Unpacking Hansoh Pharma's Innovation Portfolio: A Deep Dive into Its Core Assets

This article is based on publicly available information and is intended solely for informational exchange. It does not constitute any investment advice.

Hansoh Pharma, the "pioneer" of China's Big Pharma innovation transformation, has recently encountered a major setback.

Hansoh Pharma's wholly-owned subsidiary, Jiangsu Hengte Pharmaceutical Sales Co., Ltd., was fined nearly 25 million yuan for unfair competition. Against the backdrop of the pharmaceutical industry's anti-corruption campaign, Hengte Pharmaceutical's punishment is considered to be possibly related to violations in academic promotion. This clearly does not align with Hansoh Pharma's "image" of innovative transformation.

When it was listed on the Hong Kong Stock Exchange in 2019, Hansoh Pharma set itself the goal of becoming "an innovation-driven pharmaceutical company."

At that time, the only innovative drug that could generate cash flow for Hansoh Pharma was the anti-infective drug Malindao. Now, its innovative drug pipeline has expanded to eight products, covering multiple fields such as oncology, autoimmune diseases, chronic diseases, and anti-infectives. In the fiscal year 2023, Hansoh Pharma achieved a revenue of 10.104 billion yuan, with the innovative drug business contributing 6.865 billion yuan in revenue, accounting for 67.9% of total revenue. It seems that the company's earlier promise has been fully realized.

Figure: An overview of Hansoh Pharma's marketed innovative drugs, Source: Jinduan Research Institute

Due to the outstanding performance of its innovative drug business, Hansoh Pharma is also regarded by many investors as a typical example of "innovative transformation" among traditional pharmaceutical enterprises. From a major generic drug manufacturer to a pioneer in innovative drugs, Hansoh Pharma has taken only five years. Is its innovation capability really that strong?

To clarify this issue, we will comprehensively analyze the core competitiveness of all eight innovative pipelines of Hansoh Pharma, thereby restoring the competitiveness of Hansoh Pharma's existing pipelines.

It should be noted that our interpretation of innovation here only covers the eight products that have already been marketed, and does not include pipelines under research such as ADC. Therefore, this article mainly focuses on the analysis of Hansoh Pharma's current innovative products.

01Mailingda

Mailingda, namely Morinidazole Sodium Chloride Injection, belongs to a new generation of nitroimidazole drugs and is also the first innovative drug product independently developed by Hansoh Pharma.

As early as 2014, Mailind was approved for use in gynecological pelvic inflammatory disease, combined surgical treatment of suppurative appendicitis, and gangrenous appendicitis indications, with higher safety compared to traditional drugs. Relevant data shows that the domestic market share of Morinidazole Sodium Chloride Injection in China has exceeded 500 million yuan, and currently, only one product from Hansoh Pharma has been approved, which can basically be regarded as its market size.

However, with Maillingda having been on the market for a decade, it is about to face competition from generic drugs. Since Sichuan Huiyu Pharmaceutical first submitted a generic drug application for Morinidazole Sodium Chloride Injection in 2022, other pharmaceutical companies such as Shijiazhuang Siyao, Chengdu Guowei Biomedical, Shandong Qidu Pharmaceutical, Chongqing Sunva Pharmaceutical, and Chengdu Better Pharmaceutical have followed suit. Although no company has yet received approval for the first generic version, it is only a matter of time, and this will become a key factor affecting Maillingda's revenue performance.

02Furime

Furui Mei, namely Polyethylene Glycol Lozenatide Injection, is the first domestically developed long-acting GLP-1 class hypoglycemic drug formulation in China.

In May 2019, Fulaimi was approved for marketing. At that time, long-acting GLP-1 drugs were still a scarce category. Prior to this, only Eli Lilly's dulaglutide had been approved in China in February 2019, and Novo Nordisk's long-acting GLP-1 drug semaglutide was not approved to enter the Chinese market until April 2021. As a domestically produced alternative, Fulaimi possessed certain market competitiveness at that time.

The subsequent explosion of weight-loss indications has made GLP-1 drugs the focus of market attention. Whether it's generic or original drugs, a large number of players are trying to enter this track. Under such market changes, Fulaimei, which focuses solely on hypoglycemic indications, is obviously being marginalized by the market. Hansoh Pharma is also developing the GLP-1/GIP dual-target agonist HS-20094 to maintain its market competitiveness.

03Xinfu

Xinfu, namely Flumatinib Mesylate Tablets, is a second-generation BCR-ABL inhibitor, which was approved for marketing in November 2019.

Reviewing the Evolution of BCR-ABL Inhibitors: Three Major Iterations Have Occurred. The first approved was Novartis' Imatinib, commonly known as "Gleevec," which significantly improved the five-year survival rate for patients with CML (chronic myeloid leukemia). Although Imatinib addressed the issue of no available treatment for CML patients, it was not perfect. Patients could still develop resistance mutations at over 70 sites, leading to CML recurrence. Filling this gap became the direction for subsequent iterations of BCR-ABL inhibitors.

Figure: Overview of International Approvals for BCR-ABL Inhibitors, Source: Jinduan Research Institute

Among the 70 mutation sites associated with imatinib resistance, the mutations with the highest frequency are T315I, E225K, Y253F, and M351T, accounting for approximately 60% of all imatinib resistance-related mutations. While second-generation BCR-ABL inhibitors cover the majority of mutation sites, they fail to address the critical issue of the T315I mutation, which is why third-generation products were developed.

Before the launch of Xinfu, no second-generation BCR-ABL inhibitor had been approved in China. Therefore, the launch of Xinfu filled the gap in the domestic CML market at that time and addressed the issue of most resistance to Imatinib. However, this was merely the competitive landscape at that time. With the launch of Ascentage Pharma's third-generation BCR-ABL inhibitor, Olverembatinib, in 2021, the innovative halo above Xinfu is gradually fading.

Figure: Overview of BCR-ABL inhibitors approved in China, Source: Jinduan Research Institute

Although Xinfu is no longer the innovator of BCR-ABL inhibitors today, its past contribution to filling clinical gaps is still commendable.

04Almonertinib

Almonertinib Mesylate Tablets (Brand name: Almonertinib), developed by Hansoh Pharma, is the first approved third-generation EGFR inhibitor in China.

Since the birth of EGFR inhibitors, they have gone through three generations. Currently, AstraZeneca's third-generation EGFR inhibitor, osimertinib, has become the mainstream for this target, with revenue reaching $5.799 billion in 2023.

Figure: EGFR Inhibitor Market Share, Source: Zheshang Securities

A Review of the Historical Market Share of EGFR Inhibitors: The industry leadership has essentially transitioned from the first generation to the third generation, with second-generation EGFR inhibitors never becoming mainstream. The core issue with first-generation EGFR inhibitors was the T790M resistance mutation, which second-generation products failed to adequately address. However, osimertinib, a third-generation EGFR inhibitor, was the first product to comprehensively resolve the T790M resistance problem, successfully extending the overall survival of lung cancer patients to 38.6 months.

Almonertinib is the first domestically produced third-generation EGFR inhibitor in China that can rival osimertinib. Its emergence has broken the monopoly of osimertinib, providing more options for patients in China. As a successor to a "blockbuster" product, almonertinib has benefited from significant first-mover advantages, making it an essential revenue driver for Hansoh Pharma. Its revenue is projected to have reached 3 billion yuan.

However, the substitution红利 of Amelie is continuously diminishing. In March 2021, Allist's third-generation EGFR inhibitor, Furmonertinib, was approved, which to some extent encroached on Amelie’s market share. By mid-2023, Furmonertinib's revenue had reached 1.978 billion yuan, and Allist's stock price surged due to the increase in Furmonertinib’s market share.

Figure: Approval Status of Third-Generation EGFR Inhibitors in China, Source: Jinduan Research Institute

In addition to Fumetinib, Bebtelovimab from Betta Pharmaceuticals, Rizetinib from Bei’erda Pharmaceuticals, and Reutinib from Nanjing Shenhe Pharmaceuticals have also been approved in the past year. The competition for third-generation EGFR targets has become increasingly fierce, posing challenges to the future sales of Amoytinib.

05Hengmu

Hengmu, or Amibufortide Tablets, is the first domestically developed oral anti-hepatitis B virus drug in China.

Similar to Hansoh Pharma's Amelotinib, Hengmu also follows the domestic substitution route, primarily replacing Gilead's blockbuster hepatitis B drug Vemlidy (Tenofovir Alafenamide Fumarate Tablets). Currently, Vemlidy is the most mainstream hepatitis B drug globally, with revenue reaching $862 million in 2023, nearly approaching its product peak.

Figure: Sales of Gilead's Vemlidy, Source: Jinduan Research Institute

Currently, there are three commonly used hepatitis B treatment drugs in China: Entecavir, Tenofovir Disoproxil Fumarate, and Tenofovir Alafenamide. Tenofovir Alafenamide is the most effective but also the most expensive. Although Hengmu is not as excellent as Vemlidy, it has certain advantages over the first-generation product Tenofovir Disoproxil Fumarate—only one-tenth of the dose is needed to achieve similar antiviral efficacy. Moreover, in key secondary safety endpoints (bone and kidney indicators), it significantly outperforms the original Tenofovir Disoproxil Fumarate. Therefore, Hansoh Pharma hopes to achieve domestic substitution through Hengmu and capture a certain market share from Vemlidy.

In theory, under the logic of domestic substitution, Henmu has the potential to become a blockbuster drug, given that hepatitis B is a massive indication in China. However, it is unfortunate that the patent for Vemlidy has long expired in China, and multiple generic drug products have already entered the market. Faced with the extremely low prices of generics, the market prospects for Henmu may not be as promising as initially expected.

06Xevio

Xpovio, also known as Selinexor, is an innovative product developed by Antengene Corporation, primarily targeting the XPO1 mechanism with a novel mode of action.

In November 2023, Hansoh Pharma entered into an exclusive commercialization cooperation agreement with Antengene Corporation. Hansoh Pharma acquired the exclusive commercialization rights for Xpovio in mainland China for an upfront payment of 200 million yuan and milestone payments totaling 535 million yuan. Antengene Corporation will continue to receive sales revenue from Xpovio in mainland China, while Hansohn Pharma will collect service fees from Antengene.

Although Xpovio is the world's first product targeting the XPO1 pathway, its commercialization process has not been smooth, achieving only 67.305 million yuan in revenue in its third year on the market. There are also not many pharmaceutical companies globally focusing on the XPO1 target. The American company Karyopharm has absolute competitiveness in the XPO1 target, and the core technology of Antengene was licensed from Karyopharm.

The core reason for the weak commercialization of Xpovio lies in the awkward position of the XPO1 target. Apart from XPO1 drugs, multiple myeloma patients still have various emerging therapies as back-line treatment options, such as CAR-T therapy and BTK inhibitors. Patients' acceptance of XPO1 drugs will directly determine the revenue ceiling of Antengene.

07Xinyue

Xinyue, or Inebilizumab Injection, is a CD19 monoclonal antibody drug introduced by Hansoh Pharma from Viela Bio. In March 2022, Xinyue was approved for the treatment of Neuromyelitis Optica Spectrum Disorder (NMOSD) and successfully launched in China.

In February 2021, U.S.-based Horizon Therapeutics acquired Viela Bio. Two years later, Amgen acquired Horizon Therapeutics, thus currently holding the overseas rights to inebilizumab injection. According to Amgen's 2023 financial report, the revenue of inebilizumab injection in the fourth quarter was only $65 million, and it has yet to become a standout product.

Figure: Amgen's Inebilizumab Revenue Summary, Source: Company Financial Report

Although Xinyue has no competitors in the NMOSD indication, the extremely low incidence rate of NMOSD, at only 0.278 per 100,000 people, limits the total number of patients in China to around 50,000, which, to a certain extent, caps Xinyue's revenue potential.

Of course, Amgen is currently conducting clinical work on IgG4-related diseases and myasthenia gravis indications, and if these indications proceed smoothly, it may help Xinyue raise its revenue ceiling.

08Saint Laurent

Shengluolai, also known as Pemodasit Injection, is the first domestically produced long-acting multi-peptide EPO receptor agonist to be launched in China.

Erythropoietin (EPO) is a glycoprotein hormone secreted by the kidneys, acting as a hormone-like substance that promotes red blood cell production. It belongs to the class of erythropoiesis-stimulating agents (ESAs) and can bind to EPO receptors on the surface of red blood cells, stimulating their proliferation, differentiation, and maturation.

Currently, the treatment of renal anemia in China is still dominated by short-acting recombinant human EPO, which requires administration 1-3 times per week, leading to poor patient compliance. Hansoh Pharma's Shengluolai, however, maintains longer activity and effectively extends the half-life to approximately 70 hours. Compared with placebo, the increase in hemoglobin after a single dose of Shengluolai can last nearly 30 days.

Since Saint Laurent was just approved in June 2023, there is still a lack of comparable products in the industry, and its market performance remains to be tested.

09Conclusion

After a comprehensive analysis of Hansoh Pharma's eight innovative products, investors should now have a clear understanding of the company's innovation capabilities.

Unlike the leading innovation of MNCs, Hansoh Pharma's innovation model is clearly more down-to-earth. Products like Fulamei, Xinfu, Amelotin, and Hengmu all follow the logic of "imitative innovation" based on domestic substitution, which is similar to the earlier strategy of "racing for the first generic drug." Compared to leading innovation, this approach carries less risk but places greater demands on a company’s strategic judgment and clinical R&D capabilities.

In addition to "follow-on innovation," Hansoh Pharma has also actively engaged in external BD transactions, such as selling its self-developed ADC pipeline to GSK and acquiring the commercialization rights for Cevior and Xinyue. These BD deals not only demonstrate Hansoh Pharma's strong R&D capabilities but also reflect its MNC-level industry acquisition vision.

Overall, Hansoh Pharma is actively transitioning towards innovation and striving to address many unmet clinical needs. However, its core innovative strength is not as robust as the numbers might suggest, and several of its high-profile pipelines will actually face rather fierce competition.

The fine of 25 million serves as a wake-up call, warning Hansoh Pharma that its transition to innovation is far from the moment to pop the champagne, and still requires a longer period of continuous accumulation.

       Title: A Look at Hansoh Pharma's Hidden Strengths