Fosun Pharma Witnesses an Increase of 33.51% in its 2014 Net Profit by Strengthening its Core Competitiveness with Improved Strategic Deployment
On 24 March 2015, Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma” or the “Company”; stock code: 600196-SH, 02196-HK), a leading healthcare company in the PRC, is pleased to announce its audited consolidated financial results for the year ended 31 December 2014.
It is disclosed in the Company’s annual report that in 2014, the Company recorded revenue of RMB 12,025.53 million, and net profit of RMB 2,112.87 million attributable to the shareholders of the listed company, up by 20.30% and 33.51% over 2013, respectively. In terms of each business segment, revenue of pharmaceutical manufacturing and R&D business segment was RMB 7,336.65 million, and revenue of healthcare service business segment was RMB 1,185.89 million, representing a year-on-year increase of 11.43% and 149.66%, respectively. The growth was mainly attributed to the pharmaceutical manufacturing business and healthcare service.
In 2014, the Company continued to strengthen the industry operation, devoted more resources to supporting product innovation and market expansion, actively carried out mergers and acquisitions in the therapeutic areas of concern, rapidly expanded industry scale, and continuously boosted the overall market competitiveness. At the same time, the Company capitalized on the opportunities arising from the favorable policy environment in the medical service industry to accelerate the development in this field, commented Chen Qiyu, Executive Director and Chairman of Fosun Pharma.
Constantly improve R&D capability by strengthening internationalized R&D deployment
Fosun Pharma has focused on innovation and R&D in long run and continued to increase R&D expenditures in 2014. The cumulative R&D expenditures for the year of 2014amounted to RMB 685 million，among which the R&D expense amounted to RMB 564 million, up by 28.93% over 2013. R&D expenditures in the pharmaceutical manufacturing and R&D segment were RMB 452 million, accounting for 6.16% of the revenue of the pharmaceutical manufacturing and R&D segment.
Currently, the Company has an internationalized R&D deployment in place with strong R&D capability. The Company has established an interactive integrated R&D system located in Shanghai, Chongqing, and San Francisco, with an efficient R&D platform in the fields of small molecule innovative chemical drugs, macromolecular generic biopharmaceutical drugs, generic drugs of high difficulty, characteristic formulations, etc.
By the end of 2014, the Company has completed its capital increase in Shanghai Henlius, Chongqing Fochon, and SunTech Pharmaceuticals so as to effectively advance the R&D of generic biopharmaceutical drugs and innovative drugs. In addition, the Company strengthened the product deployment of anti-tumor drugs. At present, there are more than 20 biologics (monoclonal antibody) and chemical drugs in development after years of R&D efforts.
By the end of 2014, the Company has 125 pipelines of new drugs, generics, biological medicine and vaccines in total. 26 projects had been applied for going into clinical trials. 11 projects were being tested in clinical trials. 41 projects were waiting for approval to go into the market. According to the management of the Company, it is expected that these products in development will lay a good foundation for continued improvement of the operating performance in the next years.
During the year, the Company applied for 86 patents in total for pharmaceutical manufacturing and R&D, including 6 for US patents and 3 PCTs; in the pharmaceutical manufacturing segment, the Company obtained 36 patent licenses, including 35 patents for invention (including 17 patents in US, Japan and Europe)
Pharmaceutical manufacturing business: steady sales of major products and significant increase of anti-tumor products
In 2014, the Company’s pharmaceutical manufacturing and R&D business witnessed rapid growth, recording revenue of RMB 7,336.65 million, up by 11.43% over 2013.
The Company continued the heavy investments in the therapeutic areas of cardiovascular system, central nervous system, blood system, metabolism and alimentary system, anti-tumor and anti-infection. The sales of major products maintained rapid growth. The sales of major products in therapeutic areas of cardiovascular system, metabolism and alimentary system, anti-infection, and anti-tumor recorded year-on-year growth rates of 25.24%, 17.39%, 30.37%， and 254.37%, respectively. Among the new products, sales of You Di Er (alprostadil dried emulsion), a product in the cardiovascular system therapeutic area and You Li Tong (febuxostat tablets) in the metabolism therapeutic area witnessed rapid growth.
In addition, in 2014, the Company had 17 formulation items and series with sales of over RMB 100 million, among which the sales of Xihuang Capsules and Compound Aloe Jera Capsules exceeded RMB 100 million for the first time and the sales of Adegold and Atomolan exceeded RMB 500 million.
As of the end of 2014, the Company has 16 APIs (Active Pharmaceutical Ingredients) and the production lines with certifications from WHO-PQ, the US FDA, EU Certification, Ministry of Health, Labour and Welfare of Japan and Federal Ministry of Health of Germany, 4 production lines for formulation passed the WHO-PQ certification, and Health Canada GMP certification.
Healthcare services: strengthen the operating capabilities and promote the regional development of services
In 2014 the Company, based on its substantially completed deployment of its healthcare services business integrating high-end healthcare institutions in the more developed coastal cities and specialty and general hospitals in second-tier and third-tier cities in the PRC, further strengthened the operating capabilities of the healthcare institutions controlled by the Company, and facilitated the regional development of the Company’s healthcare services business.
Jingjin Building, a new complex of Chancheng Hospital (禅城医院) was completed and commenced operation, which established a foundation for creating the differentiated healthcare service platform. Chancheng Hospital (禅城医院) established the tumor center jointly with Nanyang Tumour Hospital (南洋肿瘤医院), and set up the laser plastic surgery center with Alma Lasers, marking the full launch of the international strategy across the Company’s medical and health industry chain. Zhongwu hospital has started the construction of a habilitation and body-check hospital, making the Company’s medical service platform more diversified. In addition, "Taizhou Zanyang Hospital-Caring Project" (Taizhou City Zhejiang East Medical Raising Investment Management Co., Ltd (台州市立浙东医养投资管理有限公司) and its affiliated hospitals) commenced the construction to initiatively explore the new mode of hospital-caring integration.
In 2014, the healthcare services entities controlled by the Company achieved total revenue of RMB 1,185.89 million, an increase of 149.66% over 2013. As at the end of 2014, the total number of beds available for the public in Jimin Cancer Hospital (济民医院), Guangji Hospital (广济医院), Zhongwu Hospital (钟吾医院) and Chancheng Hospital (禅城医院), controlled by the Company, was 2,770 .
In addition, the Company participated in the privatization of Chindex International Inc., and actively supported and facilitated the development and deployment of hospital and clinic network under “United Family Hospital”, a leading premium healthcare services brand under Chindex. In 2014, the United Family Hospital’s business in Beijing, Shanghai and Tianjin grew significantly and maintained a good momentum, reflecting the growing market demand for premium healthcare services and the strong brand recognition of “United Family Hospital”.
Pharmaceutical distribution and retail: promote the integration of the industry and continue to strengthen the core competitiveness
In addition to the steady growth of the business segments above, the pharmaceutical distribution and retail business of the Company for the year 2014 realized revenue of RMB 1,547.51 million, representing an increase of 2.73% as compared with the corresponding period of 2013. Fosun Pharmaceutical is the second biggest shareholder of Sinopharm, which is the largest pharmaceutical distribution enterprise in China and continues to maintain the leading position in the domestic pharmaceutical circulation field. In 2014, Sinopharm continued to accelerate the industry integration, expanded the distribution network of pharmaceutical products, and achieved the operating revenue of RMB 200.1 billion.
The Company signed an equity transfer agreement with Sinopharm to conduct integration of drug distribution and retail business, including Fosun Pharmaceutical, Forme Pharmacy (复美大药房), and Golden Elephant Pharmacy (金象大药房), so as to optimize resources allocation. In addition, the Company attempted to work with "registration network" to develop new business models.
Medical diagnosis and medical devices: increase the efforts of mergers and acquisitions to speed up the international integration
In the field of medical diagnosis and medical devices manufacturing business, in 2014, the Company has achieved operating income of RMB 1,503.88 million, representing an increase of 38.20% as compared with the corresponding period of 2013. By investing in overseas enterprises, such as miacom Diagnostics GmbH, and Genefirst Limited, the Company further strengthened the cooperation with the international diagnosis companies and extended the influence of the Company's diagnostic products in the international market.
In addition, the Company actively fostered the business development of Alma Lasers. In 2014, Alma Lasers speeded up the development of international markets and attached more importance to the emerging markets, such as India and China. The Company achieved the annual revenue of RMB 621.41 million, representing an increase of 13.40% as compared with the corresponding period of 2013. At the same time, Alma Lasers further strengthened the development of new products, especially the development of medical treatment devices, expanded the product lines to the field of clinical treatment. 5 products, including 1470 nm laser surgery system, passed the EU CE certification, and 3 products obtained US FDA approvals.
Capitalizing on the opportunities arising from the rapid growth of the PRC medical market and the fast grow of generics in European and American mainstream market, Fosun Pharmaceutical will adhere to the strategies of organic growth, external expansion and integrated development, increase the mergers and acquisitions of outstanding enterprises in the industry, continuously optimize and integrate medicine industry resources, strengthen the establishment of innovation system and product marketing system, actively promote the realization of industry internationalization, and strengthen the core competitiveness, thereby further improving the operating performance, said Chen Qiyu.
Looking ahead, Fosun Pharmaceutical will adhere to its business philosophy of “Innovation for Good Health”, stick to the mission of continuously promoting human health, and continuously improve the capabilities of innovation, service, integration and internationalization, and effectively operate, manage and invest in outstanding enterprises in the industry, so as to become a leading company in providing healthcare products and services.
It is disclosed in the Company’s annual report that in 2014, the Company recorded revenue of RMB 12,025.53 million, and net profit of RMB 2,112.87 million attributable to the shareholders of the listed company, up by 20.30% and 33.51% over 2013, respectively. In terms of each business segment, revenue of pharmaceutical manufacturing and R&D business segment was RMB 7,336.65 million, and revenue of healthcare service business segment was RMB 1,185.89 million, representing a year-on-year increase of 11.43% and 149.66%, respectively. The growth was mainly attributed to the pharmaceutical manufacturing business and healthcare service.
In 2014, the Company continued to strengthen the industry operation, devoted more resources to supporting product innovation and market expansion, actively carried out mergers and acquisitions in the therapeutic areas of concern, rapidly expanded industry scale, and continuously boosted the overall market competitiveness. At the same time, the Company capitalized on the opportunities arising from the favorable policy environment in the medical service industry to accelerate the development in this field, commented Chen Qiyu, Executive Director and Chairman of Fosun Pharma.
Constantly improve R&D capability by strengthening internationalized R&D deployment
Fosun Pharma has focused on innovation and R&D in long run and continued to increase R&D expenditures in 2014. The cumulative R&D expenditures for the year of 2014amounted to RMB 685 million，among which the R&D expense amounted to RMB 564 million, up by 28.93% over 2013. R&D expenditures in the pharmaceutical manufacturing and R&D segment were RMB 452 million, accounting for 6.16% of the revenue of the pharmaceutical manufacturing and R&D segment.
Currently, the Company has an internationalized R&D deployment in place with strong R&D capability. The Company has established an interactive integrated R&D system located in Shanghai, Chongqing, and San Francisco, with an efficient R&D platform in the fields of small molecule innovative chemical drugs, macromolecular generic biopharmaceutical drugs, generic drugs of high difficulty, characteristic formulations, etc.
By the end of 2014, the Company has completed its capital increase in Shanghai Henlius, Chongqing Fochon, and SunTech Pharmaceuticals so as to effectively advance the R&D of generic biopharmaceutical drugs and innovative drugs. In addition, the Company strengthened the product deployment of anti-tumor drugs. At present, there are more than 20 biologics (monoclonal antibody) and chemical drugs in development after years of R&D efforts.
By the end of 2014, the Company has 125 pipelines of new drugs, generics, biological medicine and vaccines in total. 26 projects had been applied for going into clinical trials. 11 projects were being tested in clinical trials. 41 projects were waiting for approval to go into the market. According to the management of the Company, it is expected that these products in development will lay a good foundation for continued improvement of the operating performance in the next years.
During the year, the Company applied for 86 patents in total for pharmaceutical manufacturing and R&D, including 6 for US patents and 3 PCTs; in the pharmaceutical manufacturing segment, the Company obtained 36 patent licenses, including 35 patents for invention (including 17 patents in US, Japan and Europe)
Pharmaceutical manufacturing business: steady sales of major products and significant increase of anti-tumor products
In 2014, the Company’s pharmaceutical manufacturing and R&D business witnessed rapid growth, recording revenue of RMB 7,336.65 million, up by 11.43% over 2013.
The Company continued the heavy investments in the therapeutic areas of cardiovascular system, central nervous system, blood system, metabolism and alimentary system, anti-tumor and anti-infection. The sales of major products maintained rapid growth. The sales of major products in therapeutic areas of cardiovascular system, metabolism and alimentary system, anti-infection, and anti-tumor recorded year-on-year growth rates of 25.24%, 17.39%, 30.37%， and 254.37%, respectively. Among the new products, sales of You Di Er (alprostadil dried emulsion), a product in the cardiovascular system therapeutic area and You Li Tong (febuxostat tablets) in the metabolism therapeutic area witnessed rapid growth.
In addition, in 2014, the Company had 17 formulation items and series with sales of over RMB 100 million, among which the sales of Xihuang Capsules and Compound Aloe Jera Capsules exceeded RMB 100 million for the first time and the sales of Adegold and Atomolan exceeded RMB 500 million.
As of the end of 2014, the Company has 16 APIs (Active Pharmaceutical Ingredients) and the production lines with certifications from WHO-PQ, the US FDA, EU Certification, Ministry of Health, Labour and Welfare of Japan and Federal Ministry of Health of Germany, 4 production lines for formulation passed the WHO-PQ certification, and Health Canada GMP certification.
Healthcare services: strengthen the operating capabilities and promote the regional development of services
In 2014 the Company, based on its substantially completed deployment of its healthcare services business integrating high-end healthcare institutions in the more developed coastal cities and specialty and general hospitals in second-tier and third-tier cities in the PRC, further strengthened the operating capabilities of the healthcare institutions controlled by the Company, and facilitated the regional development of the Company’s healthcare services business.
Jingjin Building, a new complex of Chancheng Hospital (禅城医院) was completed and commenced operation, which established a foundation for creating the differentiated healthcare service platform. Chancheng Hospital (禅城医院) established the tumor center jointly with Nanyang Tumour Hospital (南洋肿瘤医院), and set up the laser plastic surgery center with Alma Lasers, marking the full launch of the international strategy across the Company’s medical and health industry chain. Zhongwu hospital has started the construction of a habilitation and body-check hospital, making the Company’s medical service platform more diversified. In addition, "Taizhou Zanyang Hospital-Caring Project" (Taizhou City Zhejiang East Medical Raising Investment Management Co., Ltd (台州市立浙东医养投资管理有限公司) and its affiliated hospitals) commenced the construction to initiatively explore the new mode of hospital-caring integration.
In 2014, the healthcare services entities controlled by the Company achieved total revenue of RMB 1,185.89 million, an increase of 149.66% over 2013. As at the end of 2014, the total number of beds available for the public in Jimin Cancer Hospital (济民医院), Guangji Hospital (广济医院), Zhongwu Hospital (钟吾医院) and Chancheng Hospital (禅城医院), controlled by the Company, was 2,770 .
In addition, the Company participated in the privatization of Chindex International Inc., and actively supported and facilitated the development and deployment of hospital and clinic network under “United Family Hospital”, a leading premium healthcare services brand under Chindex. In 2014, the United Family Hospital’s business in Beijing, Shanghai and Tianjin grew significantly and maintained a good momentum, reflecting the growing market demand for premium healthcare services and the strong brand recognition of “United Family Hospital”.
Pharmaceutical distribution and retail: promote the integration of the industry and continue to strengthen the core competitiveness
In addition to the steady growth of the business segments above, the pharmaceutical distribution and retail business of the Company for the year 2014 realized revenue of RMB 1,547.51 million, representing an increase of 2.73% as compared with the corresponding period of 2013. Fosun Pharmaceutical is the second biggest shareholder of Sinopharm, which is the largest pharmaceutical distribution enterprise in China and continues to maintain the leading position in the domestic pharmaceutical circulation field. In 2014, Sinopharm continued to accelerate the industry integration, expanded the distribution network of pharmaceutical products, and achieved the operating revenue of RMB 200.1 billion.
The Company signed an equity transfer agreement with Sinopharm to conduct integration of drug distribution and retail business, including Fosun Pharmaceutical, Forme Pharmacy (复美大药房), and Golden Elephant Pharmacy (金象大药房), so as to optimize resources allocation. In addition, the Company attempted to work with "registration network" to develop new business models.
Medical diagnosis and medical devices: increase the efforts of mergers and acquisitions to speed up the international integration
In the field of medical diagnosis and medical devices manufacturing business, in 2014, the Company has achieved operating income of RMB 1,503.88 million, representing an increase of 38.20% as compared with the corresponding period of 2013. By investing in overseas enterprises, such as miacom Diagnostics GmbH, and Genefirst Limited, the Company further strengthened the cooperation with the international diagnosis companies and extended the influence of the Company's diagnostic products in the international market.
In addition, the Company actively fostered the business development of Alma Lasers. In 2014, Alma Lasers speeded up the development of international markets and attached more importance to the emerging markets, such as India and China. The Company achieved the annual revenue of RMB 621.41 million, representing an increase of 13.40% as compared with the corresponding period of 2013. At the same time, Alma Lasers further strengthened the development of new products, especially the development of medical treatment devices, expanded the product lines to the field of clinical treatment. 5 products, including 1470 nm laser surgery system, passed the EU CE certification, and 3 products obtained US FDA approvals.
Capitalizing on the opportunities arising from the rapid growth of the PRC medical market and the fast grow of generics in European and American mainstream market, Fosun Pharmaceutical will adhere to the strategies of organic growth, external expansion and integrated development, increase the mergers and acquisitions of outstanding enterprises in the industry, continuously optimize and integrate medicine industry resources, strengthen the establishment of innovation system and product marketing system, actively promote the realization of industry internationalization, and strengthen the core competitiveness, thereby further improving the operating performance, said Chen Qiyu.
Looking ahead, Fosun Pharmaceutical will adhere to its business philosophy of “Innovation for Good Health”, stick to the mission of continuously promoting human health, and continuously improve the capabilities of innovation, service, integration and internationalization, and effectively operate, manage and invest in outstanding enterprises in the industry, so as to become a leading company in providing healthcare products and services.