China’s Fosun posts 26 per cent jump in net profit, gets ready to make generic Pfizer and Merck Covid-19 pills

Fosun International, one of China’s largest private conglomerates, has stepped up preparations to produce cheaper generic versions of Covid-19 medications developed by American pharmaceutical giants Pfizer and Merck.

Its subsidiary Shanghai Fosun Pharmaceutical Group is looking into which of its existing plants can be used to manufacture generic versions of Pfizer’s nirmatrelvir, which is sold under the Paxlovid brand name, and Merck’s molnupiravir, Fosun International co-CEO Chen Qiyu said during an earnings briefing on Thursday.

“We are trying to figure out which production base [under Fosun Pharma] will be the ideal place to make the medications,” he said. “Among them, we are considering the factories at our units, such as Guilin Pharma and YaoPharma.”

Fosun Pharma is one of five Chinese drug firms licensed to make generic versions of the Pfizer and Merck Covid-19 medications. The firm has, however, played a significant role in the battle against the coronavirus in the region – it has the exclusive rights to distribute Pfizer and BioNTech’s mRNA vaccine in China, Hong Kong, Macau and Taiwan. It has been restricted to Hong Kong, Macau and Taiwan, however, because it has yet to receive an approval from mainland Chinese regulators.

Last year, it distributed 22 millon doses of the vaccine, generating revenue of about US$500 million, according to Chen. On Thursday, Fosun International reported a 26 per cent year-on-year increase in net profit to 10.1 billion yuan (US$1.6 billion) for 2021. Fosun Pharma’s Shanghai-listed shares have advanced 8.7 per cent to 53.19 yuan this year.

The pharmaceutical unit last week signed agreements with Medicines Patent Pool (MPP), an organisation that aims to increase access to medication in poorer countries, for the production and supply of generic versions of Pfizer’s Paxlovid pills.

United Nations-backed MPP said that drug makers sub-licensed to produce the Covid-19 pills had been selected based on their production capacity, regulatory compliance and ability to meet international quality standards. The pills will be offered to 95 lower-income countries. China was not among these countries.

“We hope the medication can be exported to those countries and regions as soon as possible,” Chen said, adding that Fosun Pharma would accelerate the process of technology transfer and improve its manufacturing techniques to save costs. He did not reveal when production would start.

Pfizer’s Paxlovid is an antiviral inhibitor that prevents the virus from replicating. Fosun Pharma is also eligible to produce and supply the raw ingredients for nirmatrelvir.

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China started importing Paxlovid for the first time last week to support its fight against the Omicron variant, which has wreaked havoc across the country, including its biggest cities such as Shanghai and Shenzhen.

Fosun secured the licence to make a generic version of Merck’s molnupiravir in January, also under MPP. The Merck pill, which is sold under the Lagevrio brand name, is a nucleoside analogue with a mechanism that aims to introduce errors into the genetic code of the virus.

“Given the transmissibility of the Omicron variant, medication that are effective in treating patients will still be in high demand in some developing countries,” said Ivan Li, a fund manager with Shanghai-based Loyal Wealth Management.

“On the domestic stock market, it will also hone Fosun Pharma’s image as a leading player, as it has been endorsed by a UN-backed organisation.”