Sansure Biotech Files for STAR Market IPO After Developing SARS-CoV-2 Nucleic Acid Test Kit in Just 72 Hours

On March 4, 2020, Sansure Biotech submitted its prospectus to the Shanghai Stock Exchange for an initial public offering on the STAR Market. The company planned to issue 40 million shares, raising approximately RMB 557 million. After turning profitable in 2018, Sansure Biotech saw rapid growth in net profit in 2019, reaching RMB 37.65 million, with a net profit margin exceeding 10%.

During the COVID-19 pandemic, Sansure Biotech also responded swiftly. On January 20, 2020, Sansure Biotech announced that it had successfully developed a nucleic acid test kit for the novel coronavirus (2019-nCoV) in just 72 hours, with results available in as little as 30 minutes. The test kit was approved on January 28, 2020, becoming one of the second batch of approved nucleic acid test kits for the novel coronavirus.

Sansure Biotech is a provider of comprehensive in vitro diagnostic (IVD) solutions, centered on independently developed genetic technologies and integrating the research and development, manufacturing, and sales of diagnostic reagents and instruments, as well as third-party medical laboratory services. The company was founded in 2008 by Dr. Dai Lizhong, a postdoctoral fellow from the Massachusetts Institute of Technology (MIT), a recipient of the Chinese Organization Department’s “National Thousand Talents Program,” and one of the first distinguished experts selected for Hunan Province’s “Hundred Talents Program.”

Sansure Biotech's Financing History

Sansure Biotech completed a strategic financing round of RMB 500 million in December 2017, led by Lilly Asia Ventures and Honghui Capital, both of which are leading investment firms in China’s healthcare sector.

Over the past 12 years of development, Sansure Biotech has strategically focused on four major technological domains: sample processing, detection technologies, automation control and integration, and bioinformatics analysis. Its portfolio encompasses a series of core technologies, including “high-precision magnetic bead method,” “one-step method,” “fully automated unified sample processing,” “POCT mobile molecular diagnostics,” “multiplex fluorescent PCR,” “high-throughput sequencing,” “microdisk liquid-phase chips,” and “bioinformatics technology.”

During the COVID-19 pandemic prevention and control efforts in 2020, Sansure Biotech leveraged its systematic technology platform and efficient R&D system to rapidly develop a precise, rapid, simple, and high-throughput nucleic acid detection kit for the novel coronavirus. The company quickly obtained registration certification through the emergency approval process of the National Medical Products Administration (NMPA), becoming one of the first six enterprises in China to have its novel coronavirus testing products approved for market launch. Building on its robust production, marketing, and service networks, the company’s products were swiftly deployed to the frontlines of pandemic prevention and control in more than 30 provinces, municipalities, and autonomous regions, including Hubei, Hunan, Beijing, and Shanghai. As of February 29, 2020, nearly 4 million test kits had been shipped (including approximately 540,000 kits to the frontlines in Hubei and nearly 100,000 kits to international markets), making a significant contribution to domestic and global pandemic response efforts.

Proposed Use of Funds Raised by Sansure Biotech in Its IPO Application

Sansure Biotech’s IPO application plans to issue no more than 40 million shares, raising RMB 557 million. The proceeds will be primarily used for the construction of its production base for the Precision Intelligent Molecular Diagnostic System. The remaining funds will be allocated to the upgrading of its R&D center and the enhancement of its marketing network and information systems.

The project to establish a production base for the Precision Intelligent Molecular Diagnostic System will expand the production capacity of nucleic acid reagents—including blood screening reagents, respiratory detection reagents, and reproductive infection and genetic testing reagents—as well as instruments such as POCT mobile molecular diagnostic systems and fully automated PCR analysis systems. This expansion will facilitate the synergistic development of diagnostic instruments and reagents. The R&D Center Upgrade Project will enhance the company’s technological innovation capabilities to meet the demands of business expansion. The implementation of the Marketing Channel Network Upgrade Project will broaden sales coverage and support the promotion and sales of new products following their market launch.

In other words, in the next phase, Sansure Biotech will significantly expand production capacity and improve sales team efficiency while ensuring continuous R&D follow-up, with a primary focus on market-driven growth to widen its gap from other nucleic acid testing companies.

Product Classification of Sansure Biotech

Sansure Biotech’s product portfolio primarily comprises diagnostic reagents, instruments, and testing services. Leveraging its versatile technology platform—which offers high-level coverage of the entire nucleic acid testing workflow and integrates diverse technological elements—Sansure Biotech has developed a comprehensive product lineup that addresses most common pathogens. The company has obtained more than 200 regulatory approvals domestically and internationally, including 28 Class III, 65 Class II, and 5 Class I medical device registration certificates.

Sansure Biotech's Product Revenue Overview

Currently, Sansure Biotech’s revenue is primarily derived from reagents, particularly the sales of nucleic acid testing (NAT) reagents. Over the past few years, the proportion of NAT reagent revenue in Sansure Biotech’s total revenue has continued to rise. From 2017 to 2019, the share of revenue from NAT reagents increased from 50.36% to 63.61%.

Sansure Biotech's Key Financial Data

Sansure Biotech has achieved continuous revenue growth over the past three years, with a compound annual growth rate (CAGR) of 27.55% from 2017 to 2019. A key highlight in its financial performance is that Sansure Biotech successfully turned profitable in 2018 and reported a net profit attributable to shareholders of RMB 37.65 million in 2019, with a net profit margin exceeding 10%. This turnaround to profitability represents a significant positive development for Sansure Biotech, indicating that it has firmly established its position in the field of nucleic acid testing and secured its own market share.

According to the financial statements disclosed by Sansure Biotech, its R&D expenditure accounted for 10.66% of its revenue in 2019. In its cost structure, selling expenses were the largest component apart from operating costs, reaching RMB 127 million in 2019. With this IPO application, Sansure Biotech also aims to leverage digitalization to reduce its heavy burden of sales personnel costs.