Favorable policies in the medical industry have been released frequently, Shanghai Fosun Pharmaceutical (600196.SH; 02196) has focused on the innovation of pharmaceuticals and medical devices, and has achieved multiple successes worldwide.

Recently, a blockbuster news about pharmaceutical centralized procurement has been widely circulated. On March 26th, the National Medical Insurance Bureau held a research and development meeting to optimize pharmaceutical centralized procurement. The market expects the meeting to promote the optimization details of drug centralized procurement, especially focusing on the discussion of the draft plan for further optimizing drug centralized procurement policies, providing a more relaxed market environment for innovative pharmaceutical companies. In addition, on March 31st, the National Medical Products Administration issued the "Measures for Optimal Supervision of the Entire Lifecycle to Support the Innovative Development of High-end Medical Devices (Draft for Solicitation of Comments)", aiming to support the innovation of high-end medical devices by improving evaluation and approval mechanisms, bringing new growth opportunities for upstream and downstream enterprises in the innovative drug industry. The support of national policies for innovative drugs and medical devices is undoubtedly beneficial for innovative leading companies like Shanghai Fosun Pharmaceutical. Almost all policies are aimed at encouraging pharmaceutical companies to innovate. Against this background, the future development of Shanghai Fosun Pharmaceutical in the fields of innovative drugs and high-value medical devices will have more room for growth. It is understood that Shanghai Fosun Pharmaceutical has now established an open, global drug innovation and research and development system combining independent research and development, cooperative development, licensed introduction, and industrial investment, focusing on core treatment areas such as tumors (solid tumors, blood tumors) and immune inflammation. The company has strengthened core technology platforms such as antibodies/ADCs, cell therapy, and small molecules, and collaborated with industry funds to develop cutting-edge technologies such as core drugs, RNA, gene therapy, and AI drug research. According to Shanghai Fosun Pharmaceutical's 2024 financial report data, its operating income was 41.067 billion RMB, and net profit attributable to the parent company was 2.77 billion RMB, an increase of 16.08% year-on-year; operating cash flow was 4.477 billion RMB, an increase of 31.13% compared to the same period, surpassing the growth rate of operating profit. Overseas income ratio increased to 27.51%. Several core indicators show the effectiveness of its strategic focus in recent years. In the context of increasingly fierce competition in the global pharmaceutical industry, Shanghai Fosun Pharmaceutical has taken a unique development path of "technological breakthroughs - global layout - value realization" with its strategic focus on innovative drugs and high-value medical devices, as well as the continuous deepening of its global operational capabilities. In 2024, Shanghai Fosun Pharmaceutical had a total of 7 innovative drugs/biosimilars covering 16 indications approved for listing, covering major diseases such as lung cancer and breast cancer. Additionally, 8 projects were in the pre-listing approval stage, and 38 generic drugs were approved domestically and internationally. There are over 80 innovative drug and biosimilar drug projects in research. For the global highest incidence of lung cancer, Shanghai Fosun Pharmaceutical has developed an all-round layout of innovative drugs and precision diagnosis and treatment, benefiting patients worldwide. Shanghai Fosun Pharmaceutical's independently developed innovative drug anti-PD-1 monoclonal antibody Hansu injection (Suliri monoclonal antibody injection) is the world's first PD-1 monoclonal antibody approved for first-line treatment of extensive-stage small-cell lung cancer (ES-SCLC), and is also the first and only PD-1 monoclonal antibody approved for the treatment of ES-SCLC in the European Union. In 2024, Hans injection obtained a new indication for first-line treatment of non-squamous non-small cell lung cancer (nsNSCLC) in China, making this the third indication approved for the drug in the field of lung cancer, further expanding its coverage. Currently, Hansu has been marketed in more than 30 countries such as China, Europe, and Southeast Asia, benefiting over 100,000 patients. To help more lung cancer patients obtain early diagnosis and treatment through less invasive methods, the joint venture company Intuitive Fosun's Ion bronchoscope navigation control system ("Ion system") was approved by the China National Medical Products Administration in March 2024 and commercialized. In the high-incidence cancer fields of breast cancer and gastric cancer, the monoclonal antibody biosimilar drug Hanqueyou (trastuzumab for injection) independently developed by Shanghai Fosun Pharmaceutical has been successfully approved for marketing in over 50 countries and regions including China, the EU, the United States, Canada, and Australia, and has been included in the medical insurance catalogs of several countries such as China, the United Kingdom, France, and Germany. As of now, Hanqueyou has benefited over 240,000 patients. Targeting the treatment of gastric cancer, the targeted HER2 innovative monoclonal antibody HLX22 and the new type of breast cancer endocrine therapy HLX78 (raloxifene tablets) are both in the international multi-center Phase III clinical trial stage. The application for the listing of the biosimilar drug HLX11 of the drug paclitaxel has been accepted in China and the United States, and the global clinical capabilities continue to strengthen. In addition to the common cancer areas, Shanghai Fosun Pharmaceutical has also made arrangements in the fields of immune inflammation, chronic diseases, and rare diseases. Its independently developed MEK1/2 selective inhibitor Luvomeitinib tablet for the treatment of adult dendritic cell and merkel cell tumors, and the treatment of plexiform neurofibromas (PN) associated with the NF1 disease in children over 2 years old have filed for market registration in China and are both under priority review. In the field of kidney diseases, the newly developed first-in-class innovative drug Vadility (tenofovir disoproxil fumarate tablets) for the treatment of CKD adult dialysis patients, exclusively developed and commercially licensed by Shanghai Fosun Pharmaceutical, has been approved in China in February 2025, bringing new treatment hope to dialysis patients with high phosphorus levels. In the field of high-value medical devices, Shanghai Fosun Pharmaceutical is accelerating the integration by focusing on R&D, production, products, marketing, etc., through the combination of "introduction and incubation" and "Chinese smart manufacturing" to build systematic capabilities. In 2024, the joint venture companyImpress has Impress Impmpressedustrialization.Fosun observed that the installation of "Da Vinci Surgery Siasun Robot & Automation" in China and Macao totaled 58 units. The Fosun headquarters industrial base is expected to be completed and put into use in June 2024 in the Zhangjiang Xi'An International Medical Investment Park in Shanghai. In addition, Shanghai Fosun Pharmaceutical and Insightec have established a joint venture in China called Fosun MedicView, which has achieved sales of the "Magnetic Knife" brain treatment system. They have also started a strategic cooperation with Neusoft Medical Systems to jointly establish brain science joint laboratories in multiple hospitals, promoting scientific research, clinical cooperation, and commercialization of innovative products such as brain magnetic resonance instruments. In 2024, Shanghai Fosun Pharmaceutical's licensed product DAXXIFY became the first Daxibotulinumtoxin A botulinum toxin product to be approved and launched in China, aiming to improve moderate to severe glabellar lines and treat adult cervical dystonia.In 2024, Shanghai Fosun Pharmaceutical continued to maintain a high level of research and development investment, with a total R&D investment of 5.54 billion yuan. This included research and development expenses of 3.44 billion yuan, with pharmaceutical business research and development investment of 4.10 billion yuan, accounting for 16.98% of pharmaceutical business revenue. In the current era of deepening artificial intelligence applications, Shanghai Fosun Pharmaceutical launched its independently developed PharmAID decision-making intelligent platform in early 2025, based on modules such as information extraction, patent insights, and business forecasting to support intelligent decision-making in drug research and development. The platform has a data update timeliness of T+1 standard, providing more convenient and precise decision support for drug research and development, helping to improve decision-making efficiency and accuracy. The latest research report released by CICC indicates that Shanghai Fosun Pharmaceutical's performance in 2024 meets market expectations, with the company advancing product structure and strategic transformation, continuously reducing costs and increasing efficiency, improving operational efficiency, and constantly optimizing the innovation research and development system, with a further focus on the product pipeline. The rating of Shanghai Fosun Pharmaceutical H shares is maintained at outperform the industry, with a target price of 18.6 Hong Kong dollars.