Due to advertising the prescription drug Yilapao at the hotel venue, a subsidiary of the leading innovative pharmaceutical company in China, BeiGene (688235. SH, stock price 127.25 yuan, market value 172.388 billion yuan), was fined hundreds of thousands of yuan.
Recently, the official website of the Shanghai Municipal Administration for Market Regulation showed that BeiGene (Shanghai) Biotechnology Co., Ltd. (referred to as "BeiGene Shanghai") was fined 400000 yuan for using advertisements to falsely promote goods or services.
According to the prospectus of Baekje Shenzhou, Baekje Shenzhou Shanghai is a wholly-owned subsidiary of Baekje Shenzhou and the domestic sales team of the listed company, mainly engaged in the commercialization of drugs. In recent years, the sales expenses of BeiGene have been increasing year by year. In the first three quarters of 2023, the company's sales expenses have reached 5.166 billion yuan.
In addition, due to high sales and research and development expenses, the company is still in a loss making state. The drug "Pamipali Capsules" involved in this incident experienced a year-on-year decrease of 18.6% in product revenue in the first half of 2023.
Official website of Shanghai Municipal Administration for Market Regulation
Illegally publishing prescription drug advertisements and receiving a light fine of 400000 yuan
According to the administrative penalty decision, on August 18, 2022, Baekje Shenzhou Shanghai held the "Baihuize City Conference" and during the conference, advertisements for Pamipali capsules were posted in public areas using flip flops and promotional leaflets as carriers, It is claimed that "Baihuize (Pamipali) is the only PARP inhibitor approved for the treatment of recurrent ovarian cancer with 3L gBRCAm platinum sensitivity and platinum resistance; CGCS guidelines recommend Pamipali as the preferred drug for the treatment of recurrent ovarian cancer; the monthly treatment cost for medical insurance patients is only 1929 yuan.".
According to the data, Pamipali Capsules (trade name "Baihuize") are the latest self-developed commercial product of BeiGene. They were approved for sale in China in May 2021 and were announced to be included in the national medical insurance drug catalog in December 2021. They can be used for the treatment of recurrent advanced ovarian cancer, fallopian tube cancer, or primary peritoneal cancer patients with germline BRCA (gBRCA) mutations who have undergone second-line or higher chemotherapy in the past. However, as the product is a prescription drug, it can only be advertised in medical and pharmaceutical professional journals jointly designated by the health administrative department and the drug regulatory department of the State Council.
After investigation, it was found that Baekje Shenzhou Shanghai was entrusted by Baekje Shenzhou Co., Ltd. to be responsible for the marketing of Pamipali capsules. During the "Baihuize City Fair" conference, in order to increase the product's popularity and sales, BeiGene Shanghai promoted the drug Pamipali capsules in public places through promotional flyers, flip flops, and other forms.
The Market Supervision Administration of Jing'an District, Shanghai believes that the advertising of the above-mentioned prescription drugs in public places by Baekje Shenzhou Shanghai in the form of pull-up banners and promotional leaflets will have an impact on the selection of ordinary patients and consumers without professional medical and pharmaceutical knowledge, and cannot guarantee the scientific, correct, reasonable, and safe use of drugs. The behavior of Baekje Shenzhou Shanghai violates Article 15 of the Advertising Law of the People's Republic of China, constituting an illegal act of publishing prescription drug advertisements. However, due to discretionary factors such as the duration of the illegal act being less than 3 months, a lighter punishment was imposed and a fine of 400000 yuan was imposed.
On the evening of January 19th, Baekje Shenzhou told a reporter from the Daily Economic News that the reason for the punishment was due to improper placement of the flip flop with medical information. The company will take this as a warning and strictly abide by relevant laws and regulations in its future work.
The annual sales expenses approach 6 billion yuan, and the sales of the products involved in the case have declined
In addition to revealing the common illegal propaganda tactics used in the pharmaceutical industry, this incident has also sparked market attention to the commercial products of BeiGene.
As a leading innovative drug company in China, BeiGene is the world's first innovative drug company to be listed in three cities: A+H+N. In November and December 2019, the company's Zebutinib and PD-1 tirizizumab were successively approved for listing in China; In May 2021, Baihuize (Pamipali) was approved for market launch in China, and the commercial product portfolio of three self-developed drugs by BeiGene was officially formed, which has continued to this day. During this period, many new indications for the drugs were approved.
However, it is worth noting that in the first year of commercialization in BeiGene, the company's personnel turnover was relatively frequent. The "Commercial Operations" four member team of BeiGene originally included Zhu Yifei, Bian Xin, Wu Qingyi, and Liu Yan. The first two resigned in March 2019, while Wu Qingyi and Liu Yan resigned in October 2021 and June 2022, respectively. At present, the Chief Business Officer of the company in Greater China is Yin Min, who officially joined BeiGene in January 2022 and previously served as the Head of the Oncology Division at AstraZeneca China.
In recent years, the commercialization team of BeiGene has gradually expanded, and sales expenses have also skyrocketed. According to the company's financial report, by the end of 2019, the global commercialization team of the company had grown from over 150 people in 2017 to over 900 people; In 2021 and 2022, this number increased to 3100 and 3500 respectively.
From 2020 to 2022, the sales expenses of BeiGene were 2.618 billion yuan, 4.452 billion yuan, and 5.997 billion yuan, with sales expense ratios of 123.46%, 58.66%, and 62.69%, respectively; In the first three quarters of 2023, the company's sales expenses had reached 5.166 billion yuan, with a sales expense ratio of 40.13%.
However, due to high sales and research and development expenses, BeiGene is still in a loss making state. From 2020 to the first three quarters of 2023, the company achieved net profits attributable to shareholders of -11.384 billion yuan, -9.748 billion yuan, -13.642 billion yuan, and -3.878 billion yuan, respectively. However, Pamipali capsules, which were involved in this incident, experienced a decline in revenue in the first half of 2023. The financial report showed that in 2022, Baihuize's product revenue was 5.46 million US dollars, a year-on-year increase of 49.1%; In the first half of 2023, Baihuize's product revenue was 3.725 million US dollars, a year-on-year decrease of 18.6%.
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