Shanghai Fosun Pharmaceutical : Fosun Pharma Announces 2020 Annual Results Multiple Innovative Products Launched with Significant Improvement in the Capability of Global Commercialization

(29 March 2021, Shanghai, China) 29 March 2021, Shanghai Fosun Pharmaceutical (Group) Co., Ltd ('Fosun Pharma' or 'the Group'; Stock Code: 600196.SH, 02196.HK), a leading healthcare group in China, announced its annual results for the year of 2020 ('the Reporting Period'), together with its 2020 Corporate Social Responsibility (CSR) report.

Under the guidance of the 4IN (Innovation, Integration, Internationalization, and Intelligentization) strategy, Fosun Pharma practices innovation and transformation, integrated operation and steady development. Rooted in China with expanding global business, Fosun Pharma strategically operates businesses in the pharmaceutical and health industry, including pharmaceutical manufacturing, medical devices and medical diagnosis, and healthcare services. Through its associated company Sinopharm Co., Ltd., Fosun Pharma's business extends to pharmaceutical distribution and retail.

During the Reporting Period, Fosun Pharma achieved steady growth as the revenue increased by 6.02% yoy, to RMB30,307 million; the net profit attributable to shareholders of the listed company amounted to RMB3,663 million, representing an increase of 10.27% yoy; the net profit attributable to shareholders of the listed company after deducting extraordinary gain or loss amounted to RMB2,718 million, representing an increase of 21.65% yoy. During the Reporting Period, the Group's core business, the pharmaceutical manufacturing segment, realized revenue of RMB21,880 million. The medical devices and medical diagnosis segment realized revenue of RMB5,217 million. The healthcare services segment realized revenue of RMB3,172 million.

Continues to increase R&D investment with multiple innovative products launched
Took innovative R&D as its core driver and through in-house R&D, co-development, in-licensing and incubation, Fosun Pharma had established platforms for small molecule innovative drugs, antibody drugs and cell therapy, focusing on major therapeutic areas, including oncology, immunology, '4 hypes' (hypertension, hyperlipemia, hyperglycemia, hyperuricemia) and their complications, as well as central nervous system. In the meantime Fosun Pharma keeps close track of cutting-edge technologies, such as targeted protein degradation, RNA, oncolytic virus and gene therapy to enhance its innovation ability.

During the Reporting Period, Fosun Pharma continued to increase R&D investment. The annual R&D expenditure totaled RMB4,003 million, representing an increase of 15.59% yoy; of which, R&D expense was RMB2,795 million, representing an increase of 36.94% yoy. The R&D expenditure of pharmaceutical segment was RMB3,670 million, representing an increase of 17.21% yoy, accounting for 16.77% of the revenue from the segment. In particular, pharmaceutical R&D expense increased by RMB727 million or 41.76% yoy to RMB2,468 million, accounting for 11.28% of the revenue from the segment.

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Fosun Pharma established in-house R&D platforms in China and the US since 2009, including Fochon and Henlius, and strived to improve its R&D competence through 24-hour ongoing R&D globally. In recent years, CMO office was established to manage global clinical registration, and an upgraded Global R&D Center has been set up in early 2020 to coordinate project approval and internal and external resources. It also prioritized strategic products, strengthened global clinical and registration capabilities, and improved R&D efficiency. In addition, Fosun Pharma cultivated a global Business Development team to search for the industry-leading products and technology platforms and realize the value. As of the end of the Reporting Period, there were nearly 2,300 R&D professionals (about 1,200 are with master's degree or higher), representing approximately 7% of the total number of employees in the Group. The Group had 247 pipeline projects including innovative small molecule candidates, generic candidates, biosimilars and consistency evaluation of generic candidates, of which 56 were innovative candidates.

With over 10 years of investment, multiple products have been approved for marketing and realized increasing sales in the past two years, with innovative products being the major driver for sustainable growth. Among them, Rituximab Injection (汉利康®) achieved rapid sales growth after obtaining approval for its additional production capacity (2,000L), with revenue amounting to RMB750 million for the year. The coverage of new patients was more than 50%. The new products, Avatrombopag Maleate Tablets(苏可欣®）and Trastuzumab Injection (汉曲优®), which was launched to market in August 2020, accelerated market access and have been included in the National Drug Reimbursement List, with revenue reaching approximately RMB140 million respectively.

While improving its in-house research and development capabilities and promote the launching of products under development, Fosun Pharma actively seeks collaboration opportunities with the world's leading pharmaceutical enterprises. By accessing the world's leading technologies and high-value products, the Group enriched its product pipelines and enhanced its market expansion capabilities. In terms of in-licensing, on 16 March 2020, BioNTech and Fosun Pharma announced a strategic collaboration to work jointly on the development and commercialization of COVID-19 vaccine products in Chinese Mainland and Hong Kong SAR、Macau SAR and Taiwan Region based on BioNTech's proprietary mRNA technology platform. The BNT162b2 COVID-19 mRNA vaccine has been granted Authorization for Emergency Use in Hong Kong in January 2021 and was used in the COVID-19 Vaccination Program of Hong Kong and Macau in March 2021. The phase II clinical trial in Mainland China was also in progress.

As for out-licensing, Fochon, a subsidiary of Fosun Pharma, entered into a licensing agreement with Eli Lilly in October 2020, authorizing Eli Lilly exclusive rights of a selective small-molecule BCL-2 inhibitor targeting hematological malignancies, to research, develop, manufacture, and commercialize in all countries and regions excluding Mainland China. Under the terms of the agreement, Eli Lilly will pay the Group an upfront payment up to $440 million. In addition, HLX02 (trastuzumab for injection) has been launched in the UK, Germany and Portugal through a strategic partnership with Accord.

Strengthening marketing system and global commercialization capability in shape
During the Reporting Period, Fosun Pharma continued to strengthen the construction and integration of its marketing system, formed a product line-based system matching the existing products and products to be launched, and adhered to the strategy of specialization, branding and digitalization. As of the end of the Reporting Period, Fosun Pharma had a commercial team of nearly 6,000staff, divided into multiple business units around the major product lines, covering more than 2,000 Class III hospitals and 10,000 Class I and Class II hospitals. There were around 1,500 sales professionals in the innovative drug commercialization team and around 1,000 in the OTC and online 'new retail' channels. There were around 1,000 staff in the professional marketing team in Africa, Europe and the United States. Besides, Fosun Pharma's clinical medicine, market access, brand promotion and other support systems to achieve efficient R&D realization of innovative products, and serve the implementation of more innovative drugs and comprehensive treatment programs in the future.

The medical devices segment has built a marketing network that combines global direct selling and distribution. The sales network of Breas mainly covers Europe, the United States, China, Japan and Australia, while Sisram Medical's marketing network covers more than 90 countries and regions around the world, including 7 direct sales regions.

Values ESG management and take on corporate social responsibility
Fosun Pharma has always regarded sustainable development as an important benchmark of corporate operations, and has issued corporate social responsibility report for 13 consecutive years to show stakeholders the Group's practices and achievements in the field of social responsibility. In 2020, in order to further improve its corporate governance structure, Fosun Pharma upgraded its internal ESG management structure, established the ESG Committee at the Board of Directors and its subordinate ESG working team, to carry out ongoing ESG management. Fosun Pharma strives for sustainable development in terms of health, environmental protection, occupational health and safety, staff development and business ethics. In the meantime, the MSCI ESG rating of Fosun Pharma has been upgraded from BB to BBB.

Looking forward, Wu Yifang, Chairman and CEO of Fosun Pharma, expressed that 'China's pharmaceutical and healthcare industry is still in the crucial phase of development and transformation in 2021. The opportunities and challenges coexist under the recovery time of post-COVID-19. As a large-scale pharmaceutical and medical enterprise with excellent products, Fosun Pharma takes the lead in internationalization and uses Internet technology to expand its business. Fosun Pharma will continue to accelerate its innovation and transformation, strengthen its integrated operation and expands its global market steadily. In the same time, Fosun Pharma will focus on the unmet demand in the therapeutic areas to take actions on mergers and acquisitions. As for the healthcare services, Fosun Pharma will continue to manage effective operation, and focus on disciplined clinical department construction and operation, leverage its development in specialty, so as to reinforce the leading position of private hospital management in China. Fosun Pharma will firmly follow the path of innovation transformation to provide patients with more affordable new treatment methods.'