Cross-Border, Offshore, New Buy-In Doctrine: The Truth About The $28 Billion In Revenue Driving Shih Pharma

Recently, Shih Pharmaceutical Group released its 2021 results. Shiyapharm's revenue was 27.867 billion yuan, an increase of 11.7% year-on-year, of which the sales of the adult pharmaceutical business were 22.681 billion yuan, an increase of 11.2%. in 2020, Shiyapharm's revenue was 24.942 billion yuan and the sales of the adult pharmaceutical business were 20.405 billion yuan. On a comparative basis, revenue and the API business achieved steady growth.

　　In the latest results presentation, Shih Pharma disclosed the progress of the mRNA series pipeline: the new crown mRNA vaccine is expected to IND in the near future; IND rabies vaccine, respiratory syncytial virus (RSV), herpes zoster vaccine and HPV infection treatment vaccine will also be filed this year and next year. It also stressed that the period of valuation adjustment of Biotech provides a good opportunity for BD, and Shiyapharm will seize this opportunity to carry out BD on products and technology.

In the industry's view, such a growth rate in volume is rare, and Shih Pharma is demonstrating the comprehensive capabilities of a pharmaceutical giant. Under the development trend of "no innovation, no future", from APIs to innovative drugs, from new in China to new globally, Shiyapharm has been making innovative changes.

　

1. Cross-border product lines and therapeutic areas

　　

In terms of therapeutic areas, Shifa's product matrix is iterating, from the neurological area to the oncology and neurological areas, and the anti-infection and cardiovascular disease products are blooming, entering more cutting-edge technology.

　　

As a long-established field of Shifa, anti-tumour drugs are accelerating. The three major single products of oncology drugs all achieved rapid growth: Domesol (doxorubicin hydrochloride liposome injection), Zingyouli (polyethylene glycolised recombinant human granulocyte-stimulating factor injection) and Keleli (paclitaxel albumin-conjugated for injection) grew 24.0%, 13.1% and 27.5% respectively in sales revenue in 2021, becoming the main source of revenue growth.

It is worth noting that two new anti-tumour drugs have been approved by Shifu this year: Dornada (mitoxantrone hydrochloride liposome injection) and PI3Kδ/γ inhibitor Duveliset capsule.

　　

The neurological sector is a long-standing area of strength for Shifu, with sales of the exclusive product Enbep reaching 6.5 billion yuan in 2020 and sales in 2021 remaining largely unchanged from 2020. And Shuanling, used to treat ischemic cerebrovascular disease, peripheral vascular disease and diabetic complications, doubled its sales revenue by 213.3% in FY 2021.

Shiyang's first Parkinson's disease treatment drug, Ensio, won the tender for the national procurement in 2021, with sales revenue increasing by 172% in FY2021. These two drugs have become potential growth varieties in the field of neurology of Shiyang.

　　

It is understood that Shiyang targets cutting-edge technology direction, drug research and development has now entered the era of nucleic acid drugs, but also will target emerging technology areas such as gene therapy and cell therapy, and develop cutting-edge technologies such as in vivo reprogramming of immune cells.

For a long time, domestic pharmaceutical companies have been criticised for their low investment in research and development (R&D) and their emphasis on sales rather than R&D.

Behind Shifa's innovation advancement is the continuous increase in R&D investment, with R&D investment of RMB2 billion and RMB2.89 billion in 2019 and 2020 respectively. 2021 will see Shifa's R&D investment exceed RMB3 billion for the first time, an increase of 18.8% year-on-year to RMB3.433 billion, accounting for approximately 15.1% of the revenue of its proprietary pharmaceutical business.