Simcere President Reflects on 'Late' Transformation: Not Fast Enough, Not Determined Enough, Now Accelerating

By Ji Yuanyuan, 21st Century Business Herald

In the first half of 2026, Simcere Pharmaceutical Group delivered a market-striking performance: total revenue reached RMB 4.58 billion, up 27.8% year-on-year; adjusted net profit stood at RMB 964 million, a 48.7% increase; and innovative drug revenue hit RMB 3.887 billion, accounting for 84.9% of total revenue. The company has raised its full-year revenue target to exceed RMB 10 billion, and its profit target from RMB 1.6 billion to RMB 1.8 billion.

From a generics-focused business in 2015 to innovative drugs now accounting for nearly 85% of revenue, Simcere has completed a strategic transformation over more than a decade.

In September 2026, ten government departments jointly issued the 15th Five-Year Plan for Pharmaceutical Industry Development, which sets clear targets: by 2030, China’s first-in-class drugs should account for over 25% of the global total; the innovative drug industry should grow at an average annual rate of over 20%; and the number of drugs with global annual sales exceeding USD 1 billion should reach no fewer than five. Biomedicine has been elevated from a strategic emerging industry to a strategic pillar industry.

With favorable policy winds, Simcere now stands at a new starting line. However, when interviewed by 21st Century Business Herald, Simcere Group President Zhou Yunshu began not with achievements, but with reflection: “The biggest lesson we learned is that we recognized innovation transformation as an inevitable choice and started relatively early, but we were not fast enough, and our goals were not firm enough.”

Such candor is rare in the public narratives of domestic pharmaceutical companies. Yet it is precisely this “latecomer’s clarity” that provides the key to understanding Simcere’s transformation logic: after the release of the 15th Five-Year Plan and amid favorable policy conditions, how can a traditional generics-dependent company, having missed first-mover advantages, reshape its DNA through stronger execution and find its place in global competition?

Forging Innovation Capabilities

Founded in 1995, Simcere started with generics and was once a leading player in China’s generics sector. In 2001, founder Ren Jinsheng proposed shifting the strategic focus toward innovative drugs, but it took nearly two decades to fully break away from traditional path dependency.

“When old businesses were still running smoothly, we lacked the real courage to adjust our development direction and reallocate high-quality resources,” Zhou admitted. “Compared with some leading domestic companies, Simcere actually missed some development opportunities. During that period, we still had a mindset of pursuing both generics and innovative drugs, without completely cutting off our dependence on traditional development paths.”

This “wanting both” mentality is quite representative among traditional pharmaceutical companies. Zhou once used the metaphor of a “model student” to describe the predicament: sales must increase, profits must increase, and R&D spending must increase—all three sides of the triangle must grow. Compared with biotech companies without historical baggage, traditional pharma companies face a more difficult transformation.

The turning point came during the “14th Five-Year Plan” period. The data speaks to the scale of change: R&D investment jumped from less than RMB 2 billion during the “13th Five-Year Plan” period to over RMB 9 billion; R&D staff expanded from about 300 to 1,000; only one innovative drug was approved during the “13th Five-Year Plan” period, compared with seven during the “14th Five-Year Plan” period; and the share of innovative drug revenue rose from about 45% to approximately 80%. From 2021 to 2025, the company’s R&D intensity remained above 20%, peaking at over 30%.

Zhou summarized the transformation journey into three key insights:

• First, upgrading to innovative drugs must begin with talent upgrading. The current R&D team of about 1,000 people has over 70% holding master’s or doctoral degrees, and over 10% are overseas talent.
• Second, open innovation is an inevitable choice. Through platforms like Baijiahui, Simcere has incubated innovation projects and directly or indirectly collaborated with over 100 companies, forming an ecosystem of upstream-downstream linkage and collaborative innovation.
• Third, innovation requires building a solid foundation. Capital investment must be sustainable, with a willingness to invest and tolerate failure—without being short-sighted.

Today, Simcere has built a portfolio of 11 innovative drugs covering neuroscience, oncology, autoimmune diseases, and anti-infective therapies. In the first half of 2026, the company added 6 Phase I clinical/IND projects, initiated 3 new Phase III clinical trials, and submitted 5 new drug applications, with over 90 innovative drug R&D pipeline projects. Multiple follow-up innovative products are expected to launch between the second half of 2026 and 2028, with peak sales of upcoming products totaling approximately RMB 15 billion.

Xianbixin is Simcere’s flagship product. Supported by robust clinical evidence and academic results published in top international journals, the Xianbixin series has become a cornerstone neuroprotective drug in China’s stroke treatment field, with cumulative sales exceeding RMB 10 billion since launch. In July 2026, Xianbixin injection was included in the latest National Essential Drug List, which is expected to boost peak sales by 15%. The sublingual tablet formulation is also seeking inclusion in medical insurance to facilitate full-course treatment and expand patient coverage.

However, Simcere is actively working to reduce its dependence on a single product. In neuroscience, the new-generation DORA anti-insomnia drug Daridorexant has ranked first in insomnia drug sales on major e-commerce channels within just over 9 months of launch. The company expects full-year 2026 sales to exceed RMB 700 million. In autoimmune diseases, the atopic dermatitis drug Pumicitinib gel is expected to become China’s first domestically produced topical JAK inhibitor for atopic dermatitis and the world’s first gel formulation. In oncology, the new-generation ALK inhibitor Ceritinib is seen as a potential major growth product in the lung cancer field, leveraging its ability to overcome second-generation ALK resistance and its differentiated application in brain metastasis patients.

“As these products are approved and launched successively, each of our key focus areas will be supported by multiple follow-up products with potential sales exceeding RMB 1 billion,” Zhou said. “Simcere’s innovation-driven growth means that in every field, we will shift from being driven by a single product to being driven by a multi-product matrix.”

However, the true measure of innovation is not just “whether you have it,” but “how innovative it is.” Zhou acknowledged that original innovation remains rare at present.

“In the future, as Chinese pharmaceutical companies improve their innovation capabilities, they will gradually move toward original innovation,” Zhou said. In terms of R&D resource allocation, Simcere’s strategy is to “focus on core tracks, reject low-level ‘involution,’ know what to do and what not to do, and avoid chasing trends.” At the same time, the company is actively embracing AI technology. In July 2026, it signed a drug R&D collaboration agreement with Schrödinger Inc. to leverage AI for original innovation.

From “Selling Seedlings” to “Selling Capabilities”

If innovation transformation was Simcere’s first major battle, internationalization is the second one underway.

In 2025, the total value of Chinese innovative drug BD outbound deals reached approximately USD 130 billion. In the first half of 2026, this figure was about USD 110 billion. Among the global Top 10 out-licensing deals, 8 came from Chinese companies. Chinese pharmaceutical companies have moved from following and running alongside to leading in some areas of ADC, bispecific antibodies, and trispecific antibodies.

Simcere’s BD pace is also accelerating. In January 2026, the company partnered with Germany’s Boehringer Ingelheim to co-develop the TL1A/IL-23p19 bispecific antibody SIM0709 for inflammatory bowel disease, with a potential total deal value of up to EUR 1.058 billion. In September of the same year, its subsidiary Simcere Zaiming signed an exclusive licensing agreement with Roche for global development of the trispecific antibody SIM0660, with an upfront payment of USD 75 million and milestone payments of up to USD 1.455 billion.

According to 21st Century Business Herald’s calculations, as of mid-September 2026, Simcere had completed 6 out-licensing deals with a potential total transaction value exceeding USD 6.1 billion. In the first half of 2026, the company received USD 154 million in upfront and R&D milestone payments, of which USD 63.5 million was recognized as revenue, becoming an important engine for performance growth.

But Zhou’s understanding of BD is undergoing a qualitative change. “In the early days, we felt we had made a profit as long as we sold a product. But looking back now, we might consider more collaborative approaches,” Zhou said. Simcere’s strategy will be adjusted: for high-quality assets with global competitiveness, the company will prioritize independent overseas development, possibly collaborating only in mid-to-late clinical stages, or even pursuing independent overseas development and commercialization.

The industry backdrop for this shift is that BD has evolved from single-product cooperation to platform-level collaboration. In 2026, many multinational pharmaceutical companies are no longer simply buying a product; they are engaging in platform-level, earlier-stage, and more comprehensive collaborative development with Chinese companies.

“We are shifting from selling seedlings to advancing projects to later clinical stages and accumulating more data before collaborating, and from single-product licensing to normalized, sustainable cooperation, making BD a second growth curve,” Zhou observed. Multinational companies have gone from visiting once every few years to visiting several times a year, with increasingly deeper exchanges and regular communication about potential collaboration opportunities. This gives Simcere more options.

The deeper logic is that the role of Chinese pharmaceutical companies is shifting from “source of innovation” to “innovation partner.” Through deep-binding models like co-development, Chinese companies can not only receive milestone payments but also participate in global profit sharing—moving from “selling seedlings” to “selling capabilities” and even “selling ecosystems.”

According to Zhou, Simcere is actively building overseas platforms, recruiting overseas innovative drug talent to form an international team, and exploring deep overseas opportunities through models such as New-Co (establishing new companies) and Co-Co (co-development, co-commercialization). “In the next two to three years, I believe we will see results,” Zhou said.

Internationalization is not an optional choice for the company but a necessary path. Domestic innovation is highly competitive, and China’s payment capacity lags far behind Europe and the United States. Chinese pharmaceutical innovation must move from meeting domestic needs to participating in global competition.

But internationalization is not a smooth road. Zhou acknowledged that the foundation for overseas clinical research is that the product must have unique clinical value overseas, with sufficient improvement over existing standard therapies. “These are areas where Chinese pharmaceutical companies need to learn and improve,” Zhou emphasized.

He added that the company must steadily improve its innovation capabilities to truly compete internationally and engage in more original innovation. At the project initiation level, Simcere already has projects based on overseas demand, divided into two categories: one where multinational companies are very interested and willing to license, but considering market potential and regulatory strategy, the company may first advance overseas clinical trials to a certain stage before considering collaboration; the other involves projects initiated with differentiated development targeting diseases prevalent in European and American populations.

Divergence and Choice

Simcere’s transformation story, set against the backdrop of the “15th Five-Year Plan,” offers broader reference value. The 15th Five-Year Plan for Pharmaceutical Industry Development explicitly calls for supporting pharmaceutical industry enterprises to target cutting-edge pharmaceutical technologies, develop a batch of first-in-class and best-in-class drugs with new targets, mechanisms, and drug types, and increase R&D efforts in key areas such as oncology, autoimmune diseases, metabolic diseases, cardiovascular diseases, and neurological diseases.

Under these policy incentives, domestic pharmaceutical companies face a critical choice: continue making “better generics” or fully shift to innovation-driven development?

Zhou’s assessment is that Chinese pharmaceutical companies will inevitably diverge in the future. “Over the past 20 years, we have seen many ups and downs. The next 10 years will be another process of re-divergence and change. International companies and leading domestic companies will definitely emerge. In the future, not every biotech will want to become a pharma company. There will be divergence and division of labor. Some will become leading advantaged companies, others will become biotechs with technological advantages, forming areas of relative strength.”

Simcere’s own choice is to advance “Innovation 2.0,” addressing the transition from Chinese innovation to global innovation. The core goal is to have drugs approved for marketing in major European and American countries. In project initiation, the standard must be internationally leading and oriented toward global demand. In talent, more high-level personnel with international perspectives are needed. In investment, R&D spending during the “15th Five-Year Plan” period is expected to exceed RMB 18 billion, doubling from the “14th Five-Year Plan” period. In collaboration, the company will explore more international cooperation and collaborative innovation models driven by clinical needs.

Simcere already has specific plans for its internationalization path. Public information shows that the company currently has R&D centers in Shanghai, Nanjing, and Beijing, a collaborative innovation center in Hong Kong Science Park, and an R&D center in Boston, USA, building overseas clinical registration capabilities.

The Hongqiao R&D Center, launched in June 2026, is positioned as a window for引进海外技术、拥抱全球合作 (introducing overseas technology and embracing global cooperation). Shanghai is a hub for top universities, leading hospitals, and clinical resources, while Hongqiao is an international open hub. Simcere hopes to leverage the Hongqiao R&D Center to strengthen domestic and international cooperation and explore non-consensus innovation.

In terms of R&D resource allocation, Simcere emphasizes:

• Rapidly scaling up already commercialized innovative products to generate cash flow that supports sustained high R&D investment
• Improving early-stage research capabilities and normalizing out-licensing to cover R&D costs and activate early-stage assets
• Focusing on core tracks and rejecting low-level “involution”
• Appropriately allocating resources to late-stage and soon-to-launch pipelines to accelerate market realization
• Actively embracing AI technology to form a company-wide AI system permeating the entire cycle from target discovery to clinical implementation, drug manufacturing, and even marketing management and organizational operations

In terms of government-industry-academia-research-hospital collaborative innovation, Simcere operates the National Key Laboratory for Neuro-oncology Drug Research and Development, the only one independently built by a private enterprise in the biomedical field. The company has also launched the “Quest Plan,” with a scientific steering committee composed of 18 academicians responsible for overall planning, project guidance, and evaluation. The plan establishes open research projects under the national key laboratory, open to hospitals nationwide in the neurology and oncology fields. It also includes the “Quest Fund” with diversified capital in the Jiangbei New Area, where enterprises provide funding and propose topics, academicians provide guidance, and the government provides matching support. Additionally, the company has established translation centers with hospitals and research institutes, signing strategic agreements.

Zhou said the “Quest Plan” is more about supporting non-consensus original innovation, benefiting the entire biomedical industry.

A Latecomer’s Advantage?

Looking back at Simcere’s transformation journey, a question worth pondering is: Can a company that was “late” to transform still have a late-mover advantage? The answer may be yes.

The “lessons” Zhou mentioned—not being fast enough and not having firm enough goals—have precisely become the internal driving force behind the company’s accelerated transformation in recent years. From the leapfrog growth in R&D investment, to the upgrade of BD strategy from “selling seedlings” to “selling capabilities,” to the global layout of “Innovation 2.0,” Simcere is using stronger execution to make up for lost time.

In the historical process of China’s pharmaceutical industry moving from a “generics powerhouse” to an “innovation powerhouse,” Simcere’s significance lies in proving the feasibility of one path: traditional pharmaceutical companies can complete the genetic reshaping from generics to innovation through sustained high-intensity R&D investment and open innovation ecosystem building. But there are no shortcuts on this path. What is needed is not only capital and talent but also strategic determination and long-term patience.

As Zhou said: “To upgrade to innovative drugs, you must first complete talent upgrading as quickly as possible. The entire innovation chain is very long, and open innovation is an inevitable choice. Capital investment must be sustainable, with a willingness to invest and a mindset that tolerates failure—without being short-sighted.”

This is perhaps the question that all Chinese pharmaceutical companies on the transformation path need to answer.