New York, August 3, 2022—On August 3, Fortune announced its Global 500 list for 2022. Shanghai Pharmaceuticals Holding Co., Ltd. (SPH) (601607.SH, 02607.HK) made the list for the third consecutive year since its first appearance in 2020. The Company ranked 430th on the list, moving up seven spots from the previous year.
The Fortune Global 500 list is regarded as the most authoritative ranking for weighing large global enterprises, measured primarily by annual revenues and profits. It is widely used as a measurement for business growth and operational efficiency, and has already been a proven authority to show the shift in the business landscape and to measure the comprehensive strength of enterprises around the world.
As a leading pharmaceutical player in China, SPH possesses unique advantages in the full industrial value chains of R&D, manufacturing, distribution and retail. The 2021 annual report states that SPH achieved an operating revenue of RMB215.8bn, representing a year-on-year growth of 12.46%. Investment in R&D amounted to RMB2.5bn, representing a year-on-year growth of 26.94%. Net profit attributable to shareholders totaled RMB5.1bn, representing a year-on-year growth of 13.28%.
In Q1 2022, SPH achieved an operating revenue of RMB56.9bn, representing a year-on-year growth of 10.27%, of which, the pharmaceutical manufacturing segment generated a revenue of RMB6.9bn, representing a year-on-year growth of 7.14%; the pharmaceutical services realized a revenue of RMB49.970bn, representing a year-on-year growth of 10.72%.
A number of initiatives at SPH yielded positive results in 2021.
Technological Innovation Empowers High-Quality Development
Adhering to innovation-driven development, SPH has made remarkable achievements through optimizing the R&D incentive mechanism, an innovation incubation system and platform, and improving organizational structure and R&D personnel allocation. As of the end of Q1 2022, there were 47 new drugs under research including 39 innovative drugs and 8 improved drugs. Milestones have been reached in multiple projects, including the new anti-tumor drugs I022 and I036, the new drug for diabetic nephropathy I001, and the new drug for stroke I037. SPH has become a leading company in the R&D and production of orphan drugs for rare diseases in China. It provides more than 20 orphan drugs on the market, targeting over 30 rare diseases.
SPH completed the first license-out deal for its novel anti-tumor drug SPH6162 (developed in-house) in June last year, a testament to the international recognition of the Company’s innovation capabilities. It also introduced many potential new drugs, including Guizhou Sinorda’s new acid suppressant P-CAB X842, KoBioLabs’s KBL697 and KBL693, two single-strain probiotics for the treatment of immune system diseases, Phagelux’s new anti-bacterial product ClyO. The Phase I clinical trial for I037, a new drug for the treatment of acute ischemic stroke, in cooperation with Taiwan Lumosa Therapeutics (6535.TW), were completed at the end of January 2022.
SPH set up the Shanghai Industrial Innovation Center for Biopharmaceuticals with Shanghai Overseas Tokyo, Shanghai Jiao Tong University School of Medicine, and Center for Excellence in Molecular Cell Science, Chinese Academy of Sciences and Zhangjiang Group. Going forward, the innovation center will:
● Aggregate the resources of top enterprises, universities and hospitals in Shanghai;
● Adopt a market-oriented operation mode;
● Bring in top talents through various channels;
● Follow the development process of new drugs from the discovery of lead compounds to the acquisition of candidate drug molecules, to clinical studies (prior to Phase II clinical trials);
● Build a systematic, efficient, high-level, and accessible drug discovery and commercialization platform to produce first-in-class drugs;
● Serve global patients’ clinical needs, and boost the original innovation of Chinese biomedicine.
Non-public Offering Boosts Transformation at SPH
On June 18, SPH ranked 2nd on the “Top 100 Pharmaceutical Wholesale and Retail Companies in China” list; its subsidiaries Huashi Pharmacy ranked 7th and Yiyao Pharmaceutical (DTP platform for new and special drugs) ranked 19th among pharmaceutical retailers. As a leading pharmaceutical distributor in China, SPH achieved an annual revenue of RMB190.73bn from pharmaceutical distribution and retail in 2021, representing a year-on-year growth of 13.42%.
SPH is committed to strengthening its pharmaceutical services innovation and becoming a leader in value-added innovation in the healthcare field:
● SPH launched life-cycle management services for innovative drugs including pre-market clinical trial supply chain support, new drug import and out-of-hospital services, innovative financial payment solutions, nationwide hospital market distribution, and general contracting of urgently needed drugs.
● It promoted SPD in-hospital supply chain management. So far, its SPD project has covered over 300 hospitals across China, with more than 1,000 professional pharmacists, becoming a vital force in modern hospital management.
SPH consolidates its strengths through network expansion, resource integration and development of innovative businesses. To date, its pharmaceutical distribution network has covered 31 provinces, municipalities and autonomous regions. To enhance its regional market competitiveness, it has recently expanded the network in Chongqing, Yunnan, Hunan, Liaoning, Tibet and Qinghai. Based on a nationwide terminal network, its subsidiary SHAPHAR strives to promote hospital supply chain services, develop new distribution and retail models. Its distribution network covers more than 30,000 healthcare institutions across China, and is highly competitive in high-end consumables, DTP and SPD. Since 2018, SPH has successfully integrated SPH KDL Health in strategy, organization, management, business, and information. In the last four years, SPH KDL Health has constantly improved its profitability, significantly enhanced its industrial competitiveness, and increased its net sales margin from 0.65% in 2017 to 2% in 2021. SPH also expands its innovative business and the non-drug segment. SPH’s “Internet+” platforms SPH Cloud Health and MediTrust Health, respectively completed Series B and Series C funding. In 2021, the Company’s non-drug segment reached a revenue of RMB24.7bn, representing a year-on-year growth of nearly 30%. Its subsidiary SPH Kyuan has introduced over 8,000 new medical devices over the years.
During the COVID-19 pandemic, SPH fully committed to its mission and corporate social responsibility with practical actions, followed the guidance of local government departments, and ensured the delivery of medical supplies to the frontline in the fight against the novel coronavirus outbreak.
SPH has been listed on the Fortune Global 500 List for three consecutive years, climbing steadily to 430th and made the list of “Pharm Exec’s Top 50 Companies” again in 2022, rising to 41st. The Company gained its competitive edge through continued investment in innovation, network expansion, and portfolio optimization. These outstanding results can also be attributed to SPH’s pillar strategies of innovation, intensive development, globalization and integration of finance and real economy, in addition to digitalization.
In the past decade, this time-honored pharmaceutical enterprise has been forging ahead to become an industry leader. As China’s pharmaceutical industry keeps growing, SPH will spare no efforts to contribute to public health.