SDIC leads the investment of Xuanzhu Biopharmaceutical with RMB 800 million, promoting innovation and R&D

HONG KONG, Aug. 24, 2020 /PRNewswire/ -- Sihuan Pharmaceutical Holdings Group Ltd. (HKEX: 0460 "Sihuan Pharmaceutical" or the "Company", together with its subsidiaries, the "Group") is pleased to announce that Xuanzhu Biopharmaceutical, its innovative drug research and development platform, successfully completed the A round of equity financing, introduced State Development and Investment Corporation (SDIC) as a shareholder, which subscribed for 18.6% equity interest in Xuanzhu Biopharmaceutical with RMB800 million. In the future, the two parties will conduct comprehensive strategic cooperation in the field of innovative drugs introduction and development. In addition, the financing will implement with an equity incentive plan so as to work with the management of Xuanzhu Biopharmaceutical to build a leading first-class innovative drug R&D and production platform in China.

Xuanzhu Biopharmaceutical, an innovative drug R&D platform with high quality and high growth potential

Xuanzhu Biopharmaceutical was founded in 2002. In 2012, it became a wholly-owned subsidiary of Sihuan Pharmaceutical. In 2018, Xuanzhu Biopharmaceutical spun-off and became independent, with a registered capital of RMB1.15 billion.

Different from other emerging unprofitable biotechnology companies, Xuanzhu Biopharmaceutical is one of the few domestic innovative drug companies with a complete research and development industry chain. It has not only more than a dozen innovative R&D products, but also support from leading domestic pharmaceutical company Sihuan Pharmaceutical. With strong production and commercialization capabilities, it possesses the potential of becoming an international enterprise integrating R&D, manufactuing and marketing platform.

Xuanzhu Biopharmaceutical's product pipeline covers products multiple therapeutic areas such as oncology, diabetes, metabolic diseases, digestive system, male reproduction, and anti-infection, and a number of them have commenced their late clinical stage. A key product Birociclib, a CDK4/6 inhibitor for advanced breast cancer, has successfully carried out multiple clinical trials. Another blockbuster product, Janagliflozin, an SGLT2 inhibitor for the treatment of diabetes, can reduce blood sugar while protecting the heart and kidneys. It has entered clinical phase III and is expected to bring hope to patients in China.

Xuanzhu Biopharmaceutical has a high-quality pre-clinical R&D team of nearly 200 people, including many senior scientists who have more than 20 years of industry experience in internationally renowned pharmaceutical companies before returned to China. The 200-person clinical development team includes more than 70 people with doctors, masters degrees and returned from oversea. Thus the team has strong research and development capabilities.

Relying on the platform of Sihuan Pharmaceutical, Xuanzhu Biopharmaceutical is able to quickly develop innovative drugs that are differentiated, effective and safe, with global intellectual property rights, and achieve the goal of solving the huge and unmet clinical needs in oncology, metabolic diseases and other diseases field. At present, Xuanzhu Biopharmaceutical has established branches in the United States, HKSAR and PRC, fully covering key links in new drug research and development.

SDIC cooperate with Xuanzhu Biopharmaceutical to keep up with the trend of innovation

As the world's second-largest and rapidly growing pharmaceutical market, with the support of strong policies of the government, China's pharmaceutical industry is shifting from being "primarily generic" to "primarily driven by innovation." Along with market demand and the government's incentive policies for innovative drugs, the number of clinical applications for innovative drugs in China has increased significantly since 2016.

According to data from the China Association for the Promotion of Medicines, the number of annual clinical applications for category 1 chemical new drugs increased from 220 in 2016 to 381 in 2019, of which anti-tumor drugs accounted for 44.3%. There was a lack of clear regulations on drug review time in the mainland China, however, along with the refinement of the priority review regulations for innovative drugs and breakthrough drugs, the review time will be shortened, and an outbreak period of China's innovative drugs will be expected in the next three years.

As a professional private equity management institution, SDIC has accumulated assets under management of more than RMB100 billion, with investors include financial institutions, social security funds, state-owned and private capital, and has strong capabilities. Its management team has been focused on the investment in the advanced manufacturing industry, valued technological innovation, outstanding entrepreneurs and teams, and focused on investing in life sciences, smart manufacturing, smart and new energy vehicles, information and communication technology and other fields, with rich investment experience. The fact that SDIC chose to cooperate with Xuanzhu Biopharmaceutical, is a recognition of Sihuan Pharmaceutical's strategic development vision, its powerful sales platform and its vision in seizing the trend in the innovation-driven era.

"Xuanzhu Biopharmaceutical is deploying research and development of market-leading innovative drug, and is rapidly promoting clinical research and development and marketing, thus building a strong platform." SDIC said: "We are very happy to support Xuanzhu Biopharmaceutical's highly efficient team at this exciting stage. They are using their expertise and capabilities to expand treatment options and benefit Chinese patients."

"The joining of the SDIC is an affirmation of Xuanzhu Biopharmaceutical's current achievements. We will continue to bring world-leading, unique and innovative therapeutic drugs to more clinical patients in the future," said Dr. Li Jiakui, President in Research and Development of Xuanzhu Biopharmaceutical. "With the help of Sihuan Pharmaceutical's extensive commercialization experience in China, as well as our outstanding R&D capabilities and localized development capabilities, we believe that Xuanzhu Biopharmaceutical can gain a competitive advantage in the ever-evolving clinical and regulatory environment in China, thus to occupies a place in China's medical market."

Dr. Leslie Boyd, Chief Commercial Officer of Xuanzhu Biopharmaceutical, also said, "We are very pleased to see that SDIC has full confidence in Xuanzhu Biopharmaceutical's ability in developing high-value innovative drugs. The new investment will make Xuanzhu capable of maintaining a good cooperative relationship with those partners who share the same values with us for a long time, and always use innovative therapies to continuously improve patients' lives and medical standards."

Dr. Che Fengsheng, Chairman and Executive Director of Sihuan Pharmaceutical Holdings Group, said: "The investment by SDIC has strengthened Sihuan Pharmaceutical's strategic plan: Sihuan Pharmaceutical consists of an innovative drug R&D center, a generic drug R&D center and high-quality manufacturing companies as its core, at the same time investing and incubating a batch of qualified sub-enterprises. The company hopes to bring in the initiative of each sub-enterprise through the introduction of capital, CMO and other independent operations, and to improve the efficiency and competitiveness of Sihuan Pharmaceutical, so as to adapt to MAH and series of policy changes and industry competition patterns. At the same time, Sihuan Pharmaceutical continues independent innovation, research and development and the cultivation of high-quality production enterprises as its core values, supplemented by investment, mergers, incubation, holdings, spin-offs, etc., to produce a group of independent operating subsidiary companies and help them to be able to land in the capital market soon, also add value to the parent company. This dual approach of strategic planning and core values will enable Sihuan Pharmaceutical to focus on global level, focus on the pharmaceutical field, and form the most competitive, international and professional pharmaceutical group enterprise."

About Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001, Sihuan Pharmaceutical is a pharmaceutical group with 21 subsidiaries and integrated R&D, production and marketing and sales capabilities. Because of the continuing efforts over the past decade, Sihuan Pharmaceutical has formed a R&D platform with over 1,000 researchers conducting more than 110 pharmaceutical research projects currently. More than 300 patents on innovative drugs were granted in China and over 80 are PCT patents, covering pipeline projects including important areas of diabetes, oncology, anti-infectives and non-alcoholic steatohepatitis etc.

For more information about Sihuanpharm, please visit the company website

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