Recently, Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (hereinafter referred to as "Fudan Zhangjiang") announced that its wholly-owned subsidiary, Taizhou Fudan Zhangjiang, has not received approval from the National Medical Products Administration for its application to market Obeticholic Acid tablets. This drug is classified as a Category 3 chemical generic drug intended for the treatment of primary biliary cholangitis (PBC).
This decision not only signifies that the company's cumulative R&D investment of approximately 125 million yuan has gone to waste but also reflects the systemic risks the company faces regarding product structure, R&D strategies, and external policy environments.
1. Obstacle to Generic Drug Path and Highlighted R&D Risks The Obeticholic Acid tablets submitted by Fudan Zhangjiang are categorized as "Category 3 chemical drugs," which are generic drugs for foreign brand-name drugs that are already marketed abroad but not yet in China. However, the original manufacturer of the drug, Intercept Pharmaceuticals, has withdrawn its Obeticholic Acid product from the European and American markets in recent years due to safety issues.
In October 2023, the European Medicines Agency recommended revoking its marketing authorization; in September 2024, the European Commission officially revoked it; and in September of this year, Intercept voluntarily withdrew the drug from the U.S. market following a request from the FDA.
This series of "overseas withdrawals" has directly severed the domestic generic drug registration pathway that relies on the reference of the brand-name drug, resulting in rejections of applications from multiple companies, including Fudan Zhangjiang, Hengrui Medicine, and Chengdu Kanghong.
Risk Warning: Pharmaceutical companies selecting generic drug development targets may easily fall into the dilemma of “falling behind in R&D and being rejected upon application” if they fail to adequately assess the long-term safety, regulatory dynamics, and market prospects of the branded drugs.
2. Single Revenue Structure, Ongoing Impact of Centralized Procurement Currently, Fudan Zhangjiang has four commercialized products: Liposomal Doxorubicin, Fuxingda, Aira, and Oncared. Among these, the photodynamic products Fuxingda and Aira contribute approximately 70% of the revenue, while the anti-tumor drug Liposomal Doxorubicin accounts for about 29.04%, indicating a highly concentrated product structure.
The situation is further complicated by the fact that Liposomal Doxorubicin (Doxorubicin Liposome Injection) failed to be selected in the national centralized procurement catalog after being included in 2024. The company expects that starting in May 2025, the price of this drug will decrease by no less than 35%, which could lead to a more than 50% year-on-year decline in sales revenue in 2025, and it may even experience losses on this single product.
Additionally, Fuxingda's sales revenue declined by 7% year-on-year in the first half of this year, while Aira saw a slight increase of 2%, but its growth remains weak and cannot support overall performance.
Risk Warning: A narrow product line and excessive dependence on a few products leave the company with little buffer against policy impacts like centralized procurement, increasing the risk of performance fluctuations.
3. High Investment in New Drug R&D with Uncertain Returns Despite Fudan Zhangjiang's emphasis on not adjusting its overall R&D strategy due to the outcomes of individual projects, the failure of the Obeticholic Acid project still exposes the reality of "high investment, long cycles, and high risk" in pharmaceutical R&D. The company is currently increasing investment in the ADC (antibody-drug conjugate) platform in an attempt to build a differentiated advantage.
However, competition in the ADC sector has intensified in recent years, with both domestic and international pharmaceutical companies entering the field, while barriers to clinical development and commercialization continue to rise. Whether Fudan Zhangjiang can stand out in this fierce competition remains uncertain.
4. Stricter Regulations and Narrowed Reference Path for Generic Drugs In recent years, the National Medical Products Administration has continually strengthened the life-cycle regulation of drugs, with increasingly stringent requirements for reference formulations. If the original drug is withdrawn from the overseas market for safety or efficacy reasons, its generic counterpart will lose the legal basis for approval referencing.
This reminds domestic pharmaceutical companies that when initiating generic drug projects, they should not only focus on “patent expiration and unmarked products in China” but also pay attention to global regulatory dynamics and real-world data concerning the original drug.
Conclusion: Challenges Remain on the Path of Transformation Fudan Zhangjiang stated that it will "continue to improve the risk identification and dynamic assessment system throughout the project lifecycle" and will proceed with the R&D of innovative drugs like ADCs. However, from the aging structure of photodynamic products, missteps in initiating generic drug projects, to the impacts of centralized procurement on core products, the company is facing multiple challenges regarding product continuity and weak performance growth.
Balancing short-term revenue with long-term strategy while stabilizing existing business and accelerating the development of competitive innovative drug pipelines will be a core issue that Fudan Zhangjiang and its investors must confront.
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