As always, people generally think the innovation and R&D capacity of Chinese Pharmaceutical industry is weak, and the commonly used cardiovascular drugs, diabetes drugs and anti-cancer drugs are firmly occupied by Pfizer and Bayer. Recently, however, a newspaper article about the Shanghai Fosun Pharmaceutical Group (Shanghai Fosun)transfer IPRs of two chemicals to a foreign company is getting more and more concern.

Fochon signs agreement with SELLAS

The contract is signed between Shanghai Fosun's subsidiary Chongqing Fochon Pharmaceutical Company (Chongqing Fochon) and SELLAS Clinicals Holding AG. (SELLAS). Fochon emphasized on the discovery of effective treatments for cancer and metabolic diseases. Fochon focuses on drug research and discovery from the lead generation and optimization up to the preclinical development. SELLAS is an international company with biology and clinical research as characteristics, focusing on innovative drugs R&D in healthcare.

Based on the agreement, Chongqing Fochon will transfer its global rights, except the People's Republic of China, in development, sales and distribution in two innovative therapies for Type II Diabetes and Tumor, Fotagliptin benzoate and Pan-HER Inhibitors, respectively. The estimated total consideration of approximately EUR388 million (approximately RMB3.248 billion) will be settled by installment. Besides, Chongqing Fochon will hold a 10% royalty in these regions on net revenue sales for eight years.

"Fosun Pharma cooperates with Greek pharmaceutical R&D Company and promotes the innovative products to mainstream European and American innovative drug company. This means that the R&D investment of Fosun Pharma is entering into the harvest stage gradually. We firmly believe that our commitment to innovation investment will continuously improve the company's innovation ability and bring in new products to markets," said Chen Qiyu, Chairman of Fosun Pharma.

The agreement caused a huge storm in the industry after it was announced to the public. As a result of this very positive news, the stock price of Fosun Pharma show up fully, but fueled the suspicion and controversy over the transaction behavior as well. "From cooperation, transaction amount to revenue-sharing model disclosed by the media, some doubtful points are in existece ," said a industry player.

"The pharmaceutical licenced by Fosun Pharma, however,  are under pre-clinical phases, while most of pharmaceutical would be eliminated in that phase, that is to say, it is unclear whether the total contract amount could be honored ,"An experienced pharmaceutical patent operator who declined to be identified told to CIP News reporter. "it is not hard to see that the transaction is unprofesstional, and I think it's mucher a show than a trade." said him.

Explores mature trade mode

Fosun Pharma's success is far from guaranteed. But it is a critical question worth our profound meditation. For many years, the problems faced by domestic pharmaceutical company including weak innovation capacity, unreasonable industry structure, low S&T industry arrangement and substandard market operation order.

With biology and pharmaceutical industry classified as new strategy industry, China has attached a great importance to the industry. The domestic biology and pharmaceutical industry is on the rise, narrowing the gap between it and developed countries. Such industry has entered an important transformation period by relying on innovation and changing the development mode. Some group of biology and pharmaceutical projects with high market reputation and good market prospects are extremely popular with overseas pharmaceutical companies. How to promote the Chinese pharmaceutical company to go overseas? The relevant expert suggest that China must keep improving self-innovation and pharmaceutical R&D, and explore a high-quality and systematic achievement transformation model, thus gradually integrated pharmaceutical development and market demand. 

"In recent years, China has indeed increased its innovation strength in pharmaceutical industry, and the export of pharmaceutical technology shown a tendency to increase, but not on a large scale. The main problems are: firstly, compared with huge spending on R&D of new pharmaceutical, the investment of Chinese new pharmaceutical is quite limited, while Chinese capital market (including angel investment and venture investment) is not yet ready for developping new pharmaceutical. Secondly, the shortage of high-level R&D talents has restricted the development of China's new pharmaceutical R&D," said Li Zhonghua, vice president of China Technology Exchange.

(China IP News)