Contribution of Sales of New Products to Revenue Rises to 47.4%
Driving Revenue Up by 16.4%
Sino Biopharmaceutical Limited (Sino Biopharmaceutical or the Company, together with its subsidiaries, the Group) (HKEX:1177), a leading and innovation-driven pharmaceutical conglomerate in the PRC, has announced its unaudited first quarterly results for the three months ended 31 March 2021.
- Chia Tai – Tianqing Pharmaceutical Group Co. Ltd. (“CT Tianqing”), a member company of the Group, and Beijing-based Genetron Holdings Limited (NASDAQ: GTH) signed a strategic cooperation agreement on early screening of liver cancer. The two parties will work together in the next three years in selected areas in the country to serve those at high risk of developing liver cancer, including Hepatitis B carriers and other liver disease patients, thereby establishing industry benchmarks for early liver cancer screening in China and for the world.
- The Group’s 6 products, namely Esomeprazole Magnesium Enteric-coated Capsules, Empagliflozin Tablets, Emtricitabine and Tenofovir Disoproxil Fumarate Tablets, Canagliflozin Tablets, Bortezomib for Injection and Ticagrelor Tablets, were included in the fourth batch of centralized procurement drugs. Of them, 4 products including Esomeprazole Magnesium Enteric-coated Capsules, are newly approved products which, being qualified for centralized procurement, are expected to quickly gain market share.
- The Group, through its subsidiary C-Lab International Limited, had acquired 100% equity interest in the Belgian private company SOFTHALE NV. SOFTHALE’s soft mist inhalation device (SMI) operating on differentiated technology allows more efficient drug deposition in the lungs. It is the next generation transpulmonary drug delivery technology and has good application prospects in treating a board range of diseases such as chronic obstructive pulmonary disease. The Group also plans to through the acquisition build a key strategic hub for development in Europe.
- Fosaprepitant Dimeglumine for Injection, a drug developed by CT Tianqing for prevention of nausea and vomiting caused by chemotherapy, secured approval from the U.S. Food and Drug Administration (FDA). This is another entry pass to international markets obtained by the product, following that from the European Union. It is also another product developed by CT Tianqing that has been granted approval for launch from three mainstream international markets, namely China, the U.S. and Europe.
- Under the guidance of the Beijing Municipal Science and Technology Commission, the Management Committee of the Beijing Economic-Technological Development Area, the Chinese Academy of Medical Sciences and Sino Biopharm, the first “Future Stars” Innovation Achievement Transformation Project Competition hosted by the Institute of Materia Medica at Chinese Academy of Medical Sciences and Beijing Tide Pharmaceutical Co. Ltd., a member company of the Group, was held in Beijing between 6 and 7 January, 2021. The competition has helped enhance mutual understanding between R&D institutions and enterprises, and also presented enterprises an effective mechanism to transform R&D institutions’ projects into products.
Sales of new products as a percentage to revenue increased to 47.4%, driving revenue up 16.4%; profit attributable to the owners of the parent climbed by 118.5%
During the period, the Group recorded revenue of approximately RMB7.24 billion, an increase of approximately 16.4% over the same period last year. Among them, sales of new products amounted to RMB3.43 billion, accounting for approximately 47.4% of the Group’s total revenue for the period, up from approximately 32.9% last year. Profit attributable to the owners of the parent was approximately RMB1.91 billion, representing a year-on-year increase of approximately 118.5%. Earnings per share attributable to the owners of the parent were approximately RMB10.19 cents, an increase of approximately 118.7% over the same period last year.
The Group’s financial position remains strong and stable, cash and bank balances totaled approximately RMB7.93 billion at the period end.
The Board of Directors declares a quarterly dividend of HK2 cents per share (Q1 2020: HK2 cents).
Building effective marketing by leveraging emerging online platforms amid the pandemic, which in turn boosted product sales; sales of oncology medicines doubled
During the period, the Group’s marketing and sales team was able to accurately grasped opportunities arising from hospitals resuming service with the pandemic under control and more and more patients going to the hospital for consultation. Abiding strictly with pandemic prevention and control policies, marketing activities fully resumed and an effective marketing and service system was formed by integrating the online academic promotion and patient education and service platforms set up during the pandemic.
Sales of oncology medicines amounted to approximately RMB2.64 billion, representing an increase of 31.8%. Its contribution has quickly increased to approximately 36.4% and become the Group’s largest product category in terms of revenue. With the well-known innovative drug Anlotinib giving the push, and newly launched products in good number and boasting wide coverage of indications, and by giving support to clinical experts in exploring various combined treatment options, Anlotinib as well as other products continued to see fast growth in sales. These products included Qingkeshu (Abiraterone), a prostate cancer drug on the national drug procurement list, the targeted therapy drugs for myeloma, namely Qianping (Bortezomib for injections), Andxian (Lenalidomide capsules), Anyue (Pomalidomide) and Leweixin (Bendamustine Hydrochloride for Injection), the first generic drug Qingkeyi (Fulvestrant Injection) for treating breast cancer, the first generic drug Weishou (Azacitidine for Injection) for treating leukaemia, and the antiemetic drug Shanqi (Fosaprepitant Dimeglumine for Injection).
In the cardiovascular and cerebrovascular segment, 8 products developed by the Group were selected in the past 4 rounds of national procurement. To make the best of those related opportunities, the Group worked hard on ensuring smooth production, logistics and supply of its products. As such, products including Tuotuo, Beilishu and Anxinfen reported satisfactory growth.
In the field of orthopedic and analgesia, the Group applied its chronic disease management system, well-established and strengthened during the pandemic period, to enhance services for doctors and patients. Gaisanchun (Calcitriol Capsules), Debaian/Zepolas (Flurbiprofen Cataplasms), Yigu (Zoledronic Acid Injection), Kaifen (Flurbiprofen Axetil Injection), Chia Tai Jiuli (Glucosamine Hydrochloride Tablets), Taiyan (Tofacitinib Citrate Tablets), Fenkexin, Yu An (Parecoxib Sodium for Injection), and Sulibao (Celecoxib Capsules) all achieved remarkable sales performance.
In the field of respiratory, the Group’s first generic drug for allergic asthma, Tianqingsuchang (Budesonide Suspension for Inhalation), was launched, helping enrich the Group’s respiratory product line and providing local patients with a new option for the first time other than imported products. At the prompt decision of the medical and marketing departments to set up a hospital service system pinpointing asthma patients, sales of the product increased markedly. Currently, the Group still has a number of respiratory products under development and the area will be one of its main foci in the future.
Digestive products, such as Getai (Diosmin Tablets) and Deyou (Pronase), infusion products Fenghaina (Compound Sodium Acelate Ringer’s Injection), and contrast products, such as Qingliming (Iodixanol Injection) and Xianai (Gadoxetate Disodium Injection), performed far better than expected during the period.
Strong R&D capabilities has been the key profit driver
Over the years, the Group has put immense resources into bolstering its R&D capability to turn it into a key profit driver. It has 50 products on sale launched in or after 2018 and their total revenue grew over 90% during the period. The Group’s product lines under development have strong reserves of new products to add to every year.
During the period, the Group obtained 7 production approvals: 3 specifications of Anlotinib Capsules’ New Indication for Medullary Thyroid Carcinoma, 2 specifications of Esomeprazole Magnesium Enteric-coated Capsules, and 2 specifications of Empagliflozin Tablets; and 12 passes of Consistency Evaluation (or are deemed to have passed): 2 specifications of Esomeprazole Magnesium Enteric-coated Capsules (or are deemed to have passed), 2 specifications (or are deemed to have passed) of Empagliflozin Tablets, 2 specifications for Bortezomib for Injections, Parecoxib Sodium for Injection, Docetaxel Injection, 3 specifications of Decitabine for Injection, Alfacalcidol Soft Capsule. 7 pharmaceutical products obtained clinical trial approvals and 8 filed applications for clinical trial. 2 filed applications for production approval and 4 made application for Consistency Evaluation. The Group obtained 39 new invention patent approvals, and made 212 applications for invention patents. Cumulatively, the Group has obtained 963 invention patent approvals.
During the period, the total R&D expenditure was approximately RMB1.06 billion, accounting for approximately 14.7% of the Group’s revenue.
Prospects: deploy the Internet and big data riding on the “Internet + healthcare” national policy
According to forecasts, the global economic recovery is likely to continue in the second quarter, with further divergence among economies depending on epidemic control, vaccine supply, economic fundamentals and stimulus policies. China’s economic activity will continue to show a higher year-on-year growth rate after a full recovery due to its relatively low performance in the same period last year. Health care reform has entered deeper waters. The dynamic adjustment of the National Reimbursement Drug List and the normalization of centralized drug procurement will pave the way for the restructuring of the pharmaceutical industry. R&D innovation capability, production and operational efficiency will be the key to the survival and competitive success of pharmaceutical companies.
The Group has been aware of the trend of encouraging and promoting “Internet + healthcare” by national policy, and has started to deploy and will continue to make good use of the Internet and big data to efficiently and cost-effectively conduct academic activities while provide better services to patients through chronic disease management.
About Sino Biopharmaceutical Limited (HKEX:1177)
Sino Biopharmaceutical Limited is a leading, innovative R&D driven pharmaceutical conglomerate in the PRC. Its business encompasses a fully-integrated chain which covers an array of R&D platforms, a line-up of intelligent production and a strong sales system. The Group’s products have gained a competitive foothold in various therapeutic categories with promising potentials, comprising a variety of biopharmaceutical and chemical medicines for tumors, liver diseases, cardio-cerebral diseases, orthopedic diseases, respiratory system diseases and parenteral nutrition.
Sino Biopharm is a constituent stock of the following indices: MSCI Global Standard Indices – MSCI China Index, Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng Composite Index, Hang Seng Healthcare Index, Hang Seng SCHK Mainland China Healthcare Index, Hang Seng Composite LargeCap Index, Hang Seng Composite LargeCap & MidCap Index, Hang Seng China (Hong Kong-listed) 100 Index and Hang Seng Stock Connect Hong Kong Index, etc.. Sino Biopharm was ranked as one of “Asia’s Fab 50 Companies” by Forbes Asia for three consecutive years in 2016, 2017 and 2018.