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Strengthening Innovation and R&D, Deepening Internationalization Strategy

03-26 2018

In the evening of 26 March 2018, Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun Pharma” or “Company”, stock code: 600196.SH, 02196.HK) announced 2017 Annual Results.


In 2017, Fosun Pharma continued commitment to the mission of improving human health. Adhering to the development model of “organic growth, external expansion and integrated development” under the guidance of “4IN” strategy (Innovation, Internationalization, Integration, Intelligentization), Fosun Pharma focused on its core pharmaceutical and healthcare businesses and its annual results maintained steady growth.


As shown in the Annual Report, in 2017, Fosun Pharma recorded revenue of RMB18,533.55 million, representing an increase of 26.69% as compared to 2016;Profit total amounted to RMB4,061.72 million, net profit attributable to shareholders of the listed company amounted to RMB3,124.50 million, net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss amounted to RMB2,345.91 million, representing an increase of 13.72%, 11.36% and 12.10% respectively as compared to 2016.


In particular, the Company achieved rapid growth in core pharmaceutical manufacturing business and overseas business. The revenue from pharmaceutical manufacturing and R&D segment amounted to RMB13,195.47 million, representing an increase of 28.62% as compared to 2016. Revenue from overseas countries or regions amounted to RMB3,350.78 million, representing an increase of 57.88% as compared to 2016.


Continuing Strengthening in Innovation and R&D, Core Pharmaceutical Manufacturing Business achieved rapid growth


Fosun Pharma always regards innovation as the driving force for its business growth.

In 2017, Fosun Pharma continuously optimized its pharmaceutical R&D system that integrates biosimilars and innovative drugs and has established international R&D team in China, the United States, India and etc., forming a globally interactive R&D system.


Fosun Pharma maintains a national recognized enterprise technology center and establishes innovative chemical drugs platform, biologics platform, high-value generic drugs platform and cell-therapy platform.

 

During the Reporting Period, the total R&D investment amounted to RMB1,529 million, representing an increase of 38.26% as compared to the same period in 2016. The total R&D expenses incurred for the Year amounted to RMB1,027 million, representing an increase of 43.62% as compared to the same period in 2016. In particular, the R&D expenses in pharmaceutical manufacturing amounted to RMB799 million, accounting for 6.1% in pharmaceutical manufacturing revenue.


As of 31 December 2017, except Gland Pharma, Fosun Pharma had a total of 171 projects, including pipeline of innovative drugs, generic drugs, biosimilars and consistency evaluation projects; in early 2018, amlodipine benzene sulfonate (Shi Li Da®) passed consistency evaluation, which is beneficial to continuously improve product quality. During the same period, Fosun Pharma accelerated the R&D in monoclonal antibody products and obtained approval of clinical trial in PRC for a total of 6 monoclonal antibody product types with 11 indications, of which, 3 products were in phase III clinical trial in mainland China; another 3 innovative monoclonal antibody products all obtained clinical trial approval both in U.S. and Taiwan area. Meanwhile, rituximab injection (for the treatment of non-Hodgkin's lymphoma) was applied for NDA in 2017, and is expected to achieve breakthrough as the first monoclonal antibody biosimilar drug produced in China.


Driven by the ever-increasing R&D competitiveness, according to IQVIA statistics, the Company ranked among the top five domestic pharmaceutical companies in China. In 2017, except Gland Pharma, Fosun Pharm had 21 formulation items or series that each recorded revenue of over RMB100 million


At present, Fosun Pharma maintained the leading position with core products in various therapeutic areas, including oncology, cardiovascular system, central nervous system, blood system, metabolism and alimentary system and anti-infection. All products occupy the leading position in each market segment and the sales of core products recorded relatively fast growth. In particular, in 2017, the sales revenue of core products of blood system therapeutic area recorded a year-on-year increase of 64.16% ; the sales revenue of core products of central nervous system therapeutic area recorded a year-on-year increase of 43.66%; the sales revenue of core products of metabolism and alimentary system therapeutic area recorded a year-on-year increase of 26.73%; the sales revenue of core products of anti-infection therapeutic area recorded a year-on-year increase of 22.07%.


Focusing on the unmet needs in the medical field, Fosun Pharma creatively integrated global resources. In 2017, Fosun Pharma established a joint venture with Kite called Fosun Kite, to introduce Yescarta, which is the first U.S. FDA-approved product of Kite, bringing the world’s cutting-edge CAR-T technology for Chinese cancer patients and leveraging the synergy effect with the biologics platform of Fosun Pharma.


Also, Artesun® (artesunate for injection), an innovative drug of Fosun Pharma, is fully IP-protected with guaranteed quality recommended by the World Health Organization (WHO) for severe malaria treatment, and is estimated to have cured more than 20 million patients with severe malaria, among which most are African children under five.

 

Deepening Internationalization Marketing Strategy

 

In 2017, through completing M&A of Gland Pharma and Tridem Pharma, Fosun Pharma continued to facilitate the industrial upgrade of pharmaceutical manufacturing business, and the construction of international marketing platform selling pharmaceutical products, and expedite the internationalization.


Gland Pharma is a leading Indian pure-play generic injectable pharmaceutical products company. Fosun Pharma will leverage on Gland Pharma's own R&D capabilities and international drug registration capabilities, as well as Indian market's unique advantages on the generic drugs policy and cost advantage, in order to facilitate the industrial upgrade of the pharmaceutical manufacturing business and increase market share in global generic drugs market.


Tridem Pharma is the third largest pharmaceutical distribution and promotion company in French-speaking Africa, primarily engages in the import distribution of pharmaceutical products in French-speaking African countries and French overseas territories. Fosun Pharma is the China’s largest enterprise specialized in R&D and manufacturing of antimalarial medicine, and its independently developed Artesunate-based medicine has been influential in Africa. In particular, Artesun® (artesunate for injection), an innovative medicine, has been registered and sold in 35 African countries. By virtue of Tridem Pharma's mature sales network and upstream and downstream resources of clients and customers in French-speaking African countries, Fosun Pharma is poised to perfect the international marketing platform selling pharmaceutical products and strengthen its position in those regions, and expedite internationalization in deep cooperation with pharmaceutical companies in Europe and the United States.


Meanwhile, Fosun Pharma encouraged its member companies to promote internationalization in line with international standards from U.S., European Union and WHO. During the Reporting Period, Gland Pharma’s four manufacturing facilities all successfully passed drug regulatory audit or certification conducted for production lines. More than 10 APIs of Fosun Pharma received cGMP certifications from healthcare authorities including the U.S. FDA, the EU, Ministry of Health, Labor and Welfare of Japan and Germany’s Federal Ministry of Health; 1 oral solid formulation, 3 injectable formulations and 5 APIs of Guilin Pharma are approved by WHO PQ; Yao Pharma’s oral solid formulation passed GMP inspection from Health Canada and U.S.FDA, and several formulations products have been successfully launched overseas.


Developing C2M demand, Optimizing Products and Services


Fosun Pharma deepened the distribution and continuously improved the quality of healthcare services. In 2017, Fosun Pharma continued to reinforce its basic healthcare services network with premium healthcare services in economically developed coastal cities, as well as the specialist hospitals and general hospitals in the second and three tier cities. The Company strives to seek cooperation with local large state-owned enterprises, public hospitals, and university affiliated hospitals, accelerate the development strategy of Internet medical treatment, and continuously improve the business scale and profitability.


As of the end of the Reporting Period, the combined number of authorized beds controlled by Fosun Pharma including Chancheng Hospital, Hengsheng Hospital, Zhongwu Hospital, Wenzhou Geriatrics Hospital, Guangji Hospital, Jimin Cancer Hospital and Zhuhai Yannian, etc. was 3,818 in aggregate. In particular, Chancheng Hospital received the title of the first five-star non-public medical institution in China in 2017, became the first Chinese large-scaled 3As general hospital that satisfied the standard of JCI (sixth edition) in early 2018, and ranked first on the "2017 China Non-Public Hospital Competitiveness Ranking" .


In 2017, Fosun Pharma continued to develop medical devices and medical diagnosis, the sales revenue of 6 products or agent series products recorded over RMB100 million. In particular, the number of surgeries by Da Vinci surgical robotic system sustained rapid growth and amounted to over 28,000 in Mainland China and Hong Kong in 2017, representing an increase of approximately 46 % as compared to 2016.


In September 2017, Sisram (SISRAM MED, stock code: 1696.HK), a subsidiary of Fosun Pharma, became first Israeli company listed on the Hong Kong Stock Exchange Main Board. Sisram is a leading global provider of energy-based medical aesthetic treatment systems. In 2017, Sisram continued to strengthen the development of new product portfolio, especially the development of medical devices, and extended its production lines into the clinical treatment area, achieving the best historical performance. At the same time, Sisram developed C2M (Customer to Maker) demand and increased brand awareness. In 2017, 2 products of Sisram obtained European CE certifications and 3 products were approved by U.S. FDA.


Sinopharm, an associate of Fosun Pharma, put continuous efforts in accelerating industry consolidation, expanding distribution network of pharmaceutical products and maintaining rapid growth in business. In 2017, Sinopharm realized revenue of RMB277,717 million.


With continuous rapid development, Fosun Pharma remains committed to undertaking corporate social responsibilities, and leads the pharmaceutical industry in this field. Fosun Pharma's "2017 Corporate Social Responsibility Report" will be released along with the Company's annual results. This is Fosun Pharma's CSR report for the 10th consecutive year. In 2017, Fosun Pharma won multiple awards such as 2017 Ronglv- Caixin ESG Good 50 Index and 2017 Sustainable Action Impact Award.


Looking forward, Mr. Chen Qiyu, Co-president of Fosun International and Chairman of Fosun Pharma said, “Fosun Pharma considers innovation as the most important part of our corporate social responsibility. In 2018, Fosun Pharma will closely attend to the unmet needs in the medical field. Through continuous innovation, and driven by technology development, we will endeavor to capture the opportunities presented by the broad pharmaceutical market in China, the rapid growth of generic drugs in mainstream markets such as Europe and the U.S. as well as the continuous R&D activities in innovative drugs, and further seek M&A opportunities in the international pharmaceutical industry. By continuing to optimize and integrate resources in the pharmaceutical industry chain, strengthening innovation and marketing systems construction, we will continuously empower M-end, reach C-end, and integrate both ends into an Internet-based digital platform, and deeply understand different needs of patients and clients, so as to provide them with better quality, more convenient, precise, and affordable products and services."

—End—


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