Chinese conglomerate Fosun’s pharmaceutical unit to increase spending on innovative drugs, step up generic medication production
- Company to partner with teams developing new drugs, acquire patents and create joint ventures to improve capabilities
Shanghai Fosun Pharmaceutical, a unit of mainland Chinese conglomerate Fosun International, will increase its investment on innovative drugs, and produce more generic drug types to bolster its profit, according to its chairman.
Currently, 65 per cent of its total research and development expenditure is on innovative drugs, and the company wants to step up its spending over the next few years, Chen Qiyu, Fosun Pharmaceutical’s chairman, said in an interview at the China International Import Expo in Shanghai on Wednesday.
“We will do more to strengthen our innovation capability to better serve the health needs of the Chinese people,” he said. Fosun Pharmaceutical will achieve this mainly through partnerships with teams developing new drugs, as well as by acquiring patents and creating joint ventures, Chen added.
The company has accelerated its investment in advanced medical technology over the past couple of years. Its CAR T cell therapy, a type of adoptive cell transfer, is considered one of the most advanced forms of cancer treatment. The technology behind the da Vinci surgical robot, which helps surgeons perform minimally invasive surgeries, was introduced in China from the United States after Fosun Pharmaceutical formed a joint venture.
The company is also expected to increase production of more generic drugs, including an insulin drug.
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A centralised drug procurement programme launched by Beijing at the country’s public hospitals, which triggered big declines in shares of generic drug makers, is not expected to affect corporate profits, Chen said. This had prompted the company to resume and enlarge production of such drugs.
Fosun Pharmaceutical’s net income dropped 1.5 per cent from a year earlier to 2.06 billion yuan (US$295 million) in the first nine months of this year, as the company realised one-time gains from asset disposals and benefited from a change in the fair value of financial assets a year ago. Excluding these factors, its profit increased 8.2 per cent.
It is also proceeding with the listing of Gland Pharma, an Indian unit engaged in the production of injectable drugs, in India, Chen said. The listing still requires approvals by regulators in China and India, he said. Gland Pharma is the only India-based company to have secured an approval for medicines from the US Food & Drug Administration. Its products are mainly sold in the US and Europe.
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Fosun Pharmaceutical’s shares dropped 1.2 per cent to 25.47 yuan in Shanghai and declined 0.1 per cent to HK$22.60 in Hong Kong on Wednesday.
