the international political situation.
• Conversion period of insulin prices after volume-based procurement, commercial companies and terminal medical institutions started to collect and stock up gradually, controlling the purchase of high-priced products, which affected the Company’s product sales.
• Adjusting the price of inventory products before volume-based procurement by means of price compensation.

Mitigation Strategies

• Expanding the professional academic representative team to provide more services to medical institutions, better cover the free competitive market, and expand the scope of academic publicity.
• Encouraging the academic representative team to sink into the primary tier market.
• Increasing investment in R&D to ensure future long-term development.
• Actively exploring the layout of the comprehensive portfolio of diabetes treatment drugs.
• Expanding the Linyi production base to provide a strong guarantee for the Company’s globalization strategy and commercialization of biologics, chemicals, medical devices, and other products.
• Accelerating the progress of R&D projects and continuously enriching the R&D pipeline.
• Improving the accuracy of production plans, formulating reasonable safety stock levels, maximum and minimum stock levels, and reorder points to continuously optimize the linkage system of research, supply, production, and sales planning, improve supply chain resilience, reduce costs and increase efficiency while ensuring efficient and safe production.
• Implementing supplier management and cooperation strategies to cope with the complex and ever-changing international situation and the impact of the global epidemic.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 2021 Evergreen Award Annual Innovative Pharmaceutical Enterprise
• Beijing New Technology New Product
• 2021 China Biopharmaceutical Enterprise Top 20

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Launched a “Dumplings will shine” Dragon Boat Festival welfare activity, using recyclable canvas bags instead of disposable paper gift boxes and inflatable sofas, encouraging green and healthy living.
• Organized a spring public welfare activity of “6S Tidying Up - Clothes Donation”, recycling and donating 123kg of old clothes, equivalent to reducing 658kg of carbon dioxide emissions and saving nearly 738 cubic meters of industrial water resources.
• Carried out a renewable energy renovation project for photovoltaic power generation in the plant, generating 431,390.39 kWh of electricity, equivalent to 260.56 tonnes of carbon dioxide emissions reduction.

Social Achievements

• Successfully reversed the short-term loss situation after the volume-based procurement, achieving an operating income of RMB 1.23 billion (a 47.31% increase compared to the previous year) and a net profit attributable to shareholders of the listed company of RMB 0.13 billion.
• Successfully secured the bid in Brazil and arranged for the first batch of delivery within a short period of time, helping patients receive the necessary treatment in a timely manner.
• Expanded sales staff by nearly 1,000 people in the first half of 2022 to support the centralized procurement.

Governance Achievements

• The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of Gan & Lee Pharmaceuticals assure that the content set out in this semi-annual report is true, accurate and complete, and free from any false record, misleading representation or major omission, and are individually and collectively responsible for the content set out therein.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to international political circumstances and exchange rate fluctuations.
• Slow implementation of second-generation insulin products in the first year due to insulin generation upgrading.
• Single revenue structure and technology iteration risks.
• Uncertainty in the development of innovative drugs.

Mitigation Strategies

• Actively seeking external high-quality bids for introduction to expand its product line.
• Refining the management of cost and quality, and responding to the downward trend of product price by reducing cost and increasing efficiency.
• Accelerating the coverage of newly admitted medical institutions in insulin volume-based centralized procurement.
• Accelerating the speed of getting certification of products in European Union and the United States to develop new profit growth points for the Company.
• Promoting the localization process of raw materials and consumables to cope with the instability of international supply.
• Strengthening its efforts to promote capacity upgrade and supply assurance, and reasonably carrying out inventory reserves.
• Carrying out lean production activities, improving the resilience of the supply chain, and taking the supply of the products won in the centralized procurement as the first priority to ensure efficient production, quality first, and stable supply.
• Accelerating the construction of capacity increment projects to enhance the scale of the production capacity.
• Strengthening R&D innovation capabilities, exploring new targets, and promoting the rapid transformation and implementation of new hypoglycemic drugs.
• Actively expanding overseas business, increasing the proportion of international business revenue in operating income.
• Strengthening industry-university-research cooperation, enriching the Company's product pipeline, and optimizing the Company's income structure.
• Developing new drugs with similar efficacy and safety or better Me Better new drugs, and gradually trying the development of Class I new drugs.
• Establishing a scientific decision-making system, ensuring the scientific decision-making process of the project.
• Conducting technical assessment and risk control at the preliminary stage of R&D projects and at key nodes, reducing R&D risks.
• Actively seeking high-quality resources that fit its future development strategy and cooperating with innovative biopharmaceutical R&D companies.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• China Pharmaceutical and Biotechnology Industry Circuit Winner Award
• National Intellectual Property Demonstration Enterprise
• Sixth Governing Unit of the Beijing Pharmaceutical Industry Association
• Tongzhou District Medical-Industrial Collaborative Innovation Base
• 2022 Zhongguancun Listed Companies Science and Innovation 100

Environmental Metrics

Environmental Achievements

• Achieved zero incidents of wastewater and exhaust gas exceeding discharge standards in Beijing and Shandong facilities.
• Implemented various waste reduction measures, including sludge drying, green packaging, and paperless office.
• Successfully completed the renewable energy renovation project for photovoltaic power generation, reducing carbon dioxide emissions by 291.6039 tons.
• Purchased green electricity, reducing carbon dioxide emissions by 7,032.6172 tons.

Social Achievements

• Supported rural industries through the China Rural Revitalization Entrepreneur Support Program.
• Successfully passed EMA's pre-approval GMP inspection, marking a solid step in internationalization.
• Received multiple awards and recognitions for brand building, humanistic care, and social responsibility.

Governance Achievements

• Implemented a restricted stock incentive plan for 87 core technical talents.

Climate Goals & Targets

Environmental Challenges

• Risks associated with single revenue structure and technology iteration.
• Risks of supply of selected products in centralized procurement.
• Uncertainty in innovative drug development.

Mitigation Strategies

• Actively seeking external high-quality targets for the introduction and expansion of product lines.
• Refining cost and quality management to address the downward trend in product prices.
• Accelerating the coverage of recently admitted medical institutions in insulin-specific centralized procurement.
• Speeding up the certification process for the products in Europe and the United States.
• Promoting the localization of raw material consumables to cope with the instability of international supply.
• Strengthening production capacity upgrading and supply security, and rationalizing inventory reserves.
• Carrying out lean production activities, improving supply chain resilience.
• Accelerating the construction of capacity incremental projects to enhance the Company's capacity scale.
• Strengthening R&D and innovation capabilities, exploring new targets, and making efforts in drug design and clinical trials.
• Actively expanding overseas business, strengthening cooperation with overseas customers, and increasing the proportion of international revenue to operating income.
• Strengthening collaboration with universities and research institutes in production, learning, and research, expanding into other therapeutic drug areas.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• CLS 2023 Most Investable Overseas Enterprise
• 2022-2023 Pharmaceutical Supply Chain "Gold Award" Top Ten Industrial Enterprises
• On Health 2023 Star List-Brand Communication Star of the Year
• FESCO 2023-2024 Top 100 Happiest Companies in China
• Common Development Award
• Beijing Sub-center Enterprise with Green Credit B-level
• 2023 Top 20 Chinese Biopharmaceutical Companies