Weekly Medical and Pharmaceutical Brief (03.16-03.20)

Sapharose: Inquiry Letter from SSE Regarding 528 Million Yuan Acquisition of 100% Equity in Shanghai Qinli

Recently, Sapharose announced that it plans to acquire 100% equity in Shanghai Qinli held by Yihe Medical and Yanghe Industrial for 528 million yuan in cash. After the completion of this acquisition, Sapharose will directly hold all shares of Shanghai Qinli and indirectly own 100% of Shanghai Tianlun Hospital.

This transaction constitutes a related-party transaction, with the counterparties being the company’s controlling shareholder Yanghe Industrial and its concerted action partner Yihe Medical. Prior to the transaction, the company did not hold any equity in Shanghai Qinli. After the acquisition, it will directly hold 100% of Shanghai Qinli and indirectly own 100% of its wholly owned subsidiary, Tianlun Hospital. The deal includes performance commitment clauses, with the target company promising net profits of no less than 32.4 million yuan, 37.3 million yuan, and 42.65 million yuan for 2026 to 2028, respectively, totaling a cumulative net profit of over 112 million yuan.

On the same day, Sapharose disclosed that it received an inquiry letter from the SSE regarding this matter. The inquiry requests Sapharose to disclose the reasonableness and fairness of the transaction valuation, the achievability of the performance commitments, the sources of funds and payment ability, the ownership, operational qualifications, and transitional arrangements of the target assets, among other aspects. Sapharose is required to respond in writing within five trading days.

Nanjing Pharmaceutical: Rescinds Some Director Positions and Dismisses Vice President Luo Xunjie

Recently, Nanjing Pharmaceutical announced that the board of directors intends to remove Marco Kerschen and Luo Xunjie from their director positions, as well as their roles on relevant board committees. The board also dismissed Luo Xunjie from his vice president position.

The announcement states that Alliance Healthcare no longer holds shares in the company. According to the strategic cooperation agreement between the company, Alliance Healthcare, and related parties, upon termination of the agreement, the company plans to remove the two directors nominated by Alliance Healthcare, Marco Kerschen and Luo Xunjie, and dismiss Luo Xunjie from his vice president role.

Junshi Biosciences: 2025 Revenue to Grow 28.23% to 2.498 Billion Yuan, Commercial Drug Sales Revenue Increases Year-over-Year

Recently, Junshi Biosciences announced that in 2025, it expects to achieve operating revenue of 2.498 billion yuan, a year-over-year increase of 28.23%. The net profit attributable to the parent company’s shareholders is a loss of 875 million yuan, compared to a loss of 1.281 billion yuan in the same period last year. The company will not distribute profits or convert capital reserves into share capital for 2025.

The revenue growth is mainly due to increased sales of commercialized drugs compared to the previous year. The reduction in net loss attributable to shareholders is primarily because of higher sales revenue from commercial drugs.

China Resources Pharmaceutical: Plans to Sell 5.88% Stake in Tianmai Bio for 510 Million Yuan

Recently, China Resources Pharmaceutical announced that its wholly owned subsidiary, China Resources Pharmaceutical Investment Co., Ltd., has initiated a potential sale of approximately 5.88% of its stake in Hefei Tianmai Biotechnology Development Co., Ltd., with an initial listing price of about 510 million yuan. This potential sale is separate and unrelated to the previously announced sale of some shares in Tianmai Bio.

Dongyang Sunshine Pharmaceutical: 2025 Growth of 228.57% to About 270 Million Yuan, Core Product Market Demand Significantly Increased

Recently, Dongyang Sunshine Pharmaceutical announced that, based on unreviewed management accounts and preliminary estimates by management, it expects to achieve a net profit attributable to the parent of about 270 million yuan for the year ending December 31, 2025, turning from a net loss of approximately 210 million yuan in the same period last year, representing a significant increase of about 228.57%.

The performance forecast growth is mainly due to a significant increase in demand for the company’s core product, oseltamivir phosphate, as a first-line drug for flu prevention and treatment, amid a high incidence of influenza in the second half of 2025.

Kangzhe Pharmaceuticals: 2025 Revenue Up 9.9% to 8.212 Billion Yuan, Innovative and Exclusive Drugs Become Core Growth Drivers

Recently, Kangzhe Pharmaceuticals released its 2025 annual performance report. During the reporting period, the company’s revenue increased by 9.9% to 8.212 billion yuan, from 7.469 billion yuan last year. If calculated based solely on drug sales revenue, revenue increased by 8.9% to 9.386 billion yuan, mainly due to continued growth in sales of innovative and exclusive products.

Gross profit increased by 8.3% to 5.872 billion yuan, from 5.422 billion yuan last year; normalized annual profit increased by 3.6% to 1.776 billion yuan, from 1.714 billion yuan last year. The annual net profit decreased by 10.5% to 1.443 billion yuan, mainly due to the impact of one-time non-operating items. Basic earnings per share declined by 7.8% to 0.6154 yuan. The proposed final dividend is 0.1366 yuan per share, with a total annual dividend of 0.2921 yuan per share, a 9.0% increase from last year.

Management’s discussion and analysis highlight that the company’s strategic transformation has been effective, with innovative and exclusive drugs now serving as the main growth engines, and product structure continuously optimized. The proportion of key exclusive/brand drugs and innovative drugs in total revenue has risen to 59.8%. In terms of business segments, the dermatology health line achieved revenue of 1.07 billion yuan, a 73.2% increase year-over-year.