"CSPC Group" Aborts $1.05 Billion Biopharma Acquisition

On May 6, CSPC Innovation Pharmaceutical Co., Ltd. announced that it had received the “Decision on Terminating the Review of the Application for Issuing Shares to Purchase Assets and Raise Matching Funds” from the Shenzhen Stock Exchange (SZSE). The SZSE approved CSPC Innovation Pharmaceutical’s termination of the transaction involving the purchase of assets through issuance of shares and cash payment, along with the raising of matching funds and related-party transactions, as well as the withdrawal of its application documents.

With this, the “CSPC Group” acquisition, with a total transaction value of RMB 7.6 billion, has been officially terminated.

Xinnowei’s planned acquisition of Bcht Biotechnology dates back to January 2024, when the company announced its intention to acquire 100% equity interest in Changchun Bcht Biotechnology Co. through a combination of share issuance and cash payments, along with raising matching funds. At that time, Xinnowei stated that the transaction remained subject to uncertainties, and specific details regarding the acquisition price, transaction structure, and counterparties would be disclosed in subsequent announcements.

On January 20, 2025, CSPC Nova (Xin Nuowei) issued another announcement proposing to acquire 100% equity interest in CSPC Baikel held jointly by Weisheng Pharmaceutical, CSPC Shanghai, and Enbipu Pharmaceutical through the issuance of shares and cash payments. The proportion of the consideration paid via share issuance and cash accounts for 90% and 10% of the total transaction consideration, respectively. The consideration paid via share issuance amounts to RMB 6.84 billion, while the cash consideration amounts to RMB 760 million, bringing the total transaction value to RMB 7.6 billion.

As the outside world focused on this major Chinese pharmaceutical acquisition, the situation took a turn.

On the evening of April 28, 2025, Xinnuowei issued an announcement stating that the Company convened the 24th Meeting of the Sixth Board of Directors and the 19th Meeting of the Sixth Supervisory Committee on April 28, 2025. The meetings reviewed and approved the “Proposal on Terminating the Issuance of Shares and Payment in Cash to Purchase Assets and Raise Matching Funds, Constituting a Related-Party Transaction, and Withdrawing the Application Documents,” thereby agreeing to terminate the aforementioned transaction and withdraw the related application documents.

Regarding the termination of the acquisition, Xinnuowei stated, “Since the planning and initial announcement of this transaction, the Company has strictly complied with relevant laws, regulations, and normative documents, and has actively organized all relevant parties to advance the restructuring. However, given that a considerable period has elapsed since the inception of the restructuring planning, and considering that certain changes have occurred in the overall environment of the pharmaceutical industry and capital markets compared to the initial planning stage, the Company has decided to terminate this restructuring matter. This decision was made after friendly consultations, careful study, and thorough deliberation with all relevant parties involved in the transaction, based on prudent considerations and aimed at safeguarding the long-term interests of all shareholders.”

Although Xinnuowei’s statement was rather official, the once high-profile acquisition has indeed drawn to a close in line with the official narrative. Ultimately, Xinnuowei missed an opportunity to acquire a “cash cow.”

It is reported that Baicheng Biopharmaceuticals was established in 1994, formerly known as Shandong Grand-Biochem Pharmaceutical Co., Ltd., and is now a wholly-owned subsidiary of CSPC Pharmaceutical Group. Leveraging the support of CSPC Pharmaceutical Group and its own innovative R&D capabilities, Baicheng Biopharmaceuticals has developed significant advantages in biotechnology and product portfolio, with marketed products including PEG-rhG-CSF (brand name: Jin You Li) and more than seven assets in development.

Jinyouli, its flagship independently developed product, is China’s first long-acting recombinant human granulocyte colony-stimulating factor (rhG-CSF) injection with independent intellectual property rights. The commercialization of Jinyouli filled the domestic gap in long-acting leukocyte-elevating drugs. In 2017, the product was included in the National Reimbursement Drug List, and in 2021, it was listed among the major achievements of the past 60 years of clinical trials of new anti-tumor drugs in China. The “Key Technology System for Site-Specific PEGylation of Recombinant Protein Drugs and Its Industrialization” has been honored with the Second Prize of the National Science and Technology Progress Award, the China Patent Gold Award, the Commendation Award of the China Industry Award, and the First Prize of the Shandong Provincial Science and Technology Progress Award.

Since its market launch, Jinyouli has maintained strong sales performance. According to data published by Menet, Jinyouli is one of the four chemical drug brands under CSPC Pharmaceutical Group with terminal sales exceeding RMB 1 billion in Chinese public medical institutions.

In addition to its blockbuster product, Jinyouli, Changchun Bcht Biotechnology’s investigational GLP-1 pipeline candidate, TG103, has also attracted significant market attention and is regarded as the company’s most promising GLP-1 agent for weight loss and glycemic control. TG103 is an innovative recombinant human glucagon-like peptide-1 (hGLP-1) Fc fusion protein that acts as a GLP-1 receptor agonist. Built on the hyFc long-acting fusion protein platform technology, TG103 features a molecular design that extends the half-life of GLP-1 in vivo. Existing clinical trial data indicate that TG103 can be administered via subcutaneous injection once weekly or once every two weeks, thereby substantially improving patient adherence. TG103 has demonstrated a favorable safety profile in preclinical studies and in a previous Phase I clinical trial conducted in Germany.

Currently, TG103 has been approved to conduct clinical trials for indications including type 2 diabetes, overweight/obesity, non-alcoholic steatohepatitis (NASH), and Alzheimer’s disease. Among these, the trial for the overweight/obesity indication is in Phase III, while the Phase II clinical trial for type 2 diabetes has been completed. According to disclosures from CSPC Pharmaceutical Group, TG103 is expected to receive marketing approval in 2026.

With the termination of the acquisition, Shinova Pharma and Changchun Bcht Biotechnology Co. are temporarily unable to leverage each other’s flagship commercial products and high-potential pipeline assets.

Nevertheless, Xinnuowei itself is also a high-quality enterprise. Its official website indicates that the company is one of the largest chemical synthetic caffeine production bases globally and ranks among the top tier in China’s health food industry. With its production scale and market share of caffeine leading worldwide, it serves as a global supplier to three major international beverage companies: PepsiCo, Coca-Cola, and Red Bull. The production scale of its acarbose active pharmaceutical ingredient (API) holds a global advantage, effectively meeting the substantial clinical demand for blood glucose management among individuals with diabetes or at risk of developing the condition.

Had the acquisition proceeded smoothly, it would have represented an integration of resources between two high-quality enterprises, accelerating the development pace of both leading pharmaceutical companies. With the acquisition now terminated at this stage, the two companies can still “thrive independently” by leveraging their respective advantages in their niche sectors.

In fact, CSPC Innovation Pharmaceutical and Changchun Bcht Biotechnology are actually part of the same family, both being subsidiaries of CSPC Group.Prior to this, Xinnowei had already acquired five subsidiaries under the CSPC Group.

In 2016, Xinnuowei acquired Hebei Zhongnuo Guoweikang Health Products Co., Ltd. and CSPC Zhongnuo Pharmaceutical (Taizhou) Co., Ltd., both subsidiaries of CSPC Group, thereby obtaining the functional food-related businesses of these two companies.

In 2022, Xinnowei acquired 100% equity of CSPC Shengxue, a subsidiary of CSPC Group, for a consideration of RMB 800 million. CSPC Shengxue’s main products include acarbose active pharmaceutical ingredients (APIs) and anhydrous glucose APIs. It is the largest domestic producer of acarbose APIs and serves as a supplier to most formulation manufacturers. This transaction further enriched Xinnowei’s API segment and enhanced the company’s profitability. Data shows that CSPC Shengxue achieved a net profit of RMB 90.0882 million in 2022, thereby fulfilling its first-year performance commitment.

In August 2023, Xinnowei disclosed its plans to make a cash capital injection into Jushi Biologics, a subsidiary of the CSPC Group, to acquire more than 51% equity and achieve controlling interest. In September, Xinnowei announced that it had signed a capital increase agreement with Jushi Biologics and NBP Pharmaceutical, confirming a capital injection of RMB 1.871 billion to acquire a 51% stake in Jushi Biologics.

Notably, Jushi Biologics is one of the core biological innovative drug assets of CSPC Pharmaceutical Group. It is an innovative biopharmaceutical company focused on cutting-edge fields such as antibody-based therapeutics, antibody-drug conjugates (ADCs), and mRNA vaccines. Its pipeline products primarily target indications including breast cancer, cervical cancer, gastric cancer, and psoriasis. This transformation has also enabled Xinnuowei to evolve from a functional food company into an innovative pharmaceutical enterprise, resulting in a significant surge in its valuation.Subsequently, to highlight its innovative R&D characteristics, Xinnuowei changed its full Chinese company name to “CSPC INNOVATION PHARMACEUTICAL CO., LTD.”

As Xinnuowei stated in its acquisition announcement, mergers and reorganizations are an important means to optimize resource allocation and stimulate market vitality. Xinnuowei has grown and expanded its boundaries through successive acquisitions; the current termination represents a comprehensive adjustment based on the dynamic environment of the pharmaceutical industry and the overall capital market. We look forward to Xinnuowei, as the innovative drug platform of CSPC Group, making a strong comeback after this adjustment.