HONG KONG, Nov. 23, 2011 /PRNewswire-Asia/ -- Shandong Luoxin Pharmacy Stock Co., Ltd. ("Luoxin" or the "Company", together with its subsidiaries, the "Group", HKEx stock code: 8058), a leading PRC pharmaceutical enterprise, will continue to build the Group, by means of the three major strategies, into one of the leading high-tech and specialized pharmaceutical enterprises with high growth potential in the Chinese pharmaceutical manufacturing sector.
The introduction and implementation of various pharmaceutical-related policies have created a profound impact on the competitive landscape of the pharmaceutical industry and the regime for medicinal value in recent years. This presents both challenges and great opportunities to pharmaceutical enterprises. Shandong Luoxin Pharmacy Stock Co., Ltd. ("Luoxin Pharmaceutical") has seized the opportunity to optimize product mix through technological innovation, carry out ongoing successful R&D and marketing of State-level drugs (specialty drugs for various systems have become products with core competitiveness) as well as establish several new sales channels. This "Troika" project has driven product sales, delivering rapid growth in the gross profit and ongoing improvement in the performance.
I. Luoxin Pharmaceutical adjusted product mix through technological innovation so that the performance of specialty products for the respiratory and digestive systems has enhanced to offset the impact of the restricted application of antibiotics, and the Company maintained satisfactory performance development, having laid a foundation for successful attainment of the objectives under the "Twelfth Five-year" plan as well.
1. "Jin Xin" (i.e, ambroxol hydrochloride), a specialty drug for the respiratory system, has driven performance improvement on a large scale.
One-stop production and sales from bulk pharmaceuticals, oral preparations to injection solutions has been created for this product, contributing to the Company a rise from the gross profit margin of 15.85% in 2010 to 19.5% from January to September 2011, during which sales revenue amounted to RMB150 million. This product is able to maintain rapid growth primarily due to the following advantages:
(1) One-stop production from bulk pharmaceuticals to preparations:
Luoxin Pharmaceutical has a complete industry chain from bulk pharmaceuticals to finished preparations for ambroxol hydrochloride. By optimizing the production process for raw materials, Luoxin Pharmaceutical has shortened the production cycle, improved the yield and quality, removed the relatively risky oxidation-reduction reaction process and alleviated the environmental pressures so that the produced raw materials have the advantages of low cost, high output, low impurity and high quality. These have not only reduced the costs of preparations production, improved the quality and lengthened the industry chain, but also obtained good mastery of the market for finished preparations through raw materials production.
The Company remains committed to further improving pharmaceutical quality, technical standards, product stability and curative effects of pharmaceuticals by optimizing the production process for preparations and carrying out technology upgrades to ensure medication safety as well as minimize the cost of use and toxic side-effects, offering quality, inexpensive, safe and effective drugs of major categories for the prevention and treatment of major diseases in China.
In 2004, the Group appointed West China Hospital of Sichuan University as the head unit, and Southwest Hospital of Third Military Medical University and other hospitals as research units to conduct random experiments in imported product "Mucosolvan" as a reference product. Clinical findings suggested that ambroxol hydrochloride for injection was up to 96.6% effective in the treatment of "acute and chronic pulmonary diseases caused by increased ropy sputum combined with respiratory secretions". The curative effects were consistent with those of the imported product, with a 1.7% incidence of adverse drug reactions. The drug is safe and well tolerated. The Company has obtained a national invention patent with Patent No. ZL200810009183.8. for its ambroxol hydrochloride lyophilized powders.
(2) Large market share in preparations
Ambroxol hydrochloride is a specialty drug and is clinically the latest, the most curative and the safest lubricating expectorant and mucolytic. In particular, it has marked curative effects in the treatment of abnormal sputum secretions or poor expectoration caused by surgical anesthesia, neonate, bronchial lung disease, influenza and other respiratory diseases. There is an enormous market demand for this product. According to figures from the Medicine Economic News, clinical western expectorants account for 54%, of which ambroxol hydrochloride takes up more than 60% and is a well-deserved and leading drug in terms of dosage among expectorants and cough suppressants. This category has been included in the national health insurance directory, with its market share to be further increasing. Given the product of Luoxin Pharmaceutical has the above-mentioned advantages, its market demand is rising and sales are increasing considerably, making Luoxin Pharmaceutical the enterprise that holds the largest market share of the product on a nationwide basis.
(3) Included in the National Key Sci-Tech Special Project under the Twelfth Five-year Plan for "Key New Drug Creation and Manufacturing":
"Key New Drug Creation and Manufacturing" is one of the sixteen major national science and technology projects set under the national long- and medium-term (2006-2020) science and technology development plan, shouldering a major mission of the pharmaceutical sector to realize an innovative national development plan. Its overall development objective is to accelerate the conduct of research on Chinese medicines and the historic, strategic evolution from the imitation focus to the independent innovation focus in the pharmaceutical industry to push forward China gradually to develop from "a great pharmaceutical nation" into "a powerful pharmaceutical nation". The inclusion of ambroxol hydrochloride, a product of the Company, in the National Key Sci-Tech Special Project for "Key New Drug Creation and Manufacturing" is a strong proof that the Company's independent innovation capabilities and standards in the new pharmaceutical research and manufacturing sector have been improving rapidly, thereby having increased the product's market share and further facilitated the enhancement and rapid development of the overall corporate competitiveness.
(4) New dosage form of water injection to be launched in the market:
To meet the different needs from different types of patients for the product, the Group has stepped up its input in scientific research. Upon completion of one-stop production ranging from bulk pharmaceuticals, lyophilized powder injections and oral preparations, the Group will soon receive approval for the production and marketing of water injection dosage forms under R&D. The launch of this new product in the market will be a strong impetus to the product sales.
2. The launch of "Lan Chuan", a specialty drug for the digestive system, in the market has driven performance improvement.
"Lan Chuan" (whose chemical name is lansoprazole for injection) was launched in the beginning of the year and granted a pharmaceutical composition invention patent by the State Intellectual Property Office in June this year. Since its quality is better than that of imported products, it has become a new medication favourite for the digestive system, leading to the optimization and upgrading of the industrial structure for ulcerous disease-related products. It has enormous market potential. After the launch of the product, the market in the provinces, after winning tenders, has developed rapidly. Following a new round of invitation for tenders in various provinces in winter this year and in spring next year, the product will create new, better benefits.
(1) One stop-production from bulk pharmaceuticals to preparations
The raw materials used in the production of lansoprazole for injection are produced by the Company. International state-of-the-art menstruum recrystallization technology is employed for bulk pharmaceuticals to make the product purer. During R&D process, Luoxin Pharmaceutical on the basis of existing national standards has firstly increased and improved quality control indicators for bulk pharmaceuticals, drafted the quality standards for raw materials specifically for injection purposes and upon approval by the State Food and Drug Administration, set a high starting point and an assurance for the mass production and clinical application of "lansoprazole for injection" lyophilized powder injection at quality standards. The Company's capability to carry out one-stop production of its product "Lan Chuan" ranging from bulk pharmaceuticals to finished preparations has not only reduced costs, improved quality and lengthened the industry chain, and also obtained good mastery of the market for finished preparations through the production of raw materials.
(2) Process and quality have marked advantages over imported products.
- Lansoprazole for injection produced by the Group has a quality standard superior to that of original research institutions around the globe. Shenyang Pharmaceutical University has conducted a comparative study on "lansoprazole for injection" in mass production and on imported products in terms of quality by using advanced HPLC-MS evaluation and resolution for qualitative and quantitative analysis of relevant substances. Clinical applications were simulated as well by selecting nine points of time to carry out a study on the comparison of impurity degradation under indoor stability, high temperature stability and UV irradiation stability conditions respectively. The experiment findings indicated that the amount and type of impurities in the two preparations were identical, and that the impurity content of the Company's product was significantly lower than that of imported product, and these impurities were more stable than those in imported products. This suggested that "lansoprazole for injection" made by Luoxin Pharmaceutical surpassed imported products in terms of quality standards.
- The Group has tackled the complex technology issue involving lansoprazole for injection lyophilized powder preparations. Following clinical trials, the superiority of lyophilized powder preparations was confirmed: stability, low level of relevant substances, less adverse drug reactions, safe, reliable and easy to store and transport; the prepared lyophilized powder was highly pure; its quality was stable and controllable; it was more stable if it was enclosed in vacuum condition in a vacuum bottle. Lansoprazole for injection is a national health insurance product, and has successively been included under the "Shandong Scientific and Technological Development Project" and the "Shandong Technological Innovation Project". Upon acceptance of inspection, the technology in the project achieved international state-of-the-art standards.
Currently, the product has received two invention patents:
- Chinese invention patent for "lansoprazole for injection composition lyophilized powders" with Patent No. ZL201010198253.6 granted in May 2011 under patent protection for 20 years.
- Chinese invention patent for "lansoprazole for injection composition lyophilized powder and its preparation method" with Patent No. ZL200810001185.2 granted in July 2009 under patent protection for 20 years.
The product made by Luoxin Pharmaceutical is the only infusion filter-free lansoprazole for injection product. The production costs could be reduced substantially as a result.
(3) Enormous market potential:
The product is a specialty drug applied to the treatment of gastric ulcer, duodenal ulcer, reflux esophagitis and Zollinger Ellison Syndrome, especially applicable to duodenal ulcer with bleeding not suitable for oral therapy. Ulcer disease is a common disease in contemporary society with increasing incidence. It is clinically recurrent, often accompanied by severe complications.
In recent years, many people have contracted various kinds of stomach disorders because of their irregular eating hours and lack of attention to healthy eating, while there are signs indicating that more young people have stomach trouble. It is estimated that the stomach medication market can continue to grow in size in the future, compounded by an enormous market demand for anti-peptic ulcer drugs in China. According to the figures in "The Pattern of Medications in the Chinese Pharmaceutical Market" released by the China National Pharmaceutical Industry Information Centre and the Shanghai Institute of Pharmaceutical Industry Information Centre, medications for the digestive system used by sample hospitals in 22 major Chinese cities grew 17.33% in 2010 over the previous year, and are expected to top RMB15 billion by 2015. Of this amount, anti-peptic ulcer drugs account for 40%.
(4) R&D of follow-on product series is being stepped up:
The "Research on Lansoprazole for Injection Products" is the subject of independent R&D conducted by Luoxin Pharmaceutical, and has been incorporated into the Shandong Science and Technology Development Project in 2009. After the product received a national invention patent, it has fostered further R&D of proton pump inhibitors. The Group is currently accelerating the study on the treatment of more "gastric hemorrhage" indications by the product. The Group has entered the stage of clinical trials, and expects to receive approval in July next year to increase the scope of clinical applications for indications, such that clinical application of the product will be expanded, while the industrial structure of ulcerous disease-related products will be optimized and upgraded, the industry chain will be lengthened as well as satisfactory social and economic benefits will be generated for further boosting an increase in the market share of the product to enhance performance.
3. Other products for the digestive system maintain a very large market share, creating continuous high benefits.
Other products for the digestive system made by Luoxin Pharmaceutical have been maintaining a very large market share. Luoxin Pharmaceutical is able to produce not only raw materials of omeprazole currently under production, and also oral preparations, injections and pellets. The product has the following key advantages:
(1) One-stop production from bulk pharmaceuticals to preparations:
Bulk pharmaceuticals of omeprazole enteric-coated pellets produced by the Group have unique advantages: a) the appearance of the pellet is clean and smooth with consistent granularity; b) spherical pellet has a small surface area so that it is least affected by humidity, heat and air if stored, and thus has good storage stability; c) the pellet has good disintegration and dissolvability, producing fast curative effects; d) the pellet is largely distributed in the gastrointestinal tract, and has high bioavailability but less irritation; e) the pellet is less affected by the rhythm of food delivery along the digestive tract; and f) the pellet has good liquidity and a uniform size and is easy to fill.
The Company's capability to carry out one-stop production of the product from bulk pharmaceuticals to finished preparations in various dosage forms has not only reduced costs, and also improved the quality and lengthened the industry chain.
(2) Process and quality have marked advantages:
The advanced process technology in the product achieves state-of-the-art standards in China. The preparation techniques for product preparations are mature and reliable so that the products have various advantages such as stable quality, high bioavailability, easiness to take and complete dosage forms and specifications. In particular, omeprazole enteric-coated capsules are effective in solving the problems regarding the instability of omeprazole in acidic and neutral media, and the vulnerability to destruction in stomach acid. If omeprazole is in the form of enteric-coated tablet, the tablet is not digested and absorbed in the stomach and can safely pass through the stomach into the intestines where it is disintegrated or dissolved to produce curative effects and improve bioavailability of the drug. The product received a national invention patent for "omeprazole lyophilized powder injection and its preparation method" in 2009 with Patent No.: ZL 200810001181.4.
II. Continuous successful R&D and marketing of the Company's State-level new pharmaceuticals
Over the years, the Company has been committed to increasing input in scientific research. By leveraging the extensive experience of its R&D team and its own strong R&D capabilities, the Company has formed alliances with domestic and foreign universities and research institutions to provide strong R&D backup, enabling it to maintain a competitive edge through the ongoing development of new drugs.
Currently, the Company has successfully developed a number of high-tech, high value-added State-level new pharmaceuticals, and has received certificates of new pharmaceuticals for 41 State-level new pharmaceuticals and obtained 46 national invention patents. More than 50 products have been approved, including those of which R&D are being stepped up, and those which will soon be launched in the market.
The Company will substantially enhance its independent innovation capabilities and standards in the research and manufacturing of new pharmaceuticals and further speed up the R&D and marketing of new independent R&D-related pharmaceuticals carrying independent intellectual property rights to enhance its core competitiveness.
III. Establishment of the third terminal and an OTC sales network to adapt to a new market competitive landscape and ensure and facilitate the continuous growth of the Group.
As a result of the introduction of the national health care reform, a basic medication policy has been implemented on a nationwide basis. This has brought enormous space for pharmaceutical demand in the third terminal market (township hospitals, community health centres and clinics). Luoxin Pharmaceutical has more than 50 products in the national essential drugs directory, and numerous products in the provincial and municipal essential drugs directories in various provinces and municipalities across the country. These have created a good opportunity for Luoxin Pharmaceutical to expand the third terminal business. To capture this opportunity, Luoxin Pharmaceutical has developed an array of effective and feasible proposals on the establishment of a third terminal network. Since the establishment commenced in the beginning of the year, the third terminal network has covered 50% of the provinces and municipalities, and has played a very important role in generating benefits. The Group plans to build an intensive, seamless third terminal sales network on a nationwide basis by March 2012. Moreover, in order to allow more than 30 OTC product resources to generate benefits, Luoxin Pharmaceutical will also step up initiatives for the establishment of a sales network for the OTC line. The completion of these two new networks will provide a strong impetus to the Company's business growth.
Driven by the "Troika" project, Luoxin Pharmaceutical will continue to improve its performance, grow better and faster during the period of the "Twelfth Five-year Plan" to bring greater returns to its shareholders.
About Shandong Luoxin Pharmacy Stock Co., Ltd.
Luoxin has been listed on the GEM of the Stock Exchange of Hong Kong Limited since 9 December 2005. The Company was recognized as one of the "Top Ten Pharmaceutical Enterprises with Growth Potential" and named as one of the "Top 100 Pharmaceutical Companies in China" since 2006. It was also selected on the "List of Small and Medium-sized Enterprises in China with Most Potentials" by Forbes for three consecutive years. The Company is principally engaged in the development, manufacturing and sale of different types of prescription and OTC (over-the-counter) medicines in 4 major categories: (1) system-specific medicines, including digestive system medicines, cardiovascular system medicines and respiratory system medicines; (2) anti-viral medicines; (3) antibiotics, including Cephalosporines antibiotics, Quinolones antibiotics and Macrolides antibiotics; (4) other chemical medicines, including Antineoplastic medicines. The Company's production facilities are located in the High and New Technology Experimental Zone, Linyi, Shandong Province, the PRC, and has obtained all required production permits as well as GMP certification. Its sales and marketing networks cover 27 provinces and 4 municipalities in the PRC.
For further information, please contact:
Porda Havas International Finance Communications Group
Tel: +852-3150-6788
Fax: +852-3150-6728