Fosun Pharma (2196.HK) Saw Rapid Growth in 2013 Annual Results, Driven by Quick Expansion in Healthcare Services

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Tuesday, 25 March 2014, 11:06 HKT/SGT

HONG KONG, Mar 25, 2014 - (ACN Newswire) - 24 March 2014, Fosun Pharmaceutical (Group) Co., Ltd. ("Fosun Pharma" or the "Company"; stock code: 600196-SH, 02196-HK), a leading healthcare company in the PRC, is pleased to announce its audited consolidated financial results for the year ended 31 December 2013.

In 2013, the Company recorded revenue of RMB9,921 million, up by 36.31% over 2012. In terms of each business segment, revenue of pharmaceutical manufacturing and R&D business segment was RMB6,524 million, representing a year-on-year increase of 40.82%, and revenue of healthcare service business segment increased by 198.74% year on year. The growth was mainly due to the sales growth in pharmaceutical manufacturing and the manufacturing of medical diagnosis;and the business contributions from newly acquired and merged enterprises.

Chen Qiyu, Executive Director and Chairman of Fosun Pharma, commented, in 2013, the Company adhered to its business philosophy of "Innovation for Good Health", focused on its core pharmaceutical healthcare businesses, continued to develop product innovation and improve management, actively promoted the strategies of organic growth, external expansion and integrated development, and thereby maintaining a rapid growth of its major businesses.

R&D expenditures increased by more than 43% with continuous innovation in R&D system

The Company has focused on innovation and R&D in long run and continued to increase R&D expenses in 2013. The R&D expenses for the year of 2013 amounted to RMB438 million, up more than 43% over 2012, of which the R&D expenses in the pharmaceutical manufacturing and R&D segment were RMB359 million, accounting for 5.50% of the revenue of the pharmaceutical manufacturing and R&D segment.

The Company focused its R&D on therapeutic areas including metabolism and alimentary tract, cardiovascular system, central nervous system, anti-tumor and immune modulating and anti-infection, and the major products have gained leading position in each of the market segments.

In 2013, the Company had 119 pipeline drugs and vaccines; obtained production approvals for 4 drugs within the year; attained 1 license for new medicines, 9 production approvals, 10 approvals for the clinical trial for new medicines and 8 projects under clinical trial. Fotagliptin Benzoate, the Company's first innovative drug, successfully obtained the approval for clinic trial from CFDA; in addition, the Company has completed construction and selection of high-expressing production cell lines for five monoclonal antibody products, tendered applications for clinical trial to the State Food and Drug Administration ("SFDA") for four monoclonal antibody products (five indications).

In 2013, the Company creatively integrated domestic resources and continued to enhance R&D capabilities of the enterprise. The "Technology Innovation Strategic Alliance" formed by the Company with prestigious research institutes in China is one of the "industry-academia-research strategic alliances" under the national major project of pharmaceutical innovation and manufacturing. We cooperated with Shanghai Institute of Materia Medica of the Chinese Academy of Sciences to invent a new R&D model. We established a joint venture company with Dalian Wanchun Medicine Co., Ltd. to jointly develop new anti-tumor drugs with international patents. The Company has also collaborated with Shanghai Jiao Tong University to jointly invent the synthesized arteannuin technology from arteannuin. In 2013, the Company was once again awarded the "Most Innovative Pharmaceutical Enterprise in China".

Pharmaceutical manufacturing: product innovation lifted competitiveness and sales

In 2013, the Company's pharmaceutical manufacturing and R&D business witnessed rapid growth, recording revenue of RMB6,524 million, up by 40.82% over 2012 and realizing segment results of RMB1,201 million, up by 73.13% over 2012.

The sales of the Company's major products in therapeutic areas of cardiovascular system, central nervous system, blood system, metabolism and alimentary tract and anti-infection recorded year-on-year growth rates of 31.05%, 89.94%, 37.79%, 15.64% and 47.04% respectively.

Additionally, in 2013, the Company had 15 formulation items and series with sales over RMB100 million, among which sales of You Di Er, artesunate injection series and Mo Luo Dan exceeded RMB100 million for the first time and the sales of Ao De Jin and Atomolan exceeded RMB500 million. Also, the number of formulations that gained sales volume as much as RMB100 million has increased to 15 in 2013 from 11 in 2012.

Healthcare service: the high-end United Family Hospitals and private hospitals formed complete business layout

Chen Qiyu said that in 2013 the Company further increased its investment in the healthcare services segment and has largely completed the strategic deployment of its healthcare services business to combine high-end healthcare institutions in the more developed coastal cities and specialty and general hospitals in second-tier and third-tier cities in the PRC.

In 2013, the healthcare services entities controlled by the Company recorded a total revenue of RMB475 million, which represented a 198.74% as compared with 2012. In particular, the revenue of "United Family Hospital", a leading premium healthcare services brand of Chindex International Inc. ("Chindex"), recorded US$179 million, representing an increase of 17.68% as compared with 2012, reflecting the growing market demand for premium healthcare services and the strong brand recognition of "United Family Hospital". The total number of beds approved in the four hospitals in which the Company has a controlling stake, i.e. Anhui Jimin Cancer Hospital, Guangji Hospital, Zhongwu Hospital and Chancheng Hospital, was 2,090.

Chen Qiyu also noted that the healthcare services segment in China will be further opened up and the participation in the segment by social enterprises has been highly encouraged, such as by further opening up of market access (through a permitted-if-not-forbidden market policy) and encouraging social enterprises to participate in public hospital reform. In addition, pilot scheme of multiple practices in various provinces and cities has been introduced and approvals on acquisition of medical equipment have been gradually loosened, and medical insurance has been introduced into hospital system. These would provide the Company with tremendous opportunities to further expand its business in the healthcare services sector.

Benefiting from the overall environment of the pharmaceutical industry and further sharpening up core competitiveness in 2014

In addition to the fast growth in the above-mentioned business segments, the pharmaceutical distribution and retail business of the Company recorded revenue of RMB1,502 million in 2013. The Company's pharmaceutical retail brands, For Me Pharmacy and Golden Elephant Pharmacy, which had a total of over 650 retail pharmacies, recorded sales of RMB828 million, maintaining a leading market share in the pharmaceutical retail markets in Shanghai and Beijing. The Company recorded revenue of RMB1,081 million for the manufacturing of medical diagnosis and medical devices segment, representing an increase of 86.38% as compared with 2012.

In 2013, Fosun Pharma acquired Alma Lasers, a global leading provider of laser medical equipment, maintaining its global leading position in such market segment. As an important step made by the Company towards international development, it will strength Fosun Pharma's medical devices manufacturing business and help the Company build up its capabilities for innovations in the medical devices area and international operation and boost its competitive edge.

Besides, in 2013 the Company accelerated the pace of its international merger and acquisition and made aggressive progress on its internationalization strategies and increased business scale through acquisition of oversea enterprises such as Alma Lasers, Saladax Biomedical, Inc. and OXFORD.

During the Reporting Period, the Company formulated a restricted share incentive scheme, in order to further improve the Company's corporate governance, facilitate the Company's establishment and improvement to the incentive and restraint mechanism, fully motivate the Company's directors and key staff and integrate the interests of shareholders and the Company with the personal interests of managers, thereby prompting all stakeholders to focus on the long-term development of the Company.

Looking forward, Chen Qiyu noted that China's pharmaceutical industry is full of opportunities. Being a pharmaceutical enterprise with a considerable size and the first pharmaceutical group to develop internationally, the Company will benefit from the current government policies for the pharmaceutical market and industry. The Company will continue to strengthen its business operation and invest more resources to support product innovation and market expansion, and will also continue to proactively carry out mergers and acquisitions in therapeutic areas and rapidly extend the scale of its business to continuously enhance its overall competitiveness. As for the healthcare service sector, the Company will seize the opportunity and speed up its expansion.

About Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

Established in 1994, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. ("Fosun Pharma") is a leading listed company in China's pharmaceutical industry and was listed on Shanghai Stock Exchange in August 1998 and on the Main Board of the Stock Exchange of Hong Kong Limited in October 2012 (stock code: 600196-SH, 02196-HK). Its main business includes pharmaceutical manufacturing, distribution and retail of medicine, medical service, diagnostic products and medical devices. For more information, please visit www.fosunpharma.com.

Topic: Press release summary Sectors: Daily Finance, Daily News, BioTech, Healthcare & Pharm
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