We are in the pharmaceutical product development and sale business in China. Currently, we work in outsourcing services of generic drug formulation development for local China big pharma. We also developing our own products with accumulation of profit since operation.
This is Tsang-Bin Tzeng, PhD. I used to work in the US for 25 years as university faculty and clinical pharmacologist for big pharma. Ten years ago, I went back to my grown-up country, Taiwan, to serve as the President of a pharmaceutical company and that of a clinical CRO company. I have founded ProMed Pharmaceuticals in Shanghai since September 2016 with my partner, Mr. Yi Sun, an executive in pharmaceutical sale in a state-owned company, who grew up in Shanghai. ProMed has employees of 30. Since operation, we have not had loss in any single year of financial report. But, 2020 might be the year of exception.
Based upon McKinsey report in 2019, China will be the biggest global healthcare market. That’s not an opinion….It’s a fact. China has 5 times population of USA. In 2016, China pharmaceutical industry sale volume was $110 billion dollars; brand products accounted for 43% while generic products accounted for 50%. In 07/22/2015, China CFDA (now NMPA) announced to request all new generic application (ANDA) or renewal in old generic products should provide all US generic gold standard materials, namely, formulation development research data and clinical BE data to show bioequivalence to brand products in order to get approval. These materials have never been requested and never been generated before in almost every marketed generic product in China. There is a total of approximately 108,000 ANDAs being required to scratch from the beginning of this generic development research in China with no exceptions. A pharmaceutical formulation development service fee is averaged of US$420,000 dollars, the marketing size of this service for old ANDAs in China would account for a total of US$45 billion dollars in market size. As China marketing is so huge, any generic products are able to generate above US$10-15 million revenue with 30% profit per year easily. Besides, product life cycle of a generic drug is usually 5 time longer than that in the USA due to several segments in financial layers of the general population. Therefore, the return of investment for a generic product is considered to be excellent. Also, China has a unique MAH system, which allows anyone can be a marketing authorization holder for any pharmaceutical products to encourage the investment.
Promed profits by collecting service fees for undertaking drug formulation development services. With a service charge of about $420,000 service fee, company profit is about 25% from a project with duration is nine months, and manpower of three. We also attempted to negotiate to collect the marketing profit sharing of high-end products developed by us, but with very limited success. Our development service can be extended to the project management of the clinical bioequivalence study as well as regulatory submission preparation.
We simultaneously developed our own products. Therefore, our future profit can be from marketing sale of our products. These products might be generic drugs, complicated generic drugs and 505(b)2. We also look for opportunities to import products from oversea to sell in China.
We have been working on 12 projects right now for domestic companies in China. Two of them have passed clinical bioequivalence studies, ready for regulatory submission. Two have just passed preliminary bioequivalence studies. One injection project is at the stage of preparing for regulatory submission.
One of our core competences of success in the copycat formulation development is that we are able to get the exact formulation compositions of each excipient for the reference listed drug product (most of them are brand products) of our targeted product. There are total of 134 generic products in our list that we have means to acquire the quantitative composition information. Based upon this information along with patent publication by the brand product, our team is able to efficiently duplicate the manufacturing process up to the small scale of production within nine months along with assay development and methodology development in quality control. Not only facilitate the development progress, our approach greatly reduces the risk of generic development in manufacturing process, stability and clinic. Clinical bioequivalence successful rate is greater than 80%. We have adopted this approach to successfully develop our own two products up to small scale manufacturing stage. The dissolution curve data are perfect and development progress was amazingly smooth and fast. The knowledge of the compositions of brand products enables us to develop generic Q1Q2 products, which are products required by FDA to use exact the same excipients of the brand products and the amount used for each excipient should be less than 5% difference from brand products. Some Q1Q2 products require clinical bioequivalence study or clinical efficacy study, yet, several can be waived in clinical trial. The formers are high hurdle and high investment products; the latter are quick to market with low investment.
More than 99% of pharmaceutical companies or CRO’s in China (or even in Asia countries except India) still do not have the access or platform to obtain quantitative compositions of brand products. Mos of them use dissolution profile to guess the compositions of the excipients, leading to slow in progress and high risk in development due to wrong results. Their clinical successful rate was 63% based upon China CDE report.
Also, in the future the company owned generic products will focus on high hurdle generics to mitigate competition in China market. Four categories of generic drugs belong to these high hurdles; they are products with limited sources in active pharmaceutical ingredient, combination drugs, sustained release dosage forms, and Q1Q2 drugs with required clinical BE/efficacy trials.
ProMed Company executive team members also include co-founder partner, Mr. Yi Sun, and Chief of Scientific Officer, Ms. Li-Pin Kung, who are familiar with the regulatory affairs in USA. ProMed has assembled managerial team from international resources. Several managers are from Taiwan, where generic drug industry has had started 15 years ago. Pharmaceutical scientists from Taiwan generally have more experience in the generic product development and exhibit more working ethics, more stable in job, as well as easier to be trained when compared to China local scientists. Our technological consultation team is consisted of experienced members from Taiwan, US, and professor from Pharmacy school.
We are looking for angel or venture fund of about US$5 million dollars in exchange for 20% to 25% of company equities. Tsang-Bin Tzeng possesses 70% and Mr. Yi Sun holds 30%. Exit plans of the investment are flexible and negotiable. We do have a plan to bring the company to the public either in US or in China. This funding allows us to develop our own products to the market and expand the current service program. I am in Cherry Hill NJ now and can be reached at land phone of 856 795-3058.