· Revenue for the year ended December 31, 2021 was RMB39,005 million, representing an increase of 28.70% YOY;
· The proportion of revenue from new products as well as regions outside Mainland China and countries overseas continue to increase, continuously optimizing the revenue structure;
· In 2021, the revenue from new and sub-new products including COMIRNATY® (mRNA COVID-19 vaccine, also known as BNT162b2), Han Li Kang, Han Qu You and Su Ke Xin accounted for over 25% of the revenue in the pharmaceutical manufacturing segment;
· Revenue from regions outside Mainland China and countries overseas reached RMB13,599 million, accounting for 34.86% of the total revenue, marking a step forward on globalization.
(22 March 2022, Shanghai, China) 22 March 2022, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma” or “the Group”; Stock Code: 600196.SH, 02196.HK), a global innovation-driven pharmaceutical and healthcare industry group in China, announced its annual results for the year of 2021 ("the Reporting Period"), together with its 2021 Corporate Social Responsibility (CSR) report.
Under the guidance of the 4IN strategy (Innovation, Internationalization, Integration and Intelligentization), Fosun Pharma continues to adhere to the business philosophy of “Innovation for Good Health” by promoting innovation and transformation, accelerating globalization, strengthening the integrations of R&D, supply chain, manufacturing and commercialization to further improve business operation and operating efficiency and to realize steady financial growth.
Revenue for 2021 was RMB39,005 million, representing an increase of 28.70% YOY. Revenue from regions outside Mainland China and countries overseas accounts for 34.86% of the total revenue. The net profit attributable to shareholders of the listed company amounted to RMB4,735 million, representing an increase of 29.28% YOY. The net profit attributable to shareholders of the listed company after the one-off gain amounted to RMB3,277 million, representing an increase of 20.60% YOY. Net operating cash flow was RMB3,949 million, representing an increase of 53.07% YOY.
Continuously increasing R&D investment and promoting innovation and transformation
Innovative R&D is the core driver for sustainable growth of Fosun Pharma. The Group had built in-house R&D, co-development, in-licensing and incubation capabilities and had established platforms for small molecule innovative drugs, antibody drugs and cell therapy products, focusing on major therapeutic areas, including oncology, immunology, metabolism and digestive system, and central nervous system. Fosun Pharma also keeps close track of cutting-edge technologies, such as RNA, oncolytic virus, gene therapy and targeted protein degradation, to enhance its innovation ability. The development of innovative technologies and products is accelerated under the management of global R&D center.
Fosun Pharma strategically increases R&D investment. The annual R&D expenditure was RMB4,975 million, representing an increase of 24.28% YOY; R&D expense was RMB3,834 million, representing an increase of RMB1,039 million and 37.17% YOY.
The R&D expenditure of the pharmaceutical manufacturing segment was RMB4,486 million, representing an increase of 22.23% YOY, accounting for 15.52% of the revenue from the segment. Pharmaceutical R&D expense amounted to RMB3,359 million, representing an increase of RMB891 million and 36.10% YOY, accounting for 11.62% of the revenue from the segment.
By the end of 2021, the Group had over 2,800 R&D professionals (over 1,500 professionals with master's degree or higher), representing approximately 7.85% of the total employees in the Group. By the end of 2021, the Group had over 240 pipeline projects, including innovative candidates, biosimilars, generic candidates and consistent evaluation of generic candidates.
After over a decade of continuous investment, innovative products including Han Li Kang (Rituximab Injection), Han Qu You (Trastuzumab Injection), Su Ke Xin (Avatrombopag Maleate Tablets) and COMIRNATY® (mRNA COVID-19 vaccine) have been approved and sold in large quantities in the past three years, accelerating the implementation of innovative R&D and driving sustainable growth of the Group. In 2021, the revenue from new and sub-new products accounted for more than 25% of revenue in the pharmaceutical manufacturing segment. The revenue structure is continuously optimized.
Sales from in-house developed product Han Li Kang (Rituximab Injection) reached RMB1,690 million, representing an increase of 125.33% YOY. Han Qu You (Trastuzumab Injection) and Su Ke Xin (Avatrombopag Maleate Tablets), both launched in 2H 2020, recorded revenue of RMB930 million and RMB426 million respectively in 2021. Gland Pharma's revenue in 2021 increased by 29.48% YOY (according to Gland Pharma's financial statements in local currency), benefited from the contribution from Micafungin, Enoxaparin Sodium Injection and new products launch.
COMIRNATY® (mRNA COVID-19 vaccine) jointly developed by Fosun Pharma and BioNTech, was included in the government vaccination programs in Hong Kong SAR and Macau SAR in March 2021 and supplied to the Taiwan region in September 2021. By the end of February 2022, over 20 million doses of BNT162b2 have been administrated in Hong Kong SAR, Macau SAR, and Taiwan region, helping to establish the local COVID-19 immune barrier.
In June 2021, Yi Kai Da (Axicabtagene Ciloleucel Injection) of Fosun Kite, a joint venture, became the first CAR-T cell therapy product approved for launch in China, offering the possibility of sustained remission for patients with lymphoma after two or more lines of systemic therapy. Since the launch of Yi Kai Da, Fosun Kite has been exploring diversified and innovative payment methods to increase product accessibility to benefit more patients. As of the end of February 2022, Yi Kai Da has been included in the urban inclusive supplementary medical insurance and over 40 commercial insurance in 23 provinces and cities, and the number of registered treatment centers has reached 75. In addition, around one hundred patients have entered into the treatment process.
Fosun Pharma has a strong innovative medicine pipeline. The New Drug Application (NDA) for the treatment of microsatellite instability-high (MSI-H) solid tumours has been accepted by the National Medical Products Administration (NMPA) with priority review. The NDA for locally advanced and metastatic squamous non-small cell lung cancer (sqNSCLC), has also been accepted by the NMPA. Han Bei Tai (bevacizumab biosimilar) and Yi Bao (human erythropoietin for injection) for the treatment chemotherapy-induced anemia in patients with non-myeloid malignancies were approved for launch in Mainland China.
Continuously strengthening the global operation capability and making further enhancement
For globalization, Fosun Pharma has formed a global operating system for R&D, manufacturing and commercialization, and continuously expands overseas markets. Revenue in regions outside the Chinese Mainland and overseas countries in 2021 was RMB13,599 million, accounting for 34.86% of the total revenue. Globalization capability is continuously strengthened. The second headquarters in the United States help to build a global business landscape with full coverage of R&D, manufacturing and commercialization.
By the end of 2021, Fosun Pharma’s overseas commercialization team with over 1,200 employees has built marketing platforms in the United States, Africa and Europe and has achieved direct sales of formulations to the U.S. market. The medical device segment, including Sisram Medical and Breas, has covered China, the United States, Europe and other major regions. The COVID-19 test kit by Fosun Diagnostics has been sold in over ten countries. In 2021, the first regional center for drug distribution in Africa, the Côte d’Ivoire distribution center, was officially put into service, winning a substantial sales breakthrough in South Sudan. Gland Pharma, a holding subsidiary in India, received approvals from the US FDA for 13 generic drugs in 2021.
Leveraging the current global manufacturing capability and world-class manufacturing facilities including Yao Pharma, Guilin Pharma and Wanbang Biopharm with International GMP certification, Fosun Pharma has accelerated the acquirement of international GMP certification of domestic production lines, laying a solid foundation for exporting domestic products. In January and March 2022, Fosun Pharmaceutical Industrial obtained the Medicines Patent Pool (MPP)'s license to produce and supply the generic version of Merck's oral COVID-19 treatment Molnupiravir and Pfizer’s oral COVID-19 treatment Nirmatrelvir, as well as the co-packaged product of Nirmatrelvir and Ritonavir of Pfizer, to agreed low- and middle-income countries. The license includes both ingredients and the finished drug. Through this license, Fosun Pharma devoted itself further to fighting against the pandemic around the world.
As of January 2022, the total number of Fosun Pharma’s WHO-PQ-approved antimalarial series products has increased to 30, including 26 preparations and 4 API products, making Fosun Pharma the antimalarial drug manufacturer with the most certifications.
Accelerating the strategic upgrade and internal integration to drive specialization
In 2021, Fosun Pharma actively promoted the integration of systems and resources in R&D, supply chain, manufacturing and commercialization to enhance synergies and operational efficiency and promote solid financial growth. The Group’s core business, the pharmaceutical manufacturing segment, achieved revenue of RMB28,904 million; the medical devices and medical diagnosis segment achieved revenue of RMB5,938 million, and the healthcare services segment achieved revenue of RMB4,118 million in 2021.
During the Reporting Period, Fosun Pharma promoted the strategic integration of the manufacturing facilities by sorting out the advantageous production capacity within the pharmaceutical manufacturing segment, strengthening the supply chain management and accelerating the construction of competitive manufacturing facilities. In early 2022, the pharmaceutical manufacturing segment was upgraded and divided into Innovative Medicines Division, Established Medicines Manufacturing & Supply Division and Vaccines Division to clarify business boundaries with divisions and accelerate specialization.
During the Reporting Period, the medical devices and medical diagnosis segments continued to strengthen their independent operation capability. Through business integration, the medical devices segment has initially formed three major business divisions with medical aesthetics, respiratory care and professional medical care. Sisram, the core platform for medical aesthetics, actively expanded the original energy-based medical aesthetic equipment business and simultaneously developed aesthetic dentistry, injectables and personal care business units, to accelerate the construction of the medical aesthetic ecosystem.
During the Reporting Period, Fosun Pharma has completed its review of the medical diagnosis segment and has initially realized the integration of operation. To cope with the strategic layout of the medical diagnosis business, Fosun Pharma has completed the acquisition of Suzhou Abcarta to enrich its business lines in this area. Centered on six major therapeutic areas (tumor, infection, digestion and metabolism, reproduction, cardiovascular, and central nervous system), Fosun Pharma has formed a cross-methodological product portfolio as well as a matrix R&D thinking that expands to different disease fields under the same methodology.
Strictly observes CSR and pursues ESG sustainability
Fosun Pharma has always valued sustainable development as an important benchmark of corporate operations and has released corporate social responsibility (CSR) report for 14 consecutive years to show stakeholders the Group's practices and achievements in the field of social responsibility. Fosun Pharma’s 2020 CSR Report issued in March 2021 won a five-star rating (excellent) by China CSR Report Rating Expert Committee. At the same time, Fosun Pharma continued to improve its ESG management level and promote sustainable ESG development. The MSCI ESG rating of Fosun Pharma has been upgraded from BB to BBB.
Wu Yifang, Chairman and CEO of Fosun Pharma, said, “Given the pandemic entered a new phase of normalization, Fosun Pharma continued to promote innovation and transformation, as well as the comprehensive globalization capacity. In 2021, we achieved steady financial performance growth and continued to optimize our revenue structure. Focusing on pandemic prevention and control, Fosun Pharma has accelerated the technological innovation of anti-pandemic related products to ensure the supply of relevant materials and strategic products. Looking forward, Fosun Pharma will continue to adhere to its 4IN (Innovation, Internationalization, Integration and Intelligentization) strategy, actively deploy new technologies and products around unmet needs in therapeutic areas, connect with outstanding scientific talents from all over the world through in-house R&D, co-development, in-licensing and incubation, so as to promote the development and implementation of innovative technologies and products. At the same time, based on the existing advantages of medical resources and the Internet platform, Fosun Pharma will actively explore the integrated service model of online and offline, promoting the transformation of online healthcare.”
Unfortunately, it is NOT legal unless the manufacturers have branches with qualification in China to deal with the registration issues. Otherwise, it is a must-do that manufacturers overseas are required to appoint a Chinese agent for the medical device registration.
Regarding the registration fee for NMPA, as for the imported medical devices, the registration of Class II medical device needs 210,900 CNY while that of Class III costs 308,800 CNY. In addition, other kinds of possible fees should be taken into consideration such as fees of document translation, clinical trial, and so forth.
After the registration materials are accepted by NMPA, technical review for Class II medical devices takes 60 working days to process while for Class III medical devices, technical review takes 90 working days. If supplementary materials are required by NMPA, manufacturers are obliged to conduct submission within one year, otherwise the review may result in termination.
MDs with CE or FDA certificate are feasible to enter SAR without NMPA certificate. As for the Greater Bay Area and Hainan province, MDs marketed in HK or MO as a premise can enter the pilot areas if designated medical institutions in pilot areas are willing to procure medical devices out of clinical urgent needs under the approval of local government.
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