Huahai Pharmaceutical Introduces Strategic Investor for Subsidiary to Accelerate Innovative Drug Development

　　【Pharmaceutical Network Enterprise News】To accelerate the development of innovative drug business, Huahai Pharmaceutical recently introduced a significant investor for its subsidiary. On December 25, Huahai Pharmaceutical announced that it plans to introduce HAIJING Venture Capital to subscribe for 20 million new shares issued by its subsidiary, Shanghai Huaota Biopharmaceutical Co., Ltd. ("Huaota"). As the investor, HAIJING Venture Capital has a state-owned background.
 

It is reported that after this increase in capital and expansion of shares, the registered capital of Huaota will increase from 300 million yuan to 320 million yuan, and the total number of shares will increase from 300 million shares to 320 million shares. Huahai Pharmaceutical stated that Huaota's increase in capital and expansion of shares and the introduction of investors will accelerate the long-term, continuous, and stable development of the company's biotech innovation drug sector, further enhancing the company's core competitiveness and sustainable operating capabilities.
 

In this capital increase, the parties to the transaction have agreed on the equity repurchase of Huaota. If Huaota fails to obtain marketing approval for one product within three years after the completion date of this capital increase, initiate a pivotal Phase III clinical trial for one product, advance one product to Phase II/III clinical trials, or if Huaota does not obtain marketing approval for two products (including products approved within three years), and advance two products to Phase II/III clinical trials within five years after the completion date of this capital increase, or if Huaota fails to achieve a domestic/overseas listing within the time frame stipulated in the capital increase agreement, the investing party has the right to require Huahai Pharmaceutical to repurchase all newly issued shares at a price determined by the principal amount of the subscription payment plus the agreed annual simple interest rate as per the agreement.
 

Data shows that since its establishment, Huaota has been committed to developing biopharmaceuticals with clinical value through innovative technologies. Its dual-target platform technology not only enhances the targeting and efficacy of drugs but also reduces side effects, providing patients with safer and more effective treatment options. The company stated that these funds will mainly be used to accelerate the progress of existing R&D projects and further expand its drug development pipeline in the fields of oncology and autoimmune diseases. However, from the current performance, Huaota is still in a loss-making state. Data indicates that Huaota's net profit for 2023 was -371 million yuan, and the net profit for the first three quarters of 2024 was -216 million yuan.
 

Data shows that Huahai Pharmaceutical is aActive Pharmaceutical IngredientsAn integrated enterprise in the field of pharmaceutical preparations, mainly engaged in the business of pharmaceutical preparations and active pharmaceutical ingredients (API), has formed a leading product series in the fields of cardiovascular, psychiatric disorders, nervous system, anti-infective, etc.
 

In terms of performance, in the first three quarters of this year, Huahai Pharmaceutical's API business achieved revenue of approximately 797 million yuan, and its formulation business achieved revenue of approximately 1.283 billion yuan. From 2024 to date, the company's domestically produced formulation products have received approval for 25 new products (including 4 from Changxing Pharmaceutical), with more than 10 new products launched for sale.
 

In recent years, Huahai Pharmaceutical has regarded its innovative drug business as an important strategic layout in the company’s development process. In terms of biologic innovation drugs, Huahai Pharmaceutical focuses on the independent research and development of large-molecule biologic innovation drugs in the fields of autoimmune diseases and oncology. Currently, it has over 20 projects under development, among which 12 have entered the clinical research stage. These include a key clinical-stage IL-36R monoclonal antibody independently developed in China targeting generalized pustular psoriasis, a potential IL-17A monoclonal antibody with differentiated advantages that has entered pivotal Phase 3 clinical trials, and a core project involving a PD-L1/VEGF bispecific antibody currently in Phase II clinical trials, which has shown positive efficacy signals in combination chemotherapy for first-line treatment of endometrial cancer, advanced lung cancer, and other tumor diseases.
 

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