Renfu Pharma's Subsidiary Receives CFDA Clinical Trial Approval for Human Fibrinogen with Global Market Estimated at USD 3 Billion

VCBeat (WeChat ID: vcbeat), May 15 – Humanwell Healthcare announced today that its wholly-owned subsidiary, Wuhan Zhongyuan Ruide Biologics, has received the "Drug Clinical Trial Approval" issued by the China Food and Drug Administration.

The announcement disclosed that the project has incurred cumulative R&D expenses of RMB 10 million, and its application for clinical trial registration was submitted and accepted in June last year. According to relevant data, global sales of this drug amounted to approximately USD 540 million in 2015, and currently, nine companies in China have obtained production approvals for this drug.

A search by VCBeat reveals that human fibrinogen is a typical life-saving medication used to treat congenital hypofibrinogenemia or afibrinogenemia, as well as coagulation disorders caused by fibrinogen deficiency resulting from severe liver injury, disseminated intravascular coagulation (DIC), postpartum hemorrhage, and major surgery.

Since last year, blood products represented by human fibrinogen have also entered a phase of tiered price increases. Securities research reports indicate that the price of human fibrinogen rose by 80% to 130% early last year, with the 0.5g/vial specification increasing from RMB 280 per vial to RMB 350 per vial.

According to the previously issued “Opinions on Advancing Drug Price Reform,” government-set prices were abolished as of June 1, 2015, except for narcotic drugs and Class I psychotropic substances. This policy has also been interpreted as favorable for the blood products industry, suggesting that blood products will enter a promising period of market-oriented development.

It is under these circumstances that, in addition to the established leaders in the blood products sector, numerous pharmaceutical companies specializing in chemical drugs and traditional Chinese medicine (TCM) proprietary medicines have also begun to penetrate the blood products market.

Humanwell Healthcare’s announcement disclosed that human fibrinogen has been marketed abroad for many years, with major manufacturers including ABBOTT, GE HEALTHCARE, and CSL Behring, 2In 2015, the global sales of this drug were approximately $540 million.

Additionally, according to the website of the China Food and Drug Administration,Currently, nine companies in China have obtained production approvals for this drug.Major manufacturers include Jiangxi Boya Bio-Pharmaceutical Co., Ltd., Shanghai RAAS Blood Products Co., Ltd., Hualan Biological Engineering Inc., and Green Cross (China) Biological Products Co., Ltd.In 2015, the domestic batch release volume of human fibrinogen was approximately 500,000 vials, and in 2016 it was approximately 960,000 vials (converted to 0.5 g per vial).

Humanwell Healthcare stated that Zhongyuan Ruide submitted a clinical trial registration application in June 2016, which was accepted for review.The cumulative R&D investment for the project is approximately RMB 10 million.. In accordance with the laws and regulations governing drug registration in China, Zhongyuan Ruide will initiate clinical research activities upon receipt of the aforementioned approval for clinical drug trials. Upon completion of the clinical studies, the company will submit clinical trial data and related documentation to the China Food and Drug Administration (CFDA) to apply for production and market launch.

Humanwell Healthcare was established in 1993 with a registered capital of RMB 1.286 billion. It was listed on the Shanghai Stock Exchange in 1997. Its core businesses span multiple pharmaceutical sub-sectors, including chemical pharmaceutical formulations, active pharmaceutical ingredients (APIs), traditional Chinese medicine (TCM), and biological products. As a leading enterprise in Hubei Province’s pharmaceutical industry and a national-level enterprise technology center, Humanwell Healthcare ranked 28th among the Top 100 Pharmaceutical Enterprises in China in 2015.

Currently, the Company and its subsidiaries hold 576 drug production approval numbers, including 48 exclusive product specifications. A total of 141 varieties are included in the National Essential Medicines List (2012 Edition), and 316 varieties are included in the National Drug Reimbursement List for Basic Medical Insurance, Work-Related Injury Insurance, and Maternity Insurance (2017 Edition).

Historical data shows that Humanwell Healthcare's revenue and net profit maintained rapid growth over several years,It surpassed RMB 10 billion in 2015, with both revenue and net profit in 2016 doubling compared to 2012.

Humanwell Healthcare's Historical Revenue Data (Source: Annual Reports; Unit: CNY 100 Million)

According to the revised annual report released by Humanwell Healthcare several days ago, the company achieved an operating revenue of RMB 12,330.9501 million in 2016, representing a year-on-year increase of 22.65%. The net profit attributable to shareholders of the listed company amounted to RMB 832.4034 million, up 27.31% from the same period last year. Among this, the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was RMB 564.7624 million, reflecting a slight year-on-year increase of 0.02%.

By business segment, the pharmaceutical wholesale business generated RMB 6.738 billion in revenue and RMB 863 million in profit; the pharmaceutical manufacturing business brought in RMB 5.439 billion in revenue, with a gross profit margin as high as 66.38%.

Humanwell Healthcare's 2016 Revenue and Cost by Business Segment, (Unit: 100 million）

In terms of production and sales, its flagship products include Fentanyl Citrate Injection, Remifentanil Hydrochloride for Injection, Midazolam Injection, Human Albumin, and Neomycin Sulfate API, with production volumes showing a significant increase compared to the previous year.

Production and Sales Volume Data of Humanwell Healthcare’s Main Products (Source: 2016 Annual Report)

As of the market close on May 15, Humanwell Healthcare’s stock closed at RMB 19.80 per share, with a total market capitalization of RMB 25.464 billion.