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Foreign pharmaceutical companies have made another big move. This month, Japanese pharmaceutical company Kyowa Kirin announced that it would reorganize its business in the Asia-Pacific region, including transferring all the shares of its Chinese subsidiary Kyowa Kirin (China) Pharmaceutical Co., Ltd. to Hong Kong Weijian Pharmaceutical Group (hereinafter referred to as Weijian Pharmaceutical) for RMB 720 million.

The chief international business officer of Concord Kirin said the move was mainly due to "the company's growing challenges in the Asia-Pacific region." Affected by the centralized procurement of drugs, sales of Granosate, a drug under Concord Kirin, declined in 2023.

Resources focus on core disease areas

Last week, Kyowa Kirin announced a business strategy for the Asia-Pacific region, initiating a major reorganization of the company's Asia-Pacific business and reaching cooperation with Asia-Pacific holding company DKSH Holding and Weijian Pharmaceutical respectively.

Specifically, Concord Kirin transferred all the equity of its Chinese subsidiary Concord Kirin (China) Pharmaceutical Co., Ltd. to Weijian Pharmaceuticals for RMB 720 million. The transaction is expected to be completed on September 30. According to the agreement, the labor contracts of Concord Kirin (China) employees will not be affected. After the transaction, the employees will be automatically transferred to Weijian Pharmaceuticals, and the labor contracts will continue to be performed. Employees can also choose to buy out their seniority in the form of N+1.

Founded in 2006, Weijian Pharmaceuticals is an innovative biopharmaceutical company based in China and facing the world, dedicated to providing innovative therapies for patients with rare diseases and other unmet medical needs. The two parties have cooperated before. Public information shows that as early as 2020, Weijian Pharmaceuticals and Kyowa Hakko Kirin (China) Pharmaceutical Co., Ltd. announced a strategic cooperation to jointly promote renal products in mainland China.

The reorganization of Concord Kirin also includes cooperation on the commercialization rights of multiple products. Among them, Concord Kirin and Weijian Pharmaceuticals reached a promotion and distribution agreement on the commercialization rights of their global products CRYSViTA (FGF23 blocking antibody) and POTELIGEO (moglizumab). In addition, Concord Kirin has also reached a promotion and distribution agreement with Asia-Pacific holding company DKSH Holding for the commercialization rights of its existing drug portfolio. This agreement involves seven brands covering the markets of Hong Kong, Macau, Taiwan, South Korea, Malaysia, Singapore and Thailand. Concord Kirin also signed a promotion and distribution agreement with the company, which obtained the global commercialization rights of some of Concord Kirin's drugs, namely the commercialization rights of CRYSViTA (FGF23 blocking antibody) in the Hong Kong/Macau, Malaysia, Singapore and Thailand markets and POTELIGEO (moglizumab) in Singapore.

Kyowa Kirin described the move as a "difficult decision". Dr. Abdul Mullick, the company's chief international business officer, said, "Given the increasing challenges the company faces in the Asia-Pacific region, we have made the difficult decision to restructure our Asia-Pacific business to ensure continued access to medicines for patients and to ensure the future and continuity of as many employees as possible. This transformation will improve our efficiency and agility."

Kyowa Kirin said that it will also focus its internal resources on its core disease areas for future growth, such as bones and minerals, refractory blood diseases, blood tumors, and rare diseases, by forming an Asia-Pacific cluster. This cluster will cover the Korean, Taiwanese, and Australian markets. Kyowa Kirin said that these actions highlight the company's 2023 vision goal, which is to ensure the accessibility of its product portfolio of 11 brands in four therapeutic areas and bring life-changing medical value to patients in the Asia-Pacific region. These 11 brands involve four therapeutic areas, including Darbepoetin α (NESP, trade name Nicebo) for the treatment of renal anemia and ROMIPLATE, a drug that promotes platelet production.

Japan, Europe and the United States are the main markets

Kyowa Kirin, headquartered in Japan, is committed to developing and providing innovative drugs and treatment solutions to bring life-changing medical value to patients around the world. The company's China headquarters is located in Shanghai, and Kirin (China) Pharmaceutical Co., Ltd. (the predecessor of Kyowa Kirin China) was established in 1993. In 1997, Kyowa Kirin Shanghai Production Base was established. It is the first bio-high-tech pharmaceutical project introduced after the establishment of the "National Shanghai Biomedical Science and Technology Industrial Base". It has built drug production workshops, warehouses, instrument analysis laboratories, sterile laboratories, animal laboratories, office buildings and equipment buildings.

However, Kyowa Kirin's main revenue comes from Japan and Europe and the United States. In 2023, Kyowa Kirin achieved global sales revenue of 442.2 billion yen (about 21.674 billion yuan), a year-on-year increase of 11%, and net profit of 81.2 billion yen (about 3.980 billion yuan), a year-on-year increase of 51.5%. However, due to the implementation of centralized procurement in some parts of China, the company's revenue from Granosate, a drug for the treatment of neutropenia, has shown a downward trend. But overall, Kyowa Kirin's main markets are in Japan, the United States and Europe, and the Chinese mainland market accounts for less than 3% of Kyowa Kirin's global business. In the first half of this year, Kyowa Kirin's total revenue was 233 billion yen (about 11.421 billion yuan), a year-on-year increase of 17%. The significant increase in new drug and technology licensing revenue in North America has become the main reason for the growth in performance.

In recent years, Concord Kirin has frequently made investments in the fields of biologics and gene therapy. This year, Concord Kirin started building a biomanufacturing plant in North Carolina. The project plans to invest $530 million and is expected to be completed in 2027. Also this year, Concord Kirin acquired gene therapy company Orchard Therapeutics for $387 million. The latter's one-time gene therapy Lenmeldy has been approved by the U.S. Food and Drug Administration.

Beijing News reporter Zhang Xiulan

Proofread by Liu Baoqing