Recently, Dr. Zhang Zhefeng, Chairman of Chihealbio Group, led a delegation of senior executives to visit the Guangdong Biopharmaceutical Innovation Association for learning and exchange. The delegation also held discussions with entrepreneurs from Guangzhou and Shenzhen. Zhu Shaoxuan, Executive President of the Association, warmly received the group and presided over the exchange meeting.

President Zhu expressed: "Dr. Zhang shared insights into platforms ranging from innovative drugs to Class II drugs, including innovative and generic drug products. One key takeaway is Dr. Zhang's deep understanding of policies and regulations, which are critical for formulating development strategies for each product in every company. Many of the enterprises present today can likely relate to the importance of this understanding. Dr. Zhang is highly experienced and has been involved in numerous projects. I hope the enterprises here can further deepen their exchanges, unite their strengths, and work together toward mutual success!"

Dr. Zhang Zhefeng analyzed the impact of the generic drug consistency evaluation and centralized procurement linkage mechanism on the pharmaceutical industry's development and trends. He pointed out that generic drugs are the cornerstone of China's healthcare system and the foundation of the country's pharmaceutical enterprises. This linkage mechanism provides a strategic opportunity for enterprise growth. By seizing the opportunity and selecting the right products, companies can either leverage the momentum to grow stronger or achieve rapid breakthroughs, as evidenced by the occasional emergence of a listed company driven by just a few generic drugs.

In the post-centralized procurement era, generic drugs still offer opportunities for profit, but product selection is paramount, supply chain assurance is critical, and project selection strategies become more significant. Fast-tracked and efficient R&D processes are key to success.

However, in the long term, the future path for most pharmaceutical companies lies in transformation and differentiation, grounded in proprietary core technologies or intellectual property rights. Under the centralized procurement environment, companies must think critically about how to avoid excessive competition and choose differentiated pathways. Strategic use of limited funds to highlight enterprise strengths is essential, particularly in areas such as generic drug selection, innovative improvements, and self-owned intellectual property development.

Dr. Zhang Zhefeng also shared the development journey and future plans of Chihealbio. Established in 2018, the company has rapidly grown into a pharmaceutical R&D service (CRO) company with a team of nearly 200 professionals. It now boasts multiple technical platforms, core technologies, and key product pipelines, including generic drugs & consistency evaluation, innovative drug discovery, industrial-scale liposome production, drug-device combinations, peptide drugs, and oral mucosal improved formulations, among others.

The company is positioned as a high-end CRO with a unique model: building on the classic pharmaceutical R&D service approach, it emphasizes the provision of core technologies, transfer of key products, and fast-follow FIC (first-in-class) capabilities.

During the session, Dr. Zhang engaged in in-depth discussions with association and corporate representatives about potential areas of collaboration, fostering mutual understanding and exploring avenues for joint efforts.

On-site Exchange

As the centralized procurement model enters its latter stage, the difficulty of selecting generic drug projects continues to increase. Avoiding over-concentration of R&D products and ensuring rapid entry into centralized procurement after passing evaluations are the critical challenges of product selection. It requires precise pre-application assessment of the number and status of competing products under development. Chihealbio shared its experience in leveraging big data technology to effectively evaluate the concentration and progress of R&D products, thus avoiding overcrowding in product development. Through timeline simulations, Zhihe aligns three key elements: R&D progress, review and approval processes, and the timing of centralized procurement triggers. This approach provides clients with comprehensive strategic advice to secure a competitive advantage in centralized procurement.

During the exchange, it was discussed that among the three basic registration categories—innovation, improvement, and generic drugs—the overheated trend in innovative drug development caused by excessive capital investment in previous years has entered a cooling and adjustment phase. Generic drugs, following the widespread adoption of national procurement, have quickly settled into a low-profit normalization period. In contrast, improved innovation is poised to rise as a breakthrough strategy for small and medium-sized pharmaceutical enterprises, serving as a strategic turning point for upgrading products from centralized procurement to national negotiations.

In response, Nanjing Zhihe has strategically leveraged its technical advantages and integrated resources to focus on molecular modification, formulation improvements, and the discovery and expansion of new indications. The company has built multiple technical platforms, including industrial-scale liposomes, drug-device combinations, and oral mucosal drug delivery systems.

Early R&D and design have been completed for several blockbuster improved new drugs, such as:

• Sublingual tablets for emergency stroke treatment,
• Antibiotic injections tailored for pediatric mycoplasma infections,
• Drug-device combinations for interventional liver cancer treatment,
• Topical formulations for acne, whitening, and hair growth,
• Specialized gynecological foam formulations.

These projects have entered standardized R&D phases.

Particularly noteworthy is the industrial-scale liposome platform, which has established two commercial production lines. Partnering clients can utilize these production lines without investing heavily in building their own, redirecting existing funds toward product development. This arrangement significantly reduces the financial burden on small and medium-sized enterprises and effectively mitigates financial risks.