In February 1980, Yan Yiyi was appointed as the director of Tongshan Pharmaceutical Factory (predecessor of Chengyi Pharmaceutical) by the then Dongtou County Party Committee. For nearly half a century, Yan Yiyi led his team to turn a small collective workshop that was on the brink of bankruptcy into a listed company on the Shanghai Stock Exchange. Yan Yiyi also became the most senior "meritorious entrepreneur" in Wenzhou today, earning respect and praise from all sectors of society. Since the company went public in March 2017, Chengyi Pharmaceutical has been steadily advancing and has become the "first stock of marine medicine" in China, receiving high attention from consumers and the capital market.
Enlightenment from the "Whole Industry Chain" of Aminosugar
In the field of pharmaceutical production, having a "full industry chain" is the goal pursued by many enterprises. As it includes various major links such as upstream, midstream, and downstream, product quality and production costs are easy to control, and enterprise benefits can be maximized, it has unparalleled advantages in market competition.
From the day she decided to make glucosamine hydrochloride (hereinafter referred to as "glucosamine"), Yan Yiyi decided to build it into a "full industry chain" product, which includes not only raw materials, but also various preparation products that are segmented by population, age, and disease, It must be a "pure natural, no excipients, no additives" green ammonia sugar. After more than 20 years of development, "Chengyi ammonia sugar" has become a widely popular product in the market and consumers.
When reviewing the development history and success of Chengyi Pharmaceutical's ammonia sugar products for over 20 years, Yan Yiyi gained three inspirations:
The first is quality assurance.
Quality is the life of a product. Yan Yiyi often said, "Drugs are a special commodity, life is at stake, and there must be no flaws." Starting from the first raw material and process, Chengyi Pharmaceutical uses shrimp shells and crab shells to make "chitin," which is also the "only legal source" approved by national regulations; The extraction of "chitin" into an amino sugar raw material drug is fundamentally different from the amino sugar capsules synthesized through fermentation, enzymatic synthesis, and chemical synthesis on the market.
Secondly, there are cost implications.
In November 2018, Chengyi Pharmaceutical acquired Fujian Huakang Company. After four years of transformation and improvement, this chemical enterprise transformed into a pharmaceutical enterprise, becoming a holding subsidiary of Chengyi Pharmaceutical deployed in other provinces to specialize in the production of ammonia sugar raw material drug "chitin". At present, Fujian Huakang has the production conditions and capacity to produce 2000 tons of ammonia sugar raw materials annually, and mainly supplies high-quality raw materials to the parent company. Therefore, in terms of time cost, procurement cost, manufacturing cost, and other aspects, Chengyi Pharmaceutical's ammonia sugar products can "dominate". At present, Chengyi Pharmaceutical has a production capacity of 2000 tons of ammonia sugar raw materials, which is the largest in Asia and has a strong competitive advantage in the industry.
The third is the price implications.
The biggest impact of the three-year epidemic on the manufacturing industry and the real economy is the threat to the security of the supply chain. With quality assurance and cost containment, Chengyi Pharmaceutical's ammonia sugar products maintain a healthy and orderly entire chain, with high-level and high-quality development. To this end, Chengyi Pharmaceutical can confidently lower the price to the lowest level, thus winning the "first place" in the seventh batch of national centralized procurement, occupying over 41% of the Chinese hospital market.
Yan Yiyi stated that after completing the construction of the "entire industry chain" of glucosamine hydrochloride capsules, he is planning the construction of "fish oil" and "cicada flower cordyceps" products, and is determined to mature and improve one before launching another.
Ultra high purity fish oil EPA settled in Chengyi
The 40 years of reform and opening up have been a period of rapid progress in the domestic health product industry. Over the past 40 years, the "505 Shengong Yuanqi Bag" in Shaanxi, the "Taiyangshen Oral Liquid" in Guangdong, the "Sanzhu Oral Liquid" in Shandong, the "Yangshengtang Turtle Pill" in Hainan, and the "Angli No.1 Oral Liquid" in Shanghai have been popular across the country, becoming the "top spot" in China's health products (food and supplies) at a certain time. Nowadays, many have disappeared into the long river of history. However, abroad, there is a continuous theme of "health products" that runs through the main process of public life and industrial development, that is, the development of "marine biomedicine" is gradually becoming a climate. From the initial popularity of "fish liver oil" in Europe and America to the luxury goods that billionaires are now flocking to - "ultra high purity fish oil EPA soft capsules" is an example. As of now, globally, the most typical and mature product of "marine biomedicine" is the "ultra high purity fish oil EPA soft capsule" product, which can be called the "king" of health products.
After 40 years of refining, the Chinese health product industry has also sublimated into a "life and health industry", moving from being limited to "terrestrial organisms" in the past to developing "marine organisms". This is an extremely difficult and risky "deep blue" field, and after successfully obtaining the development experience of ammonia sugar, a marine biopharmaceutical product, Chengyi Pharmaceutical is determined to enter the "deeper" waters.
Under the leadership of Yan Yiyi, the chairman of the board of directors, Chengyi Pharmaceutical R&D team spent more than 10 years with the Chinese Academy of Sciences Shanghai Institute of Materia Medica to jointly develop Dongtou Sargassum fusiforme as a drug. Scientists used "enzyme engineering technology to separate and study polysaccharides and oligosaccharides in the screening of active substances, and made new progress", which has opened a "door" for the treatment of Alzheimer's disease. This is one of the dreams of Chengyi Pharmaceutical to accelerate its transformation from "generic drugs" to "innovative drugs".
After long-term investigation, exploration, and experimentation, by the end of 2022, Chengyi Pharmaceutical successfully developed two high-purity fish oil EPA soft capsule health foods, named "Vasepa" and "Sankang". Simple experiments have shown that the higher the EPA content, such as 93% pure fish oil soft capsules, which have almost no impurities and saturated fatty acids, the closer they are to single molecule physical properties - even if frozen in the refrigerator, they will not solidify, This is a characteristic that other low purity fish oil soft capsules do not possess. At the same time, Chengyi Pharmaceutical has also lowered the price of each soft capsule from around 20 yuan overseas to around 8 yuan, striving to make it affordable, long-lasting, and effective for every ordinary consumer.
After more than half a year of promotion, it has been widely praised in the national market and is currently in the stage of increasing market supply at full power.
Chairman Yan Yiyi said that looking back in the past, the chaotic situation where the "life and health industry" casually contracted a few workshops and invited several industry experts to sit down and dare to say that certain health products can cure all diseases, thus fooling consumers, has gone forever. The current "life and health industry" is under the gaze of the Internet and the rapidly changing high-tech world. Every step it takes requires rigorous scientific basis, scientific spirit, and the original mission of serving the people with excellent quality, in order to stand firm and move forward steadily.
On May 23, 2023, Shanghai's Xinmin Evening News reported that the first high-purity prescription fish oil formulation, Omaco, was originally imported from a foreign health industry company（ ω- 3 fatty acid ethyl ester 90 soft capsules have been prescribed for the first time in several hospitals across the country, marking the official entry of this high triglyceride treatment drug into clinical application in China. Yan Yiyi believes that the high-purity fish oil EPA product developed by Chengyi Pharmaceutical has already met the conditions to enter the national hospital market.
Correspondingly, at the beginning of the year, the 2023 version of the "Guidelines for the Management of Blood Lipids in China" (hereinafter referred to as the "Guidelines"), compiled by authoritative domestic institutions, was officially released. According to statistics, more than 40% of adults in China currently have dyslipidemia, and the number of cardiovascular diseases is as high as 330 million, indicating a high incidence of cardiovascular diseases. Scientists have found through repeated experiments that statins and high-purity ethyl eicosapentaenoate (IPE) are one of the best combination drugs. The American diabetes Association (ADA), the National Lipid Association (NLA), the Food and Drug Administration (FDA) and other authoritative organizations have recommended that high-purity fish oil products can be added to patients whose triglyceride levels are still high (<500mg/dL) after the use of statins to further reduce cardiovascular risk. Chengyi Pharmaceutical's high-purity fish oil EPA soft capsules, which have been launched, are rich in ethyl eicosapentaenoate (IPE) and will enter clinical applications in China, providing a new treatment option for the general population with dyslipidemia.
The birth of each new drug is the result of long-term development of human, material, and financial resources. Chengyi Pharmaceutical produces health food based on the production equipment, technology, and conditions of pharmaceutical companies, making the quality of its health products widely recognized by the market.
In mid July, Chengyi Pharmaceutical obtained the Registration Acceptance Notice for the "Eicosapentaenoic Acid Ethyl Ester Soft Capsule" (also known as the scientific name of ultra-high purity fish oil EPA soft capsule) applied to the National Drug Administration. Chengyi Pharmaceutical's pharmaceutical grade fish oil is one step closer to its market launch, and its production of fish oil raw materials is also accelerating verification and approval. Consistent with the ammonia sugar industry, Chengyi Pharmaceutical hopes to once again build fish oil into a part of the "entire industry chain" of products.
Yan Yiyi revealed that in the next step, the company will send personnel to coastal countries around the world to conduct in-depth investigations and gain a deeper understanding of deep-sea fish fishing, processing, and export. If possible, it will directly establish bases abroad to provide a continuous supply of high-quality raw materials for the company's products.
Building the "Chengyi Territory" of the Life and Health Industry
For Chengyi Pharmaceutical, moving from drug research and production to the "life and health industry" can be said to be effortless. Since 2022, Chairman Yan Yiyi has proposed that during the 14th Five Year Plan period, the company will focus on the "Two Strong and One Large" strategy, accelerating the transformation from "generic drugs" to "innovative drugs": "Two Strong" means strengthening the ammonia sugar industry and fish oil industry, and "One Large" means expanding the life and health industry. Over the past two years since the implementation of the "Two Strong and One Large" initiative, a "Chengyi Territory" of the "Life and Health Industry" based in Dongtou and facing the whole country has been preliminarily formed.
On April 1st of this year, a group of top domestic "life and health industry" experts from Beijing made a special trip to Chengyi Pharmaceutical to investigate the development of the life and health industry of listed companies. Director Dr. Li Dingchuan from the People's Liberation Army 305 Hospital said, "This is my first time visiting Dongtou Island. I was shocked to see that Chengyi Pharmaceutical has already launched fish oil soft capsules that have achieved a purity of 98% of EPA. I am very confident in China's vigorous development of the life and health industry
In the eyes of experts in Beijing, it is not easy for a private enterprise to leverage its strengths and avoid weaknesses to build its own "industrial map". In today's rapidly aging society in China, doing a good job in managing the health of middle-aged and elderly people is the greatest merit, and there will inevitably be rich rewards.
Exploring the "Chengyi Territory", we found that companies have put in a lot of effort in terms of product features and effects:
——For the cardiovascular and cerebrovascular health issues of the middle-aged and elderly population, there is an ultra-high purity fish oil EPA soft capsule health food that assists in reducing blood lipids. On this basis, pharmaceutical grade fish oil EPA soft capsules will be launched; Regarding the prevention and treatment of systemic bone and joint diseases in the middle-aged and elderly population, there are ammonia sugar capsules, and the ammonia sugar industry has become the largest in the country; In response to the issue of neurological diseases in the middle-aged and elderly population, the company has developed a series of health foods that were launched in early July this year; In response to the problem of sleep disorders in the middle-aged and elderly population, the company has collaborated with the Zhejiang Subtropical Crop Research Institute to develop a series of cicada flower cordyceps products, which are currently accelerating production; In response to the issue of improving the immunity of the middle-aged and elderly population, its nine immortal grass series products such as Dendrobium officinale are well-known "internet celebrity products" in the Pearl River Delta region of Guangdong. Yan Yiyi stated that with the gradual spread of "flagship products" such as ultra-high purity fish oil EPA soft capsules, ammonia sugar, cicada flower cordyceps, and dendrobium officinale, Chengyi Pharmaceutical's "territory" of the life and health industry will continue to expand, deeply serving the middle-aged and elderly population in China, deeply exploring the rich gold mines in the industry, and quickly achieving the company's stock market value of 10 billion yuan.
On May 17th, at the "Healthy Wenzhou and Municipal Health Modernization Construction Promotion Conference" hosted by the Wenzhou Municipal Party Committee and Government, Zhao Chunjian, the general manager and party secretary of the company, made a statement on behalf of the enterprise at the conference. He stated that Chengyi Pharmaceutical will focus on building an "innovative highland" for marine biopharmaceuticals in the field of new drug research and development. During the 14th Five Year Plan period, we will continue to promote the research and development of over 30 new products; Continue to strengthen deep cooperation with Academician Ding Jian's Workstation, Shanghai Institute of Pharmacy, Oujiang Laboratory, China University of Pharmacy, Wenzhou Medical University, and other research institutes and colleges, further expand and strengthen the marine biopharmaceutical industry, and focus on building an "aircraft carrier" for southern Zhejiang medicine. In terms of strengthening digital leadership, we will focus on creating a "digital highland" for pharmaceutical intelligent manufacturing; We will continue to adhere to the guidance of digital innovation, promote the deep integration of pharmaceutical industrialization and informatization, actively participate in the construction of "Internet plus+Medical Health" projects such as the National Medical Data Trading Center, and strive to build a "future factory" for pharmaceutical intelligent manufacturing, so as to provide "Chengyi samples" for Chinese pharmaceutical industrial enterprises to achieve intelligent management, intelligent production, green manufacturing, and digital marketing. ( Wu Fengxu Lingfei )
Article source: Dazhong Securities Network