HONG KONG – The pharmaceutical arm of Chinese conglomerate Fosun Group plans to channel its research and development efforts into biosimilars and generic chemicals with more than ¥5 billion (US$800 million) of investment in the coming years.

Shanghai Fosun Pharmaceutical (Group) Co. Ltd. (SZ: 00196, HK:02196) released a public notice Jan. 6 regarding its investment plan through 2020.

"During the 13th five-year period [2016-2020], the group will mainly focus on R&D investment in macromolecular biological generic drugs, small-molecule chemistry innovative drugs and difficult generic drugs," the company noted in its public notice. "The group will continue to strengthen its R&D capabilities and increase its product reserve."

The total R&D expenditure of Fosun's total R&D expenditures in the current five-year plan [2011-2015] has reached almost ¥1.5 billion. According to its R&D expenditure plan, Fosun will spend more than ¥5 billion on R&D from 2015 to 2020. The company plans to spend ¥1.5 billion on its biosimilar drugs, ¥1 billion on novel small-molecule chemical drugs, ¥1 billion on advanced generics and another ¥1 billion on global abbreviated new drug applications (ANDAs). It also will invest an additional ¥500 million in building a stronger traditional Chinese medicine pipeline.

"We don't have a lot of traditional Chinese medicines at the moment but we're trying to make more efforts to enrich our product line," Song Dajie, director of investor relationships at Fosun, told BioWorld Asia.

"Fosun Pharma needs to fully integrate itself into the global innovation and R&D 'ecological circle' to build both an international R&D industry chain and a leading domestic biotech drug R&D center," said Shao Ying, Fosun Pharma's vice president and head of R&D. "We have to set up relatively competitive novel small-molecule chemicals, bring in international leading technology and teams, build a differentiated R&D center and complete the construction of an innovation and R&D center for traditional Chinese medicine."

R&D expenditures by Fosun have been growing continuously for the last few years since it established a "four-plus-one" strategy, mainly focusing on large molecule biopharmaceutical drugs, novel small-molecule chemical drugs, hard-to-copy chemical generics and specialized formulations. The company spent ¥3 billion, ¥4 billion, ¥5 billion and ¥3 billion in 2011, 2012, 2013 and the first half of 2014, respectively, on R&D.

Along with its R&D expenditure plan, Fosun confirmed the commencement of its Shanghai Henlius Biotech Monoclonal Antibody Drugs Good Manufacturing Practice (GMP) Production Base Project, of which construction started on Dec. 22, 2014.

Shanghai Henlius Biotech Co. Ltd. is a joint venture company founded by Fosun and Henlius Biopharmaceuticals Inc. in December 2009. Henlius focuses on the development, manufacture and commercialization of monoclonal antibody drugs.

The production base, with a planned floor area of more than 10,000 square meters, is designed and renovated in line with Chinese, European and U.S. GMP standards. It also features one-time production technology.

"Upon completion, the production base can fulfill the commercial production needs of the group for monoclonal antibodies," said Fosun.

"In all of our biopharmaceutical business, Henlius is responsible for developing all our monoclonal antibodies," Song said. "We have other biological drugs such as blood products, but Henlius is the focus of the attention."

Henlius' pipeline includes biosimilar versions of Rituxan (rituximab, Roche AG) for the treatment of non-Hodgkin's lymphoma and rheumatoid arthritis; Herceptin (trastuzumab, Roche) for the treatment of breast cancer; Humira (adalimumab, Abbvie), the top-selling drug in 2013 used to treat rheumatoid arthritis; and Avastin (bevacizumab, Roche) for the treatment of colorectal cancer.

Henlius has filed investigational new drug applications for all four biosimilar drugs and has received approval from the CFDA to move its biosimilar rituximab to clinical stage in April.

Chen Qiyu, chairman of Fosun, pointed out at the company's 20th anniversary that big health is the most promising new industry to outperform the internet industry in the future.

"First, we need to surpass our rivals in terms of business model, products and innovation," Chen said. "Second, we need to deliver worldwide innovation while based in China, a further step to help accomplish our goal."

Last year, Fosun filed 59 invention-related patent applications. The company has an experienced international R&D team of 779 located in Shanghai, Chongqing and San Francisco.