GENSCRIPT BIO (01548) has announced a profit warning for the fiscal year ending December 31, 2025. The company expects to report a significant net loss for the period.

For the reporting period, the Group's continuing operations are projected to achieve an adjusted net profit between approximately $207 million and $242 million. This represents a substantial increase of 246.5% to 304.3% compared to the adjusted net profit of about $59.8 million recorded in the previous fiscal year ended December 31, 2024. The anticipated rise in adjusted net profit is primarily attributed to a significant increase in license revenue. The Group expects license revenue to be between approximately $256 million and $299 million, a sharp increase from the roughly $2.4 million recognized in the prior year. This growth is mainly due to sub-license revenue generated from LianBio.

Regarding the investment in its cell therapy business, the Group expects to recognize a non-cash share of loss of approximately $304 million to $352 million from Legend Biotech Corporation. Additionally, an impairment loss on the investment in Legend is estimated to be between approximately $378 million and $438 million. Legend Biotech, whose shares are listed on the Nasdaq Global Select Market, was deconsolidated from the Group effective October 18, 2024, and has since been reclassified as a significant associate of the company. Following the deconsolidation, the company accounts for its share of Legend's profits and losses using the equity method. A significant decline in the price of Legend's American Depositary Shares as of December 31, 2025, compared to the price on the deconsolidation date, was identified as an indicator of impairment. This triggered an impairment assessment under relevant accounting standards. The estimated impairment loss is a non-cash accounting item and is not expected to have a material adverse impact on the Group's cash position or liquidity during the reporting period.

Consequently, the Group forecasts a net loss ranging from approximately $506 million to $586 million for the 2025 fiscal year. This contrasts with a net profit of about $2.9 billion achieved in the prior year. The expected shift from profit to loss is largely due to a high base effect from the previous year, which included a one-time, unrealized gain of approximately $3.2 billion arising from the deconsolidation of Legend. Excluding the impact of this one-time gain from the prior year and considering the information detailed above, the Group's underlying profitability remains robust. Furthermore, Legend Biotech's adjusted net loss narrowed significantly to $33.1 million for the reporting period, down from $189 million in the previous year.