A pharmaceutical company treating vitiligo, which once earned 600 million yuan a year from selling skin disease drugs, aims for an IPO.

Text by | Hu Xiangyun

Edited by | Hai Ruojing

Over 40 years ago, when the legendary superstar Michael Jackson "ascended to godhood" on stage with his moonwalk, the strange transformation of his skin color from black to white also brought vitiligo, a skin disease not well - known to the public at that time, into the spotlight of society.

In China, the number of vitiligo patients exceeds 10 million. However, due to the complex pathogenesis, there are few drugs on the market that can effectively treat vitiligo. It was not until last September that "Ruxolitinib Cream", a drug specifically developed for this disease, officially submitted an application for marketing approval in China.

The market seems to have smelled the explosion of a multi - billion - dollar market in advance. Although Ruxolitinib Cream has not been approved yet, its sales "operator" behind the scenes, Constellation Pharma (00867.HK‌), has decided to spin off its subsidiary, Dermira Pharma, which holds the domestic rights of the drug, and list it independently in Hong Kong.

At the end of April, Dermira Pharma submitted its prospectus, allowing the market to catch a glimpse of its true features: its product pipeline almost includes all the high - quality products that Constellation Pharma, an established CSO company, has scoured from around the world after deciding to focus on the skin health track. Among them, there are many mature drugs that have already been launched on the market.

Thanks to these, in the past three years, although Dermira Pharma has not yet achieved profitability, it has had a considerable cash inflow every year. In 2024, the company's revenue exceeded 600 million yuan.

After breaking away from the support of its parent company, backed by the skin disease market with "rigid treatment demand", can Dermira Pharma break through the siege in the biotech sector of the Hong Kong stock market? Can the strategy highly dependent on introductions build a high - enough product barrier for this company that wants to build an empire of skin drugs?

The good cards in Constellation's hand are going solo

After "leaving" Constellation Pharma, Dermira Pharma took away the skin health products, which are now one of the most promising growth businesses under its parent company.

Constellation Pharma was established in 1995. In its early years, it made its fortune through the CSO (Contract Sales Organization, referring to a company good at sales) model. There is no need to mention its commercialization genes, but what is more worthy of attention is actually its product - selection ability. In the era of generic drugs in the early years, there were mainly two types of high - return products: being the first to imitate or acting as an agent for original research drugs. The representative enterprise of the former is Hengrui Medicine, while Constellation Pharma is a classic practitioner of the latter.

This is an enterprise quite good at "achieving great results with limited resources". Its approach is often to look for products with low sales overseas but in demand in China, obtain the agency rights at a low cost, and then turn them into billion - yuan single products with its marketing ability. This is the case in the traditionally strong cardiovascular and digestive fields, as well as in the newly - developed skin/aesthetic medicine business in recent years.

Take Ruxolitinib Cream as an example. Currently, among Dermira Pharma's many products, it is the one most anticipated by the market.

There are two core reasons: the scarcity of the variety and the strong demand. This is a product introduced by Dermira Pharma from the American biotech company Incyte, with which it has cooperated many times. It is also the only JAK inhibitor currently approved by the FDA (in 2022) for skin repigmentation in vitiligo worldwide.

Although vitiligo is painless, itchy - free, and non - contagious, it often has a serious impact on the appearance of patients. What is particularly painful is that it usually appears on the exposed parts of the body. A previous survey of more than 1,000 vitiligo patients showed that the proportion of patients affected by the disease on the face and neck exceeded 45% and 20% respectively.

Traditional drugs (included in the diagnosis and treatment guidelines but not approved for the indication of vitiligo), surgical and other treatment methods either cannot be used for a long time to maintain the curative effect or have strong side - effect problems. In contrast, the clinical effect of Ruxolitinib Cream is worth looking forward to.

Previously, the results of two Phase III clinical trials involving 674 patients showed that at the 24th week of treatment, about 30% of the patients had a 75% improvement in the Vitiligo Area Scoring Index compared with the baseline; by the 50th week, the proportion of beneficiaries increased to 50%. In terms of long - term effects, it showed good safety performance during the three - year follow - up.

In 2023, the first full - year of sales, the sales of Ruxolitinib Cream reached 340 million US dollars. Currently, although the product is still in the application stage in China, it has been launched in Boao Lecheng, Hainan in advance. The price of a single 100 - gram dose is 6,800 yuan. When the affected area is small, one tube can be used for half a year. Even with high - dose use, at most two tubes can be used in a month.

In addition to Ruxolitinib Cream, in the core field of skin prescription drugs, most of the other 3 launched products and 5 R & D pipelines of Dermira Pharma also follow this approach.

Product pipeline of Dermira Pharma's skin prescription drugs (Source: Dermira Pharma's prospectus)

In terms of indications, they are basically concentrated in the "small but beautiful" tracks such as atopic dermatitis, psoriasis, and superficial phlebitis, where the number of patients ranges from tens of millions to hundreds of millions; from the perspective of product selection, they basically have the necessary characteristics of being "exclusive" or "differentiated".

For example, in 2021, the Polidocanol Injection obtained by the company through the acquisition of the full equity of Luqa is currently the only product approved in China for the sclerotherapy of varicose veins; another product, Mucopolysaccharide Polysulfate Cream, is also the only product approved in China for the treatment of superficial phlebitis, and there are no other targeted treatment drugs in the clinical stage in the market, so it may enjoy a long - term market monopoly period.

In the past two years, due to the failure of 3 original research drugs in the cardiovascular and digestive lines to win the bids in the national centralized procurement, Constellation Pharma's profits have declined significantly. In 2024, there was even a situation where both the revenue and net profit declined for the first time. In contrast, although the emerging "skin + aesthetic medicine" business is still small in scale, it has maintained a clear growth trend. The revenues in 2023 and 2024 were 569 million yuan and 673 million yuan respectively, with year - on - year growth of 20.2% and 18.2%.

In this spin - off, the skin health products obtained by Dermira Pharma are the major part of Constellation Pharma's "skin + aesthetic medicine" business line. The revenues in 2023 and 2024 were 473 million yuan and 618 million yuan respectively, accounting for more than 80%.

Revenues and gross profits of Dermira Pharma's two major businesses (Source: Dermira Pharma's prospectus)

Recently, the IPO market has shown signs of recovery. With such a performance, does Dermira Pharma have the possibility of "going public"?

Expanding product categories: From serious medical to consumer medical

With a solid foundation of big - selling products, if Dermira Pharma can inherit Constellation Pharma's sales genes and become a CSO company focusing on the skin health field, it seems to be a good "smooth path".

Then, sales ability becomes the primary factor for evaluation. Dermira Pharma was established in 2020 and started operating as an independent business unit in the following year. Most of the core management team joined Constellation Pharma around 2000 and have grown from product assistants to sales "veterans". From the team proportion, it can also be seen that the company attaches great importance to this. Among the 764 full - time employees today, the number of the commercialization team reaches 653, accounting for more than 85%.

In the marketing logic centered on prescription drugs, the most core elements are in - hospital channels and medical insurance. In the past four years, this has also been the key investment direction of Dermira Pharma. As of now, the company covers more than 10,000 hospitals and more than 100,000 offline retail pharmacies and e - commerce platforms. Wide channels are the foundation for the core products to increase sales.

Currently, two core launched products, Polidocanol Injection and Mucopolysaccharide Polysulfate Cream, have been included in the medical insurance. According to the prospectus, the compound annual growth rate of the former's sales from 2022 to 2024 reached 54.2%.

In addition to prescription drugs, Dermira Pharma also has a part of dermatological skin - care product business, mainly including the products of the "Heling" brand acquired in 2022, which are positioned in the popular "sensitive skin" concept in the current skin - care field and mainly consist of affordable products for the treatment of dermatitis and acne. Although it only accounts for about 10% of the total market share, the gross profit in 2024 was close to 75%, even exceeding that of the prescription drug segment.

For such products with both medical and consumer attributes, Dermira Pharma's approach is to strengthen its new - media marketing ability in addition to traditional sales channels and expand its influence in off - hospital channels. Nowadays, many user promotions about "Heling" can also be seen on platforms such as Xiaohongshu and Douyin.

Sales ability is Dermira Pharma's current strength. However, another problem is that to truly achieve the goal of being a "big leader in a specialized niche field" set at the beginning of its establishment, it needs to continuously introduce high - quality new products.

In this regard, first of all, Dermira Pharma's advantage does not lie in self - research. This can also be seen from its annual R & D expenditure of less than 100 million yuan and a R & D team of just over 40 people.

Doing product introductions like its parent company is obviously a more logical way. In the topic of innovation transformation of traditional pharmaceutical companies, Constellation Pharma has given an excellent answer. By being an LP, the company has established close cooperative relationships with a large number of professional medical funds, which has thus become an important channel for the company to access excellent products. For example, Constellation Pharma once invested in Xihong Biotech, which is engaged in aesthetic medicine business, and then introduced several aesthetic medicine injection products such as the "teenage needle" developed by it.

However, this method mainly relies on the strong capital and market capabilities of the listed company to complete. Before the "separation", Constellation Pharma's strong product - selection and BD capabilities were undoubtedly a plus for Dermira Pharma when planning its product matrix. Will this support continue in the future?

From 2023 to 2024, the company's gross profit margin declined from 76.88% to 63.46%; in 2024, the company's sales expenses directly accounted for more than half of the revenue. As of the end of 2024, the cash on Dermira Pharma's account was 282 million yuan. And the company's current spin - off does not involve the issuance of new shares for financing. Then, at the critical node of product marketing, how much resources and financial power can be allocated to the search for new products?

This answer may also determine how far the "independent" Dermira Pharma can go in the future.