Huadong Medicine Co., Ltd.
2022Annual Report
April 2023
ALetter to the Shareholders
Distinguished shareholders,
As the year ends, we usher in a new year with endless possibilities. The year of
2022 brought more challenges that forced the pharmaceutical industry to accelerate its
transform, reshuffle and reshaping in response to the gloomy situation, numerous
uncertainties, and downward pressure, which raises more challenges for
pharmaceutical enterprises’emergency response abilities and resilience.
For Huadong Medicine Co., Ltd. (“We” or “the Company”), the year of 2022
witnessed our unremitting efforts and remarkable achievements, which is the first year
for us to implement our seventh three-year planning, step forward to a new stage of
innovative transformation and development, and pull off our visions by 2030. By
continuously strengthening the strategic guidance, focusing on the primary business of
pharmaceuticals, taking active actions and seeking progress while maintaining stability,
we have accelerated our businesses quarter by quarter and successfully achieved
continuous growth against changes in the pharmaceutical industry under complicated
internal and external environments in the new era. Over the past four years, we have
kept improving our capacities, embracing more cooperation opportunities in an open
manner, and endeavoring to seek sustained development, with the focus on four major
business segments of pharmaceutical industry, pharmaceutical business, aesthetic
medicine and industrial microbiology. Taking targeted steps from multiple aspects, we
have made look-forwarding and international layout to adapt to cutting-edge
innovative technology platforms and unsatisfied market demands. The strategic
reshaping empowers qualitative changes of development paths. To date, the Company
has stepped into a new stage in both scale of operation & development and quality of
intrinsic growth.
In 2022, we made breakthrough in our operating revenue as the net profit after
deducting non-recurring profit and loss was still comparable with the highest level in
history in spite of up to 2 billion yuan of annual R&D and BD input. The Company’s
pharmaceutical industry segment has now broken through bottlenecks of growth,
witnessed stable recovery, and fostered strong resilience after gradually getting out of
the influence of multiple external factors. Remarkable achievements in strategic
transformation and positive figures further strengthen our confidence to unswervingly
seek the high-quality development driven by technological innovation. We also
launched our equity incentive plan since we were listed to motivate excellent staff
creating values for us.
In 2022, we have brought new connotations for our R&D ecology with the focus
on “advantaged, differentiated and source-based innovation” to create a new ecology
ofinnovativeR&D.AsforreforminR&D, wehavesuccessfullyincubatedourinternal
wholly-owned subsidiary - Hangzhou VicrobX Biotech Co., Ltd., established two core
technology platforms of Micro-restructuring and Micro-delivery, and set up the ADC
R&D Center to gradually create a differentiated ADC independent R&D platform. In
terms of external collaboration, we strategically held the equity of Heidelberg Pharma,
a global emerging technology enterprise based in Germany that specializes in ADC,
andestablishedcooperationinproductdevelopmenttoempowertheoncologyproducts
chain and ADC ecological chain, and further enhance our R&D ecology that features
cooperation and sharing.
In 2022, we also achieved successive milestones in R&D. ELAHERE™, a global
pioneering ADC medicine for platinum-resistant ovarian cancer co-developed with
ImmunoGen from the U.S., was the onlyADC medicine approved by FDAin 2022. Its
clinical work in China is progressed smoothly and it is planned to submit for BLA by
late 2023. HDM1002 (micromolecule GLP-1 receptor stimulant), an innovative
medicine for type 1 diabetic mellitus that is developed by us independently with global
intellectual property rights, has been successfully submitted for approval in the U.S.
and China. ARCALYST®, an overseas new medicine in urgent need for clinical
purpose introduced from Kiniksa and included in the list of priority review varieties,
will be submitted for BLA this year and is expected to put in commercialized
production in China to benefit Chinese patients. To date, the Company has launched
ongoing development programs for over 50 types of innovative and biosimilar
medicines. The Liraglutide Injection, the Company’s first biological medicine for
diabetes mellitus indications, was approved for sale in March 2023, being the first
domestic of its kind in China. It is also under normal review for weight loss indications
and is expected to be approved in 2023, which will facilitate the successful overseas
authorizations for both indications. The strategic transformation of the Company is
now gradually rewarded and new products
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