China’s Sihuan Pharmaceutical Holdings Group Ltd (HKG: 0460) has released its 2022 interim report for the first six months of the year. The firm reported RMB 1.464 billion ($204.3 million) in revenues, down 23.2% year-on-year (YOY). The decline was attributed to COVID-19 related lockdowns in the domestic market.
Business Segment Performance
Sihuan’s medical esthetics business generated RMB 98.6 million ($13.7 million), down 61.8% YOY. The generic drug segment reported RMB 1.233 billion ($159 million), down 18.3% YOY. Operating profit for the period was RMB 203 million ($26.3 million), down 77.1% YOY. Despite these declines, research and development expenses increased by 37.1% YOY to approximately RMB 457 million ($59.2 million).
Transformation to Dual-Target Business Model
Sihuan is undergoing a strategic transformation into a dual-targeted business model, focusing on medical esthetics and biopharma. In July, the company announced plans to sell off a portion of its generic drugs and other “non-core” conventional medicine businesses and assets. This move aims to concentrate management and corporate resources on high-growth areas such as medical esthetics and innovative biologics.
Medical Aesthetics and Biopharma Progress
Sihuan’s medical esthetics platform, Meiyoung, has made significant progress in the Chinese market. As of July 31, 2022, the sales channel for its botox product Letybo covered over 280 cities in 29 provinces, with new smaller dosage options. The unit also saw multiple in-licensed and in-house developed products approved during the period.
Subsidiaries Huisheng Pharm and Xuanzhu Biopharm have been advancing their product research and development. Xuanzhu has 25 drugs under development for cancer, metabolic diseases, and digestive diseases, including CDK4/6 inhibitor birociclib, bispecific antibody (BsAb) KM257, and XZP-5610, a nonalcoholic steatohepatitis (NASH) therapy, all in clinical development. Huisheng has a pipeline of over 40 drug candidates for diabetes and its complications, including insulin and analogs, traditional oral hypoglycemic drugs, and innovative drugs targeting new mechanisms such as DPP-4, GLP-1, and SGLT-2.
CDMO Business Expansion
Sihuan is also expanding its contract development and manufacturing organization (CDMO) business, having completed the integration and unified management of production bases for APIs and advanced intermediates during the first half of this year.-Fineline Info & Tech
