The central theses:

• Hengrui Pharma has appointed the former top executive at smaller CStone as its new chief strategy officer in hopes he can help reverse the recent decline
• The company has lost four vice CEOs since last year, and its stock has fallen nearly 60% from its late 2020 peak.

By Molly Wen

2022 was a year for this pharmaceutical giant Jiangsu Hengrui Medicine Co.Ltd. (600276.SH) I would rather forget. Management underwent a major overhaul, crippling its revenue, profits and investor confidence as the stock fell to a four-and-a-half-year low.

Seeking medicine to reverse its decline, the company unveiled on Jan. 2 by announcing that Jiang Ningjun, co-founder and former chairman and CEO of CStone Pharmaceuticals(2616.HK), would join as vice general manager and chief strategy officer overseeing clinical trials and business expansion. His arrival creates a triumvirate of Chairman Sun Piaoyang and Vice General Manager and Global Development Director Zhang Lianshan to lead the company’s corporate strategy and R&D decision-making.

But the market reaction has been overwhelming. Shares of Hengrui fell 0.2% the day after the news broke and rose 0.9% the next day, suggesting investors may need more time to explore what Jiang can bring to the company.

Jiang, 61, is a veteran in medical research and commercialization of new drugs. He worked for Sanofi (SAN.PA) in France for 14 years as Vice President of the Clinical Research Center in China, President of the R&D Headquarters in Asia Pacific and Global Vice President.

He co-founded CStone in 2016 and later assumed the position of chairman. Within just five years, the company received approvals for four innovative products. He also led the signing of a strategic cooperation agreement with an industry giant Pfizer Inc. PFEincluding the transfer of interest in CStone’s PD-L1 products to the US company in exchange for up to…