Shanghai Fosun Pharmaceutical (Group), controlled by conglomerate Fosun International, hopes to expand its international footprint through mergers and acquisitions (M&As) and sales of its innovative drugs in more overseas markets.
The Hong Kong and Shanghai-listed group, which holds the distribution rights for BioNTech’s Covid-19 vaccine in Hong Kong and Macau, aims to increase its offshore sales to 40 per cent of group revenue over the next five years, chairman and chief executive officer Wu Yifang said. They accounted for about 27 per cent in 2020 and 23 per cent in 2019.
“For Fosun Pharma’s international business, we will pay close attention to new innovative platforms and technologies around the world,” Wu said in an interview. The firm will also look out for potential M&As and opportunities to expand its strategic layout, he added.
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The outreach is seen as a crucial support for its beleaguered parent Fosun International, whose global diversification strategy into the hospitality and events industries in recent years came unstuck as the Covid-19 pandemic slammed travel and tourism worldwide.
The conglomerate’s health business, led by its 39.4 per cent stake in Fosun Pharma, was the only division to generate more gross profits in 2020, according to its latest filing. The wealth and intelligent manufacturing divisions made less money while the happiness unit fell into the red.
On its own, Fosun Pharma generated 8.2 billion yuan (US$1.25 billion) of sales outside mainland China last year, 27.2 per cent of total revenue, its latest report showed, versus 6.6 billion yuan in 2019. Growth targets include the US, Africa, Europe and India, said Wu.
Much of its global push will be backed by research and development (R&D) on new innovative drugs. Novel drugs currently in the pipeline could reach the markets as early as 2023, including Orin1001 oral tablets for the treatment of solid tumours and breast cancer.
Orin1001 was approved for clinical trials in the US by the Food and Drug Administration in 2019, according to a filing. Cancer drug FCN-437c to treat solid tumours commenced phase two clinical trials in China last September.
Its subsidiary Fochon Pharmaceuticals last October reached a licensing agreement with US drug maker Eli Lilly to develop and commercialise cancer drug FCN-338, oral tablets to treat haematological malignancies, in all countries and regions excluding China.
Fosun Pharma reported a 10.3 per cent increase in its 2020 net income to 3.7 billion yuan, beating consensus forecast for flat earnings by analysts compiled by Bloomberg.
New product launches, including three biosimilars and the innovative drug Su Ke Xin to treat chronic liver disease, helped lift earnings, said Wu. The company intends to launch three to four biosimilars and innovative drugs this year, and more in 2022.
“In the previous few years, many projects had been in the R&D phase. The number of innovative drugs reaching the market will gradually increase,” he added. “R&D [of new drugs] in China will flourish over the next five to 10 years. There will be plenty of opportunities for the industry in the future.”
Sales in the medical devices and diagnosis segment jumped about 40 per cent to 5.2 billion yuan, accounting for 17.3 per cent of the group’s total revenues.
In terms of combating the Covid-19 pandemic, Fosun Pharma will focus on mRNA vaccines, and develop antibody treatments against the virus, Wu added. The mRNA technology platform has wider applications that can be exploited for other purposes.
“We will not only set our eyes on developing these products to tackle one viral infection,” Wu said. “This technology platform can be used to develop other potential products targeting other diseases, such as tumours and other possibilities.”
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