Shanghai Haihe Pharmaceutical Research and Development Co., Ltd. (hereinafter referred to as "Haihe Pharmaceutical") responded to the Shanghai Stock Exchange's first-round inquiry on September 4. After a five-year hiatus, Haihe Pharmaceutical is once again knocking on the door of the STAR Market. This innovative drug company, which carries the "academic halo" of the Shanghai Institute of Materia Medica of the Chinese Academy of Sciences and is helmed by Ding Jian, an academician of the Chinese Academy of Engineering, has already achieved commercial launch of three products and successfully entered the Japanese market.

From a historical perspective, Haihe Pharmaceutical's predecessor was a state-controlled enterprise. In 2016, Ding Jian acquired nearly 40% of the company's equity for a total consideration of RMB 2. Meanwhile, the company's valuation has plummeted from a peak of RMB 31.5 billion at the time of its initial IPO attempt in 2021 to RMB 6.82 billion before this application, a decline of more than 70%. The actual controller, Ding Jian, holds the dual role of a core leader at the Shanghai Institute of Materia Medica and the helm of the company.

At the operational level, the company accumulated losses exceeding RMB 1 billion during the reporting period, with accumulated losses to be made up reaching as high as RMB 2.797 billion. The "explosive" growth in revenue actually relies on the occasional surge from BD licensing income rather than the true cash-generating ability of its main business. In 2025, the single product glumetinib contributed over 84% of revenue, while oral paclitaxel and resolicit have yet to form an effective supplement. The company has only 133 registered employees and no self-built sales team, with product commercialization fully outsourced to partners such as CSPC and 3SBio. R&D investment halved from RMB 424 million to RMB 205 million over two years, and it also recorded a RMB 35.57 million impairment on development expenditures due to slower-than-expected indication expansion.

A 70% Shrinkage in Valuation, with a RMB 1 Compensation Share Transfer Struggling to Mask Historical Flaws

Haihe Pharmaceutical's predecessor can be traced back to March 2011, when it was jointly established by the Shanghai Institute of Materia Medica of the Chinese Academy of Sciences and Shanghai Zhangjiang Science and Technology Investment Co., Ltd. as a state-controlled enterprise. At that time, the institute contributed intangible assets valued at RMB 50 million, while Zhangjiang Science and Technology Investment contributed RMB 50 million in cash, with each side holding 50%. However, the transformation from state-controlled to privately controlled was fraught with unsettling "pricing puzzles."

In December 2013, Zhangjiang Science and Technology Investment transferred its 50% stake to Zexi Investment, marking the beginning of state capital's retreat. In September 2015, Tibet Nanjiang injected RMB 250 million, diluting the institute's stake from 50% to 19.51%. The critical turning point came in 2016 when the institute transferred its remaining 19.51% state-owned stake through a property rights exchange to Green Valley Group for RMB 80.1895 million. Curiously, just two months after Green Valley Group took over, it transferred the stake to Ding Jian for a mere RMB 1. Almost simultaneously, Tibet Nanjiang also transferred its 20.49% stake to the same person for RMB 1. Ding Jian acquired nearly 40% of the company for a total cost of just RMB 2.

In the first-round inquiry, regulators required the company to explain: the reasons and rationality for Tibet Nanjiang conducting an equity incentive for Ding Jian exceeding the control threshold in 2016, the main content of the incentive plan and the basis for determining the incentive price, whether the incentive plan fulfilled necessary decision-making procedures, the main agreements between Ding Jian, Tibet Nanjiang, and Green Valley Group, and whether there was any shareholding entrustment or other interest arrangements. In 2018, Ding Jian further acquired the remaining 15.48% stake at RMB 0.99 per registered capital, bringing his total controlling stake to 55.48%. At this point, a state-owned enterprise originally controlled by a national-level research institute was completely transformed into a private enterprise controlled by a natural person.

Haihe Pharmaceutical's IPO journey has been fraught with obstacles. In February 2021, the company first attempted to list on the STAR Market, sponsored by Guotai Junan, planning to raise RMB 3.15 billion, corresponding to a valuation as high as RMB 31.5 billion. However, after two rounds of inquiries and two listing committee meetings, the STAR Market review committee ultimately decided to terminate its listing review after nearly eight months. On May 28, 2026, Haihe Pharmaceutical returned, this time sponsored by Guojin Securities with KPMG Huazhen as auditor, and submitted another STAR Market listing application. This time, it plans to raise RMB 2.9 billion, down RMB 250 million from the previous attempt. However, the company's valuation has dropped sharply from a peak of RMB 31.5 billion to RMB 6.82 billion, less than 30% of its peak.

The actual controller, Ding Jian, an academician of the Chinese Academy of Engineering, is now 73 years old. His resume is illustrious: he graduated from Jiangxi Medical College in 1980, obtained his PhD from Kyushu University in Japan in 1991, and has worked at the Shanghai Institute of Materia Medica of the Chinese Academy of Sciences since 1994, holding positions including research group leader, deputy director, director, and chairman of the academic committee. Before filing, Ding Jian directly held 16.8129% of shares and indirectly controlled 5.4916% through Shanghai Heying, giving him a total of 22.3045% of voting rights.

The lineup of star shareholders is quite impressive: Splendid Family holds 7.8706%, its controlling shareholder Shanghai Nanjiang holds 5.0561%, Tibet Nanjiang holds 5.2701%, and the Huagai series (Huagai Xincheng, Huagai Healthcare, Meishan Huagai, and Huagai Qianning) collectively hold 7.7515%. It is worth noting that the related-party relationships among shareholders are complex and intertwined. The controlling shareholder of Splendid Family is Shanghai Nanjiang, and Tibet Nanjiang, a wholly-owned subsidiary of Shanghai Nanjiang, is also a shareholder of Haihe Pharmaceutical. Splendid Family's subscription to Haihe Pharmaceutical's rights issue was classified as a related-party transaction. The four Huagai series institutions are all controlled by Xu Xiaolin. Director Liu Yajuan serves as the chairman and legal representative of Shanghai Nanjiang, and the company's CFO and board secretary previously served as vice president of Splendid Family (a concert party of Shanghai Nanjiang).

Near the current IPO, in December 2025, the company raised approximately RMB 400 million by issuing shares at RMB 4.75 per share to institutions including Splendid Family through a rights issue. Since the placement price was lower than the early investment price of some old shareholders, in March 2026, Ding Jian and related parties transferred over 20.3 million shares at a consideration of RMB 1 each to 48 shareholders as "interest compensation." In 2025, the total compensation for the company's directors and senior management was RMB 8.1901 million, up 21.70% year-on-year. This growth rate far exceeded the revenue growth rate of 10.70%.

R&D Investment Halved in Two Years, with RMB 35.57 Million in Capitalized Impairments

During the reporting period, the company's revenue was RMB 33.8316 million, RMB 414 million, and RMB 389 million, respectively. In 2024, revenue surged 11-fold, but in 2025, it fell back by 5.97%. The revenue surge in 2024 was largely due to BD income from Japan's Taiho Pharmaceutical; the company licensed the Japanese rights to glumetinib tablets to Taiho, recognizing approximately RMB 142 million in technology licensing and royalty income. By 2025, technology licensing income dropped sharply to RMB 35.0232 million. In 2025, glumetinib tablets generated sales revenue of approximately RMB 330 million, accounting for over 84% of the company's total revenue. Although sales volume increased from 11,400 boxes in 2023 to 195,700 boxes in 2025, the average selling price fell from RMB 2,979.44 per box to RMB 1,685.15 per box.

Oral paclitaxel's sales revenue in 2025 was only RMB 15.9969 million, while resolicit is only marketed in Japan, with its domestic listing application still in progress. Among the three products, only glumetinib truly carries the revenue banner. As of the end of 2025, the company had only 133 registered employees, 85 of whom were R&D personnel. The company had not built any sales team. The commercialization of glumetinib in Greater China is handled by CSPC Group, oral paclitaxel's domestic sales are entrusted to 3SBio, and the Japanese market is exclusively entrusted to Taiho Pharmaceutical. During the reporting period, net profits attributable to the parent were RMB -537 million, RMB -244 million, and RMB -267 million, with cumulative losses over three years of approximately RMB 1.048 billion. As of the end of 2025, accumulated losses to be made up reached RMB 2.797 billion. The consolidated asset-liability ratio was approximately 89.25%.

During the reporting period, R&D investment fell from RMB 424 million to RMB 205 million. The ratio of R&D investment to revenue dropped from over 1000% in 2023 to 52.81% in 2025. The number of R&D personnel was 85. The Shanghai Stock Exchange's first-round inquiry directly questioned: Does the decline in R&D investment and R&D personnel weaken the company's independent R&D capability? More noteworthy is the capitalization policy for R&D expenditures. The company capitalizes R&D expenditures after entering Phase III clinical trials. During the reporting period, capitalized amounts were RMB 41.39 million, RMB 30.65 million, and RMB 17.62 million, respectively. In 2025, due to slower-than-expected progress in glumetinib's indication expansion clinical trials, the company recorded a RMB 35.5744 million impairment on development expenditures.

During the reporting period, sales revenue from the top five customers accounted for 87.83%, 85.81%, and 81.74% of each period's total revenue, respectively. Major customers include Sinopharm Holding, Shanghai Pharma, Taiho Pharmaceutical, and China Resources Pharma. During the reporting period, net cash flows from operating activities were RMB -255 million, RMB 88.1184 million, and RMB -217 million, respectively. The brief turnaround in 2024 was mainly due to the arrival of BD proceeds, but it turned negative again in 2025. As of the end of 2025, the company had RMB 983 million in cash on its books. Despite holding nearly one billion in idle funds, it plans to use RMB 600 million from the IPO proceeds to supplement working capital.

It is worth mentioning that the company's subsidiary, Taizhou Haihe, has a construction project contract dispute with 11 Technology. 11 Technology is seeking Taizhou Haihe and the issuer to jointly pay the remaining project payment of RMB 41.0383 million, overdue liquidated damages of RMB 3.7019 million, and overdue interest of RMB 2.0223 million. The related property preservation resulted in the freezing of some of Taizhou Haihe's bank accounts and the sealing of its factory premises.