Eight Chinese Pharmaceutical Companies Withdraw IPO Applications in Early 2024, Half Failed on STAR Market

Jan 26, 2024 13:52 CST Updated 13:52

Kangya

Developer, Manufacturer, and Distributor of Chemical Drug Preparations and Active Pharmaceutical Ingredients

Hanyu Medical

Structural Heart Disease Interventional Devices and Electrophysiology Product R&D, Manufacturer

ArkBio

Innovative Drug Developer

Thousand Oaks

Biopharmaceutical R&D and Production Service Provider

The IPO status of pharmaceutical enterprises can, to a certain extent, reflect the overall activity level of the pharmaceutical industry.Against the backdrop of a tightened IPO market, regulators have become more cautious towards companies lacking sustained profitability. According to statistics, from the start of 2024 until now, a total of eight pharmaceutical companies have halted their IPOs., respectivelyGiantech Hi-technology, Ruiyi Medical Technology, Kangya Pharmaceutical, Hanyu Medical, ArkBio, Bona Precision Drug Delivery System, Huayi Biotechnology, and Thousand Oaks Biopharmaceuticals, and the reasons for termination are basically that the companies and sponsors withdrew their applications. The specific situations are as follows.

Giantech Hi-technology

On January 19, Chengdu Giantech Hi-technology Development Co., Ltd. applied to withdraw its application documents for issuance and listing. The Shenzhen Stock Exchange decided to terminate the review of its initial public offering of shares and listing on the ChiNext.Chengdu Giantech Hi-technology Development Co., Ltd. is mainly engaged in the research, production, and sales of chemical drug preparations, chemical active pharmaceutical ingredients (APIs), and pharmaceutical intermediates, while also providing technical services externally. It aims to become a leading and competitive enterprise in the field of chemical drug preparations and APIs within China.

For this listing, the specific listing standard chosen by the company is: The net profit in the last two years has been positive, and the cumulative net profit is no less than 50 million yuan.It is worth noting that the companySubmitted the ChiNext IPO application materials on June 28, 2023, but after responding to the first round of inquiriesThen withdrew the application.

Financially, from 2020 to 2022, Chengdu Giantech Hi-technology Development Co., Ltd.Revenue was 65.97 million yuan, 108 million yuan, and 283 million yuan, respectively; net profit was 13.9549 million yuan, 25.6895 million yuan, and 61.524 million yuan, respectively; non-GAAP net profit was 13.6 million yuan, 21.969 million yuan, and 61.178 million yuan, respectively.

Shanghai Ruiyi Medical Technology Co., Ltd.

On January 17, the Beijing Stock Exchange showed that Ruiyi Technology voluntarily withdrew from the Beijing Stock Exchange.IPO Application. The prospectus shows that Shanghai Ruiyi Medical Technology Co., Ltd. focuses on providing chemical synthesis CDMO services to innovative pharmaceutical companies as its core business. The company mainly engages in the customized research, development, and production of molecular building blocks required during the development and commercialization of small-molecule innovative drugs. It has established an integrated R&D and manufacturing capability encompassing route development for innovative drug molecular building blocks, process research, impurity analysis, pilot-scale amplification, and large-scale production. Its service offerings include: research services during the drug discovery phase, CDMO services during the clinical and commercial phases, and general-purpose molecular building block manufacturing services throughout the entire lifecycle of innovative drugs. All products delivered to customers are molecular building blocks.

For this listing, the company has chosen"Listing Rules of Beijing Stock Exchange (Trial)" Article 2.1.3, Criterion 1: "Market value of no less than 200 million yuan, net profit in the last two years no less than 15 million yuan each year and average weighted average return on net assets no less than 8%, or net profit in the most recent year no less than 25 million yuan and weighted average return on net assets no less than 8%."

Previously, the Beijing Stock Exchange had conducted three rounds of review inquiries on Shanghai Ruiyi Medical Technology Co., Ltd. and repeatedly inquired about its cooperation model with direct procurement and subcontracting party Yueyang Kangli, operational stability, fairness of transactions, and other aspects.

Financially, in 2020In 2022, Shanghai Ruiyi Medical Technology Co., Ltd. achieved revenues of 122 million yuan, 170 million yuan, and 361 million yuan, with non-net profit attributable to shareholders amounting to 31.7271 million yuan, 40.2805 million yuan, and 93.9914 million yuan, respectively.

Kangya

On January 16, according to the announcement by the Beijing Stock Exchange (BSE), Kangya of Ningxia Pharmaceutical Co., Ltd. submitted the "Application for Withdrawal of the Public Offering of Stocks to Unspecified Eligible Investors and Listing on the BSE" on December 27, 2023, requesting the withdrawal of its application documents. Consequently, the BSE decided to terminate the review of its public offering of stocks and listing on the BSE.Kangya is a comprehensive pharmaceutical enterprise driven by pharmaceutical R&D, focusing on the field of chemical medicines, and promoting the coordinated development of chemical medicine manufacturing and pharmaceutical contract outsourcing services.

For this listing, the specific listing standard chosen by the company is: The estimated market value is no less than 200 million yuan, with net profits in the last two years being no less than 15 million yuan each and the average weighted average return on net assets being no less than 8%; or the net profit in the most recent year is no less than 25 million yuan and the weighted average return on net assets is no less than 8%.

Financially, from 2020 to 2022, Kangya of Ningxia Pharmaceutical Co., Ltd.'s operating revenues were 139 million yuan, 141 million yuan, and 166 million yuan respectively; net profits were 17.0981 million yuan, 28.4912 million yuan, and 42.6602 million yuan respectively.

Hanyu Medical

On January 16, the SSE announced that Hanyu Medical and its sponsor CICC withdrew their IPO application, thus terminating the review of its issuance and listing.According to reports,Hanyu Medical was founded in 2016 and is mainly engaged in the research, development, production, and commercialization of interventional devices for structural heart disease and electrophysiology products.CompanyThere are 9 products under development, among which the core product ValveClamp for interventional treatment of mitral regurgitation has received regulatory approval in September 2023 and is about to scale up.If this product successfully enters the market, it can fill the gap in domestically produced products.

For this listing, the company adopted the fifth set of standards for the Sci-Tech Innovation Board. Prior to the termination of this listing, the company responded to one round of review inquiry letters. Notably, this is not the first time Hanyu Medical has applied for a listing. In April 2021, the company submitted its prospectus to the Hong Kong Stock Exchange; in September of the same year, it passed the Hong Kong Stock Exchange listing hearing; in November, after considering factors such as market liquidity and market conditions, the company officially announced the abandonment of its plan to list on the Hong Kong stock market.

FinanceAspect, 2019-In the first three quarters of 2022, Hanyu Medical achieved revenues of 0 yuan, 490,300 yuan, 3,405,400 yuan, and 2,166,600 yuan respectively, with net profits attributable to parent company shareholders at -49,192,400 yuan, -157 million yuan, -191 million yuan, and -58,842,000 yuan respectively. The company has not yet launched its core product, and all revenue from its main business comes from providing pet health services and selling pet medical devices.

ArkBio

On January 8, the official website of the Shanghai Stock Exchange showed that ArkBio's STAR Market listing application was terminated.Regarding the specific reasons for this withdrawal of the application, relevant persons from the company stated that it is currently inconvenient to disclose.

ArkBio mainly engages in the research and development of innovative drugs in the fields of pediatrics, respiratory system, and pulmonary diseases. CurrentlyWith nine products under development, five of which have entered the clinical research stage, including three authorized introductions such as the core product AK0529, and one self-developed product with an active ingredient identical to that of an authorized introduction.

For this listing, the company adopted the fifth set of standards for the Sci-Tech Innovation Board. Notably,Applied for listing on the Main Board of the Hong Kong Stock Exchange in June 2021,But it failed.

Financially, from 2020 to 2022, ArkBio's net profit attributable to shareholders was -104 million yuan, -197 million yuan, and -214 million yuan, respectively. It is expected that there will be accumulated losses that have not been offset within a certain period in the future, and the company will continue to incur losses.

Bona Precision

On January 8, the official website of the Shenzhen Stock Exchange announcedShenzhen Bona Precision Drug Delivery System Co., Ltd. Withdraws from ChiNext IPO Application. Established in 2003, the company mainly engages in the R&D, production, sales, and related technical support of precision drug delivery devices, primarily spray drug delivery devices, as well as other pharmaceutical packaging materials.

Financially, from 2020 to the first nine months of 2023, Bona Precision's revenue reached RMB 191 million, RMB 218 million, RMB 323 million, and RMB 290 million respectively; net profits were RMB 21.72 million, RMB 21.356 million, RMB 66.8635 million, and RMB 69.53 million; non-GAAP net profits were RMB 18.83 million, RMB 14.417 million, RMB 57.69 million, and RMB 62.25 million.。

Huali Biotech

On January 3, due to Huali Bio withdrawing its IPO application and the sponsor revoking its sponsorship, the Shanghai Stock Exchange terminated the process.Its issuance and listing review. Huari Bio was founded in 2009.It is a high-tech enterprise with biotechnology as its core, mainly engaged in the research and development, production, sales, and service of biosurfactants. Its main product is lipopeptide biosurfactant, which is primarily applied in the petroleum industry, agriculture, animal husbandry, and other fields.

For this listing, the specific listing standard chosen by the company is: The estimated market value is not less than RMB 1 billion, with positive net profits in the last two years and cumulative net profits of no less than RMB 50 million; or the estimated market value is not less than RMB 1 billion, with a positive net profit in the most recent year and operating revenue of no less than RMB 100 million.It is worth noting that,The company is classified under the industry category "C26 Chemical Raw Materials and Chemical Products Manufacturing" according to the "Guidelines for the Classification of Industries of Listed Companies," and falls under the industry "Specialized Chemical Products Manufacturing" based on the National Economic Industry Classification (GB/T4754-2017).But itsThe declared STAR Market industry sector is "Biopharmaceuticals Field".

FinanceAspect, 2019-In 2021, the revenue of Hundred Lotus Bio was 37.0346 million yuan, 54.8496 million yuan, and 226.1091 million yuan, respectively, with net profits of 4.7243 million yuan, 19.5268 million yuan, and 106.6676 million yuan, respectively.

Thousand Oaks

On January 2, the SSE official website announced that Thousand Oaks Biopharmaceuticals Co. Ltd. withdrew its STAR Market IPO application, making it the first company to withdraw its application in 2024.

The prospectus shows that Thousand Oaks Biopharmaceuticals, rooted in the key raw material of cell culture media for the biopharmaceutical and biologics fields, has gradually extended its industry chain to downstream process development and production services, evolving into a comprehensive solution provider for large-scale compliant production in the biopharmaceutical/biologics industry.ItsThe main business includes the development, production, and sales of cell culture media (Cell Culture Media Business), as well as biopharmaceutical process development and manufacturing services (Biopharmaceutical CDMO Business).

Financially, in 2019-In 2021, the revenue of Thousand Oaks Biopharmaceuticals was 87.1361 million yuan, 210 million yuan, and 451 million yuan, with a net profit of -79.7511 million yuan, -38.1717 million yuan, and 71.8686 million yuan.

References:

[1] Shanghai Ruiyi Medical Technology Co., Ltd. Beijing Stock Exchange IPO Terminated. PharmaCube Invest. 2024-01-18.

[2] Another loss-making company has been terminated from IPO review, 11 companies under "Standard V" still in queue. Eagle Eye IPO Observation. 2024-01-17.

[3]IPO Terminated! The 2nd Sci-Tech Innovation Board Company in 2024!. Investment Banking Business Information. 2024-01-03.

[4] Thousand Oaks Biopharmaceuticals' STAR Market IPO Terminated, Originally Planned to Raise 3 Billion Yuan. PharmaCube Invest. 2024-01-03.

[5] This pharmaceutical company's IPO fails again, and the fate of 12 other companies still in the queue is also uncertain. First Financial News. 2024-01-10.

[6] Eight Pharmaceutical Companies Announce Halt of IPO "Termination Key". E Pharmacy Academy. 2024-01-25.

[7] SZSE, SSE, BSE official websites, etc.

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