In a surprising move, the richest man in China’s biopharma industry is stepping down.
Sun Piaoyang, 61, who’s led Jiangsu Hengrui Medicine for 30 years, will no longer serve as the Chinese pharma major’s chairman, the company said in a securities filing (Chinese, PDF) Friday. Taking his place will be Zhou Yunshu, a Hengrui veteran who’s been its president for 17 years.
Shedding the chairman title doesn’t mean Sun is retiring, though. For one thing, he’s still chairman of the Hengrui group and the drugmaker’s real controller. The Hengrui group is the Shanghai-listed pharma company’s largest shareholder, with a stake of almost one-fourth, and Sun holds about 90% equity interest in that group.
That level of ownership in one of China’s largest anti-cancer drugmakers makes Sun the wealthiest in the country’s pharma sector. In Forbes’ China’s Richest 2019 list released last November, Sun’s family wealth was valued at $25.8 billion, ranking fourth on the country's billionaire roster.
The total includes a handsome contribution from his wife, Zhong Huijuan, who saw a major boost in wealth after the pharma company she founded and heads, Hansoh Pharma, went public in Hong Kong in mid-2019. According to Bloomberg’s constantly updated Billionaires Index, Zhong’s $14.2 billion net worth ranks as 102nd worldwide, even ahead of Sun’s $13.3 billion.
Besides, Sun will remain a director on Hengrui’s board and head its strategy committee, a post that had belonged to the chairman's role—until now. It means Sun’s still the mastermind behind the curtain.
Investors responded well to the news: Hengrui’s stock price increased 4.88% during Friday’s trading.
Sun’s transition comes at a critical time for Hengrui. An old pharma major, Hengrui’s trying to shift its focus from off-patent drugs to innovative therapies. At an industry event last October, Sun unveiled that Hengrui had already terminated some generics programs as the country pushes for wider adoption of a bulk procurement scheme aimed at cutting off-patent drug prices.
Hengrui’s already getting a taste of that program. Amid the countrywide rollout of the initial program, a second round of bidding involving an additional 33 drugs was carried out Friday. According to local media reports, Hengrui’s copycat of Celgene’s BeiGene-managed chemo drug Abraxane won the contract at a price of CNY 780 ($114) per vial. The other two winners to supply the same drug include the originator’s med at CNY 1,150 ($168) and CSPC Pharma’s version at CNY 747 ($109).
At the same time, China’s biotech boom and regulators’ general welcoming attitude toward drug innovation is forcing Hengrui to compete against much larger multinationals and other domestic players born with an R&D gene.
For example, Innovent Biologics and partner Eli Lilly recently won national coverage for their PD-1 inhibitor Tyvyt in classic Hodgkin lymphoma. Hengrui’s homegrown AiRuiKa (camrlizumab) was approved in late May in that exact same indication, followed by BeiGene’s rival drug tislelizumab in December.