Beijing News (Reporter Wang Kala) Shanghai Stock Exchange announced that Hanyu Medical terminated its STAR Market IPO on January 16. The reason for the termination was that Hanyu Medical and its sponsor voluntarily withdrew the application for issuance and listing. In this IPO, Hanyu Medical originally planned to raise about 1.722 billion yuan for production base construction, R&D center construction, etc. This is the second company in the pharmaceutical field this year that planned to apply for listing using the fifth set of standards of the STAR Market and then voluntarily withdrew the application. On January 2, 2024, Ark Biopharmaceuticals voluntarily terminated its STAR Market IPO.
Hanyu Medical mainly engages in the research, development, production, and commercialization of interventional devices for structural heart disease and electrophysiology products. As of March 2023, Hanyu Medical’s product pipeline under development includes five innovative medical devices for repair targeting mitral regurgitation, tricuspid regurgitation, and atrial septal defects caused by congenital heart disease; two innovative replacement medical devices respectively targeting mitral regurgitation and tricuspid regurgitation; and two electrophysiology products. Among these, the ValveClamp product has already been submitted for market registration.
In terms of performance, due to the absence of core products approved for marketing, Hanyu Medical has not yet achieved profitability. The prospectus disclosed in March 2023 shows that in 2019, 2020, 2021, and the first three quarters of 2022, Hanyu Medical's revenue was 0 yuan, 490,300 yuan, 3,405,400 yuan, and 2,166,600 yuan respectively; net profit attributable to parent company was -49,192,400 yuan, -157 million yuan, -191 million yuan, and -58,842,000 yuan respectively.
Hanyu Medical's core product is in the field of interventional treatment for mitral regurgitation, which has significant unmet needs and has attracted numerous innovative medical devices. Several companies have already initiated clinical trials for related products. However, the interventional treatment of mitral regurgitation in China is still in its early stages of development. The number of doctors capable of performing mitral regurgitation interventional surgeries in clinical institutions is relatively limited, and patient education remains in the market cultivation phase, both of which present unfavorable impacts on the R&D of products in this field.
Hanyu Medical also admitted that the development cycle of such projects is relatively long, and continuous investment is required before commercial production can be achieved, leading to ongoing losses. Additionally, share-based payment expenses resulting from equity incentives have significantly increased the losses. Research and development expenses are expected to remain at a relatively high level, and there is also some uncertainty regarding the commercial progress of products after their market launch in the future. Therefore, it is possible that the company may continue to be unprofitable or that accumulated losses may continue to expand.
According to the original listing plan, Hanyu Medical planned to go public on the STAR Market to raise approximately 1.722 billion yuan, of which 252 million yuan would be used for production base construction projects, 856 million yuan for R&D center construction and registration trial projects, 214 million yuan for marketing network construction projects, and 400 million yuan to supplement working capital.
Reporters from The Beijing News found that in 2021, Hanyu Medical had passed the Hong Kong Stock Exchange listing hearing but later abandoned the IPO due to considerations such as market liquidity and market environment. In 2023, Hanyu Medical aimed for a STAR Market IPO, but the process was suspended due to expired financial documents requiring additional submission. After resuming the review, Hanyu Medical once again decided to terminate the listing and withdrew its application for reasons yet to be disclosed.
Due to not yet achieving profitability, Hanyu Medical originally planned to adopt the fifth set of listing standards for the Sci-Tech Innovation Board (STAR Market). This standard specifies that companies applying for STAR Market listing must have an estimated market value of no less than 4 billion yuan, with their main business or products requiring approval from relevant national authorities. The market should have significant growth potential, and the company should have already achieved phased results. Pharmaceutical industry enterprises must have at least one core product approved for Phase II clinical trials, while other enterprises that meet the positioning of the STAR Market need to possess clear technological advantages and meet corresponding conditions. Although this rule opens financing doors for companies that are not yet profitable but have profit potential, it remains challenging to use this route to list on the STAR Market. Starting from August last year, multiple media reports indicated that the fifth set of standards for STAR Market IPOs might tighten. Regulatory bodies will conduct stricter reviews of companies using the fifth set of listing standards to submit their applications.
It is unknown whether Hanyu Medical's withdrawal of its IPO application this time is due to "knowing the difficulties and retreating."
Proofread by Baoqing Liu