Shenlian Bio Announces $330M Acquisition of Controlling Stake in Shizhiyuan Biotech to Enter Human Innovative Drug Market

On the evening of February 24, SHENLIAN BIOMEDICAL announced its intention to use RMB 237 million in own funds and self-raised funds (including bank acquisition loans) to acquire a controlling stake in Yangzhou Shizhiyuan Biotechnology Co., Ltd. (hereinafter referred to as “Shizhiyuan”) through its wholly-owned subsidiary, Bentiancheng Biology, via equity transfer and capital increase.

Upon completion of this transaction, Bentiancheng’s equity interest in Shizhiyuan will increase from 16.99% to 40.65%. Shanghai Shenyuan Qihang Investment, a party acting in concert with Bentiancheng, has acquired a newly issued 10.35% equity stake in Shizhiyuan for RMB 79.9564 million. Consequently, Bentiancheng and its parties acting in concert will collectively hold a 51.00% equity interest in Shizhiyuan. SHENLIAN BIOMEDICAL will be able to control 51% of the voting rights of Shizhiyuan, making Shizhiyuan a controlled sub-subsidiary of SHENLIAN BIOMEDICAL and included within the scope of its consolidated financial statements.

SHENLIAN BIOMEDICAL, established in 2001 with a registered capital of RMB 411 million, was listed on the STAR Market in 2019. As a leading enterprise in China's veterinary biological products sector, the company specializes in the research and development, production, and sales of animal vaccines, including foot-and-mouth disease vaccines.

Its commercially available products include a series of porcine foot-and-mouth disease (FMD) vaccines, porcine circovirus vaccines, classical swine fever vaccines, bovine and ovine FMD vaccines, lumpy skin disease vaccines for cattle, and a range of veterinary diagnostic products. Meanwhile, SHENLIAN BIOMEDICAL maintains a robust pipeline of products under development, covering additional porcine vaccines, bovine and ovine vaccines, pet biologics, and veterinary diagnostic products. These include triple vaccines against porcine FMD, classical swine fever, and pseudorabies; vaccines for Seneca virus infection in pigs, porcine reproductive and respiratory syndrome (PRRS), bovine FMD, and echinococcosis (hydatid disease) in sheep; mRNA vaccines for pets; long-acting recombinant canine alpha interferon; and aquatic biological products such as diagnostic reagents for Vibrio glassy shrimp disease.

In addition to its core business of veterinary biological products, SHENLIAN BIOMEDICAL has also been strategically expanding into the field of innovative human pharmaceuticals in recent years.For instance, through its wholly-owned subsidiary Bentiancheng, the company has acquired a stake in Shizhiyuan, marking a cross-industry expansion into the field of innovative human therapeutics. Shizhiyuan specializes in the development of innovative drugs, clinical trial applications, clinical trials, and commercial sales of products. Currently, Shizhiyuan has three innovative drug candidates in its pipeline, including a monoclonal antibody for HIV treatment (UB-421), an anti-allergy Anti-IgE monoclonal antibody (UB-221), and a monoclonal antibody against herpes simplex virus (UB-621).

Monoclonal Antibody Drug for AIDS Treatment (UB-421):Its unique mechanism of action lies in the drug’s binding to domain 1 of the CD4 receptor on the surface of target T cells, thereby effectively blocking HIV entry into host cells through competitive inhibition. As UB-421 does not directly target viral genes, it has a lower probability of inducing viral resistance mutations compared with currently available anti-HIV medications on the market, and it also exhibits immunomodulatory effects. The project has engaged in in-depth collaboration with the U.S. National Institutes of Health (NIH) and has made significant progress, with research findings successively published in top-tier journals such as the New England Journal of Medicine, The Lancet, and Nature Medicine. Shiyuanzhiyuan plans to submit an Investigational New Drug application for Phase II/III clinical trials targeting multidrug-resistant HIV in the first half of 2026, and is currently communicating with leading domestic research institutes to explore combination therapies based on UB-421 aimed at achieving a functional cure for AIDS.

Anti-allergic Anti-IgE Monoclonal Antibody Drug (UB-221):Developed by Dr. Zhang Ziwen, the inventor of anti-IgE therapy, this next-generation product is a subcutaneously administered, humanized, original monoclonal antibody. UB-221 not only neutralizes free IgE that triggers allergic reactions but also inhibits IgE synthesis by binding to IgE attached to CD23 receptors on the surface of B cells. Preclinical data have fully demonstrated that UB-221 possesses superior pharmacological characteristics compared to similar marketed products. Currently, Shizhiyuan is conducting comprehensive Phase II clinical trials of UB-221 in China to evaluate its efficacy and safety in patients with chronic spontaneous urticaria. Based on the results of the Phase II clinical trials, Shizhiyuan plans to submit an application for Phase III clinical trials in 2026.

Anti-Herpes Simplex Virus Monoclonal Antibody Drug (UB-621):Indicated for the treatment of human herpes simplex virus (HSV) infections, it works by binding to the glycoprotein D (gD) of HSV, thereby indirectly interfering with viral attachment to epidermal cells and inhibiting its tissue dissemination and infectivity. The investigational indication of UB-621 is precisely focused on recurrent genital herpes, a condition in which patients often rely long-term on existing small-molecule therapies yet struggle to achieve adequate disease control even with daily dosing. The development program plans to submit an Investigational New Drug (IND) application for Phase II clinical trials in China in 2026.

It is evident that Shiyuanzhiyuan remains in a cash-burning R&D phase, with net losses of RMB 15.652 million in 2024 and RMB 12.9427 million in 2025. As of the end of 2025, its total assets amounted to approximately RMB 201 million, shareholders’ equity stood at around RMB 197 million, and the debt-to-asset ratio was 1.93%.Following the completion of this transaction, Shiyuanzhi will, on one hand, leverage the biopharmaceutical platforms established by SHENLIAN BIOMEDICAL—comprising five major platforms: synthetic peptide technology, genetic engineering technology, novel inactivated vaccine technology, mRNA technology, and in vitro diagnostic technology—to expand the development of biologics such as synthetic peptides and protein-based drugs. On the other hand, it will continue to advance the clinical trials and commercialization of the aforementioned innovative drug pipeline in China.

In fact, the synergistic development of “human pharmaceuticals + animal health” is becoming an industry-wide consensus. For instance, SHENLIAN BIOMEDICAL has taken a controlling stake in Shiyuan for RMB 237 million, clearly establishing a dual-core business model centered on the coordinated growth of human medicines and animal healthcare. Yinnuo Medicine’s application for clinical trials of its new veterinary drug, esupaglutide alfa (a GLP-1 analog) for the treatment of diabetes in pets, has been formally accepted by the Ministry of Agriculture and Rural Affairs, with Phase I clinical trials expected to commence in the first quarter of 2026. Meanwhile, Huadong Medicine has entered the pet metabolic disease sector through its investment in Nanjing Agricultural University Animal Health Pharmaceutical Co., Ltd., among other examples.

This is because biopharmaceutical technology platforms exhibit significant cross-species reusability.Taking the acquisition by SHENLIAN BIOMEDICAL as an example, the company has been deeply engaged in veterinary biological products for over two decades and has established five major technology platforms, including synthetic peptide vaccines, VLP vaccines, and mRNA vaccines. Its capabilities in macromolecular expression, purification processes, and GMP-compliant large-scale production can be directly transferred to the development of human monoclonal antibody drugs. Conversely, Shi Zhi Yuan’s expertise in target screening for human antibody drugs and clinical trial design can help address the experience gaps that animal health companies often face in the registration and approval of innovative drugs.

Secondly, the synergistic development of “human pharmaceuticals + animal health” offers market complementarity.The animal health industry exhibits distinct cyclical characteristics and is significantly influenced by fluctuations in the breeding sector. In contrast, while innovative human pharmaceuticals entail high R&D risks, they offer substantially higher market ceilings and greater pricing power once approved, compared to animal health products. SHENLIAN BIOMEDICAL’s 2025 earnings forecast indicates an estimated net loss attributable to shareholders of approximately RMB 20 million, highlighting an urgent need to cultivate new growth drivers. By adopting a dual-engine strategy of “human pharmaceuticals + animal health,” SHENLIAN BIOMEDICAL can achieve a balance between cash flow stability (with animal health operations providing short-term revenue) and growth potential (with its human drug pipeline delivering long-term value).

Therefore, SHENLIAN BIOMEDICAL also stated that, following the completion of this transaction, it will actively promote synergy between both parties in areas such as biopharmaceutical technology platforms and manufacturing processes, achieving technology sharing and resource complementarity, and further expanding its presence in frontier fields such as therapeutic biologics. This transaction will not only help enhance SHENLIAN BIOMEDICAL’s overall R&D innovation capabilities and core competitiveness, but also inject new growth momentum into its sustainable development, thereby creating greater industry value.