On August 27, 2024 Shanghai Fosun Pharmaceutical (Group) Co., Ltd. ("Fosun Pharma" or "the Group"; Stock Code: 600196.SH; 02196.HK), reported its operating performance for the first half of 2024 (the "Reporting Period"). During the Reporting Period, Fosun Pharma achieved revenue of RMB20.46 billion,an increase of 5.31% YoY after excluding COVID-related products (Press release, Fosun Pharma, AUG 27, 2024, View Source [SID1234647175]). The net profit attributable to owners of the parent of the Group after deducting extraordinary gain or loss amounted to RMB1.3 billion. In the second quarter of 2024, the net profit attributable to owners of the parent of the Group after deducting extraordinary gain or loss was RMB646 million, a quarter-on-quarter increase of RMB37 million.
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As a global innovation-driven pharmaceutical and healthcare industry group, Fosun Pharma continuously advance its innovation transformation and the development and commercialization of innovative products. In the first half of 2024, Fosun Pharma’s revenue from key innovative products in pharmaceuticals business grew steadily, exceeding RMB3.7 billion.
In 2024, Fosun Pharma continued to boost operational efficiency and profitability, laying the foundation for long-term sustainable development. During the Reporting Period, the gross margin minus the selling and distribution expense ratio increased by 1.72 percentage points YoY; excluding the impact of newly acquired companies, the management expense decreased by about RMB0.2 billion. During the Reporting Period, Fosun Pharma ensured stable free cash flow through measures including optimizing operating cash flow, supply chain management, and controlling capital expenditures, achieving operating cash flow of RMB1.9 billion, a period-on-period increase of 5.36%, exceeding the growth of operating profit. In addition, the Group continued to optimize asset structure and improve asset efficiency. Since 2024,the cash inflow from asset disposals and the expected cash inflow from contracts signed byFosun Pharma exceeded RMB2 billion in aggregate.
Revenue from innovative products maintains steady growth, with a further focus on innovative drugs and high-value devices
In the first half of 2024, Fosun Pharma further focused on innovative drugs and high-value devices. Four key innovative products with a total of 9 indications, independently developed and licensed-in by the Group, were approved for launch domestically and internationally. In addition to the key innovative products, Fosun Pharma also had 38 generic drug varieties approved for launch domestically and internationally.
In the first half of 2024, Fosun Pharma’s pharmaceutical manufacturing segment achieved revenue of RMB14.7 billion. The innovative drug business achieved breakthroughs in core therapeutic areas such as solid tumors, hematologic tumors and immunity inflammation, and realized multiple innovative achievements in hematologic tumors, breast cancer and lung cancer, benefiting patients worldwide.
Han Si Zhuang (serplulimab injection), Fosun Pharma’s first self-developed biopharmaceutical innovative drug, as well as the world’s first anti-PD-1 monoclonal antibody (mAb) approved for the first-line treatment of small cell lung cancer (SCLC), was commercialized in the domestic market in March 2022. Up to now, it has been approved for 4 indications, broadly covering high-incidence tumours including lung cancer and gastrointestinal cancer, benefiting over 75,000 patients globally. Additionally, the 5th NDA of Han Si Zhuang for the first-line treatment of non-squamous non-small cell lung cancer (nsNSCLC) has been accepted by the National Medical Products Administration (NMPA) in China.
During the Reporting Period, Fosun Pharma’s self-developed biosimilar Han Da Yuan (adalimumab injection) received 4 new indications approval from the NMPA. It has now been approved for eight indications in China, covering all indications of originator adalimumab in China, providing more treatment options for adult and pediatric patients with autoimmune diseases.
Fosun Pharma adheres to an open innovation strategy，and actively expands its pipelines through BD in addition to independent R&D. In June 2024, Su Ke Xin(avatrombopag malatetablets), which is exclusively commercialized by Fosun Pharma, received approval in Chinese mainland for a second indication for the treatment of adult patients with chronic primary immune thrombocytopenia (ITP) who have shown poor response to prior treatment, further benefiting ITP patients in China.Additionally, certain domestic innovative drugs licensed-in by the Group such as Bei Wen (keverprazan hydrochloride tablets) and Pei Jin (telpegfilgrastim injection), were officially included in the National Medical Drugs Catalogue in January 2024. This significantly enhanced the accessibility of drugs for relevant diseases within Chinese mainland and practically reduced the burdens of drugs on patients, aiming to improve the living and life quality of patients through regulated therapies.
In the field of vaccines, Fosun Pharma has established an independent R&D system centered on two major technical platforms: bacterial vaccines and viral vaccines. In March 2024, the rabies vaccine (Vero cell) for human use (freeze dried), which is independently developed by the Group, has been approved for launch in Chinese mainland.The production line has also passed the GMP compliance inspection.
Research progress on various pipelines develops rapidly to secure innovative development
To meet the unmet clinical needs, through diversified and multi-level cooperation models such as independent R&D, co-development, license-in and industrial investment, Fosun Pharma continues to enrich its innovative product pipeline and focus on differentiated product R&D with high-tech barriers, to continuously enhance the value of its pipeline.In the first half of 2024,Fosun Pharma’s total R&D expenditure amounted to RMB2.7 billion, with R&D expenses totaling RMB1.9 billion. The R&D expenditure in the pharmaceutical manufacturing segment amounted to RMB2.4 billion, accounting for 16.4% of the segment’s revenue. In particular, R&D expenses were RMB1.6 billion, accounting for 10.7% of the segment’s revenue.
In the first half of 2024, 4 innovative drugs/biosimilarswith a total of 9 indications independently developed, co-developedand licensed-in by the Group had entered the pre-launch approval/critical clinical stage. The pharmaceutical manufacturing segment of the Group submitted 124 patent applications, including 2 American patents applications, 8 PCT applications, and the Group has obtained37 licensed invention patents authorization.
During the Reporting Period, the New Drug Application (NDA) of self-developed selective MEK1/2 inhibitor (project code: FCN-159) for two indications was accepted by NMPA in May and June 2024, both of which were included in the priority review procedure. The Marketing Authorization Application (MAAs) for five indications of the self-developed denosumab biosimilar HLX14 (recombinant anti-RANKL fully human monoclonal antibody injection) was accepted by the European Medicines Agency (EMA).
Additionally, during theReporting Period, the Phase 3 clinical trials for its self-developed Han Si Zhuang (serplulimab injection), in combination with bevacizumab and chemotherapy for the first-line treatment of metastatic colorectal cancer (mCRC) patients, had commenced in the Chinese mainland. The combination dosing of OP0595 and cefepime or aztreonam, developed by Fosun Pharma in collaboration with Meiji Seika Pharma Co., Ltd., for the treatment of adults infected by aerobic gram-negative bacteria with limited options, had commenced two phase III clinical trials in China.
During the Reporting Period, clinical data from multiple pipeline products and marketed products of Fosun Pharma were presented at global industry conferences, including the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper), American Association for Cancer Research (AACR) (Free AACR Whitepaper), and the European Hematology Association (EHA) (Free EHA Whitepaper), further demonstrating the Group’s innovative R&D capabilities on the international stage.
In addition to independent R&D, Fosun Pharma actively practices an open R&D model, engaging in the incubation and investment of R&D projects through initiatives such as the establishment and management of industrial funds, ensuring the sustainability of its innovation pipeline. During the reporting period, Fosun Pharma successfully completed the establishment and filing of Shenzhen Biopharma Industrial Fundwith fundraising size of RMB5.0 billion
Continues to enhance global operation capabilities and gains international recognition for innovative products
Fosun Pharma continues to uphold the internationalization strategy in multiple dimensions, such as innovative R&D, two-way license, production and operations as well as commercialization to enhance operational efficiency and strengthen global market layout while covering major overseas markets, including the United States, Europe, Africa, India, and Southeast Asia. As at the end of the Reporting Period, the Group had formed an overseas commercialization team of approximately 1,000 employees. For the first half of 2024,overseas revenue reached RMB5.5 billion, an increase of 15.13% YoY, accounting for 26.93% of total revenue.
During the Reporting Period, Fosun Pharma’s self-developed Han Qu You (trastuzumab injection, trade name: HERCESSI in the U.S., Zercepac in Europe) received the U.S. FDA approval for three indications covering the treatment of breast cancer and gastric cancer, becoming the first domestic biosimilar approved for launch in China, the EU and the United States. Additionally, through collaboration with global renowned pharmaceutical companies, Fosun Pharma has established a presence in Europe, the United States, Canada, and numerous emerging markets. Up to date, Han Qu You has been approved in 48 countries and regions, benefiting 200,000+ patients, bringing affordable and high-quality treatment options to breast cancer and gastric cancer patients worldwide.
Self-developed biopharmaceutical innovative drug of Fosun Pharma, Serplulimab Injection (anti-PD-1 monoclonal antibody, Chinese trade name: Han Si Zhuang) completed the first international shipment in January 2024, making it the first Chinese anti-PD-1 mAb approved for launch in Southeast Asia. The marketing authorization application (MAA) of Han Si Zhuang has been accepted in March 2023 and its head-to-head bridging trial comparing to first-line standard of care with Atezolizumab for extensive-stage small cell lung cancer (ES-SCLC) had entered clinical enrollment stage in the United States. At the same time, Fosun Pharma has established an innovative drug team in the United States to advance the commercialization of Serplulimab Injection.
Fosun Pharma actively introduces leading international technologies and products into the Chinese market to benefit more patients. During the Reporting Period, the Headquarters Industrial Base of the joint venture Intuitive Fosun officially opened and was put into operation in Shanghai Zhangjiang International Medical Park. The base integrates R&D, production and training, and its operation will further accelerate the localization process of the Da Vinci Surgical System. As at the end of June 2024, the accumulated total installation volume of the Da Vinci Surgical Robot in Chinese mainland and Hong Kong S.A.R.and Macau S.A.R. was over 380 in more than 300 hospitals. More than 540,000 patients had benefited from the Da Vinci Surgical Robot’s precise treatment and returned to normal life. During the Reporting Period, Fosun Pharma’s joint venture with Insightec, Fosun Insightec, made steady progress in the commercialization, clinical application and research of magnetic resonance-guided focused ultrasound treatment system for neurological diseases (MRgFus brain therapy system) in Chinese mainland, Hong Kong S.A.R and Macao S.A.R..
As a global pharmaceutical and healthcare industry group, Fosun Pharma continues to promote the building of production system with international quality standard, with its quality management system and production capabilities recognized by leading international certification authorities, laying a solid foundation for the overseas distribution of preparations. As at the end of the Reporting Period, all production lines of the domestic subsidiaries under the pharmaceutical manufacturing segment of the Group obtained domestic GMP certifications and 10 production lines had passed GMP certification in major regulatory markets such as the U.S. and the EU.
"Guided by the 4IN strategy (Innovation, Internationalization, Intelligentization, and Integration), Fosun Pharma consistently focuses on unmet clinical needs, prioritizes innovative R&D, adheres to technology-driven and product-driven approach, and strengthens global operation capabilities, ensuring steady and sustainable development."Wu Yifang, Chairman of Fosun Pharma, said, "Looking forward, Fosun Pharma’s internal operation will be further improved in quality and efficiency, continuing to enhance its leading position in hematologic tumors, breast cancer, lung cancer and other fields while expanding footprint in immunity inflammation, chronic diseases and central nervous system. We will also intensify industry-university-research strategic cooperation with world-class universities and research institutions to capture innovative products at an early stage. At the same time, we will actively promote the overseas export of high-quality products and promote global simultaneous development, aiming to become the global leading integrator of pharmaceutical and healthcare innovation."