Two-wheel Drive Strategy in Sihuan Medical Aesthetics and Biopharmaceuticals
Successfully Transformed to China’s Leading Medical Aesthetic and International Biopharmaceutical Company
Total revenue Increased by 33.6**% to RMB** 3,291.3 million
Declared the Proposed Final Cash Dividend per Share was RMB1.3 Cents and the Proposed Special Cash Dividend per Share was RMB9.5 Cents
HONG KONG, 31 March 2022, – Sihuan Pharmaceutical Holdings Group Ltd. (HKEX: 0460 “Sihuan Pharmaceutical” or the “Company”, together with its subsidiaries, the “Group”) is pleased to announce its annual results for the 12 months ended 31 December 2020 (the “during the Year”).
In 2021, the Group fully promoted the two-wheeled strategy of Sihuan medical aesthetic and biopharmaceuticals, and successfully realized the transformation from traditional generics drug company to leading innovative drugs and medical aesthetic leading company. During the Year, the Group's total revenue increased by 33.6% to RMB 3,291.3million, and gross profit increased by 27.9% to approximately RMB2,448.5 million. The Board declared final cash dividend of RMB1.3 cents and special cash dividend of RMB9.5 cents.
The increase in total revenue was mainly due to the Group’s new business segment, the medical aesthetics segment, revenue of which increased by 1,383.3% to RMB 399.0 million, and segment profit before tax increased significantly by 971.1% to RMB 248.5 million. The strong sales performance was mainly driven by Letybo®, which was officially launched in February 2021 and successfully achieved rapid sales, actively contributing to the performance of the Group. Besides, the generic medicine segment achieved a revenue of RMB2,598.1 million, representing a year-on-year increase of 18.2%, which showed that the impacts of Key Monitoring List Products on the generic medicine business of the Group have come to an end and the performance of generic medicine segment has entered the upward channel.
The Group continued to ramp up the investment in the R&D to promote the rapid amplification in value of the pharmaceutical segment. During the Year, the R&D expenses (including Xuanzhu Biopharm and Huisheng Biopharmaceutical) were RMB868.1 million, representing an increase of 19.0% over the R&D expenses of RMB729.2 million for the same period in 2020, accounting for 26.4% of total revenue. The high and continuous R&D investment mirrors the confidence and determination of the Group in continuous R&D and innovation, and at the same time exactly enhanced the value of R&D segment significantly for the Group.
The Group’s financial position remained solid. As of 31 December 2021, the Group’s cash and cash equivalents plus wealth management products amounted to approximately RMB5,791.7 million, and the total amount of cash and cash equivalents plus wealth management products, net of interest-bearing bank borrowings and other borrowings, was approximately RMB4,747.0 million. The Group's debt-to-equity ratio remained low at 12.6%.
2021 is the Year of Turning Point, Successfully Realized the Transformation to Medical Aesthetic and High-quality Medicine
In 2021, the Group successfully realized the transformation from traditional generics company to leading innovative drugs and medical aesthetic company. The medical aesthetics platform Beijing MeiYan KongJian Biology Medicine Co. Ltd. (MeiYan KongJian) under the Group realized the growth both in quality and quantity and penetrated into the core area of medical aesthetics by means of self-development, acquisitions and mergers, joint venture cooperation, exclusive distribution and other ways, expanded the medical aesthetics product portfolio. Meanwhile, South Korea’s No.1 Botulinum toxin Letybo® was successfully launched in February 2021. The self-developed pipelines own more than 10 Class III products and almost 20 Class II products. In respect of the acquisition of business, the Group has completed the wholly-owned acquisition of Genesis Biosystems, Inc., covering the fat harvesting system LipiVage®, and also established a joint venture with Bluepha to jointly develop PHA microspheres and bio-manufacturing-based regenerative medicine materials.
The Group has also achieved rapid growth in its pharmaceutical business. During the Year, the Group successfully incubated two innovative drug platforms, namely Xuanzhu Biopharmaceutical Co., Ltd. (Xuanzhu Biopharm), a leading biopharmaceutical company in China focusing on oncology with comprehensive innovative drug self-development capabilities in both small and large molecule areas, and also namely Jilin Huisheng Biopharmaceutical Co., Ltd. (Huisheng Biopharmaceutical), one of the few domestic integrated R&D, production and marketing platforms to achieve full product coverage in the fields of diabetes and complications. The Group is changing from “focusing on generic drugs" to "innovation-driven", to continuously promote the long-term development of the Group’s pharmaceutical business segment in the field of innovation. In addition, the active pharmaceutical ingredients (“APIs”) platform, Jilin Kangtong Pharmaceutical Group Co., Ltd (“Jilin Kangtong”) Jilin Kangtong continued to develop its API business under the integrated strategy of “API + CDMO” and promoted the gradual implementation of CDMO/CMO business. The high-end generics under the generics business platform have been successively approved and marketed, which continues to provide revenue and becomes a strong “cash cow”, ensuring that the Group’s pharmaceutical business segment becomes an innovative drug enterprise without a money- burning model.
And the three core capabilities of the Group support the above business development and produce favorable synergies. These include having very strong registration capabilities, Sihuan Pharmaceutical is the first enterprise to bring Korean botulinum toxin into the Chinese market and can also complete the registration of self-developed varieties in a very short-term, which brings first-mover advantage for the launch of products. Secondly, the Group has a high-efficiency and low-cost production platform, and its mastery of production capacity and raw materials enables the Group to have a strong cost advantage to achieve rapid industrialization development. In addition, the Group also has the market-recognized medical academic marketing ability. On the professional and efficient academic marketing platform covering the whole China, the professional marketing team and business sales network of the Group not only can promote the continuously rapid penetration of existing products, but also endow the new launched products with strong “monetization” ability.
Building a Leading Medical Aesthetics Platform based on the Rigor and Innovation of Pharmaceutical Companies in China
Taking a foothold in Chinese medical aesthetics market characterized by high growth and low penetration rate, Sihuan Pharmaceutical is dedicated to building a leading enterprise of medical aesthetics full product matrix by leveraging the rigor and innovation of pharmaceutical companies. Since the exclusive distribution agreement entered in 2014 regarding the botulinum toxin Letybo®, after years of great efforts, MeiYan KongJian , as a focusing on the “one-stop” new medical aesthetics platform, had grown from a platform of single product distribution into an integrated medical aesthetics platform on R&D, production and marketing with various self-developed products or distribution products, strong marketing abilities and full product matrix by means of globalized layout, comprehensive and professional product matrix, strong R&D and registration capabilities, low-cost localized production and diversified marketing abilities and comprehensive channel coverage in 2021.
Letybo®, as the leading product of Hugel and exclusively distributed by MeiYan KongJian, ranked first in terms of sales in the botulinum toxin market of South Korea for five consecutive years from 2016 to 2020, representing a market share of approximately 50%. Letybo® is the fourth type A botulinum toxin product approved for launch in the market of China and the first of its kind from South Korea. With its unique advantages of high quality, high efficacy and high safety, Letybo® has been highly recognized and concerned by the industry, doctors and consumers, and its sales volume has increased rapidly after launch in February 2021. The annual sales revenue of Letybo® reached RMB399.0 million. As of the end of January, it has been marketed to nearly 2,500 medical aesthetics institutions nationwide, and more than 430 institutions out of the top 500 institutions. In addition, type A botulinum toxin for injection Letybo® 50U has also officially received the marketing approval from the NMPA in February 2021. With the approval of the new product specification, Letybo® 50U has enriched product specifications and types on the basis of the previously launched Letybo® 100U, which will be conducive to the expansion and market popularization of Letybo® standard products.
In addition to the exclusive distribution of Hugel’s products, MeiYan KongJian has been constantly enriching and expanding its product portfolio. Through “self-development + exclusive distribution”, has built a whole medical aesthetics product matrix by virtue of strong self-development and BD abilities with an aim of covering the whole life cycle needs of beauty lovers and with its product layout covering dozens of high-quality medical aesthetics products, including the filling, shaping, supporting, supplementing, optoelectronic device, body sculpturing, skin care and others to provide non- or minimally invasive medical aesthetics comprehensive solutions, and has become more diversified and internationalized.
During the Year, the Group also made positive progress in the self-developed pipeline of medical aesthetics products. Currently there are more than ten types of class III medical device products in the self-developed product pipeline, including the first-generation “PLLA filler” and the second-generation “PCL filler”, as well as dozens of class II medical device products, among which, the Group’s self-developed and produced three types of products, namely PLLA gel (product name: Karlian®) (2ml/unit), medical skin care gel and medical skin repair gel, have obtained the medical device registration certificate approved by the NMPA. The indications of liraglutide developed by the Group for obesity have also entered into the development plan communication of the clinical phase III trial.
MeiYan KongJian’s has strong in-house R&D and technology transformation capabilities to support the rapid progress of the above self-developed pipelines. During the Year, MeiYan KongJian has established the Meiyen Laboratory in Los Angeles, the United States, to conduct innovative technology introduction, independent research and development of new generation medical aesthetics products and biomaterial, and the technology transformation and manufacture in China. The R&D center established in China is responsible for the improvement in existing medical aesthetics products and the exploration of new applications, and the industrial implementation of the cutting-edge technologies developed by the US R&D center. Meanwhile, it has in-depth cooperation with a number of well-known domestic research institutes and colleges to build strong R&D capabilities.
Faster realization has been seen in BD products. Relying on its strong registration and marketing capabilities, the Group has signed exclusive BD cooperation with a number of global leading enterprises at home and abroad to further expand its product portfolio of medical aesthetics products and realize rapid increase in sales scale. During the Year, the Group started its layout in the market of embedding thread products and entered into an exclusive distribution agreement with Dongbang Medical Co., Ltd. of South Korea to introduce its two types of products, namely absorbable suture and incontinence sling kit. In January 2022, the first layout of the Group in the optoelectronic equipment market was implemented. The Group entered into an exclusive distribution agreement with South Korea VIOL Co., Ltd in respect of the SYLFIRM XTM (golden microneedle) product and obtained the exclusive distribution right of the product in Mainland China, Hong Kong and Macau.
In addition, the Group further expanded its product matrix through mergers and acquisitions, and joint ventures. In December 2020, the Group wholly acquired the entire equity of Genesis, a manufacturer of high-quality aesthetic and biomedical products in the United States. Genesis specializes in microchannel system and fat collection system. It is worth mentioning that in June 2021, Meiyen Laboratory Inc, an American subsidiary of the Group, has entered into a strategic cooperation with Genesis on this product and obtained the exclusive distribution right for this product in Greater China and South Korea. In January 2022, the Group further expanded its product portfolio and entered into core areas. It signed an agreement with Bluepha Microbiology, whereby the two parties will establish a joint venture to jointly develop PHA microspheres and bio-manufacturing-based regenerative medical materials, and the two parties will jointly complete the research and development, compliance declaration and subsequent commercial promotion of the products. The strategic cooperation between the Group and Bluepha Microbiology to jointly establish a joint venture gives the Group an opportunity to enter the huge industrial blue ocean of synthetic biology in advance and successfully take the first step in the vertical extension from the medical aesthetics industry end to the upstream raw material end.
In order to realize the industrialization of R&D products, Meiyan Kongjian has set up two high-efficiency and low-cost production bases in China, with a total area of 14,000 square meters. Currently, nine production lines have been set up, covering pre-filled products, lyophilized powder injection products, active equipment, dressings, etc.
Transformation of Pharmaceutical Business from a Traditional Generics to an Innovative Drugs to further Build a leading Biopharmaceutical Company in China
Meanwhile, the Group also adheres to the path of independent R&D and continuous innovation, and makes a strategic transformation to an international leading biopharmaceutical enterprise, successfully incubated two innovative drug platforms. Among them, Xuanzhu Biopharm began to hatch innovative drug sector in 2012 which focused on the self-development of tumor drugs taking the lead in the industry. It is one of the companies in China with the most comprehensive coverage in breast cancer. Huisheng Biopharmaceutical was incubated in 2014, focusing on the field of diabetes and complications, with nearly 40 products in the pipeline and became one of the few domestic integrated R&D, production, and marketing platforms to achieve full product coverage in the fields of diabetes and complications.
Rapid progress has been seen in Xuanzhu Biopharm’s self-developed product pipeline, with over 25 innovative drugs under development, targeting areas such as oncology, metabolism and digestion. Focusing on major diseases, big markets and multi-target layout of same diseases, Xuanzhu Biopharm has made a comprehensive layout for the main targets of breast cancer in the key track, and is one of the companies with the most comprehensive layout in the breast cancer track in China.
During the Year, in the field of breast cancer, the blockbuster product Birociclib, the class I new drug candidate of Xuanzhu Biopharm, CDK4/6 inhibitor has obtained the approval for the conduction of phase III clinical trials from the Center for Drug Evaluation of NMPA; in the field of non-small cell lung cancer (NSCLC), XZP-3621, Xuanzhu Biopharm’s new drug, has obtained approval for the commencement of phase III clinical trials from the Center for Drug Evaluation of NMPA, it is also the first product of Xuanzhu Biopharm in the field of NSCLC entering key development stage; In the field of solid tumors, XZP-5955 tablet, a self-developed Category 1 new drug of Xuanzhu Biopharm, has received the notice for drug clinical trial approvals during the Year, and is expected to be the core product of dual targeted tyrosine kinase inhibitor for the second generation of NTRK and ROS1 with independent intellectual property rights in China; in the field of digestion, the NDA for the self-developed Anaprazole Sodium Enteric Dissolve Tablets has been accepted by the NMPA, as the only Chinese domestically self- developed PPI inhibitor of the new generation, the safety and symptom relief abilities of anaprazole sodium developed by the Group are the best-in-class among similar products. This NDA for anaprazole sodium was the first NDA submitted by Xuanzhu Biopharm, and its acceptance marks a new milestone for Xuanzhu Biopharm to move from research and development to commercialization.
Xuanzhu Biopharm also continuously strengthened the BD business expansion. It cooperated with a number of biotechnology companies to introduce blockbuster products and enrich its own product pipeline during the Year including, XuanzhuBiopharm completed its acquisition of Beijing Combio Pharmaceutical Inc. (“Combio Pharmaceutical”) in early 2021. The company has two antibody technology platforms, “Mab Edit” (antibody editing) and “MebsIg” (antibody editing bispecific antibodies); its main products include KM257, a bispecific antibody drug targeting bile duct cancer, breast cancer and gastroesophageal cancer, and KM501-ADC, a broad-spectrum anti-tumour antibody drug targeting breast, gastric, colorectal and lung cancers with low HER2 expression fully expanding the depth and breadth of the Company’s innovative drug product pipeline and further enhancing its innovation drive. In August 2021, have agreed to collaborate with the U.S. company HB and will jointly develop a novel targeted protein degradation technology, including three potential non-druggable targets for FICs, pioneering the molecular glue pipeline of innovative drugs, it represents a revolutionary drug discovery opportunity and is anticipated to bring about a paradigm shift in modern healthcare, and Xuanzhu Biopharm will acquire the right to develop, manufacture and commercialize the co-developed programs in the Greater China region; In September 2021, Xuanzhu Kangming, a large molecule biological drug platform of Xuanzhu Biopharm, and WuXi XDC, a global CDMO company dedicated to end-to-end bioconjugates services under WuXi Biologics (Cayman) Inc. (stock code: 2269), have reached a collaboration on the development and manufacturing of the innovative oncology drug KM501, a bispecific antibody drug conjugate (ADC). In the same month, entered into a collaboration with SignalChem Lifesciences Corporation and licensing agreement for the development and commercialization interests of SLC-391 (currently known as XZB-0004), a highly potent and highly selective AXL targeting inhibitor, in the Greater China region, pursuant to which the Group will obtain the exclusive research, development, manufacture and commercialization rights for each indication of XZB-0004 in the field of oncology treatment in the Greater China region (Mainland China, Hong Kong, Macau and Taiwan).
Xuanzhu Biopharm’s has proved its continuous innovation capability with the rapid clinical progress of R&D pipeline and the Group’s forward-looking layout have been recognized by the capital market. In December 2021, Xuanzhu Biopharm completed a Series B financing of over RMB600 million,the post-investment valuation is nearly RMB7 billion.
Huisheng Biopharmaceutical was incubated in 2014, after seven years of construction and development, Huisheng Biopharmaceutical has a strong production capacity of over 100 million sticks yearly, ranking among the top in China, which can support an annual output value of 10 billion, and brings cost-effective production advantages by virtue of its large production capacity and high quality characteristics. Riding on the strong sales resources of its parent company Sihuan Pharmaceutical, Huisheng Biopharmaceutical also has the capacity for rapidly increasing sales volume. With full-coverage and multi-level product layout, leading and blockbuster R&D pipelines, and strong and comprehensive strategic resources, Huisheng Biopharmaceutical is gradually becoming a biopharmaceutical leader in comprehensive solutions for diabetes and complications.
There is a large market opportunity in the diabetes market. Currently, Huisheng Biopharm focuses on the R&D, production and sales of drugs for diabetes and complications. Its pipeline has more than 40 products, of which a number of products are in phase I to phase III clinical trials. During the Year, the progress in the development of a number of Huisheng Biopharmaceutical’s products reaped milestones. Among them, the self- developed NDA of Insulin Aspart Injection, Insulin Aspart 30 Injection and Insulin Aspart 50 Injection has been accepted by NMPA. Huisheng Biopharmaceutical is currently the only company in China that has simultaneously applied for the biologics license of all types of insulin aspart and with all applications having been accepted. In addition, the self-developed insulin degludes and insulin aspart injection developed by Huisheng Biopharmaceutical has successfully obtained the approval for the conduction of clinical trials from the NMPA, with its research and development progress being the first with respect to biosimilar in China. The self-developed liraglutide project for the treatment of type 2 diabetes and obesity, has completed its phase I clinical study and obtained preliminary bioequivalence results on pharmacokinetics and pharmacodynamics.
During the Year, Huisheng Biopharmaceutical entered into a strategic cooperation agreement with Porton Pharma Solutions Ltd. on 27 April. Pursuant to the strategic cooperation agreement, Huisheng Biopharmaceutical and Porton Pharma will strategically cooperate in the therapeutic areas of diabetes and related complications in relation to the development and supply APIs and the co-development and launch of related preparations.Targeting the diabetes and complications market with huge potential in China, in the future, with the gradual implementation of Huisheng Biopharmaceutical’s product pipelines and the continued emergence of innovative products, Huisheng Biopharmaceutical will become the leading biopharmaceutical company in China to achieve full product coverage in the field of diabetes and complications, reaching continuous value amplification.
In addition, the Group's new business has been successfully incubated and promoted new growth momentum in the future. In the fields of modern Chinese medicine and industrial hemp, Jilin Sihuan Aokang Pharmaceutical Co., Ltd., a subsidiary of the Group, has seized the development opportunity and prioritized a comprehensive layout. In the field of pharmaceutical manufacturing, Aokang Yaoye has 164 production varieties of Chinese medicines and chemical medicines with approval numbers, of which 128 varieties are national medical insurance varieties, and 4 national exclusive varieties are “Haitianyishen Capsule”, “Niuhuang Qingnao Kaiqiao Pills”, “Caoxian Hepatitis B Capsule” and “Gandan Shuangqing Granules”. In the field of industrial hemp, aiming at the R&D and industrialization of high-content CBD medicinal and medical materials, the Group’s subsidiary Jilin Aokang Yaoye explores the entire industrial chain from upstream cultivation, extraction and processing to downstream application, and is committed to building a R&D, production and marketing center of industrial hemp in northern China.
Benefiting from global capacity transfer and domestic policy dividends, China’s CDMO market is expected to reach US$52.6 billion in 2024, and is expected to reach the level of US$100 billion in the future. In 2020, the Group revitalized its redundant API production resources and production capacity from its subsidiaries, integrated the business of some subsidiaries and established Jilin Kangtong, and adhered to implement the integrated strategy of “API + CDMO ” and aims to become a leading integrated CDMO company in the field of pharmaceutical intermediates and APIs. After a year of development, the Group has successfully built a CDMO/CMO platform with approximately 180 projects and about 40 customers. The Group has also cooperated with domestic leading CDMO companies. In addition, the Group has started the equity acquisition of Jilin Aotong Chemical Co., Ltd. and Jilin Jiahui Chemical Co., Ltd. through Jilin Shengtong, a subsidiary of the Company since 2020. As at 31 December 2021,, the Group held 100% equity interest in Jilin Aotong and 75% equity interest in Jilin Jiahui, respectively. The acquisition will be taken as the key link in Group’s entire industry chain layout.
Generic Drugs Become Stable “Cash Cow” of the Group to Gurantee Long-term and Steady Development of the Group
The Group continues to promote the R&D progress of generic drugs, the generic drug platform of the Group has nearly 100 products under development, dozens of which are high-end generic drugs with high technical barriers. During the Year, the Pantoprazole Sodium Injection (40mg/unit) and Octreotide Acetate Injection (1ml: 0.05mg, 1ml: 0.1mg, 1ml: 0.3mg) developed by the Group have obtained the notice of approval of supplemental applications on the products that passed the consistency evaluation issued by the NMPA. In addition, eight drugs developed by the Group such as Rivaroxaban Tablet (10mg and 15mg), Ambroxol Hydrochloride Injection (2ml: 15mg), Lacosamide Tablets (50mg and 100mg), Moxifloxacin Hydrochloride and Sodium Chloride Injection, Caspofungin Acetate for Injection (50mg), Clopidogrel Bisulfate Tablets (75mg), Fondaparinux Sodium Injection (0.5ml: 2.5mg) and Ticagrelor Tablet (60mg and 90mg) have obtained the Drug Registration Certificate issued by the NMPA, approving the manufacture of the drugs.
During the Year, Hainan Sihuan Pharmaceutical Co., Ltd., a subsidiary of the Group, entered into a general marketing services agreement with Pharmadax (Foshan) Co., Ltd. for the products relating to the Metoprolol Succinate Sustained-release Tablets (23.75mg/47.5mg/95mg/190mg) on 30 March 2021, and the Group owned the exclusive marketing rights for the Product in the mainland of the PRC. Subsequently, Metoprolol Succinate Sustained-release Tablets (47.5mg, 95mg) were granted the Drug Registration Certificate from NMPA in September 2021. Among them, the key core product, Kelinao (Cinepazide Maleate Injection), was approved for a new indication through a large-scale evidence-based clinical study with 1,301 cases, demonstrating its clinical value in treatment for cerebrovascular disease and is the only approved drug in the field of stroke treatment since post-marketing clinical studies were conducted in China.
The Group is expected to continue to get Kelinao back to NRDL through evidence-based medicine and achieve a resurgence in sales. The high technology barrier product Non-PVC Solid- liquid Double Chamber Infusion Soft Bag (the “Non-PVC Solid-liquid Double Chamber Bag”), which includes “non-PVC solid-liquid double chamber bag for cefuroxime sodium/sodium chloride injection”, “non-PVC solid-liquid double chamber bag for ceftazidime/sodium chloride injection” and “non-PVC solid-liquid double chamber bag for cefodizime sodium/sodium chloride injection”, as well as “non-PVC solid-liquid double chamber bag for cefodizime sodium/5% glucose injection”, has obtained drug registration approval. This product has a high R&D technology barrier with a long development period and is expected to achieve rapid growth after its official launch.
Future Prospects
Dr. Che Fengsheng, Chairman and Executive Director of Sihuan Pharmaceutical Holdings Group commented, “2021 is very special for Sihuan Pharmaceutical, and it is also the year of turning point. Throughout this year, Sihuan Pharmaceutical builds the Group’s product pipeline with high-quality ingenuity，and successfully realized the transformation from traditional generics company to leading innovative drugs and medical aesthetic company. The business and corporate value of the Group will further realize upgrade in 2022 based on the high growth of 2021. For both medical aesthetic and pharmaceutical business will step in the product harvesting period. The self-developed product pipeline will be gradually launch on the market or achieve phased clinical trial results, and more projects in product introduction, acquisition and merger will be gradually implemented, in order to further expand the product pipeline, build a complete product matrix and grow steadily. The Group will continue to implement the two-wheel drive strategy of “medical aesthetic plus pharmaceutical” with high efficiency, further achieve the strategic goal of building China’s leading medical aesthetic and biopharmaceutical company, and bring more and better investment returns to the respected shareholders and investors who have always firmly believed in and supported the Group.”
Looking forward to the future development of medical aesthetic business, the Group’s medical aesthetic business will bid farewell to the single product distribution sales model, instead, it will draw on the development of the international giant Allergan, to achieve the goal of building a leading domestic medical aesthetic platform through comprehensive product matrix, “self-developed + BD” dual engine-driven and overseas high-quality mergers and acquisitions. The domestic R&D center of the Group will continue to promote the R&D of medical aesthetic products. Dozens of class II products, class III PLLA filler and PCL filler in the self-developed product pipeline are expected to launch to the market successively in the next few years. In addition, the Group is using the Meiyen Laboratory Inc established in the United States as the Group’s overseas product R&D and introduction center. It will continue to introduce overseas cutting-edge medical aesthetic technologies and products,and bring them back to China for technology transformation and product production and sales. The Group will inherit the high-quality and leading production capacity of Sihuan Pharmaceutical in the past, realize the large-scale production of various new medical aesthetic products through three domestic production bases, and rapidly increase its volume of new products in the market through the Company’s experienced sales team and professional marketing network covering the whole country.
In terms of pharmaceutical business, the Group will further focus on and accelerate the process of transformation and development to independent R&D and innovative drug enterprises. The innovative drug platform is on the threshold of realizing a leap from product R&D to commercial development，and launching the first new drug application respectively. Among them, Xuanzhu Biopharm will continue to promote the product R&D and insistently adhere to independent R&D and continuous innovation. It aims at transforming the R&D investment into profit and from Biotech to Biopharma, so as to become a leading innovative drug company focusing on the field of tumor drugs as well as small molecules and large molecules with the capabilities to develop comprehensive innovative new drugs in China. Through a complete layout of multi mechanism, multiple variety of diabetes pipeline, Huisheng Biopharmaceutical provide full coverage and comprehensive treatment solutions. With its localized production and cost advantages, Huisheng Biopharmaceutical will build a nationwide online and offline dimensional sales network to further achieve the strategic goal of building a biopharmaceutical leader in the field of diabetes and complications with a full product matrix coverage. In terms of generic drug business, the Group will continue to promote the large-scale growth of the registration, listing and sales of high-quality and high- end generic drugs, continuously being the Group’s steady “cash cow” to ensure the long-term and steady development of the Group. Through its strong registration ability, production capabilities of high efficiency, low cost and full coverage of various dosage forms and a comprehensive and professional academic marketing platform, it ensures the successful listing of existing products and new products and the continuous growth of sales volume, so as to provide the Group with stable and sustainable cash flow. At the same time, it ensures that the innovative drug sector can be continuously invested in R&D so as to promote the release of enterprises value without relying on external emergency aid.