Shanghai Medicilon Biopharmaceutical Successfully Passes Review for Sci-Tech Innovation Board Listing

Just now, VCBeat (WeChat ID: vcbeat) learned that the results of the 24th review meeting of the STAR Market Listing Committee in 2019 were announced, approving the initial public offering (IPO) and listing of Shanghai Medicilon Inc.

Medicilon, established in 2004, is a contract research organization (CRO) specializing in drug development outsourcing services. The company currently operates three branches in Shanghai, located in the Zhangjiang Hi-Tech Park, the Pudong Chuansha Economic Zone, and the Nanhui Kailong Business Park, with a total of 30,000 square meters of R&D laboratory space and over 1,000 employees. Since its inception, Medicilon has been recognized as a “Shanghai High-Tech Enterprise,” “Technologically Advanced Service Enterprise,” “Shanghai R&D Public Service Platform,” “Pudong New Area Enterprise R&D Institution,” and “Postdoctoral Research Station for Enterprises in Pudong New Area, Shanghai.”

According to Qichacha data, Shanghai Medicilon Inc. has two holding subsidiaries: Medicilon Pusheng Pharmaceutical Technology (Shanghai) Co., Ltd. (100% owned) and Medicilon Puya Pharmaceutical Technology (Shanghai) Co., Ltd. (91.84% owned).

Since its establishment, Medicilon has been committed to providing comprehensive new drug research and development (R&D) services to pharmaceutical companies and other new drug R&D institutions. As one of the earliest enterprises in China to enter the field of biopharmaceutical R&D services, Medicilon has gradually established a competitive position in the industry by leveraging its extensive industry experience, outstanding technical capabilities, and talent advantages. Currently, Medicilon offers end-to-end services for new drug R&D, including drug exploration and discovery, pharmaceutical studies, and preclinical research, thereby assisting clients in completing each stage of preclinical new drug R&D quickly and efficiently.

Currently, Medicilon operates a suite of innovative platforms, including a pharmacokinetics research platform for protein/antibody drugs, a one-stop integrated R&D outsourcing and industrialization platform for antibody therapeutics, a parallel synthesis and new drug screening technology platform, a protein crystallography-based drug discovery and screening platform, a specialized technical platform for isotopic drug metabolism studies, a pharmacodynamics research platform based on animal disease models, an international standard-compliant new drug safety evaluation platform, and a platform for novel drug formulations and quality consistency evaluation. This positions Medicilon as one of the few comprehensive CROs in China capable of serving as a one-stop preclinical biomedical R&D service provider, managing the entire new drug development process from lead compound screening and optimization to the submission of clinical trial applications.

It is worth noting that the “Professional Technical Service Platform for Isotope Drug Metabolism Research,” the “Drug Discovery and Screening Technology Service Platform Based on Protein Crystallography,” the “Professional Technical Service Platform for Non-Human Primate Safety Evaluation of Biotech Drugs,” and the “Technical Service Platform for Non-Human Primate Experimental Research” have been designated as Shanghai Professional Technical Service Platforms or Shanghai R&D Public Service Platforms.

Medicilon Preclinical Research (Shanghai) Co., Ltd., a subsidiary of Medicilon, obtained AAALAC accreditation in 2009 and received its initial Good Laboratory Practice (GLP) certification from the National Medical Products Administration (NMPA) in 2011. To date, Medicilon Preclinical Research holds eight NMPA GLP certifications, and its GLP laboratories also comply with the GLP standards of the U.S. Food and Drug Administration (FDA).

According to the information disclosed in Medicilon’s IPO prospectus, the company has seized favorable development opportunities in the CRO market for biopharmaceutical R&D in recent years, achieving significant performance growth. Since 2015, a total of 58 new drug and generic drug projects in which the company participated have been approved by the CFDA/NMPA to enter Phase I clinical trials. Meanwhile, three new drug projects developed with the company’s involvement have passed the U.S. FDA review and entered Phase I clinical trials, and one new drug project has been approved by Australia’s Therapeutic Goods Administration (TGA) to enter Phase I clinical trials. Medicilon has assisted clients in completing comprehensive preclinical studies for several antibodies and antibody–drug conjugates (ADCs), among which two ADC drugs have passed the NMPA technical review for their full pharmacokinetic and safety evaluation studies and have entered the clinical trial stage.

Medicilon’s operating revenues in 2016, 2017, and 2018 were RMB 232 million, RMB 248 million, and RMB 323 million, respectively. Its compound annual growth rate (CAGR) from 2016 to 2018 was 18.01%. In the first half of 2019, its operating revenue reached RMB 199 million. Based on this trend, Medicilon’s full-year operating revenue for 2019 is expected to exceed RMB 380 million.

In terms of net profit, Medicilon reported net profits of RMB 43.94 million, RMB 41.23 million, and RMB 60.56 million in 2016, 2017, and 2018, respectively. The net profit for the first half of 2019 was RMB 29.26 million.

Medicilon has three co-founders: Mr. Chen Chunlin, Mr. Chen Jinzhang, and Mr. Chen Jianhuang. Prior to this offering, the three individuals collectively held 42.37% of the Company’s shares, either directly or indirectly; following this offering, they will collectively hold 31.78% of the Company’s shares, either directly or indirectly, and will remain the joint actual controllers of the Company. The three founders have entered into a Concerted Action Agreement, which stipulates that they shall act in concert when dealing with major matters concerning the Company’s operations and development that require deliberation and approval. In the event of divergent opinions among the three parties, Mr. Chen Chunlin’s opinion shall prevail.

As the founder and core technology leader of the company, Mr. Chen Chunlin possesses extensive professional experience. He graduated from China Pharmaceutical University in 1986 with a Master’s degree in Pharmacy, and obtained his Ph.D. in Pharmacology and Toxicology from Oklahoma State University in the United States in 1994. He has published nearly one hundred research papers in domestic and international journals. Previously, he served as Chairman of the Department of Pharmaceutical Sciences at the Park Hughes Cancer Center in the United States and as Chief Scientist of the Non-Clinical Drug Evaluation Department at Vertex Pharmaceuticals (US), accumulating rich experience in pharmaceutical R&D. In February 2004, Mr. Chen founded Medicilon Inc., serving as Director and General Manager. In February 2008, he established Medicilon Preclinical Research Co., Ltd., serving as Chairman. He currently serves as Director and General Manager of the company. Additionally, he holds positions such as Committee Member of the Drug Metabolism Professional Committee of the Shanghai Pharmacological Society, Director of the Bio-industry Association of Pudong New Area, Shanghai, and Committee Member of the Drug Metabolism Professional Committee of the Chinese Pharmacological Society. He is also appointed as a Visiting Professor at the School of Life Science and Technology, China Pharmaceutical University. Furthermore, Mr. Chen has been honored with titles including “Shanghai Outstanding Technical Leader,” “Shanghai Pujiang Talent,” “Shanghai Leading Talent,” “Shanghai Returnee Entrepreneurship Elite Award,” and “Individual with Outstanding Contributions to the Construction of Shanghai Zhangjiang Hi-Tech Park.”

After deducting issuance expenses, the funds raised by Medicilon in this offering will be invested in the new construction projects of the Drug Discovery and Pharmaceutical Research and Registration Platform and the Preclinical Research and Registration Platform under the Innovative Drug Research and International Registration Center, with the remaining proceeds used to supplement working capital.

The sponsor (lead underwriter) for this issuance is GF Securities.