Tragic Loss of Dr. Li Sheng, Leadership Turmoil at Genecast, and BeiGene's CFO Turnover Amid HKEX Biotech Push

At 6:30 a.m. on July 25, the farewell ceremony for Dr. Li Sheng's body was held in Hall No. 5 of Wenzhou Funeral Home.

At the farewell ceremony, mournful music played softly as people from all directions, wearing a red ribbon and holding a white chrysanthemum, paid their respects by offering flowers and bowing for a final goodbye.

On July 19, in Wenzhou, Zhejiang, Doctor Li Sheng was suddenly struck by misfortune during an outpatient consultation.At around 1 p.m., Dr. Li Sheng, a cardiologist in Room 17 of the cardiovascular department at the new campus of the First Affiliated Hospital of Wenzhou Medical University (hereinafter referred to as "Wenzhou No. 1 Hospital"), was working overtime seeing patients when he was suddenly attacked by a man wielding a hammer and knives. The assailant then fled the consultation area and jumped from the third floor of the outpatient building.

Li Sheng, 50, sustained multiple severe injuries and despite emergency treatment, he succumbed to his injuries at 9 p.m. due to ineffective rescue efforts.

In the obituary released by Wenzhou First Affiliated Hospital, there is such a sentence:"The passing of Comrade Li Sheng is a significant loss for the First Affiliated Hospital of Wenzhou Medical University and even the cardiovascular field of Zhejiang Province."

According to local media reports, thousands of people braved the rain to attend the farewell ceremony for Dr. Li Sheng. From July 21 to 24, related memorial activities were also held at the funeral home, with thousands of people spontaneously coming to bid farewell to Dr. Li Sheng. Around 6 a.m. on the 25th, a sign reading "Parking inside is full" was hung at the entrance of Wenzhou Funeral Home, with several traffic police directing traffic at the gate. Due to the large number of chrysanthemums delivered, adjustments had to be made to the flower arrangements inside the farewell hall as late as the evening of July 24.

Following the stabbing incident, the National Healthcare Security Administration and the National Health Commission successively issued statements strongly condemning the criminal acts of violence against medical staff.

No.2

HKEX CEO Amy Chen:

Currently handling 106 new listing applications

As of July 24, the Hong Kong Stock Exchange is processing 106 new listing applications; since the beginning of this year, 40 new stocks have been listed in Hong Kong, ranking third globally in terms of quantity.

HKEX CEO Nicole Chan said at the HKEX Future Technology Summit held on July 25 that many technology companies need to invest substantial funds during the R&D phase. Therefore, after consultations, it was decided to introduce Chapter 18C to the listing rules, allowing companies at an earlier stage of their lifecycle to raise funds in the public market. Last month, the first Chapter 18C company was welcomed, and currently, many more companies are preparing, with expectations of soon submitting their listing applications.

XtalPi Holdings Limited, an AI healthcare company, was listed on the Hong Kong Stock Exchange on June 13, becoming the first new stock to be listed under the Hong Kong Stock Exchange's "Chapter 18C" Specialized Technology regime more than a year after its implementation.

In March 2023, the Hong Kong Stock Exchange launched the listing rules tailored for specialized technology companies, namely Chapter 18C Specialized Technology."18C" is a listing clause specifically added by the Hong Kong Stock Exchange for specialized technology companies, significantly relaxing listing conditions such as revenue thresholds, while setting requirements for expected market value, R&D, and third-party investments.

Chen Yiting revealed that the Hong Kong Stock Exchange has already welcomed 40 new stocks this year. In terms of the number of new stock offerings, the Hong Kong Stock Exchange currently ranks third among global exchanges.

According to reports by The First Financial, since the reform in 2018 up to now, new economy companies have contributed 65% of the funds raised in Hong Kong's IPO market, among which 65 biotech companies went public through Chapter 18A.

Chen Yiting stated that China is actively developing high-tech strategic emerging industries such as biotechnology, electric vehicles, and new materials."I believe the acceleration of the filing process for mainland companies applying to list in Hong Kong is worth looking forward to."

Recently, BeiGene announced that Aaron Rosenberg has been appointed as the company's Chief Financial Officer (CFO), effective from July 22.

Aijun (Julia) Wang, who previously held this position, recently submitted a resignation application to the company.Reason for resignation: According to the announcement, Wang Aijun's decision to step down was not due to any disagreements with the company regarding operations, policies, or practices, and his resignation will not have an adverse impact on the company’s daily operations. The reason cited was his "pursuit of external development opportunities."

BeiGene is a global oncology innovation company focused on discovering and developing innovative therapies aimed at improving drug accessibility and affordability for cancer patients worldwide. According to BeiGene's Q1 2024 financial report, by the end of this reporting period, the company’s total operating revenue reached 5.359 billion yuan, representing a year-over-year increase of 74.78%, while the net loss attributable to shareholders was 1.908 billion yuan.

Overall, BeiGene has not yet turned a profit and has accumulated uncompensated losses. As of the end of 2023, the accumulated uncompensated losses amounted to 57.688 billion yuan.

BeiGene's financial report shows that in 2023, Wang Aijun received a total pre-tax compensation of 7.5084 million yuan from BeiGene.

Aaron Rosenberg, who previously worked at Merck, is BeiGene's third CFO in just over three years.In June 2021, Wang Aijun took over from Liang Heng. In June 2021, Liang Heng retired from BeiGene. Liang Heng worked at BeiGene for six years, leading the company to achieve listings on NASDAQ, the Hong Kong Stock Exchange, and the STAR Market.

During his three years at BeiGene, Wang Aijun helped raise billions of dollars in capital for the company from global stock markets.

On the evening of July 22, Ruian Gene announced that four individuals, including the company's actual controller, were taken into custody by the public security authorities on suspicion of illegal business operations.

On July 23, Ruian Gene plummeted to its lowest closing price since its listing at 14.98 yuan per share.

The company announced that it had received notices from the families of four senior executives: Xiong Hui, the actual controller, chairman, and general manager as well as core technical personnel; Xiong Jun, the actual controller, director, and deputy general manager; Xue Yuwei, the deputy general manager, have been placed under residential surveillance at a designated location by the public security authorities on suspicion of illegal business operations. He Junyan, another deputy general manager, has been criminally detained by the public security authorities on the same suspicion. Relevant matters are still under further investigation.

After four senior executives were simultaneously taken into compulsory measures by the public security authorities due to involvement in a case, Rightongene urgently convened a board meeting and decided that Gao Shangxian, the actual controller and director, would temporarily assume the responsibilities of the company's legal representative, chairman, and general manager.

From the composition of the board of directors, Ruian Gene is a typical "family business."The prospectus disclosed that Xiong Hui, the chairman involved in this case, and Xiong Jun, a director, are siblings. Gao Shangxian, who currently acts as the company's legal representative, chairman, and general manager, is married to Xiong Hui. Gao Shangxian's son, Gao Ze, has also served as a director of Rightongene since May 2019.

Ruiang Gene stated that the company's daily operations are currently running smoothly.

Public information shows that Ruiang Gene, established in 2012, is mainly engaged in the research and development, production, sales of in vitro diagnostic products (including detection instruments and reagents), as well as scientific research and testing services. Ruiang Gene's main products currently include molecular diagnostic kits related to leukemia, lymphoma, solid tumors, and infectious diseases. Its primary services encompass providing third-party medical testing services for various medical institutions, pharmaceutical companies, individual patients, etc., as well as offering gene testing research services to research hospitals, pharmaceutical enterprises, scientific research institutions, third-party testing agencies, and other organizations.

The financial report shows that in 2023, Realgen Gene achieved a revenue of 258 million yuan, a year-on-year decrease of 39.14%.Specifically, the revenue from the core business related to genes and tumors was 240 million yuan, increasing by 17.22% year-on-year; the routine testing business achieved operating revenue of 17.8194 million yuan, increasing by 82.11% year-on-year; the non-core testing business had operating revenue of 5.6717 million yuan, decreasing by 97.31% year-on-year, leading to a significant drop in total operating revenue. Its "non-core testing business" mainly consists of COVID-19 testing services.

On July 22, Huadong Medicine announced that it plans to acquire 100% of the equity in Guizhou Hengba Pharmaceutical Co., Ltd. ("Hengba Pharmaceutical") from individual shareholders He Xiaoling, He Yao, and others for a transaction price of 528 million yuan.

According to publicly available data, Hengba Pharmaceutical was established in 1995, focusing on the research and development of Miao ethnic medicines. It owns 21 Chinese medicine approval numbers and 2 chemical drug approval numbers; among them, 4 are Class A medical insurance drugs, and 10 are Class B medical insurance drugs, all of which are Chinese medicines.

Hengba Pharmaceutical is proficient in orthopedics, with main products including Shangkeling Spray and Bitongning Capsules.Among them, "Shang Ke Ling" is对标to Yunnan Baiyao Aerosol. In 2023, Yunnan Baiyao Aerosol generated revenue of over 1.7 billion yuan, representing a year-on-year increase of 15.27%.

In the past three years, Huadong Medicine has expanded its territory through "buying sprees," completing over 20 business development transactions.

Huadong Medicine's 2023 annual report shows that the company's net profit was 2.839 billion yuan, a year-on-year increase of 13.59%.After being impacted by the COVID-19 pandemic and centralized procurement, in 2023, Huadong Medicine's net profit rebounded to the level seen in 2019–2020.

However, in terms of financial performance, Hengba Pharmaceutical was once insolvent in 2023, with a net profit of 10.7118 million yuan (audited). In the first half of 2024, its net assets turned positive, with a net profit of 5.6038 million yuan. Whether it can bring performance growth to Huadong Medicine's external preparation product pipeline still needs time to observe.

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