China’s fourth richest man takes a back seat at the top drugmaker he built
After spending the past 30 years transforming Jiangsu Hengrui Medicines from just another manufacturer of dirt cheap over-the-counter pills to a top 25 global biopharma player, Piaoyang Sun is taking a step back.
The billionaire is handing over the chairman role to Zhou Yunshu, his right-hand man and president of the company, Hengrui said in a statement. But Sun will stay on the board and continue to lead the strategy committee.
As the chairman of the parent company, Sun also remains the biggest shareholder of Hengrui.
With a fortune of $25.8 billion, Sun was ranked the fourth richest man in China on Forbes’ 2019 list. He shared the spot and the wealth with Huijuan Zhong, his wife and fellow pharma tycoon: Zhong chairs Hansoh Pharma, which raised $1 billion in its Hong Kong IPO last summer.
Like Hansoh, Hengrui boasts of a stream of revenue from its generic drugs — which would have been considered “new” in China three decades ago when the industry was barely able to keep up with basic manufacturing standards. In 1990, at age 32, Sun took over one such company then known as Lianyungang.
“Back then the plant was filled with common drugs like spiramycin and erythromycin which cost 1 cent per pill and earned us a tenth of that,” Sun reflected at a 2019 conference.
He began squeezing his budget for more sophisticated me-too drug R&D and the rest is history.
Once business got better, in 1997 (the newly rechristened) Hengrui spent RMB$2.5 million on new drugs. In 2001 we went public and raised RMB$480 million, RMB$200 million of which I invested on a research facility in Shanghai. We began to recruit medicinal chemists in 2002. Now we are working on dozens of innovative drugs in our pipeline.
That second transition into novel drug development attracted the attention of Incyte, which in 2015 handed over $25 million upfront for its homegrown PD-1 inhibitor. While Hengrui didn’t disappoint in bringing one of the first domestic biotechs to score Chinese approval for a checkpoint — camrelizumab was the third, to be precise — Incyte turned to a new PD-1 partner after finding that Hengrui’s drug was tied to a side effect. Though these small, non-cancerous vascular skin growths were mild, it made camrelizumab unappealing in a highly competitive field.
Hengrui forged ahead with commercialization, marketing the therapy to patients with third-line classical Hodgkin’s lymphoma at a relatively high sticker price of RMB$19,800 (around $2800) but an aggressive discount for low-income patients.
Cancer remains its main interest, with a HER2-targeted tyrosine kinase inhibitor, a c-MET antibody-drug conjugate, a PD-L1 drug and an IDO inhibitor among its experimental assets. Then there’s a GLP-1 peptide for type 2 diabetes and an anti-IL-17A antibody for psoriasis — both hitting common targets with established drugs in the global market.