“If you’re not going overseas, you’re going out,” says Dr. Xingli Wang, Co-President of Fosun Pharma. He tells Bloomberg Intelligence’s Sam Fazeli how Fosun is transitioning from generics to novel medicines and positioning itself as a global innovator. With 90% of R&D now focused on oncology, autoimmune and neurodegenerative diseases, Wang details Fosun’s ambition to move from a China-based manufacturer to a multinational developer with true blockbuster potential. He also reflects on how disciplined capital investment, scientific partnerships and cultural persistence could make Fosun the “Takeda of China.”Listen to this episode of Vanguards of Health Care on Apple Podcasts and SpotifySee omnystudio.com/listener for privacy information.
Chapter 1: What is Fosun Pharma's strategy for global expansion?
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Welcome to another episode of Bloomberg Intelligence, Vanguards of Healthcare podcast, where we speak with the leaders at the forefront of change in the healthcare industry. My name is Sam Fazelli, and I'm a senior pharmaceuticals analyst at Bloomberg Intelligence, the in-house research arm of Bloomberg.
I'm thrilled to welcome Dr. Xingli Wang, co-president of Fosun Pharma, the parent company of Henleus. He also serves as CEO of the Global R&D Center of Fosun Pharma, where he leads programs spanning from early development right up to a late stage development for NDA submissions. Dr. Wang is a physician with a strong academic background in China, Australia, and the US.
So I wanted to just give you everybody, our listeners, a little data set for the companies that Xing Li is involved in. So Fosun Pharma has been independently listed in the Hong Kong Stock Exchange since 2013. Market cap currently is around $10 billion. revenues of around $5.7 billion in 2024. And performance has been very strong, 70% in the past 12 months in terms of share price.
The company also has a meaningful shareholding in Henleus, which has been listed on HK index, Hong Kong index since 2019. Market cap just shy of $5 billion and 2024 revenues of $795 million. Now, Helios has significantly outperformed the HS Bio, the Hong Kong Hang Seng Bio Index, and is up 300% in the past 12 months versus the 70% for the index itself, which is quite a wonderful thing to see.
We will get to talk a little bit about the performance of the China biotech sector. But without further ado, I want to welcome Xing Li to the podcast. And maybe if I could ask you to just tell us a little bit about your own history. What's your background? What brought you to sit in the seat that I see you sitting in right now?
Sure. Thank you very much, Sam. And I really appreciate you giving me the opportunity to talk with you about Fusong and about myself. I started my clinical training in Australia, Sydney, Australia, and then ended up as a cardiologist. That's where I also started my academic career in cardiovascular medicine.
And then by 1999, I went to Baylor College of Medicine and continued on my academic career. career pursuit until I became a professor and running the cardiovascular research in cardiothoracic surgery, mainly in the coronary disease and as well as aortic disease as well. And by 2008, I joined the industrial career by joining Sherwin-Plough and then shifted to Merck and then gone to Novartis.
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Chapter 2: How is Fosun Pharma shifting from generics to innovative medicines?
I would say, high-value drugs, as well as the global reach towards the U.S. and the European markets. And including where we are might be slightly different from other, especially big, farmers. We're looking also into Middle Eastern countries as well as Southeastern Asian countries of expanding our global reach and business.
Now, so that's interesting. I mean, I have a friend of mine who is a well-known immunologist who tells me that there isn't a single disease that you can point to that doesn't have the immune system involved in it. So, of course, that is, I think, a very good segue to any of these indications, cardiometabolic, chronic inflammation, neurodegenerative diseases, and, of course, oncology.
I think the company has a very interesting approach to the way that it operates in other countries outside of China. and even within China. But do you want to tell us about the various subsidiaries that you form and what the objective of those is? Does that also help you if at some future time political tensions became difficult to manage, to manage that aspect?
Maybe talk to us about how you think about structuring the ex-China businesses. Sure.
You have a lot of questions buried within one question. I will try to address it a little bit. Our grand scheme of having so many subsidiaries, we have a lot of subsidiaries, is really because of our ability or competence at the time when we started drug development business, we were not experienced. We did not have much knowledge, expertise in the novel medicine drug development.
So in the way we starting small, by starting small, the best way to do that is to start up a biotech as subsidiary companies with a focus on one technical platform. That's how we started the Henleus. So we start with also in more of low risk environment, we start with the biosimilars.
As you know, the highest risk when you develop a new drug is developed on a target which has never been developed because you don't know what outcome is. Biosimilars are different. They are proven. They're proven by the original drug. But obviously, a biosimilar in China at the time when Penlius started, it was still as the first ever biosimilar in China.
So it was new in China, but not new globally. That's how we, as a grand scheme concept, to start small as part of the overall build up. The same thing as we start as a small company and then was absorbed into the headquarter, becoming part of the headquarter activities. But otherwise we started with a small startup as well. At the same time, as you know, we also have our CAR T therapy.
That was by joint venture with the Gilead Kite. And again, it's a learning process. We knew what we do not know. So with that reason, we using subsidiaries kind of strategy to mitigate the risk of unknowns At the same time, a gradual buildup. When it's becoming matured, we will try to absorb in. Like last year, you must know we tried to privatize Henleus.
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Chapter 3: What role does oncology play in Fosun Pharma's R&D focus?
Whether it's five or 10 years, but our strategy for future is very clear. First, we will put most of our attention on drug development. You know, we have other businesses, for example, we have health care, which our goal is to spin it off to be an independent business. We have vaccines, it's also a goal to spin it off.
So we're going to focus our Futsal Pharma on the pharmaceutical development first. Second, we're going to shift 90, more than 90% of our resource on novel drugs rather than established drugs. Then when we do the novel drugs, we also, as I mentioned to you, we appreciate also understand our capabilities. So we don't want to overstretch ourselves.
So our first strategy is looking into bettering class follow others but trying to make our product somewhat distinct or differentiate from existing asset and that one again is on the safe ground obviously you will say most others do the same that's true but at the same time we don't let alone of the original research original target development we do this by collaborating with
the colleges and universities and research institute in china we do now have a designated fund to do this by we call hand-in-hand working model to work with you know university professors or the researchers who have been working on the novel target yet their ability to translate into a product is not as good as we are, but our scientific strengths are not as good as they are.
So the best way is to combine both together by sharing, you know, the knowledge, sharing profit, sharing the future together. And you're talking about five or ten years, what we're going to see ourselves. We're going to be
fewer product but with more blockbuster potentials we're going to be majority i mean the large proportion going to be better in class but one or two going to be the we're looking into first-in-class potentials so and also we're not going to be only in china we're going to be part of global this is our second element of strategy is globalization first is innovation second globalization
And our big boss always told us, if you're not going overseas, you're going out. Which is the way how we drive our business towards too. The US is a major market, Europeans and all the other countries. And we're going to choose the highest value, best product as our stepwise approach to the market outside China.
We may be initially by collaborating as you also aware our co-development and our establishment with the US and UK biotech as well as the big companies like Teva. And then by collaborating with them, we not only gaining the competence and knowledge of the local market, we also to getting, you know, the abilities or good product development, good assets together.
And then by then we became or become a global player. It's also as my personal ambition by staying in China for the time being. is to see whether my experience will help one of the Chinese companies to become a true sense of MNCs, like Takeda from Japan, which had the same journey. My feeling is It's a matter of time. Obviously, Beijing is one of the MNCs, but Beijing is different.
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Chapter 4: How does Fosun Pharma's business structure support its growth?
The next one I thought we could touch on is the CDK4-6. Now, where would you put that? Which bucket would you put that in? I know it's not a bio, but is it a beta or a same or how would you classify that drug?
I mean, this is a tough one because I would say in general, it would be similar, maybe slightly better in safety-wise. From the efficacy point of view, which is not that much different from the Qiskali of Novartis, And it's not that much different from the other, but it does have a slightly different uniqueness.
One is passing through the blood-brain barrier seems a little bit more because the clinical results does indicate. I mean, it was approved for first line and second line, the therapy on the lung cancer. I mean, also the safety profiles also appears to be less aggressive than the current existing drugs.
So I would say with this relatively mild safety profile with similar or in certain aspects slightly better efficacy, I think this drug on the market, you know, it will achieve its value.
In terms of potential outside of China, of course, the complication potentially is that iBrands is heading for genericization. And you've also got two pretty hefty competitors in the forms of Qiskali and iBrands. Palbociclib. So we have palbociclib, ribociclib, etc. So anyway, we're in a world that's complicated.
But I often find that drugs that do have better CNS penetration do have an opportunity to really take hold when you've got a disease where CNS metastasis is a significant part of it. So let's hope that that's the case.
Now, in another area that's also breast cancer, potentially not focused, but also impacts breast cancer is the HLX2022, which is a HER2 targeting antibody with non-overlapping epitopes with other drugs, particularly trastuzumab. So I'm just interested in your thinking about where that fits in the, what is the target product profile here? How do you feel that would fit with the
Evolving competition from drugs like Xanidatamab, Alphamab, KNO26, of course, N-HER2, which is an ADC, and Remagen, which is also an ADC, Dicitamab, Vedotin. What's your thinking there?
Sure. You know, as I mentioned, monoclonal antibodies are this HER2 is different from the other HER2s. It's also working on the domain 4. But same as the truss, but at the same time, it's a different epitope of the same domain, so it comes with slightly different functions. When it works together, it ends up with a little bit better outcomes, or much better outcomes.
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Chapter 5: What are the challenges and opportunities for Chinese biotech firms?
Sure. I mean, there's multifactors coming into it. You know, why is your original question Hong Kong market sector 70% or US is 5%? I think this is probably seen relative term. The Hong Kong or Asian or China related biotech sector was disproportionately suppressed over the last few years.
So this rebounds more or less in certain proportion was regaining its right positioning rather than only because of the biotech activities, which is coming to the second. US is always on the high side. They may be overvalued before. And on the second aspect or the major driver of the China biotech's output, this has been over the last 10 years.
I would say the China biotech started to become growing, to become established, to become a player like today. It's accumulation of the time. Why it comes, you know, you might or Western might say it's all of a sudden. It's not all of a sudden. There were two major factors. The Chinese academic development growth is spanning for the last 40 years.
And that's why the publications in the top journals like Cell Science Nature from Chinese institutions nowadays, number-wise, is similar to U.S. But that provided a lot of talents. The second is U.S. returnees repatriate from U.S. Most of this, if you're looking at the biotech of the startup from China, either came returned from U.S. Big Pharma or returned from U.S. as a graduate student.
And most of these technologies and talents are what more or less had gained the U.S. learnings, U.S. experiences, which is a reason why their standards are similar to what U.S. standards are. And if you look at any industry development in the early time, you may talk about the quality is an issue because when they are learning. But these people are often veterans, mature drug developers.
And when you come to drug development, you know your money, your dollar in it. It's not like when you only do academic research, your outcome is publications. This is real silver and gold. So nobody in general term, I'm not saying maybe few exceptions, will compromise their quality. So I'm currently very trusting. Obviously, you need to do very nice due diligence.
And the last two license deals, I experienced how US and UK do their due diligence. and even long due diligence, they still pass their scrutiny, which means that most of the Chinese, you know, the biotech companies, the current term, you would in general trust their quality.
But once you come to clinical trial, again, nobody at this stage, or I would say nobody, very majority of the clinical trial trialists are try their best, but some of them, their experience is not there yet. That's why sometimes you do notice a poor quality of the clinical trials. It's not intentional, I would say. It's just a lack of experience sometimes. It's a part of a growing process.
If you look in the back of US companies, say 50 years ago, they said, do the same thing.
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