Sino-Singapore Jingwei, June 28 (Lin Wansi) Recently, Chongqing Zhixiang Jintai Biopharmaceutical Co., Ltd. (hereinafter referred to as Zhixiang Jintai), a biopharmaceutical company, submitted a prospectus to prepare for listing on the Science and Technology Innovation Board.
It is worth noting that the actual controller of Zhixiang Jintai is Jiang Rensheng, chairman of Zhifei Biology, a vaccine leader with a market value of 100 billion.Judging from the prospectus, the company has not listed products in the past three years, and has suffered a loss of more than 800 million yuan.In March this year, the research and development of the two major projects was terminated, and 200 million yuan was lost.Under the heavy pressure, can Jiang Rensheng create another "Zhifei creature"?
Accumulated losses of 800 million yuan for three years without product commercialization
Zhixiang Jintai was established in 2015. Its main business is the research and development, production and sales of antibody drugs. The products under development are monoclonal antibodies and bispecific antibodies.According to the prospectus, Zhixiang Jintai plans to issue 91.68 million shares and raise funds of 3.980 billion yuan, which will be invested in projects such as antibody industrialization base projects and antibody drug research and development.
The prospectus disclosed that as of May 31, 2022, the company's 5 products (8 indications) have entered the clinical research stage, and the clinical indications cover moderate to severe plaque psoriasis, axial spondyloarthritis, systemic Lupus erythematosus, moderate to severe atopic dermatitis and other therapeutic areas.In addition, the company has 1 product that has obtained a drug clinical trial approval notice, and 6 products are in the preclinical research stage.
However, Zhixiang Jintai has not yet launched a product, nor has it achieved profitability.The most advanced product, GR1501 injection, is expected to be approved for marketing in early 2024 for moderate to severe plaque psoriasis.
As an innovation-driven biopharmaceutical company, the development of preclinical research, clinical research and pre-marketing preparation of new drugs still requires continuous large-scale R&D investment.From 2019 to 2021, Zhixiang Jintai’s R&D expenses will be as high as 125 million yuan, 228 million yuan and 295 million yuan respectively.As of the end of 2021, the company has 313 employees, including 273 technical R&D personnel, accounting for 87.22% of the overall workforce.
In the same period, Zhixiang Jintai achieved operating income of 31,100 yuan, 1,087,700 yuan, and 39,190,200 yuan respectively, and research and development expenses accounted for 400,429.05%, 21,003.69%, and 753.42% of revenue, respectively.
It is worth noting that Zhixiang Jintai’s largest customer, Zhifeilong Coma, whose revenue will account for 99.51% of the revenue in 2021, is a wholly-owned subsidiary of Zhifei Biology, and the chairman and actual controller is also Jiang Rensheng.
In the case of making ends meet, Zhixiang Jintai could not escape losses.During the same period, the net profit attributable to the owners of the parent company lost 157 million yuan, 325 million yuan, and 322 million yuan respectively, with a cumulative loss of more than 800 million yuan in three years.
Although it has not been commercialized, according to the fifth set of listing standards of the "Shanghai Stock Exchange's Science and Technology Innovation Board Stock Issuance and Listing Review Rules", that is, "the estimated market value is not less than 4 billion yuan, and the main business or products need to be approved by the relevant state departments. The market space is large, and phased results have been achieved so far.”This listing standard provides the possibility of listing for unprofitable science and technology companies.
However, for future development, Zhixiang Jintai admitted that on the one hand, the company's future sales revenue may not grow as planned, and the progress of product commercialization may be lower than expected; on the other hand, the company will continue to increase investment in research and development, new product development, Investment in marketing, resulting in a continuous increase in related costs and expenses.The increase in the company's costs and expenses may be greater than the increase in sales revenue, resulting in a sharp decline in operating profit or a sharp decline in net profit. Therefore, there is a risk that the loss will continue to expand.
2 drugs were stopped and 200 million yuan of R&D expenditure was lost
It is worth noting that Zhixiang Jintai terminated the research and development of two projects, GR1405 and GR1401, in March this year, both of which have entered the clinical trial stage.
In fact, the previous boom in the biopharmaceutical market has brought a large number of players into the market. As the market continues to evolve, some products that are not competitive in the market are gradually being eliminated.
Regarding the reason for the suspension of drug research and development, Zhixiang Jintai explained that GR1405 is an anti-PD-L1 monoclonal antibody drug, and due to the fierce competition of PD-1/PD-L1 pathway monoclonal antibody drugs, the company decided to terminate the drug development.
It is understood that in terms of monoclonal antibody drugs for the PD-1/PD-L1 pathway, a number of similar drugs have been launched in China, and the products of Junshi Bio, Innovent Bio, Hengrui Medicine, and BeiGene have all entered medical insurance.
Another project, GR1401, whose research and development was terminated, is an anti-EGFR monoclonal antibody drug.Zhixiang Jintai said that at present, there are many innovative anti-EGFR monoclonal antibody drugs/biosimilars in different stages of research and development in China, and the competition for anti-EGFR monoclonal antibody drugs is fierce.In the Phase I clinical trial, the company observed that GR1401 could not surpass the same target drug in efficacy, but showed better safety, so the research and development strategy of GR1401 was adjusted to combination therapy.
As of March 31 this year, Zhixiang Jintai has invested a total of 159 million yuan and 53 million yuan in the above-mentioned two products, and the termination of the research and development of the two projects also means that the research and development expenditure of more than 200 million yuan may be "empty."
High-level looming Zhifei Bio and former Watson Bio executives
Compared with the product pipeline, the outside world is more interested in the executives of Zhixiang Jintai.
From the perspective of equity structure, Chongqing Zhirui Investment Co., Ltd. (hereinafter referred to as Zhirui Investment) directly holds 72.73% of the company's equity and is the company's controlling shareholder.It is worth noting that, according to the prospectus, Jiang Rensheng directly holds 90% equity of Zhirui Investment, and holds 10% equity of Zhirui Investment through Zhifei Biology controlled by him. Jiang Rensheng can control 72.73% of the voting rights of the company's shareholders meeting through Zhirui Investment. , is the actual controller of the company.In addition to the actual controller, Jiang Rensheng also serves as a director of Zhixiang Jintai.
According to public reports, Jiang Rensheng, who is about to enter his rare age, is also the actual controller of Zhifei Biology, a Chinese vaccine leader and an A-share listed company.
In 1977, when the college entrance examination was resumed, Jiang Rensheng, who had been a rural teacher for seven years, ushered in the first opportunity to change his fate and was admitted to Guilin Medical College.For nearly 10 years after graduation, Jiang Rensheng has been working in the health and epidemic prevention station.Until 1999, Jiang Rensheng left public office and came to a vaccine company in Zhejiang as an assistant to the general manager.
In 2002, 49-year-old Jiang Rensheng, Liu Junhui, Wu Guanjiang and others founded Zhifei Bio.In 2010, Zhifei Bio was listed on the Shenzhen Stock Exchange, becoming the first private vaccine company listed on the Growth Enterprise Market.Today, Zhifei Bio has a market value of over 170 billion yuan. Its agent vaccine products include HPV vaccine, rota vaccine, 23-valent pneumonia vaccine and inactivated hepatitis A vaccine from the US pharmaceutical company Merck & Co.
As the exclusive agent of Merck HPV vaccine in mainland China, Zhifei Bio’s 2021 annual report disclosed that the annual batches of nine-valent and quadrivalent HPV vaccines were 10.2062 million and 8.8025 million respectively, a year-on-year increase of 101.45% and 21.93% .
As the company grew, so did the wealth of Jiang Rensheng and his family.According to Forbes' 2022 Global Billionaires List, Jiang Rensheng and his family ranked 91st in the world with assets of US$17.7 billion (about 118.366 billion yuan).
In the first quarter of 2022, Zhifei Bio has doubled its operating income and net profit, with operating income of 8.841 billion yuan, a year-on-year increase of 125.16%; net profit attributable to shareholders of listed companies of 1.923 billion yuan, a year-on-year increase of 104.95%.The batches of quadrivalent and nine-valent HPV vaccines were 2.11 million and 4.83 million, respectively, an increase of nearly 70% and 280% year-on-year.
However, in the secondary market, the trend of Zhifei Biological deviates from the fundamentals.As of press time, the share price of Zhifei Bio is nearly halved from the high price of 200.23 yuan per share.In addition, as a major shareholder of Zhifei Bio, Jiang Rensheng has cashed out about 8 billion yuan since its listing.
Another shareholder of Zhixiang Jintai, Shan Jikuan, who holds more than 5% of the shares, Sino-Singapore Jingwei found that his resume in the prospectus was the same as that of the founding shareholder in the reply of Junshi Bio’s issuer and sponsor. .According to the prospectus, Shan Jikuan served as chairman of Zhixiang Jintai. Before this issuance, Shan Jikuan directly held 5.29% of the company's shares.
According to public information, since 2002, Shan Jikuan has served as the manager of the medical department of Shanghai Fudan Zhangjiang Biomedical Co., Ltd. (hereinafter referred to as Fudan Zhangjiang), a listed company on the Science and Technology Innovation Board, and Shanghai Zerun Biotechnology Co., Ltd., a subsidiary of Watson Bio, an A-share listed company. Manager of the medical registration department and medical director of the company (hereinafter referred to as Zerun Bio), director and deputy general manager of Shanghai Zhonghe Pharmaceutical Technology Co., Ltd. (hereinafter referred to as Zhonghe Pharmaceutical), executive director and general manager of Shanghai Zhixiang, etc.
In addition to Jiang Rensheng and Shan Jikuan, the former executives of Zhifei Bio and Watson Bio are also looming on the board of directors of Zhixiang Jintai.
Among them, Li Chunsheng, director and secretary of the board of directors of Zhixiang Jintai, served as assistant, deputy director, director of the party committee office, and securities affairs representative of Zhifei Biological from 2016 to 2022.Fan Hong, Supervisor of Zhixiang Jintai, has served as the director, manager and director of Zhifei Biological Department since July 2010.
In addition, Chang Zhiyuan, director and general manager of Zhixiang Jintai, successively served as department head, manager and director of Shanghai Zerun Biotechnology Co., Ltd. from 2006 to 2014.(For more reporting clues, please contact the author of this article, Lin Wansi: linwansi@chinanews.com.cn) (China-Singapore Jingwei APP)
(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)
