Jiuzhitang Acquires Controlling Stake in Harbin Jixianglong for RMB 310 Million to Enter the Peptide Therapeutics Market

On the evening of October 29, Jiuzhitang announced that it had formally signed a strategic investment agreement with Harbin Jixianglong Biotech Co., Ltd., a leader in the peptide field. Jiuzhitang will acquire a 769,2435 yuan paid-in registered capital stake (corresponding to 35% equity in the target company post-transaction) for RMB 210 million, and subscribe to RMB 366,3065 worth of new registered capital (corresponding to 16.6667% equity in the target company post-transaction) for RMB 100 million.

Upon completion of this transaction, Jiuzhitang will hold a 51.6667% equity stake in HARBIN JIXIANGLONG BIOTECH.This corresponds to a registered capital of RMB 11.3555 million for HARBIN JIXIANGLONG BIOTECH. HARBIN JIXIANGLONG BIOTECH will become a controlling subsidiary of Jiuzhitang and be included in the scope of Jiuzhitang’s consolidated financial statements. The funding for this transaction will come from Jiuzhitang’s own funds or self-raised funds, which may have a certain impact on its cash flow but will not affect the normal operation of its production and business activities, nor will it have a material adverse effect on the company’s financial position and operating results.

As a leading enterprise in the field of traditional Chinese medicine (TCM), Jiuzhitang is better known for its century-old time-honored brand heritage and exclusive products such as Liuwei Dihuang Wan. According to public records, its predecessor, “Lao Jiuzhitang Pharmacy,” was established in the seventh year of the Shunzhi reign of the Qing Dynasty, i.e., 1650 AD. The modern Jiuzhitang was founded in 1999 and listed on the Shenzhen Stock Exchange in 2000. It has since developed into a large-scale modern pharmaceutical enterprise integrating scientific research, production, sales, and health management, with 23 subsidiaries under its umbrella.

Jiuzhitang holds two "Well-Known Trademarks of China": "Jiuzhitang" and "Youbo." In September 2006, "Jiuzhitang" was recognized as a "China Time-Honored Brand" by the Ministry of Commerce of China. In June 2008, Jiuzhitang's traditional Chinese medicine culture was included in the National List of Intangible Cultural Heritage. The company possesses 418 national drug registration approvals, including 35 exclusive products. Its product portfolio covers OTC drugs, prescription drugs, and general health products, with categories spanning cardiovascular and cerebrovascular health, kidney tonification, blood nourishment, women's and children's health, and otolaryngology.

In the OTC sector, Jiuzhitang offers a series of tonic products, including Liuwei Dihuang Wan, Xiaoyao Wan, Bushen Guchi Wan, Guipi Wan, Buzhong Yiqi Wan, Qiju Dihuang Wan, Yilingjing, Shengfa Wan, and Bushen Tianjing Oral Liquid. Its other traditional featured OTC products cover multiple fields such as internal medicine, surgery, dermatology, gynecology, and orthopedics, enjoying strong brand advantages and a solid product reputation among similar offerings.

In the field of prescription drugs, Jiuzhitang has established a product portfolio centered on cardiovascular, cerebrovascular, and neurological treatments (primarily Shuxuetong Injection, Angong Niuhuang Wan, Tianma Gouteng Granules, Danxi Granules, and Compound Lipid-Lowering Tablets); immunomodulators (primarily Siqikang); gynecological treatments (primarily Luohua Zizhu Tablets, Xiaojin Wan, Guizhi Fuling Wan, Buxue Shengru Granules, and Hemostatic and Analgesic Capsules); otolaryngological treatments (primarily Houyan Wan); digestive treatments (primarily Jianwei Yuyang Tablets); and hepatic disease treatments (primarily Jiaqi Ganxian Granules and Chidan Tuihuang Granules).

In the broader health and wellness sector, Jiuzhitang offers a product portfolio that includes donkey-hide gelatin (Ejiao) series products, premium herbal decoction pieces, substitute teas, herbal pastes, specialized dietary foods, and high-end health supplements.

However, this leading traditional Chinese medicine (TCM) company, which holds exclusive rights to multiple proprietary products, has recently fallen into a period of performance distress. Its 2025 semi-annual report shows that Jiuzhitang’s revenue and net profit in the first half of the year both declined by more than 20%, with across-the-board drops in revenue from its core products; notably, over-the-counter (OTC) product sales fell by more than 36%. Jiuzhitang’s predicament is a microcosm of the entire traditional TCM industry’s struggle for survival amid innovation-driven transformation and market competition.

To seek new growth curves, this century-old brand has frequently engaged in cross-industry innovation in recent years.

In the field of stem cells,In 2018, Jiuzhitang invested in Stemedica, a company with 14 years of experience in stem cell research, by participating in the initiation of a fund, thereby rapidly establishing its presence in the stem cell sector. In December 2019, the Jiuzhitang Meike production base, located in the Daxing Biomedical Base in Beijing, was officially completed. It is the first large-scale allogeneic stem cell R&D and production facility in Beijing to comply with Chinese, U.S., and EU cGMP standards. On February 19, 2020, the Center for Drug Evaluation (CDE) approved the clinical trial application for Jiuzhitang Meike’s new stem cell drug. Currently, the company is collaborating with Beijing Tiantan Hospital, Capital Medical University, to conduct Phase I/II clinical trials on ischemia-tolerant human allogeneic bone marrow mesenchymal stem cells for the treatment of ischemic stroke. Additionally, it is partnering with the First Affiliated Hospital of Guangzhou Medical University to carry out Phase IIa clinical trials on human bone marrow mesenchymal stem cells for the treatment of autoimmune pulmonary alveolar proteinosis.

In the field of innovative drugs,As of the first half of this year, Jiuzhitang’s R&D Center completed method development and validation for immunogenicity studies for the YB209 project, finalized Phase I clinical trials, and closed the clinical trial sites. For the YB211 project, clinical sample preparation, Segment II reproductive toxicity testing, and PK-PD studies were initiated; Phase I clinical trials were completed, and Phase II clinical trials were fully launched. During the reporting period, 17 subjects were enrolled, and as of the date of this disclosure, a total of 44 subjects had been enrolled.

This collaboration with Harbin Jixianglong Biotech represents a significant step for Jiuzhitang in strengthening its industrial and innovation chains. Through this partnership, Jiuzhitang will enhance its research, development, and manufacturing capabilities in the field of high-value peptide drugs. Harbin Jixianglong Biotech’s advanced technology platform, international regulatory registration experience, and robust product pipeline will create strong synergies with Jiuzhitang’s strengths in production management, market channels, and financial resources. This collaboration will accelerate the commercialization of innovative achievements and boost the comprehensive competitiveness of both parties in domestic and international markets.

Regarding this collaboration, there is a noteworthy point: at a time when most pharmaceutical companies are under performance pressure, Harbin Jixianglong Biotech has signed an agreement containing performance valuation adjustment mechanisms (VAM).

Pursuant to the Shareholders’ Agreement, HARBIN JIXIANGLONG BIOTECH will restructure its board of directors. Seven management shareholders among the existing shareholders of HARBIN JIXIANGLONG BIOTECH, excluding Harbin Innovation, have undertaken that the cumulative net profit of HARBIN JIXIANGLONG BIOTECH shall be no less than RMB 165 million during the three-year period from 2025 to 2027 (the “Performance Valuation Adjustment Period”). During the Performance Valuation Adjustment Period, the net profit of HARBIN JIXIANGLONG BIOTECH shall reach the targets of RMB 50 million, RMB 55 million, and RMB 60 million in 2025, 2026, and 2027, respectively. If the cumulative net profit of HARBIN JIXIANGLONG BIOTECH fails to reach RMB 165 million, the management shareholders shall provide compensation to Jiuzhitang. Furthermore, if the net profit of HARBIN JIXIANGLONG BIOTECH in 2027 falls below RMB 45 million, the management shareholders shall also provide compensation to Jiuzhitang.

It should be noted that the performance metric referred to here is “net profit.” The exact net profit of Harbin Jixianglong Biotech for 2024 is not verifiable through public channels. However, by drawing inferences from comparable companies (Sinobio Pharmaceutical reported H1 2025 revenue of RMB 338 million and net profit attributable to shareholders of RMB 89 million; Nuotai Bio reported H1 2025 revenue of RMB 1.048 billion and net profit attributable to shareholders of RMB 310 million; Hybio Pharmaceutical reported H1 2025 revenue of RMB 549 million and net profit of RMB 145 million), it can be estimated that for Harbin Jixianglong Biotech to achieve an annual net profit exceeding RMB 50 million, its annual revenue would likely need to reach several hundred million yuan.

What Fuels Jixianglong’s Confidence? Reportedly, Harbin Jixianglong Biotech is a national high-tech enterprise specializing in the R&D, manufacturing, and technical services of peptide-based generic active pharmaceutical ingredients (APIs), peptide drug formulations, and innovative drugs. Its core business encompasses the R&D, production, and sales of peptide APIs, along with CRO technical R&D services; innovative drug development (including peptide-drug conjugates [PDCs], mitochondrial repair therapies, personalized cancer vaccines, and other consumer healthcare products); and customized development services (such as custom peptide synthesis and technology transfer). As a nationally recognized “Little Giant” enterprise designated for specialization, refinement, uniqueness, and innovation, Harbin Jixianglong Biotech has been rooted in Harbin for over a decade. It has quietly emerged as a significant force in China’s peptide drug sector, bolstered by four core competitive advantages.

First, first-mover advantage in the market.Leveraging its strengths in the quality control and process R&D of peptide active pharmaceutical ingredients (APIs), the company has seized the window of opportunity for API volume expansion. By capitalizing on scarce resources—including eight core technologies, ten API approval documents, and inclusion in the FDA’s Green List—it has established differentiated competitive advantages in the peptide sector. While achieving breakthroughs in the domestic market, the company is actively advancing its international strategic layout. Currently, 13 products, including semaglutide and tirzepatide, have successfully completed Drug Master File (DMF) filings with the FDA, gaining recognition from international authoritative bodies for their product quality systems, R&D capabilities, and manufacturing processes. Overall, Harbin Jixianglong Biotech has demonstrated strong forward-looking judgment and market execution in product strategy selection, technical resource allocation, and overseas market expansion.

Second, advantages in R&D capabilities.HARBIN JIXIANGLONG BIOTECH is one of the core drafting organizations for the “Technical Guidelines for Pharmaceutical Studies of Chemically Synthesized Peptide Drugs” issued by the Center for Drug Evaluation (CDE) of the National Medical Products Administration. Its core technical team has been deeply engaged in the field of peptide active pharmaceutical ingredients (APIs) and formulations for many years, accumulating substantial technical reserves and R&D experience. The company has established a relatively comprehensive technical system and product pipeline, demonstrating sustained innovation capabilities.

Third, process advantages.In terms of active pharmaceutical ingredient (API) products, HARBIN JIXIANGLONG BIOTECH possesses capabilities for technological iteration and continuous process optimization. Leveraging multiple core proprietary technologies—including control of racemization and deamidation reactions, steric hindrance and conformational control, management of complex impurity profiles, and exclusive process equipment optimization—the company has accumulated extensive experience in process route design.

Fourth, the advantage of scarce licenses.In September 2025, the U.S. FDA announced the establishment of an import “Green List” system, aimed at intercepting unverified GLP-1 chemical substances at the source of the supply chain. Active pharmaceutical ingredients (APIs) not included on the list will be subject to the strict measure of “detention without physical examination” upon entry. According to market data statistics, a total of 37 companies worldwide were included in this Green List, among which approximately 16 were Chinese enterprises (including Harbin Jixianglong Biotech).

Bolstered by four key advantages, this leading peptide company in Harbin has confidently entered into a valuation adjustment mechanism (VAM) agreement. Furthermore, in addition to the inherent strengths of Harbin Jixianglong Biotech, Jiuzhitang may appoint senior executives to certain core positions during the VAM period. This will be done while fully respecting the operational autonomy of Harbin Jixianglong Biotech’s management team, with the aim of helping the company meet its performance commitments and maximize both operational performance and financial returns.

Overall, the collaboration between Jiuzhitang and HARBIN JIXIANGLONG BIOTECH represents a convergence of traditional heritage and innovative vitality, as well as a synergy between industrial resources and technological advantages. In the future, both parties will leverage deep synergies in R&D innovation, capacity building, and market expansion to advance the development of peptide drugs, specialized active pharmaceutical ingredients (APIs), and innovative formulations. This partnership aims to meet the growing global demand for high-quality peptide APIs, create new business growth drivers for Jiuzhitang, and accelerate the R&D and industrialization of peptide drugs in China, thereby enabling the benefits of peptide drug innovations to reach patients worldwide more rapidly.