Xintong Pharmaceutical Research Co., Ltd. (referred to as "Xintong Pharma") responded to the inquiry letter on August 12. The company's core technology foundation originates from the reverse acquisition of the struggling Kaihua Company in 2015. Amid Kaihua's debt default situation, Xintong Pharma absorbed the entity, thereby obtaining the HepDirect technology and its associated product pipeline. However, this technology route considered paramount has four core products that all stem from licensed introductions from LGND rather than independent innovation.

Looking at the corporate history, in 2017, investors such as Taizhou Yutong planned a capital increase of 180 million yuan, with an agreement to pay the remaining 80% within 10 working days after the industrial and commercial change. Yet the funds did not fully arrive until December 2019, a delay of over one and a half years. During the 2020 shareholding system reform, the audited net assets stood at 372 million yuan but were retroactively adjusted to 336 million yuan and then 337 million yuan due to accounting errors. After the company's registration became effective in April 2023, Xintong Pharma surprisingly did not launch its issuance for an entire 12 months, and the registration approval officially expired on April 25, 2024, making it the first intended IPO company with a "failed" approval under the comprehensive registration system.

The financing prices before the second filing showed stark inconsistency within the same month. In March 2025, Zhengguan No.1 invested at 25.61 yuan per share, while in the same month, Sanyuan Hangke and Hangzhou Taige subscribed at only 10.24 yuan per share, a dramatic 60% price drop within just a few months.

Net assets revised repeatedly, subscription prices inconsistent in the same month

The history of Xintong Pharma dates back to May 2000, when Zhang Dengke and Li Feiying jointly invested 520,000 yuan to establish Xintong Limited, with Zhang holding 61.54% and Li holding 38.46%. In its early days, the company pursued a strategy of "combining generics and innovation, advancing both chemical and traditional Chinese medicine," primarily engaging in R&D and sales of chemical drugs and TCM.

The year 2011 marked a watershed in Xintong Pharma's development. That year, the company became involved in the R&D of Pradefovir Maleate Tablets and MB07133 injection through cooperation with Kaihua Company. However, the real turning point came in 2015, when Xintong Pharma made a reverse acquisition of all of Kaihua's equity against the backdrop of poor operations and debt default, thereby obtaining the HepDirect technology and related product pipeline. This acquisition established the company's technological foundation for over a decade. Yet the HepDirect technology and four core products all originate from licensed introduction from LGND, not independent creation.

In the historical evolution, 2017 saw investors like Taizhou Yutong and Hanfu Hankuan plan a capital increase of 180 million yuan. The agreement stipulated paying the remaining 80% within 10 working days after the industrial and commercial change, but the funds were not fully received until December 2019. In November 2020, Xintong Pharma completed its shareholding reform, with audited net assets of 372 million yuan. However, due to retroactive adjustments for accounting errors, net assets were subsequently revised to 336 million yuan and then 337 million yuan.

Xintong Pharma's IPO journey has been fraught with twists. On December 6, 2021, the company submitted its initial STAR Market IPO application. The first listing review on December 12, 2022 resulted in "deferred review," with regulators questioning its innovativeness and requesting clarification on whether the "specific embodiment of innovation" meets the requirements of science and technology attributes. The second review passed on January 12, 2023, followed by registration submission on April 13 and registration effectiveness on April 25. After registration became effective, Xintong Pharma surprisingly failed to launch its issuance for a full 12 months, and the registration approval officially expired on April 25, 2024. This made the company the first intended IPO entity to have its approval lapse under the comprehensive registration system.

Prior to the second filing, Xintong Pharma conducted multiple financing rounds. In October 2024, Caijin Wenyuan and Kaiyuan Caijin subscribed for new shares with 66 million yuan and 50 million yuan respectively. In March 2025, Zhengguan No.1 subscribed for 5.3495 million shares with 137 million yuan at a price of 25.61 yuan per share. In the same month, Sanyuan Hangke and Hangzhou Taige each subscribed for 2.9297 million shares with 30 million yuan, yet the subscription price dropped to 10.24 yuan per share. Within just a few months, the subscription price for the same company fell from 25.61 yuan to 10.24 yuan, a decline of 60%.

Before the filing, Zhang Dengke directly held 46.45% and indirectly controlled 7.42% through Xi'an Hai Jinsha, totaling 53.86% control. The second-largest shareholder is foreign shareholder Huimei Company (under Morningside Venture) with 17.95%. Other shareholders with over 5% stakes include Taizhou Yutong (5.51%) and Kangchen Ruixin (5.39%).

Distributor suffering heavy losses yet targeting "tenfold growth in ten years," holding 260 million in wealth management while seeking 900 million from the market

Xintong Pharma currently has eight core liver disease treatment products, but only Pradefovir Maleate Tablets (Xinshumei) has achieved commercialization. This product received marketing approval in October 2024 and is touted as the "world's first liver-targeted hepatitis B drug developed through a liver-targeted technology platform." However, the "first" halo cannot mask the commercialization dilemma. In 2024, Xinshumei sales revenue was only 1.0144 million yuan, and in the first half of 2025, sales reached 4.1747 million yuan. A promising Class 1 innovative drug with over half a year on the market has generated less than 10 million yuan in sales.

Regarding customer concentration, in 2024, revenue from Kaiji Xincheng and its subsidiaries accounted for as much as 94.09%, rising further to 98.88% in 2025. For the full year 2025, a total of 99.47% of revenue came from Xinshumei. This means Xintong Pharma's commercialization lifeline is entirely tied to one product and one distributor. Kaiji Xincheng was established in April 2023, and the two parties signed a ten-year exclusive agency agreement. Sales targets for 2025 to 2029 are set at 120,000 boxes, 800,000 boxes, 1.6 million boxes, 2.4 million boxes, and 3.6 million boxes respectively. However, the concerning part is that Kaiji Xincheng itself is in a loss-making state, with operating revenue of approximately 78.1186 million yuan and a net loss of approximately 53.2843 million yuan in 2025.

From 2023 to 2025, Xintong Pharma's operating revenue was 11.9782 million yuan, 3.0187 million yuan, and 32.0147 million yuan respectively, with net profits attributable to parent of -62.2925 million yuan, -79.3555 million yuan, and -54.6352 million yuan. As of the end of June 2025, accumulated uncovered losses had reached 347 million yuan. In terms of gross margin, the company's comprehensive gross margins for the reporting period were 65.35%, 97.77%, -31.6%, and 45.43%. In 2024 and the first half of 2025, the gross margins for Xinshumei sales were -82.96% and -2.6% respectively—the more sold, the greater the loss. The company explained that because the product has not yet been included in medical insurance, sales volume remains small, and fixed cost amortization is high, resulting in negative gross margins.

As an innovative drug company, R&D investment should be the core competitiveness. However, Xintong Pharma's R&D expenses saw a cliff-like decline in 2024, dropping from 62.096 million yuan in 2023 to 26.0841 million yuan, a year-on-year decrease of 57.99%. Among this, trial expenses decreased by 29.1136 million yuan, a drop of 73.17%. The company's explanation: the Phase III clinical trial plan for Hepnofovir Fumarate Tablets was postponed to the second half of 2025, leading to lower trial expenses, and R&D investment during the Xinshumei listing approval period was capitalized into development expenditures.

From 2023 to 2025, Xintong Pharma's accounts receivable surged from 1.3031 million yuan to 16.6586 million yuan, while operating revenue during the same period grew from 11.9782 million yuan to 32.0147 million yuan. Throughout the reporting period, operating cash flow remained negative: -27 million yuan, -40 million yuan, and -107 million yuan for 2023 to 2025 respectively. Meanwhile, the company has been heavily purchasing wealth management products—in 2024 and the first half of 2025, net cash outflows from investing activities were 83.7918 million yuan and 108 million yuan, both attributed to purchases of wealth management products. As of the end of June 2025, trading financial assets reached 265 million yuan.

This IPO plans to raise 900 million yuan, a 29.6% reduction from the previous 1.279 billion yuan. The fundraising projects include: 500 million yuan for new drug R&D, 200 million yuan for constructing an innovative drug industrialization production base, and 200 million yuan to supplement working capital. Notably, the land for the fundraising project has been mortgaged. In July 2025, the company signed a mortgage contract with CITIC Bank Xi'an Branch, mortgaging the land parcel "Shaan (2021) Fufeng County Real Estate Rights No. 0000349" for bank loans. If the company experiences major adverse operational changes, the fundraising projects may face the risk of mortgage enforcement preventing normal implementation.

Furthermore, the innovative drug industrialization production base construction project completed its filing and environmental assessment in 2020-2021, but progress remains unclear to date. The Shanghai Stock Exchange has already inquired whether the filing and environmental assessment procedures need to be redone.