Sunnovo Enters Animal Health Sector with Comprehensive Pet Healthcare Platform

Recently,SunNovo, a Well-Known Listed Pharmaceutical Company, Officially Announces Entry into the Pet Health Sector, and joined forces with well-known enterprises in the veterinary drug industry, such as Deqing Pharmaceutical and Rongyao Biology, to jointly establish a veterinary drug research and development enterprise—Beijing Nuoho Animal Health Technology Co., Ltd. (hereinafter referred to as “Nuoho Animal Health”).

In recent years, in addition to actively laying out the R&D of innovative drugs such as peptide drugs, SunNovo has also been actively expanding into the two major fields of traditional Chinese medicine and veterinary medicine. The establishment of SunNovo Animal Health also marks SunNovo's official increased investment in the veterinary drug sector.

Among numerous niche sectors, why did SunNovo choose to enter the veterinary drug R&D sector? How will it strategize its presence in the veterinary market in the future? To address these questions, VCBeat conducted an exclusive interview with Jin Chen, Deputy General Manager of SunNovo Animal Health, and discussed the company’s strategic planning and future development in the pet health sector.

SunNovo’s Bet on Animal Health: The Story Begins Two Years Ago。

At that time, a well-known domestic animal pharmaceutical company approached SunNovo, seeking its technical support. It was this opportunity that sparked SunNovo’s interest in the veterinary drug market and prompted the company to conduct in-depth market research.

After thorough research, SunNovo has made the decision: we will enter the veterinary drug market!

The primary factors driving SunNovo’s decision lie in the substantial unmet demand within the animal health pharmaceutical market, coupled with the frequent introduction of national policies in recent years that encourage innovation and independent research and development in this sector.

Specifically, according to data from QYResearch, the global pet pharmaceutical market size reached USD 12.608 billion in 2019 and is projected to reach USD 20.058 billion by 2026, equivalent to approximately RMB 140.1 billion. Among these, the Chinese market has witnessed rapid growth, with its market size reaching USD 176 million in 2019 and expected to reach RMB 481 million by 2026, representing a compound annual growth rate (CAGR) of 16.44%.

Although the market size for veterinary pharmaceuticals is significantly smaller than that for human pharmaceuticals, this does not preclude the existence of substantial unmet market demand or the increasingly evident positive growth trend.

As previously reported by VCBeat, the domestic pet pharmaceutical sector is currently monopolized by overseas giants. There are few companies in China specializing in the production of pet medications, and those that exist operate on a relatively small scale. Nevertheless, even amidst this dominance by international players, the Chinese pet drug market still harbors substantial unmet demand.

For instance, most companies’ flagship products are concentrated in traditional areas such as infectious diseases, parasitic diseases, and conventional vaccines, with few enterprises venturing into the treatment of pet tumors, geriatric conditions, nutritional disorders, neurological diseases, and metabolic diseases. The reasons behind this trend will be revealed later. For now, it suffices to recognize that there remains substantial unmet demand in the pet pharmaceutical market—and the broader animal health sector—indicating significant opportunities for growth.

Meanwhile, on the policy front, China has successively introduced a series of favorable policies to promote the standardized development of the animal pharmaceutical industry. For instance, the "Procedures for Veterinary Drug Registration and Review" promulgated in 2017 introduced, for the first time, a "priority review" mechanism for veterinary drugs specifically intended for racehorses and pets that are in urgent clinical need and in short supply in the market. This move was regarded by the industry as a significant policy boost for the development of veterinary pharmaceuticals for pets.

Subsequently, the introduction of a series of policies and regulations, including the Model Instructions for Veterinary Drugs Used in Pets, Requirements for Clinical Registration Data of Chemical Drugs Used in Pets, and Requirements for Registration Data for Human Chemical Drugs Repurposed for Use in Pets, underscores the state’s emphasis on and encouragement of the pet medication industry.

Meanwhile, the capital market has also begun to take action, frequently directing funds toward enterprises with innovative technologies and products. For instance, well-known investment firms such as Morningside Venture Capital, Gaorong Capital, and Legend Star have all invested in innovative pet pharmaceutical companies.

Therefore, rather than focusing on the market size of the pet medicine sector, SunNovo’s strategic entry is driven more by its growth potential. Jin Chen, Deputy General Manager of SunNovo Animal Health, stated candidly in an interview, “Although the animal health market is smaller in scale compared to the human pharmaceutical market, its significant growth potential is gradually becoming evident as the market continues to mature and become more regulated.”

In this context, SunNovo has entered the animal health sector by adopting an integrated human-and-pet R&D approach, leveraging over 15 years of experience in the CRO industry to provide high-quality, efficient veterinary drug development solutions, with a strong emphasis on ensuring the safety, efficacy, and quality controllability of animal medicines.

The establishment and development of SunNovo Animal Health will further expand SunNovo’s one-stop pharmaceutical and clinical services for pet medications and livestock pharmaceuticals. By initiating new veterinary drug projects across multiple directions and fields, the company aims to provide high-quality CRO services to clients in the animal health sector, forming a comprehensive closed-loop solution that encompasses pharmaceutical R&D, clinical trials, project management, regulatory affairs, and post-marketing studies.

It is reported that in June 2021, SunNovo established Nuohua Ruichong, an independently operated animal health division, with a core focus on research into pet pharmaceuticals. The division provides clients with end-to-end services, including pharmaceutical research and regulatory registration for innovative veterinary drugs, generic veterinary drugs, and traditional Chinese veterinary medicines, culminating in the acquisition of New Veterinary Drug Certificates and Veterinary Drug Product Approval Numbers.

To date, SunNovo’s Animal Health Division has grown into a robust entity with an in-house R&D team of 75 members and has independently established a high-end formulation platform covering various dosage forms, including oral solid preparations, oral liquids, eye drops, topical preparations, and injections. Meanwhile, it maintains a compliant quality system that incorporates ISO, CMA, and CNAS-certified R&D frameworks, with all equipment equipped with networked audit trails. Its R&D system fully aligns with human pharmaceutical standards, ensuring full traceability for every experimental step. Furthermore, SunNovo has engaged in collaborative R&D of veterinary drugs with dozens of renowned domestic veterinary pharmaceutical companies, providing ample assurance of compliant contract fulfillment.

Therefore, the team advantages and technological expertise that SunNovo has accumulated in the field of veterinary pharmaceuticals serve as a crucial foundation for Nuoho Animal Health’s entry into the veterinary CRO sector.

Currently, under the leadership of its Chief Scientist and the head of its GCP-certified institutions, SunNovo Animal Health has established a professional team dedicated to drug and clinical development. The technical staff generally possess over five years of experience in pharmaceutical R&D and clinical research, with more than 40% holding master’s or doctoral degrees. Furthermore, the company has established centers for pharmaceutical R&D, clinical R&D, and innovative drug R&D, enabling it to provide clients with comprehensive animal health drug research services across all dosage forms.

Building on this foundation, SunNovo has established a core business scope of CRO services that comprehensively covers both companion animal and food-producing animal pharmaceuticals, providing all-encompassing, integrated solutions from drug discovery to post-marketing studies. The company’s service chain encompasses multiple critical stages, including pharmaceutical R&D, clinical research, regulatory affairs management, pharmaceutical research project management, clinical research project management, and data management and statistical services, thereby forming a complete closed-loop service system.

Similar to human pharmaceuticals, the development process for veterinary drugs also encompasses stages such as drug discovery and screening, preclinical studies, clinical trials, and regulatory approval. Multiple factors must be comprehensively considered to ensure the safety, efficacy, and quality controllability of these drugs, with a level of complexity no less than that of human medicines.

Jin Chen, Deputy General Manager of SunNovo Animal Health, also stated, “Many challenges facing R&D enterprises, such as product initiation, cost control, and R&D quality, remain to be further addressed by us.”

In response, SunNovo has established a proprietary project initiation database to ensure that selected products possess clear clinical value and market prospects. Meanwhile, the company maintains high standards in its R&D and quality management systems, while strictly controlling costs to achieve break-even on this basis.

In addition to CRO services, SunNovo Animal Health has independently initiated R&D projects for Class 1, Class 2, Class 5, and Class 3.3 new veterinary drugs, aiming to meet market demands, enhance the therapeutic efficacy of animal medicines, and ensure medication safety.

"In recent years, with the rapid expansion of the domestic animal health market, the sector for innovative veterinary drugs has entered a period of growth. 'Class 1 innovative veterinary drugs and improved formulations currently hold significant potential and opportunities,' said Jin Chen, Deputy General Manager of SunNovo Animal Health."

Facing this vast market, SunNovo Animal Health is actively positioning itself in the field of innovative veterinary drugs. Leveraging its extensive experience and professional expertise, and drawing on the resource advantages of SunNovo, it aims to translate its innovative strengths in the human pharmaceutical CRO sector into a first-mover advantage in the broader animal health industry. By focusing on both pharmaceutical R&D and clinical R&D, SunNovo Animal Health is accelerating the development of more veterinary medications.

In the future, SunNovo Animal Health will continue to uphold its philosophy of innovation, dedicating itself to the development of more safe and effective therapeutic solutions for pets and food-producing animals. With a rigorous scientific approach, it will continuously enhance its R&D capabilities, contributing to the sustained development of the pharmaceutical industry and the advancement of animal health.

At the conclusion of the interview, Jin Chen, Deputy General Manager of SunNovo Animal Health, also stated, “Although currently there is a limited variety and insufficient quantity of domestically produced pet-specific drugs, and new veterinary drugs face numerous hurdles from R&D to market launch—including high costs, long development cycles, and significant risks—all of which hinder the R&D and innovation of domestic pet medications, we believe that driven by continued policy relaxation and pet owners’ increasing emphasis on their pets’ health, the pet pharmaceutical industry is poised for an imminent surge.”

“Regarding the future of the animal health industry, we hope to work with industry partners to promote the development of the veterinary drug R&D sector toward greater standardization and efficacy, thereby accelerating the R&D and commercialization of high-quality, safe, and effective animal medicines, and speeding up the iteration and innovation of veterinary drugs.”