Chinese Pharma Companies Report Strong Revenue Growth Driven by Innovative Drugs Amid Accelerating Commercialization

　　【Pharmaceutical Network Industry Dynamics】With the acceleration of new drug approval and review, as well as the advancement of medical insurance policies and the gradual improvement of the innovative drug policy system, China's innovative drug industry is developing rapidly. New drug products are continuously coming to market, and the market is also expanding. Data shows that the scale of China's innovative drug market exceeded 100 billion yuan in 2018 and is expected to reach 250 billion yuan by 2023. Notably, against the backdrop of the continuous launch of innovative drugs, the revenue growth of a large number of pharmaceuticals has also been very strong, bringing benefits to many pharmaceutical companies.
 

Recently, Hansoh Pharma announced its 2021 annual performance. The revenue for 2021 was RMB 9.935 billion, representing a year-on-year increase of 14.3%; net profit was RMB 2.713 billion, up by 5.6% year-on-year; R&D investment reached RMB 1.797 billion, surging 43.5% year-on-year, accounting for 18.1% of total revenue. Notably, the revenue from innovative drugs in 2021 amounted to RMB 4.202 billion, increasing by 168.9% year-on-year, with its proportion of total revenue rising from 18.0% in 2020 to 42.3%.
 

According to reports, the revenue from innovative drugs includes the combined income of five products: Ameitinib (Ameile), Flumatinib (Haosen Xinfu), Morniflumate (Mailingda), Loxenatide (Fulai Mei), and Emtricitabine Tenofovir (Hengmu). These five products have all been included in the Class B National Reimbursement Drug List.
 

In addition to Hansoh Pharma, there are also companies that have begun to see an acceleration in the fruition of innovation outcomes as their investment in R&D for innovative drugs continues to expand. For instance, in 2021, the pharmaceuticals segment of Fosun Pharma achieved revenue growth of 32.1% year-over-year, reaching 28.904 billion yuan, accounting for 74.1%.
 

Among these, the significant increase in revenue from the pharmaceuticals segment mainly includes new and near-new products such as Comirnaty, Hanlikang, Hanquyou, and Sukining, which account for over 25% of the pharmaceutical business revenue. The revenue structure has been continuously optimized. Notably, during the reporting period, the self-developed product Hanlikang (Rituximab Injection) generated revenue of 1.69 billion yuan, representing a year-on-year increase of 125.33%.
 

In addition, Simcere Pharmaceutical also stated in its announcement of the 2021 financial report that the transformation towards innovation has been remarkably effective. Among this, revenue from innovative drugs has become the group's primary source of income, reaching approximately RMB 3.12 billion, representing a robust growth of about 53.8% compared to RMB 2.029 billion in innovative drug revenue for the same period in 2020. The proportion of revenue from innovative drugs to total revenue during the same period also reached a record high of 62.4% (compared to 32.9% and 45.1% for the fiscal years 2019 and 2020, respectively).
 

The announcement shows that the main reason for the rise in Simcere Pharmaceutical's total income in 2021 was the rapid revenue growth brought by the innovative drug Simnova® (Edaravone Dexborneol Injection Concentrate Solution).
 

Overall, the continuous emergence of innovative achievements is bringing benefits to a large number of pharmaceutical companies. In the future, as pharmaceutical companies steadily advance the research and development and commercialization of innovative products, the industry expects that the intrinsic potential of a large number of pharmaceutical companies will gradually awaken, leading to further growth in sales.
 

Disclaimer: In any case, the information or opinions expressed in this article do not constitute investment advice for any person.