Huadong Medicine Co., Ltd.
2021Annual Report
April 2022
To the shareholders
Dear shareholders,
Time flies. Nearly three years have passed since I served as the Chairman of the Board of Huadong
Medicine Co., Ltd, during which I have witnessed the historic changes in the pharmaceutical industry
of China. Like most domestic pharmaceutical companies, we are confronted with unprecedented
difficulties and dramatic challenges in this ever-changing era. The continued implementation of VBP
program and the negotiation on medical insurance put an end to the benefits of generic medicines,
moreover，the resurgence of COVID-19 and the instable external environment placed more
uncertainties within local pharmaceutical industry. Bearing in mind the major mission of generating
business growth, the management team of the Company struggled onward amid the pains that come
with changes, reform and transformation. It cannot be denied that the Company’s financial statements
over the past three years was not as outstanding as that in the previous time. However, all employees
in the Company weathered the test of time and flagging market, achieving innovation-driven results
that transcend financial statements by focusing on the transformation and innovation.
From2019 to 2021, whilereconsidered its positioningandvalue,theCompanyrecruitedmoretalents,
developed product pipelines faster, made greater progress in R&D capability building and achieved
more improvements in comprehensive strength than ever before, introducing tremendous changes in
and outside the Company. In the past three years, we implemented in nearly 20 BD transactions with
leading international pharmaceutical companies to create a global collaboration network and develop
diversified and differentiated innovative product pipeline in pharmaceutical and aesthetic medicine
fields, speeding up the progress of internationalization. We wasted no time in R&D, and constantly
improved our independent R&D system. At present, the Company has established an open and
science-based international R&D ecosystem with Zhongmei Huadong new drug R&D center as the
core platform and focused on endocrinology, oncology and immunology disease areas. Now the
Companyhas nearly40 innovative drugs and biosimilars under development, and proactivelycreated
a world-class ADC R&D platform, laying a solid foundation for the development of pharmaceutical
industry in the future. It achieved rapid progress in core products development. For instance, we were
the first in China to submit the application of domestic Liraglutide injection, which are now under
CDE review; the clinical trial of ADC product - Mirvetuximab moved forward in a quick manner;
and TGFR system moved to the special review procedure as China’s innovative medical device. In
addition, we facilitated the development of innovative business despite pressure and created the
unique example of the cold-chain, so as to foster a new business model. Implementing the
development strategy of domestic and international circulation, we constantly enriched the product
lines of aesthetic medicine and expanded overseas business in this field. At present, we own 35 high-
end global aesthetic medicine products featuring minimally invasive and non-invasive approaches,
and recorded rapid growth in sales revenue.Moreover,theregistrationofdomesticaestheticmedicine
products was promoted orderly, and the blockbuster product Ellansélaunched in domestic market
successfully. At the same time, we also proactively explored the new “blue ocean” of industrial
microbiology and new business layout, initiated and reserved more than 100 products, drawing a
second growth curve. Relaying on our endeavors in core business over the past three years, we are
nowmarchingforwardon an innovativepath with thecharacteristicsofHuadongMedicine, gradually
forming a new development pattern that is driven by innovation, focusing on global market, and has
multiple and diversified business lines. With initial results, we have got attention and appraisal from
the industry and market.
We owe these progresses to the deep-rooted concept of innovation and value. All employees in the
Companystraightlyfaced theweaknesses,vigorouslydiscoverednewvalue andvalorouslyovercame
uncertainties and difficulties. Our working philosophyand thought have been changed tremendously,
laying a solid foundation for innovation-driven transformation.
Inthenextthree years,wewillcontinuetouphold the“scientific-based,patient-centered”philosophy,
implement high quality development strategy with R&D, innovation and international development
at the core, and aim at creating differentiated development features, striving to become a leading
international medicine enterprise driven by scientific research and innovation, and ultimately
realizing the established long-range vision and strategy of Huadong Medicine.
Innovation and R&D remain the theme of the Company’s future roadmap. Therefore, the Co
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