Hang Seng Index constituent Sino Biopharm (HK0.1177) held its first half-year results conference and the first investor day in Beijing on August 24th, where the new CEO Mr. Tse, Eric S Y made his debut. According to the needs of innovation and internationalization strategy, Mr. Tse, Eric S Y said that Sino Biopharm will promote operational reform and continue to reduce costs and increase efficiency through a "combination" of five major aspects: R&D efficiency, production efficiency, marketing efficiency, management efficiency and culture building.

Mr. Tse, Eric S Y, CEO of Sino Biopharm

The semi-annual results announced on the evening of August 23rd show that in the first half of this year, the operating revenue of Sino Biopharm reached 15.19 billion yuan (RMB, the same below), an increase of 5.9% year-on-year, and financial management remained sound, with capital reserves of about 22.24 billion yuan. In terms of expense, the company continued to increase its investment in R&D on the one hand, with total R&D investment reaching RMB 2.19 billion in the first half of the year, an increase of 16.5% year-on-year. On the other hand, the cost reduction and efficiency enhancement effect bring remarkable results, maintaining a five-year downward trend, which better supports the company's innovative R&D and shareholders' return.

On July 28th, 2021, Mr. Tse, Eric S Y took over the position of Chief Executive Officer of Sino Biopharm, and the management of Sino Biopharm will lead the company to develop a broader pharmaceutical market with a clear division of labor. The Chairwoman of the Board of Directors, Miss Tse, Theresa Y Y, will focus on the Group's strategic planning, internationalization, capital market operations, and matters related to listed company; the Chief Executive Officer (CEO), Mr. Tse, Eric S Y, will focus on the operation and management, organizational optimization and efficiency improvement of all subsidiaries of the listed company.

Enhancing R&D efficiency to stabilize generic drug fundamentals

Among the five aspects of operational reform, Mr. Tse, Eric S Y particularly emphasized R&D efficiency improvement. He said that the company will further integrate the resources of Sino Biopharm and its subsidiaries. In terms of domestic and overseas BD mergers and acquisitions, the company will take the group as the grip to lay out four core areas of product projects, namely, oncology, surgery/analgesia, liver disease and respiratory, and combine the resource advantages of each subsidiary for precise adaptation to accelerate product implementation.

He cited some examples, such as the Group's leading investment in Yiyi Bio, and the introduction of a new tumor drug in increasing the amount of white blood cell, which will be commercialized by member company CTTQ; the Group's introduction of liver disease products from Anyuan also landed in CTTQ; in addition, the Group will explore cooperation with Japanese companies to strengthen the pipeline layout of member company Tide.

"In terms of the mechanism for setting up R&D pipeline, we used to be producing more generic drugs and innovative drugs with high certainty, which was a big and comprehensive mindset. In the past two years we have made many adjustments to focus more on innovation." Mr. Tse, Eric S Y introduced that the company's R&D investment in innovative drugs and generic drugs has been adjusted from 50 to 50 in the past to more than three quarters in innovative drugs, more focused on the four major therapeutic areas, and changed from "big and comprehensive" to "fast and accurate".

Sino Biopharm's performance report shows that it has continued to accelerate its innovation and transformation in recent years, with R&D investment of RMB 2.19 billion in the first half of the year, up 16.5% year-on-year and accounting for 14.4% of the total. Innovative drugs have played a more prominent role in promoting performance, with revenue totaling 3.49 billion yuan, accounting for 22.9% of revenue, up 14.2% year-on-year. The half-yearly report also disclosed that the company's revenue of innovative drugs will exceed 10 billion yuan in 2023.

Editor: Li Mengzhan