Pharmaceutical Company with 48 FDA Approvals Surges 400% at IPO Debut

On October 15, NOVAST officially listed on the ChiNext board. As of press time, the company's stock price stood at 35.1 yuan, surging over 401%, with a market capitalization of approximately 31.2 billion yuan.

Bell-ringing ceremony. Image source: Panorama Roadshow Network

Amidst the surging enthusiasm for innovative drugs in China, with numerous companies focusing on the development of new molecular entities, NOVAST has chosen a different path. By dedicating itself to refining high-barrier complex formulations such as sustained- and controlled-release preparations, NOVAST aims to bring Chinese-made generic drugs for chronic diseases into the mainstream U.S. prescription market.

The company holds 48 FDA marketing approvals, with multiple extended-release formulations of nifedipine and diltiazem hydrochloride capturing the top market share in the United States. It has also overcome a significant industry challenge by developing the world's first generic version of conjugated estrogens extended-release tablets, an original product launched in 1942 that had remained unreplicated for over 80 years.

In 2025, the company achieved operating revenue of RMB 895 million and a net profit of RMB 228 million. Zhang Guohua, a 77-year-old Ph.D. in pharmaceutics, along with a team of long-time colleagues, finally reached the secondary market after more than two decades of entrepreneurial efforts.

In 2005, Dr. Zhang Guohua returned to Nantong, Jiangsu Province, to establish NOVAST. Prior to this, he had spent many years specializing in pharmaceutics in the United States.

Born in 1949, he completed his bachelor's and master's degrees at Nanjing College of Pharmacy, the predecessor of China Pharmaceutical University. He then went to the United States, where he earned a Ph.D. in Pharmaceutics from the Philadelphia College of Pharmacy. In the first half of his career, he conducted postdoctoral research at Schering-Plough, followed by R&D work at Roche. He later became Vice President of DuraMed Pharmaceuticals, and since 1999 has served as Senior Vice President of Andrx Pharmaceuticals, overseeing R&D.

Dr. Zhang Guohua, Chairman and General Manager of NOVAST; Image source: Panorama Roadshow Network

Andrx was a landmark company in the field of modified-release and controlled-release formulations in the United States, and it was later acquired by Watson Pharmaceuticals. Zhang Guohua gained comprehensive experience in the development of complex formulations during his tenure there.

In 2005, after returning to China to start his business, he established United Biomedical Inc. (UBI) in Virginia, USA, indicating that NOVAST's target market was aimed at the United States from the outset.

Pinnamaraju Prasadraju, who co-founded the company with him, also worked in R&D at Roche, DuraMed, and Andrx. Since 2005, he has served as Senior Vice President and Chief Operating Officer of NOVAST.

The duo has been partnering since 2005.

Zhang Shuqiang, the son of Zhang Guohua, joined the company at a later stage. He majored in Computer Science in university and has financial industry experience at Ernst & Young, Lehman Brothers, and Barclays Bank. In 2014, he joined NOVAST as the Director of the Finance Department. Currently, he serves as a Director, Deputy General Manager, Board Secretary, and Chief Financial Officer. One focuses deeply on formulation R&D, while the other excels in capital and financial management, forming a complementary partnership.

Along its corporate development journey, the company has also attracted a cohort of professional institutional investors. Institutions such as Legend Capital, Danqing Phase II Fund, Xiamen C&D Inc., and the China International Trade in Services Development Fund have successively participated in investment rounds. Most of these institutions have deep expertise in pharmaceutical industry investments and recognize the long-term value of the overseas expansion track for complex formulations.

Open NOVAST's product list, and you'll find nothing but the most common medications for chronic diseases: nifedipine sustained-release tablets and diltiazem hydrochloride sustained-release capsules for hypertension; metoprolol succinate sustained-release tablets for coronary heart disease; and metformin sustained-release tablets for diabetes.

Common Drug, Unconventional Dosage Form.

The technical barrier for sustained- and controlled-release formulations lies in achieving a continuous drug release at a predetermined rate within the body. Taking metoprolol succinate sustained-release tablets as an example, they consist of membrane-coated microencapsulated pellets. Upon administration, each microcapsule acts as an independent drug-release unit, releasing the medication at a designed rate over approximately 20 hours. This provides therapeutic coverage for 24 hours, allowing for once-daily dosing.

For such formulations, it is not enough for the active ingredients to match those of the originator product; stringent requirements apply to every step, including formulation design, excipient selection, manufacturing processes, and in vivo release profiles. Furthermore, rigorous bioequivalence studies must be completed. Only a limited number of Chinese pharmaceutical companies are capable of producing these products at scale for export to the U.S. market.

According to IMS data, in 2025, NOVAST's Nifedipine Extended-Release Tablets (AB1, corresponding to the originator product: Bayer Adalat CC) held a 65.9% market share in the U.S., Nifedipine Extended-Release Tablets (AB2, corresponding to the originator product: Pfizer Procardia XL) held a 75.7% market share, and Diltiazem Hydrochloride Extended-Release Capsules (AB3) held a 36.9% market share, with all three ranking first in their respective categories. Metoprolol Succinate Extended-Release Tablets held a 15.0% market share, ranking second.

U.S. Market Share of the Company's Main Products, Charted Based on Prospectus Data

This leadership stems from accumulated expertise in extended-release formulation processes. Taking metoprolol succinate extended-release tablets as an example, products in the U.S. market were recalled annually from 2021 to 2025 due to failing dissolution tests, a defect that NOVAST successfully avoided by leveraging its proprietary multi-unit extended- and controlled-release technology platform.

There is also the extended-release tablet of conjugated estrogens. The original drug for this medication is an extract from pregnant mare urine, which has a complex composition, extremely low content, and poor stability. The FDA classifies it as a complex active pharmaceutical ingredient (API), and no generic manufacturer has successfully developed a generic version in the over 80 years since its market launch.

NOVAST adopted separation and purification technologies, completed pharmaceutical equivalence and bioequivalence studies by comparing fingerprint profiles of more than 60 compounds, and received approval as the first generic in October 2025. Sales of this drug exceeded RMB 84 million in the first half of 2026, with a gross margin as high as 94.01%, making it the primary driver behind the company's 7.52 percentage point increase in gross margin for the period.

Some of the Company's Approved Drugs, Image Source: Prospectus

As of March 31, 2026, NOVAST has obtained FDA approval for 48 self-developed products. Among these, four products comprising five dosage strengths have been designated by the FDA as reference listed drugs (RLDs) to replace the original brand-name drugs, establishing them as global benchmarks for bioequivalence studies in the generic pharmaceutical industry. Additionally, five drug formulations gained FDA market approval through patent challenges, with the entire process proceeding without any patent litigation disputes against the originator companies.

NOVAST's business model differs from that of most domestic pharmaceutical companies in China.

Overseas sales are conducted on a buyout distribution basis. The largest customer, Ingenus, holds exclusive distribution rights in the U.S. market for key products including Metoprolol Succinate Extended-Release Tablets, Nifedipine Extended-Release Tablets, and Conjugated Estrogens Extended-Release Tablets. During each period of the reporting period, NOVAST's sales revenue from Ingenus accounted for 56.63%, 51.87%, and 55.56% respectively, while overseas sales revenue represented 68.97%, 61.93%, and 63.15% of total operating revenue respectively.

Breakdown of the Company's Overseas Revenue, Charted Based on Prospectus Data

The U.S. market is NOVAST's core foundation. The U.S. generic drug market is highly competitive; if a company can secure first-to-file generic status or successfully challenge a patent, it can gain a period of market exclusivity, thereby achieving favorable profit margins. Once this window period expires and competitors enter the market, drug prices will gradually decline.

As of March 31, 2026, NOVAST had 39 generic drug development projects and 2 improved new drug development projects underway, with multiple projects demonstrating potential for first-to-market generic approval.

Supporting this business model is a sizable and stable U.S. market.

Taking several key products as examples, according to data from Frost & Sullivan, the U.S. market size for metoprolol succinate extended-release tablets was approximately $420 million in 2025, that for nifedipine sustained-release tablets was approximately $130 million, and that for diltiazem hydrochloride extended-release capsules was approximately $410 million.

On the other hand, NOVAST has not abandoned the domestic market.

There are approximately 370 million people with hypertension in China. The characteristics of medication for chronic diseases include a large patient base, long-term medication cycles, and high requirements for adherence. The advantages of sustained-release and controlled-release formulations precisely address these needs.

NOVAST leverages the FDA approval of its high-end formulations in the United States as a quality endorsement to shorten the domestic regulatory review cycle, while simultaneously tapping into the volume-based procurement program to expand market access.

Metoprolol Succinate Sustained-Release Tablets were selected as the top-ranked bidder in the seventh batch of China's National Centralized Drug Procurement program in 2022. The contract was renewed in February 2026, with the procurement cycle extending through the end of 2028. In terms of reported demand by healthcare institutions, the domestically produced version ranked first among Chinese manufacturers and second overall. As of March 31, 2026, the company had obtained marketing approval from the National Medical Products Administration (NMPA) for 12 products, achieving domestic sales revenue of RMB 330 million in 2025.

From 2023 to 2025, NOVAST's revenues were RMB 700 million, RMB 866 million, and RMB 895 million, respectively, with net profits attributable to shareholders of the parent company amounting to RMB 116 million, RMB 260 million, and RMB 228 million, respectively. In the first half of 2026, operating revenue reached RMB 492 million, representing a year-on-year increase of 11.59%; net profit attributable to shareholders of the parent company was RMB 141 million, a year-on-year increase of 36.80%. During the reporting period, R&D expenditure as a percentage of operating revenue remained above 11%, with cumulative R&D spending over the three years totaling RMB 291 million.

Corporate Revenue Performance, Charted Based on Prospectus Data

Following the IPO, the most pressing challenge facing the company is alleviating strained production capacity. The prospectus disclosed that the capacity utilization rate of its main products has remained at a high level for an extended period, with production capacity becoming a bottleneck constraining development. Therefore, the funds raised will be primarily allocated to the construction of production bases and R&D centers, as well as the advancement of drug development programs.

After 21 years since its founding, NOVAST has officially entered a new phase in the capital market. The alleviation of production capacity bottlenecks and the ability of its R&D pipeline to continuously deliver products are key indicators by which the market validates the company's formulation development capabilities. The pace of its dual-market expansion, both domestically and internationally, also warrants continued observation.