HONG KONG, Aug. 27, 2014 /PRNewswire/ -- Sihuan
Pharmaceutical Holdings Group Ltd. (HKEx: 0460) ("Sihuan
Pharmaceutical" or the "Company"), a leading pharmaceutical company
with the largest cardio-cerebral vascular ("CCV") drug franchise in
China's prescription drug market,
today announced the unaudited consolidated results of the Company
and its subsidiaries (collectively the "Group") for the six months
ended 30 June 2014 (the
"Period").
Financial Highlights
For the Six months
ended 30 June
|
Key Income Statement
Items
|
RMB
Million
|
Change
|
|
2014
|
2013
|
|
Profit Attributable
to Owners of the Company
|
830.1
|
617.5
|
+34.4%
|
Revenue*
|
2,000,0
|
2,324,7
|
-14.0%
|
Gross
Profit
|
1,596,0
|
1,847,1
|
-13.6%
|
Declared Interim
Dividend per Share (RMB Cents)
|
1.3
|
4.3
|
N/A
|
|
*Due to the change in
sales strategy, there was a downward adjustment in the ex-factory
price of the Group's several key products. Meanwhile, there was a
significant decrease in distribution costs in conjunction with this
change, resulting in their profit contributions being largely the
same as their profit contributions had the change in sales strategy
not taken place.
|
Following a year of strong growth in 2013, the Group sustained
sound growth momentum in the first half of 2014, thanks to its
diversified product portfolio and timely adjustments to its
marketing strategies, and entered another stage of steady
development. Sales volume of the Group's key products recorded
impressive growth compared with the same period last year. Through
the expansion of the Group's market coverage and stepping up of
academic promotion, it was able to accelerate sales growth for its
promising products. Meanwhile, the Group increased its market
penetration into the low-end market and achieved good results for
its established products. The Group's profit attributable to owners
of the Company increased by 34.4% year-on-year to RMB830.1 million. The Board declared an interim
dividend of RMB1.3 cents per
share.
Dr. Che Fengsheng, Chairman and CEO of the Company, said,
"Despite lingering challenges in China's pharmaceutical market, our
industry-leading sales and marketing capability spoke for itself by
delivering above-market performance. Our clear development roadmap
and commitment to innovation have laid a strong foundation for
where we stand today. There is no doubt that the Group has
demonstrated its capability to move in tandem with an ever-changing
market, which attests to Sihuan Pharmaceutical's strong
fundamentals built up over past years. We reinforced our leadership
in the CCV prescription drug market with our market share rising to
10.8%. Sihuan Pharmaceutical has become the third-largest
pharmaceutical enterprise in China's hospital market in terms of hospital
purchases."
Significant Sales Volume Growth of Key CCV Products
with Contribution Surge of Promising Products
CCV Products
Thanks to a young and diversified product portfolio, sales of
CCV products accounted for 94.0% of the Company's total revenue,
continuing to be the Company's largest revenue contributor. During
the Period, the sales volume of the Group's promising products such
as Oudimei, Yuanzhijiu, Yeduojia, Danshen Chuanxiongqin, Yimaining
and Salivae Miltiorrhizae Liguspyragine Hydrochloride and Glucose
Injection grew by over 30% as compared to the corresponding period
last year. Among which, Yuanzhijiu, Danshen Chuanxiongqin and
Salivae Miltiorrhizae Liguspyragine Hydrochloride and Glucose
Injection recorded sales volume growth of over 50%. Meanwhile, the
combined sales volume of established products Kelinao/Anjieli
recorded an increase of about 20% year-on-year, while sales of
Qingtong rose by 16.1% year-on-year.
Non-CCV Products
For the Period, the Group achieved strong performance with the
sales of its non-CCV products. All of its major key products
achieved sustainable growth. Sales of antiepileptic drug Ren'Ao
rose 41.1% year-on-year, while sales of respiratory system drugs
Zhuo'Ao and Bi'Ao increased by 32.6% and 6.5% year-on-year,
respectively, and sales of Luoanming rose 15.5% year-on-year.
Digestive drug Roxatidine achieved tender wins in 3 provinces and a
supplementary tender submission in another province, in which sales
activities have since started.
Widened Market Coverage of Promising Products and Furthered
Penetration into Low-end markets for Established Products
For the Period, the Group enhanced the market coverage of
promising products through provincial tender wins and supplementary
tender submissions. As a result, market coverage of Oudimei and
Yuanzhijiu has now expanded to more than 20 provinces, while that
of Yeduojia, Yimaining and Guhong has reached over 15 provinces,
and that of Danshen Chuanxiongqin expanded to 8 provinces;
meanwhile, the Group's established products such as Kelinao, Qu'Ao,
Chuanqing and Qingtong further developed the low-end markets
through inclusion on provincial Essential Drug Lists ("EDL") and
provincial New Rural Cooperative Medical Scheme Lists ("NRCMSL").
In addition, the Group conducted clinical studies on its two core
products, Kelinao and Oudimei, to further enhance physicians'
understanding of the products.
Positive Results from Product Development
The Company has intensified efforts on innovative drug projects.
The Group's innovative drug R&D division filed an application
for Approval for Clinical Trial of Janagliflozin, a Category 1.1
innovative anti-diabetic drug, to the Food and Drug Administration
("CFDA") and has received the official acceptance of the
application. This is the Group's eighth self-developed Category 1.1
innovative drug, for which an application has been successfully
filed with the CFDA. Meanwhile, Phase I of clinical trial of
Imigliptin Dihydrochloride progressed as planned. Clinical trials
of Anaprazole Sodium and Benapenem, two other Category 1.1
innovative drugs, also commenced during the Period. Currently, the
Group is actively preparing to file an investigational new drug
application for Pirotinib to the Food and Drug Administration of
the United States.
As for generic drugs, the Group filed several new production
license applications during the Period. By the end of June 2014, production license applications for a
total of 27 generic drugs were filed. Also, more than 20 new
projects commenced development during the Period. In total, the
Group has over seventy generic drug projects under development.
Production and Quality Management
The new production system has been running smoothly since the
main production facilities received the new GMP certification. The
production facility of the Group's Active Pharmacentical
Ingredients ("APIs") business, Langfang Gaobo Jingband
Pharmaceutical Co., Ltd. ("Langfang Gaobo Jingband"), received an
Establishment Inspection Report from the U.S. FDA in the first half
of this year. The Group's cooperation with Canada-based Apotex Inc. has further deepened
and the Group's over RMB10 million
contract with India's Dr. Reddy's
Laboratories Ltd. involving the Posaconazole project was also
signed. Moreover, the Group's collaboration with Italy-based company ZaCh System S.p.A. and
Israel-owned company Taro
Pharmaceutical Industries Ltd. also commenced as planned.
Future Prospects
Fueled by accelerated urbanization and the ageing of
China's population, the rigid
demand in the domestic pharmaceutical market will continue to grow.
Also, the market potential brought by national medical insurance
coverage is far from fully realized. On the other hand, the country
has been curbing the excessive growth of medical expenditures, and
the tightening of hospital medical budgets in first tier cities,
lower provincial tendering prices, and the deepening reform of
medical institutions will all exert pressure on pharmaceutical
enterprises. Moreover, a rising industrial threshold, rising
technical standards and stringent regulatory controls will speed up
the polarization and consolidation of the pharmaceuticals industry,
and quality resources will flow to leading enterprises. With
further consolidation and integration in the industry,
pharmaceutical companies with comprehensive operational advantages
will have more opportunities for their development and for
long-term success.
Looking ahead, the Company plans to continue to tap potential of
its strong existing product resources. To support the rapid and
sustainable growth in sales of its promising products, the Group
will continue to enhance both horizontal expansion by seizing all
opportunities for tender wins and supplementary tender submissions
and vertical expansion in the more economically developed regions.
For the products that are either at the earlier stages of market
development or were recently launched to the market, the Group will
step up its efforts in both academic promotion and market
expansion. Sales of the Group's established products is set to
achieve sustainable growth from further expansion in the low-end
markets through inclusion on more provincial EDLs and provincial
NRCMSLs. Meanwhile, the clinical usage of established products has
been further expanded by entering various official medicine usage
guidelines.
The Group will maintain strong sales and marketing capabilities
by making prompt adjustments to its marketing strategies and
continuing to optimize its marketing network according to changes
in the market. To carry forward the Group's long-term growth
momentum, the Group will continue to produce a steady stream of
product resources through three major channels, namely its
innovative and generic drug development platform, mergers and
acquisitions and collaboration with international companies.
Dr. Che concluded, "Moving forward, Sihuan Pharmaceutical will
continue to commit itself to product diversification through
R&D, product collaboration and M&A, focusing on proprietary
drugs in major therapeutic areas. We will fully realize the
potential of our product resources through our flexible sales and
marketing strategies and the expansion of our national network. We
expect to launch a number of innovative proprietary drugs and
blockbuster generic drugs after three years, which are
complementary to the existing product portfolio, and will continue
the cycle of high growth to bring Sihuan Pharmaceutical to new
heights. I am fully confident in Sihuan Pharmaceutical's capability
to achieve its 2014 full-year target and stride towards its future
development. It is my firm belief that we are entering a phase of
stable and sustainable growth. Upon the launch of our innovative
drugs, Sihuan Pharmaceutical will be one step closer to becoming
the most competitive, globally-recognized Chinese pharmaceutical
company."
About Sihuan Pharmaceutical Holdings Group Ltd.
Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. is a
leading Chinese pharmaceutical corporation and the largest
cardio-cerebral vascular drug franchise in China's prescription drug market by market
share. The Company also became the fourth largest pharmaceutical
company in terms of hospital purchase in China's hospital market by the end of 2013.
The success of the Company can be attributed to its differentiated
and proven sales and marketing model, extensive nationwide
distribution network, young and diversified product portfolio, and
strong R&D capabilities. The Company's current products
encompass the top five medical therapeutic areas in China: cardio-cerebral vascular system,
central nervous system, metabolism, oncology and anti-infectives.
Its major products such as Kelinao, Oudimei, Yuanzhijiu, Chuanqing
and Qu'Ao are widely used in the treatment of various
cardio-cerebral vascular diseases.
SOURCE Sihuan Pharmaceutical Holdings Group Ltd.