QLI to Expand Business in ChongQing, Supporting Heparin Sodium Production Against Covid-19

According to WHO's COVID-19 live update, the cumulative number of cases worldwide exceeded 200 million, with more than 4 million deaths. The Delta variant has been founded in 132 countries, and now the virus infection cases in the U.S. and Western Pacific keep increasing.

In order to meet the global demand for one of the antiviral drugs needed, Qilian International Holding Group (NASDAQ: QLI), a specialized pharmaceutical company with high social responsibility, increases R&D expenses and expands the supply of heparin production during the COVID-19 pandemic. Even when the COVID-19 situation is getting worse and the medicines are in shortage, the Company has ensured that the major heparin manufacturers can have sufficient raw materials for production, and maintain constant supplies to hospitals worldwide.

Heparin products have a recovery effect on the thrombosis in critically ill patients with COVID-19

According to the "New Coronavirus and Thrombosis" data, in the statistics of severe patients in many hospitals in the Netherlands, France and overseas, up to 30% of critically ill COVID-19 patients are developing dangerous pulmonary embolism (PE) or thrombosis. Heparin products play a potential role in the treatment of thrombosis in patients with severe thrombosis.

Heparin sodium is a mucopolysaccharide sulfate anticoagulant, which cannot be synthesized artificially. It is mainly extracted from the small intestinal mucosa of healthy pigs. Due to the good anticoagulant effect of heparin, it is widely used in various operations and treatments such as cardio-cerebrovascular surgery, joint replacement, dialysis, etc., and it is the preferred anticoagulant drug in clinical practice. According to media reports, in response to the COVID-19 pandemic, the United States had initiated bidding and stockpiling of raw materials such as heparin. As the current global clinical anticoagulant raw materials, heparin products have become a "rigorous need" in the global fight against the COVID-19 pandemic, and are mainly used to treat the sequelae of thrombosis caused by the new coronavirus.

The average export price of heparin hit a record high and the heparin concept stocks price increased sharply

According to the latest data disclosed by the customs, the average export price of heparin in June 2021 was US$15,819.0/kg, which was a 269% increase from the low point of US$4,282/kg in July 2020 and exceeded the previous highest price of US$11,000/kg in 2010. According to Sina Finance media reports, on August 3, heparin concept stocks increased sharply after the market opening, such as Hepalink Pharmaceutical, Qianhong Bio-pharma, Changshan Pharmaceutical rose more than 14%, King-Friend Biochemical Pharmaceutical, Dongcheng Pharmaceutical and Hongri Pharmaceutical. China has been the biggest heparin supplier all over the world. Also, China is one of the major exporters of heparin raw materials, it supplies more than 50% of heparin raw materials around the world.

Currently, major overseas heparin API manufacturers include Pfizer (NYSE: PFE), SPL, Sanofi (NASDAQ: SNY) and Bioiberica. There are five major heparin API manufacturers in China, which are King-Friend Biochemical Pharmaceutical, Hepalink Pharmaceutical, Dongcheng Pharmaceutical, Qianhong Bio-pharma and Changshan Pharmaceutical. Since the successful production of heparin sodium in 2015, Chengdu Qilianshan Biotechnology Co., Ltd. (“Chengdu QLS”), a subsidiary of QLI, has been one of the significant long-term cooperative suppliers of Hepalink Pharmaceutical, King-Friend Biochemical Pharmaceutical and Changshan Pharmaceutical, which maintains a pivotal position in the field of R&D and production of basic heparin sodium products in China.

QLI’s development and corporate social responsibility

According to QLI financial data, Chengdu QLS achieved an annual sales revenue of RMB100 million for the first time in 2018. And in such a short period of time, Chengdu QLS has improved its production technology and expanded its production scale, with expected sales revenue exceeding RMB100 million in the first half of 2021.

In order to ensure the global supply of heparin sodium products, Chengdu QLS has successfully signed a contract with the Chongqing Tongnan District Government, its pig by-products processing facility (the “Project”) officially settled in the Tongnan High-tech Zone.

The main products of the project are heparin sodium crude products and intestinal clothing, the Project covering an area of about 50 mu (8.24 acres). After the completion of the first phase of the Project, the annual output of heparin sodium can reach 5 tons, the annual output value of up to RMB400 million. The landing of this project is an important step in the QLI’s development strategy layout, which has laid a solid foundation for extending the heparin sodium industry chain, entering the field of low-molecular heparin and quickly occupying the high-end market.

Chengdu QLS relies on the advantages of the abundant pig breeding resources in Sichuan and Chongqing and its excellent production and research and development capabilities, greatly enhancing its competitiveness can contributing to the global fight against the COVID-19 pandemic.