At the end of 2011, the first drug of ranibizumab entered the Chinese market. As a biological drug for the treatment of fundus macular degeneration, it has a monopoly advantage in the market and is priced at nearly 10,000 yuan per bottle.

Originally, multinational pharmaceutical companies wanted to make a fortune from this star product in the huge Chinese market, but no one could have imagined that a Chinese local company that "sticks to its research and development" - Kanghong Pharmaceutical would overtake others and bring down the price of the drug in one fell swoop...

A pioneering journey of "a narrow escape from death"

In 1994, Kanghong was established in the wave of reform and opening up. This innovative pharmaceutical company started with traditional Chinese medicine. Its Songling Xuemaikang Capsule is an exclusive patented Chinese medicine for the treatment of hypertension and primary hyperlipidemia. At the same time, in the early days of the implementation of the GMP certification system in the China pharmaceutical industry, Kanghong obtained the first GMP certification certificate issued by the State Food and Drug Administration after its establishment.

In the 21st century, the international competition in the pharmaceutical industry has become increasingly fierce. At that time, due to the relatively backward level of resources, financial resources, talents, and information of China enterprises, it was extremely difficult for China small molecule drugs to compete with the West. The emerging Kanghong aimed at another track-biological drugs.

Due to its high efficiency and diversity, and involving multiple cutting-edge technologies such as genetic engineering, cell culture, and protein engineering, biological drugs are also regarded as a new highland by major pharmaceutical companies internationally.

Against this background, Kanghong Pharmaceutical began to explore the field of anti-VEGF biopharmaceuticals. In 2004, the research and development of Kangbercept ophthalmic injection was established, and its benchmark competitor was ranibizumab.

You know, at that time, the research and development of China's biological drug field was still in the pioneering stage. Choosing to make Chinese people's own innovative drugs was a "nine deaths and one life" road. If it failed, it would bring huge losses to the company.

But at that time, Kanghong realized one thing-if it wanted to go abroad and overtake on the curve, it could only have a real competition with international leading companies in the new track of biological drugs.

Back to reality, the industrialization of innovative biological drugs is more than one or two orders of magnitude more difficult than chemical drugs and traditional Chinese medicines. China's biotechnology started late and its industrialization foundation was relatively weak. Some key equipment could only rely on imports, and many technical difficulties could only be explored and overcome step by step.

In terms of the molecule itself, Kangbercept is a fusion protein with a large molecular weight and unique advantages such as multiple targets and full humanization. At the same time, this protein is complex and sensitive, and it is extremely difficult to protect it. Kanghong Pharmaceutical, which has been crossing the river by feeling the stones, has done a lot of scientific research in this regard. After nearly 10 years and nearly 1 billion yuan in research and development, it finally broke through layers of barriers.

In March 2014, China's original Class I biological new drug Langmu (Conbercept) was officially launched. The emergence of this product not only filled the market gap of China macular degeneration treatment drugs, but also broke the monopoly of high-priced imported drugs on the Chinese ophthalmology market.

Two years later, in 2016, Novartis Pharmaceuticals reduced the terminal price of its ranibizumab in Chinese hospitals from 9,800 yuan per vial to 7,200 yuan per vial.

Must "die-hard" research and development

In the past five years, Kanghong's average R&D investment has accounted for 21.2% of its total revenue, a figure that is comparable to that of international leading pharmaceutical companies.

Is such a high investment worth it?

The answer is yes. Data show that in the past five years, the global pharmaceutical market has grown at an average annual compound growth rate of nearly 4%. With the acceleration of the reconstruction and reengineering of the global pharmaceutical industry chain, China's innovative drugs have entered a period of explosive results. For companies, if they want to break through the siege, they must "fight to the death" in research and development.

Of course, Kanghong's investment has also reaped results. At present, 11 of the 20 drugs sold by Kanghong are exclusive, 16 are included in the national medical insurance catalog, and 9 are included in the national essential medicines catalog.

It is worth noting that Langmu, a flagship product, has also driven the coordinated development of upstream and downstream industrial chains.

Biological drugs are relatively special, and have almost stringent requirements on the environment, equipment, and technology during the production process. Before Langmu achieved industrialized production, the industrialized production of China biopharmaceuticals was immature in both hardware and software. The technical bottleneck led to the reliance on imports for some basic equipment and instruments, ranging from ordinary cell culture technology to a full-system cold chain transportation system. This seriously restricted the improvement of the level of industrialized production of biopharmaceuticals in China.

With the continuous advancement of Langmu's industrialization, Kanghong took the lead in building a biopharmaceutical industry base in Chengdu that meets the international advanced level. It not only achieved a breakthrough in core technology and established a quality system in line with international standards, but also led to technological innovation in upstream and downstream industries. In key technologies such as full-process quality control and cold chain transportation, it has reached the same level as excellent foreign biopharmaceutical companies, and the industrialization of biopharmaceuticals has achieved a leap from following to running side by side.

The 100 billion market expects more overtaking

Today, Kanghong has formed a development pattern of three arrows: biology, Chinese medicine, and chemistry, and has actively laid out the global cutting-edge technology field.

In the field of gene therapy, KH631, a gene therapy product developed by Kanghong and approved for the treatment of age-related macular degeneration, has been selected for the special project "Research on the Prevention and Treatment of Common and Frequently-occurring Diseases" of the 2023 National Key R&D Program. It has characteristics in tissue specificity, immunogenicity, expression controllability, and infection efficiency. It is currently conducting phase I clinical studies in China and the United States simultaneously; KH658 ophthalmic injection is Kanghong's second gene therapy product approved for clinical trials in China and the United States at the same time. It inhibits the growth of neovascular lesions by continuously expressing anti-VEGF proteins in the human body. In the first half of 2024, the research results related to KH658 were accepted by Nature's sub-journals, and 5 research results were also unveiled at the 2024 American ARVO and ASGCT conferences.

In the field of synthetic biology, KH617, developed by Kanghong for the treatment of advanced solid tumors, is also currently in the phase I clinical stage. In 2023, KH617 was recognized as an orphan drug in the United States and was selected as one of the third batch of key projects of drugs and medical devices by the Sichuan Provincial Food and Drug Administration.

Looking at the entire pharmaceutical industry in China, over the past few decades, from "lack of doctors and drugs" to imitation-based, and then to the combination of imitation and innovation, independent innovation, it has embarked on a leapfrog innovation and development path. Kanghong's development history is a typical epitome of this.

Data show that the number and quality of China's Chinaally produced innovative drugs have increased. By the end of 2023, the number of new drugs under development in China will account for more than 20% of the global number, and it has jumped to the second place in the world in new drug research and development. In terms of market size, the scale of China's innovative drug market has exceeded 100 billion yuan.

Observing the policy level, a series of favorable policies including the "Implementation Plan for Supporting the Development of Innovative Drugs in the Whole Chain" have been intensively introduced in recent years to help accelerate the development of the industry.

The industry believes that China's biopharmaceutical industry has ushered in a golden period of development.

Standing at a new starting point, there is reason to believe that more local companies like Kanghong will continue to stage new "overtaking on the curve" stories in the future.