Guoxin Pharma Successfully Transforms Its Business Model with Over 70% CAGR, Focusing on Innovative Drug CRO Services

“In my view, digitalization and CROs are complementary to each other, reflecting the distinction between ‘tools’ (Qi) and ‘principles’ (Dao) that we often discuss.”

This is Chen Yongqing, founder of Guoxin Pharmaceutical and one of the earliest entrants into the CRO industry with over a decade of deep expertise, sharing his insights on digitalization and the CRO sector.“Digitalization is a tool that primarily helps CROs improve efficiency and reduce costs; however, the core foundation of CRO enterprises ultimately rests on their professional expertise, medical capabilities, and profound understanding of clinical trials.”

Guoxin Pharmaceutical Group, established in 2008, is a contract research organization (CRO) engaged in pharmaceutical R&D and clinical research, specializing in providing integrated solutions for clinical research services and regulatory submission for drugs, biological products, and medical devices.Currently covering areas such as innovative traditional Chinese medicines, biologics, small-molecule drugs, orphan drugs for rare diseases, and gene and cell therapies.

From a certain perspective, CRO services serve as the “infrastructure” of the innovative drug sector. A large number of small and medium-sized enterprises leverage limited resources to accelerate R&D progress efficiently through outsourcing. Moreover, industry giants such as BeiGene, Innovent Biologics, and Zai Lab also rely heavily on such enabling forces.

China’s innovative drug industry has evolved from an era when annual antibody drug filings numbered in the single or double digits to the present landscape, where dozens of companies are positioned in each cutting-edge therapeutic area, including PD-1 inhibitors, antibody-drug conjugates (ADCs), bispecific antibodies, and CAR-T therapies. With more than 100 innovative pharmaceutical companies already listed, the pace of development is set to accelerate further. For contract research organizations (CROs), this significant opportunity will continue for many years to come.

In Chen Yongqing’s view, “Overall, the CRO industry still exhibits the characteristics of high growth potential, rapid expansion, and fast iteration.”On one hand, the R&D expenditures of start-up biotech companies are heavily supported by substantial capital, with domestic and global biomedical investment and financing remaining at high levels; on the other hand, the R&D spending of large pharmaceutical companies is also relatively stable, ensuring deterministic growth in R&D expenditures.

For the CRO industry, “the complexity, long duration, and high investment characteristics of pharmaceutical R&D activities have spurred the emergence of the CRO sector, while the rapid development of the pharmaceutical industry has accelerated its swift growth.”

At that time, Chen Yongqing not only foresaw the future of rapid growth in the CRO industry but also recognized the problems existing within it:The clinical CRO market in China is still in its early stages. Most CRO companies are small in scale, resulting in low market concentration and a fragmented, scattered, and disorganized competitive landscape. These firms typically exhibit weak medical regulatory consulting capabilities, suboptimal quality in clinical trial monitoring and execution, high staff turnover with frequent personnel changes, and face numerous uncertainties.

“This presents an opportunity for Guoxin Pharmaceutical. Recognizing these pain points, we established the philosophy of ‘prioritizing quality and respecting life’ from our inception. By placing quality at the core, we provide sponsors with high-quality, professional, and efficient clinical research services, thereby building our core competitive advantage in the market. As the market has gradually become more regulated, our unwavering commitment to quality-first has enabled us to reach where we are today,” said Chen Yongqing with emotion.

Now, Guoxin Pharmaceutical has been in operation for 13 years, collaborating with over 180 pharmaceutical companies both domestically and internationally, and has completed more than 400 drug clinical trials. It maintains close partnerships with nearly 700 Grade A tertiary hospitals and over 500 clinical research institutions across China. Its business coverage extends to more than 80 cities and 1,000 departments, with 28 provincial representative offices established. The company owns seven controlled subsidiaries and three overseas branches.Became one of the fastest-growing CRO companies in China over the past five years, with a compound annual growth rate exceeding 70%.

Prior to 2018, Guoxin Pharmaceutical was primarily a clinical CRO focused on generic drugs, traditional Chinese medicine, and post-marketing studies.

In early 2019, the management of Guoxin Pharmaceutical resolved to transform into an innovative drug CRO, acting swiftly and decisively.

“The CRO industry is, first and foremost, a talent- and knowledge-intensive sector; we require professionals with a deep understanding of every link in the business value chain to drive our operations.” This marked the beginning of Guoxin Pharmaceutical’s upgrade and iteration of its core management team.

Song Wei, CEO and MD of Guoxin Pharmaceutical, graduated from Wuhan University, licensed physician, entered the industry from hospitals in 2002, with nearly 20 years of clinical trial experience, one of the earliest senior experts engaged in drug clinical research in China.

Mr. Song Wei previously held senior executive positions at major pharmaceutical groups and R&D institutions, where he was primarily responsible for the clinical development of new drugs. His portfolio encompassed small-molecule drugs, large-molecule biologics, and cell and gene therapies, including multiple innovative drugs developed through China-US and China-Europe collaborations, dual-filed projects in China and the United States, and the world’s first project for a new indication. To date, ten of his developed drugs have been marketed.

He possesses extensive experience in communicating with regulatory authorities and is well-versed in regulatory requirements. He has a proven track record of successfully guiding multiple products through all stages, from project initiation, development, and clinical trials to market launch. Additionally, Song Wei served as a key participant in numerous new drug clinical research projects under China’s National Science and Technology Support Program and Major Special Projects during the 11th, 12th, and 13th Five-Year Plan periods.

Liu Xiaomei, Chief Operating Officer (COO) of Guoxin PharmaceuticalMaster of Immunology, with 13 years of experience in clinical drug research. Previously worked at renowned domestic and international CROs and pharmaceutical companies, including RemeGen, PPD, Parexel, and PRA.

Liu Xiaomei previously served as the Head of Clinical Operations for the Greater China Region at PRA, boasting 13 years of extensive experience in project management, team building, and personnel management. Her project portfolio encompasses Phase I to Phase IV clinical development across multiple therapeutic areas, including oncology, immunology, neurology, infectious diseases, and cardiovascular diseases, with a particular expertise in solid tumor research.

Dr. Ren Wei, Senior Vice President of Medical Affairs at Guoxin Pharmaceutical, with educational backgrounds in clinical medicine and an MBA; M.D., licensed physician. Dr. Ren Wei previously served as Senior Director of Medical Affairs and R&D at pharmaceutical companies including Roche Pharmaceuticals and Ascentage Pharma.

He previously served as Director and Vice President at internationally renowned CROs such as Parexel and Syneos, bringing extensive experience in clinical strategy screening and guidance, as well as in the formulation and implementation of medical strategies. He also possesses substantial management expertise in establishing domestic companies, building teams, and optimizing departments.

Dr. Zhao Jianmin, Chief Statistician of Guoxin Pharmaceutical, graduated from Virginia Commonwealth University in the United States, earning a Master’s degree in Statistics and a Ph.D. in Biostatistics; has dedicated 15 years to the field of biostatistics, with extensive experience in data management and biostatistics; well-versed in NMPA/FDA GCP guidelines and clinical trial SOPs. Has participated in the writing of Statistical Analysis Plans (SAPs) for over 200 clinical trials, covering Phase I through Phase IV.

Dr. Sun Xiaoyun, General Manager of Guoxin Siyu Pharmaceutical, graduated from Peking University Health Science Center with a Ph.D. in Rheumatology and Immunology, and is an Attending Physician. Has seven years of experience as a clinical physician in internal medicine. Previously held positions at Fortune 500 companies including Pfizer, Janssen, and Nestlé, engaging in medical affairs, marketing, and medical research for new product launches.

In addition, Guoxin Pharmaceutical has dozens of medical professionals with master’s or doctoral degrees, and over 97% of its team members hold a bachelor’s degree or higher.

Currently,The core management team of Guoxin Pharmaceutical is composed of senior medical and operational executives with extensive experience from multinational corporations such as Pfizer, Takeda, Parexel, PRA, and INC. The company boasts highly capable teams in medical registration, clinical operations, data management and statistical analysis, and quality control.

Guoxin Pharmaceutical also engaged an external team of professional consultants to update its entire Quality Management System (QMS), including bilingual (Chinese-English) Standard Operating Procedures (SOPs). Meanwhile, it established a high-standard, systematic, and digitalized management model and framework, enabling real-time visual management and results presentation.

Over the course of two years, Guoxin Pharmaceutical executed multiple strategic initiatives, including upgrading and iterating its core management team, establishing a comprehensive business layout for innovative drugs, and completing a Series B financing round of nearly RMB 100 million in late 2021.

Prior to 2018, the proportion of revenue recognized from Guoxin’s innovative drug-related businesses was virtually negligible; by last year (2020), revenue from innovative drugs accounted for more than 30% of Guoxin Pharmaceutical’s total.

Chen Yongqing revealed that the proportion is expected to reach nearly 55% this year, and innovative drug orders from Guoxin Pharmaceutical Technology (Beijing) Co., Ltd. will account for more than 70% of its overall business in 2022.

In addition to focusing on innovative drugs, Guoxin Medical has further expanded its post-marketing real-world study and scientific laboratory services.

“Amidst a landscape where opportunities and challenges coexist, and as the promotional model for innovative drugs gradually shifts from commercial marketing to academic engagement, real-world studies are highly likely to become the next battleground for competition among innovative pharmaceuticals.”When discussing Guoxin Pharmaceutical’s strategic layout for post-marketing real-world studies, Chen Yongqing stated, “Based on this rationale, we have launched our post-marketing research services for innovative drugs.”

The core concept of this business is the “integrated design approach for blockbuster drugs leveraging big data,” primarily based on “market research – top-level design – product positioning” to expand the market for launched drugs.

Such projects primarily aim to establish robust medical evidence based on high-volume products and big data, thereby enabling drug repurposing and secondary development. For the large number of innovative drugs slated for future market launch, pharmacoeconomic studies for market access will also require supplemental real-world data and evidence to facilitate further market expansion.

In addition, Guoxin Pharmaceutical has further expanded its scientific laboratory business.Guoxin Pharmaceutical expands its gene and cell therapy business, as well as its clinical research testing and inspection services, through inorganic growth via industrial M&A.

In the field of cell therapy, Guoxin Pharmaceutical has established strategic collaborations with institutions such as the Fifth Affiliated Hospital of Guangzhou Medical University and the Second Affiliated Hospital of Chongqing Medical University. Together, they have built a scientific translation service laboratory platform for gene and cell therapy, leveraging clinical resources to actively advance cell therapy services and investigator-initiated trials (IITs) in cell therapy.

In the realm of clinical trial medical testing services, Guoxin Pharmaceutical has acquired the Guangzhou Medical University New Drug Development Laboratory, enabling it to provide corporate clients with central laboratory specimen testing, biomarker laboratory services, and hospital-based therapeutic drug monitoring (TDM) services, thereby comprehensively building an innovative “end-to-end” biopharmaceutical R&D platform.

This has also enabled Guoxin Pharmaceutical to comprehensively shift its business positioning toward biomarker testing, medical translation, precision medicine laboratories, drug R&D, and cell therapy CDMO platforms, thereby establishing a deep presence in the frontier drug R&D services sector.

In terms of data, Guoxin Pharmaceutical is also actively building an automated clinical trial data processing system, leveraging internet-based methods for data transmission to ensure data traceability.

At the same time, a data and statistics team centered on the Chief Statistical Officer was established to conduct professional statistical analysis of clinical trial data, thereby achieving digitalization and automation in data transmission and processing.

Chen Yongqing stated, “Digitalization can significantly help us improve efficiency and reduce costs, but it cannot replace the core of this industry. I believe that a number of high-quality enterprises specializing in digital systems for clinical trials will surely emerge within the industry. They will play an important role in the industrial chain, serving as a complement to existing clinical CRO companies. This is the distinction between ‘tools’ and ‘principles.’”

When discussing the future development of Guoxin Pharmaceutical, Chen Yongqing stated, “Guoxin Pharmaceutical will continue to enhance its capabilities in serving innovative drug companies, extend the industrial chain, manage the full lifecycle of innovative drugs, and comprehensively build an academic marketing model for innovative drugs.”

In addition, it will cover clinical research, post-marketing commercialization services, and real-world study phases, providing consulting services ranging from clinical trials, regulatory affairs, and advisory to commercialization services and market access. It serves life science and biopharmaceutical clients worldwide to help them translate scientific research achievements into novel therapeutic solutions.