Hansoh Pharma Reports H1 2021 Results: Innovative Drug Revenue Accounts for Nearly 30% of Total Income

　　Hansoh Pharma Announces 2021 Interim Results: Innovative Drug Revenue Accounts for Nearly 30%, R&D Investment Increases by 44%, Diversified Collaborations Continue to Strengthen Pipeline

On August 26, Hansoh Pharma announced its 2021 interim results, with total revenue reaching RMB 4.402 billion, a year-on-year increase of 10.6%; net profit amounting to RMB 1.291 billion, up 5.6% year-on-year; and R&D expenditure totaling RMB 687 million, a year-on-year increase of 44.2%, accounting for 15.6% of total revenue.

Hansoh Pharma's business currently focuses primarily on therapeutic areas such as oncology, central nervous system (CNS) disorders, anti-infectives, and diabetes. While this focus has not changed significantly compared to the past, the continuous advancement of its innovation-driven transformation strategy in recent years has brought about a qualitative transformation in the company's revenue composition and product portfolio.

　Innovative Drug Revenue Grows Rapidly, Expected to Sustain Strong Momentum Going Forward

Historically, Hansoh Pharma's revenue was primarily driven by chemical generic drugs, including blockbuster pillar products such as Oulanning (olanzapine tablets), Pulaile (pemetrexed disodium for injection), and Zefei (gemcitabine hydrochloride for injection). As the scope of volume-based procurement (VBP) continues to expand, although Hansoh's generic drug segment has also been impacted, the inclusion of all its key products in the VBP means that the most significant adverse impact on Hansoh Pharma has essentially been fully absorbed. Subsequent blockbuster generic drugs currently under development and registration, including enzalutamide, cabozantinib, varenicline, and deferasirox, are mainly intended to provide new performance support for its generic segment. Moving forward, the driver of Hansoh Pharma's business growth will transition to innovative drugs.

Hansoh Pharma’s innovative drug business has also delivered remarkable performance in recent years, successfully launching multiple drugs to market. These include Hengmu (tenofovir amibufenamide) launched in 2021, Ameile (aumolertinib) launched in 2020, and Haosenxin Fu (flumatinib) and Fulaimei (loxenatide) launched in 2019. Revenue from the innovative drug segment reached RMB 1.26 billion in the first half of 2021, representing a year-on-year increase of over 60% and accounting for 28.5% of Hansoh’s total revenue. This marks a substantial rise from the 18.9% share recorded in the same period last year, establishing the segment as the primary driver of the company’s business growth.

Almonertinib is the first third-generation EGFR inhibitor manufactured in China to be marketed, indicated for patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) who are T790M mutation-positive and have progressed following prior EGFR-TKI therapy, and has been included in the CSCO 2020 Guidelines and the National Reimbursement Drug List. Flumatinib is a second-generation Bcr-Abl inhibitor used for the treatment of chronic myeloid leukemia, recommended as a first-line treatment in the Chinese Guidelines for the Diagnosis and Treatment of Chronic Myeloid Leukemia, and has been included in the National Reimbursement Drug List through negotiations. Polyethylene glycol loxenatide is a long-acting GLP-1 receptor agonist administered once weekly, providing a new treatment option for diabetic patients in China, and has been included in the National Reimbursement Drug List through negotiations. Tenobusvir is a novel second-generation tenofovir derivative and the first original oral new drug for hepatitis B manufactured in China, offering a new therapeutic option for the large hepatitis B patient population in China.

In addition, inebilizumab, the first large-molecule monoclonal antibody for the treatment of neuromyelitis optica spectrum disorder (NMOSD), and peihuaxihaima peptide for anemia associated with chronic kidney disease are expected to be approved next year. At that time, Hansoh Pharma will have seven Class 1 innovative drugs in its portfolio, further enriching the product lineup of its innovative drug business segment and driving steady growth across its overall operations.

　Rapid Growth in R&D Investment, Diversified Collaborations Continuously Strengthen the Pipeline

Hansoh Pharma's current shifts in business structure reflect the outcomes of its innovation-driven transformation over the past few years, while the potential scale of future business growth hinges on the intensity of current investments. In the first half of 2021, Hansoh Pharma's R&D expenditure reached RMB 687 million, representing a year-on-year increase of 44.2% and accounting for 15.6% of total revenue, which demonstrates that the Company continues to steadily increase its R&D investment in innovative drugs.

Hansoh Pharma is also one of the Chinese pharmaceutical companies with the largest R&D teams, operating four development centers in Shanghai, Lianyungang, Changzhou, and the United States, with over 1,600 researchers. It currently has more than 100 projects in development, including three innovative drugs that have entered Phase II or later clinical stages, and 18 projects undergoing human bioequivalence studies or submitted for marketing approval.

In addition to in-house R&D, Hansoh Pharma is also more actively pursuing external collaboration and M&A opportunities to strengthen its pipeline. On February 17 this year, Hansoh Pharma entered into a strategic cooperation agreement with Scynexis, securing exclusive rights for the development and commercialization of the first-in-class oral antifungal drug ibrexafungerp in the Greater China region (including Hong Kong, Macao, and Taiwan) for a $10 million upfront payment. The drug had already received FDA approval in June. This marks another successful transaction for Hansoh following its deal for the CD19 monoclonal antibody inebilizumab.

Additionally, Hansoh Pharma is also expanding its pipeline reserves and exploring greater innovation potential by incubating external innovative companies. On June 17, Hansoh Pharma and Osprey Asset Management announced the incubation and establishment of Bosheng Pharma, and jointly led the company’s $72 million Series A financing round, dedicated to bringing potential breakthrough therapies to more patients in China.

　　Conclusion

The pharmaceutical industry has undergone profound transformations in recent years. As a traditional pharmaceutical enterprise, Hansoh Pharma is steadily advancing its innovation-driven transformation strategy. Having successfully commercialized five innovative drugs, the company is gradually entering a commercial harvest phase, further enhancing its comprehensive competitiveness. Meanwhile, Hansoh Pharma is also enriching its product pipeline portfolio through multi-level collaborations, which will provide stronger support for the company's sustained and stable development.