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More than a year after it was approved, Wangao Pharmaceutical’s GEM IPO failed.

On July 30, the Shenzhen Stock Exchange announced that due to the withdrawal of the issuance and listing application by Jiangsu Wangao Pharmaceutical Co., Ltd. (hereinafter referred to as "Wangao Pharmaceutical") and its sponsor, according to regulations, the Shenzhen Stock Exchange decided to terminate its issuance and listing review.

The prospectus shows that Wangao Pharmaceutical's main business includes the research and development, production and sales of chemical drugs and traditional Chinese medicines, and it also provides external drug process research and development and production services (ie CMO/CDMO business).

Since its establishment in 2003, the company has always insisted on R&D as the guide, committed to the corporate development route of integrated production and R&D, independently developed and produced medicines for cardiovascular, diabetes and its complications, calcium supplements, anti-tumor, gastrointestinal and other fields, and established a product pipeline with diversified varieties and dosage forms, as well as an R&D and production technology service system.

At present, the main products produced by Wangao Pharmaceutical include two types: chemical drugs and traditional Chinese medicines.

Chemical drugs mainly include valsartan hydrochlorothiazide tablets/dispersible tablets, calcium dobesilate capsules/dispersible tablets, calcium carbonate D3 chewable tablets, irbesartan hydrochlorothiazide tablets/dispersible tablets, bezafibrate dispersible tablets, magnesium aluminum carbonate chewable tablets, amlodipine maleate dispersible tablets, etc.; Chinese patent medicines mainly include javanica oil soft capsules, etc.

In addition, Wangao Pharmaceuticals also provides customers with CMO/CDMO services in the research and development and production of pharmaceutical products.

Wangao Pharmaceutical’s main customers include China National Pharmaceutical Group Co., Ltd., China Resources Pharmaceutical Group Co., Ltd., Renhe Pharmaceutical Co., Ltd., Hainan Zizhuxing Pharmaceutical Co., Ltd., etc.

According to the statistics of Zhongkang CMH or Yaorongyun, from 2019 to 2021, Wangao Pharmaceutical's main products such as valsartan hydrochlorothiazide tablets/dispersible tablets, bezafibrate dispersible tablets in the cardiovascular field, calcium dobesilate capsules/dispersible tablets in the field of diabetic complications, and brucea javanica oil soft capsules in the anti-tumor field have a high market share among similar competing products, ranking in the top 3; calcium carbonate D3 chewable tablets in the calcium supplement field were launched in 2019, and its market share increased from 0.25% to 3.50%, increasing year by year, and is in a rapid development trend.

In terms of performance, from 2020 to 2022, Wangao Pharmaceutical achieved revenue of 670 million yuan, 660 million yuan, and 711 million yuan, and net profits of 58.6177 million yuan, 89.0659 million yuan, and 93.9276 million yuan, respectively.

It is worth noting that the amount of related-party transactions of Wangao Pharmaceutical is relatively large. The company has sold drugs, purchased goods and services to related parties, mainly transactions between the company and Zizhuxing. From 2019 to the first half of 2022, the sales amount of Wangao Pharmaceutical to Zizhuxing accounted for 6.92%, 7.44%, 8.35% and 9.76% of the main business income of the current period respectively; the company mainly purchased promotion services from Zizhuxing, and the amount of each period accounted for 13.84%, 5.75%, 2.11% and 0% of similar purchases respectively.

Looking back on its listing process, in June 2022, Wangao Pharmaceutical's GEM IPO was accepted. The company originally planned to raise 610 million yuan to be used for the construction projects of annual production of 3.2 billion tablets, 500 million capsules, 200 million bags of granules, 100 million bags of dry mixed suspensions, and 40 million small-volume injections, innovative drug research and development projects, and to supplement working capital.

In March 2023, Wangao Pharmaceutical's GEM IPO was approved. During the review meeting of the Listing Committee, the Listing Committee questioned Wangao Pharmaceutical on issues such as promotion service fees, related transactions, and new shareholders before filing. After the meeting, Wangao Pharmaceutical did not submit a registration application until it withdrew its IPO more than a year later.

Editor: Chen Lixiang

Proofreading: Zhu Tianting