news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

when chinese investors believed that small nucleic acid drugs would become one of the most promising innovative technologies in the future, sinopharm (02257.hk), which was crowned as "china's first nucleic acid drug stock", was in deep crisis.

at the end of august this year, sanno pharmaceuticals announced its 2024 interim results. financial report data showed that in the first half of this year, the company did not generate any product sales revenue and recorded a loss of us$43.5 million, compared with a loss of us$41.1 million in the same period last year.

in terms of cash flow, the cash and cash equivalents of sirnax pharmaceuticals decreased from us$23.9 million as of december 31, 2023 to us$7.7 million as of june 30, 2024. in addition, as of june 30, 2024, the company's financial position changed from net assets of us$24.5 million as of december 31, 2023 to net liabilities of us$17.8 million.

with its financial situation taking a sharp turn for the worse, the question of how to ensure the funding required for subsequent new drug research and development has always plagued sinopharm. lu yang, founder and ceo of sinopharm, once told times finance that the company will ease the company's cash pressure through strategic measures such as streamlining staff, adjusting pipeline focus, and exploring bd (business development) of pipeline projects.

judging from the current situation, a series of cost-cutting measures still cannot stop the downward trend of sinopharm. and in terms of finding "money", sinopharm seems to have made no new progress.

from being packed with guests when it went public in 2021 to now facing a precarious capital chain, how did sinopharm end up like this? at a biopharmaceutical industry gala held in july this year, lu yang sang a song "waiting" as a guest. perhaps this is exactly what he expects from sinopharm right now - waiting for an opportunity to break through, waiting for the day when it bottoms out and rebounds.

where did the money go?

founded in 2007, it focuses on the development of new drugs based on nucleic acid interference (rnai) technology. among domestic innovative pharmaceutical companies, shengno pharmaceuticals has a long history and can even be regarded as china's first generation of biotech.

because of the development of multiple proprietary delivery platforms, sinopharm has been favored by investors in the small nucleic acid drug track and was once the "darling" of capital. before listing, sinopharm completed five rounds of financing, with a total financing amount of nearly us$270 million. investors include yuanhe yuandian, yuexiu industrial fund, puhua capital, cornerstone capital, hongtao capital, longmen capital, etc.watson bio(300142.sz) also appears among them.

after listing on the hong kong stock market, shengnao pharmaceutical mentioned that the net proceeds raised from the global offering (including the partial exercise of the over-allotment option) were approximately us$54.8 million, and a total of 8.51 million new shares were issued.

in the pipeline, sirnax pharmaceuticals is committed to developing innovative biopharmaceutical drugs using proprietary delivery platforms for multiple disease indications, including oncology, fibrotic diseases and conditions, viral diseases, and cardiovascular metabolic diseases.

according to the annual report released in 2021, the year of its listing, sirno pharmaceuticals' main products are stp705 and stp707, and at least 16 other products are undergoing preclinical research. by 2023, sirno pharmaceuticals still has 16 projects under development in its pipeline.

but to date, none of these pipelines have produced an approved product.

according to the financial report, as of december 31, 2023, us$45.2 million of the net proceeds raised from the global offering of sirna pharmaceuticals has been invested in the development and commercialization of stp705, the development of stp707, the galnac program products, and the research and development of other preclinical drug candidates.

although the funds required for the development of innovative drugs are huge and the success rate is very high, the market is still concerned about where the money is invested.

judging from the allocation of funds raised from the ipo, stp705 is a key project invested by sirno pharmaceuticals. according to the prospectus, stp705 is a dual tgf-β1/cox-2 inhibitor.

in the 2021 annual report, the indications under development for the stp705 project include squamous cell carcinoma in situ/isscc, basal cell carcinoma/bcc, local fat reduction, liver cancer (basket type) (including cholangiocarcinoma, hepatocellular carcinoma, liver metastasis, etc.), liver cancer (combined with anti-pd-(l)1), liver cancer/lung cancer/pancreatic cancer, hts/hypertrophic scars, and liposculpture.

however, to date, the only indications that stp705 is being developed for are squamous cell carcinoma in situ, basal cell carcinoma, and liposculpture.

shidai finance read the prospectus and found that in the stp705 "disappeared" indications, shengnuo pharmaceuticals had cooperated with external parties.innovent biologics（01801.HK）、junshi biosciences(01877.hk; 688180.sh), guangzhou xiangxue and these three pharmaceutical companies have reached a development cooperation.

as early as october 2010, shengnuo pharmaceuticals and guangzhou xiangxue reached a cooperation on stp705 (for the treatment of hypertrophic scars), and guangzhou xiangxue obtained the rights and interests of stp705 in china. however, 10 years later, the agreement was terminated. financial report data showed that the loss from the termination of the cooperation agreement with guangzhou xiangxue was us$7.679 million. by the 2023 annual report, the indication for the treatment of hypertrophic scars had disappeared without a trace.

the collaborations with innovent biologics and junshi biosciences both took place in january 2020. the prospectus shows that shengnuo pharmaceuticals has collaborated with innovent and junshi biosciences to conduct research on the combination of stp705 and anti-pd-(l)1 inhibitors.

however, in the 2023 annual report, the relevant statements about the above two cooperations were also erased. in this regard, the relevant person from the securities department of shengnuo pharmaceutical only told times finance that "it is inconvenient to disclose".

perhaps, shengnuo pharmaceuticals has done a lot of exploration on stp705. judging from the progress, this is still shengnuo pharmaceuticals' fastest-growing and most commercially promising pipeline.

the 2024 interim report shows that stp705 (for the treatment of squamous cell carcinoma in situ) and stp705 (for the treatment of basal cell carcinoma) are in phase ii clinical trials, and stp705 (for fat shaping) is in phase i clinical trials.

in its 2023 performance announcement, shengnao pharmaceuticals mentioned that it had submitted an adaptively designed phase ii/iii pivotal trial for stp705 to the u.s. food and drug administration (fda) to address the undetermined dose selection issue, and proposed another phase iii trial design in accordance with regulatory requirements.

in this interim report, shengnuo pharmaceuticals mentioned that in response to the company's suggestions and issues related to the design of related non-clinical studies and clinical studies, the us fda provided a clear development path, including specific guidance on non-clinical and clinical studies, modifications to the proposed phase ii/iii and phase iii clinical studies, and further demonstration of the use of two active ingredients in the candidate drug stp705. currently, shengnuo pharmaceuticals is conducting the required research in accordance with the guidance of the us fda.

financial report data shows that in the first half of this year, shengnuo pharmaceutical invested us$4.9 million of the funds raised from its ipo into the stp705 project.

"our top priority is to commercialize stp705 for the treatment of isscc (squamous cell carcinoma in situ). we have been communicating with the fda and have received their written response regarding further development of stp705, a novel sirna therapy for the treatment of isscc. we expect to fund the stp705 trial through existing financial resources, new funds raised from the market, and collaboration with other parties," said shengnuo pharmaceuticals in its interim report.

for sirna pharmaceuticals, the stp705 project carries the company's hope of "self-sustaining". however, in june this year, dr. francois lebel, the chief medical officer of sirna pharmaceuticals, announced his resignation. he was the core person in charge of the stp705 project, which casts another layer of uncertainty on the subsequent development of stp705.

with funds dwindling, sirnac pharmaceuticals mentioned in its interim report that it has prioritized resources for projects with great potential and has suspended or slowed down the development of other projects. it particularly emphasized that it has decided to use financial resources to advance the development of stp705 and stp122g.

according to the interim report, stp122g is a candidate product formulated using sirno pharmaceuticals' galahead™ platform targeting factor 11 and is currently in phase i clinical trials.

how to solve the funding crisis?

17 years after its establishment, shengnuo pharmaceutical has fallen from its high position as "china's no. 1 nucleic acid drug stock" to its current moment of life and death.

regarding the decrease in cash and cash equivalents, shengnuo pharmaceutical mentioned in its interim report that it was mainly due to the group's r&d activities, general corporate and administrative activities.

financial report data shows that in the first half of this year, sanno pharmaceuticals' administrative expenses were us$10.16 million, compared with us$10.815 million in the same period last year; r&d expenses were us$14.251 million, compared with us$30.709 million in the same period last year.

under the cost control of sirna pharmaceuticals, both of these expenses have been reduced. however, judging from the financial report data, this is not the main reason for the deterioration of sirna pharmaceuticals' financial situation.

on july 8, sirna pharmaceuticals announced that the company's subscription to tradart flagship investment spc's independent investment portfolio totaling us$20 million (excluding transaction fees) had been redeemed as of the date of the announcement, due to the possible default of the issuer of the private bonds invested by the fund.

the interim report shows that according to the capital account statement provided by the investment manager, the company's capital account balance was us$1.935 million as of june 30, 2024. the company recorded a fair value loss of us$18.108 million on financial assets measured at fair value through profit or loss for the six months ended june 30, 2024.

according to the 2023 annual report, sirnaomics hong kong, a wholly-owned subsidiary of sirna pharmaceuticals, subscribed for us$15 million and us$5 million of independent investment portfolio shares of the above-mentioned fund in 2022 and 2023, respectively, and the fund has appointed the company's independent third party tradart asset management co., limited as its investment manager.

prior to the disclosure of this interim report, shengnuo pharmaceutical announced that the net asset value of this investment is expected to undergo significant adverse changes.

regarding this matter, shengnuo pharmaceutical mentioned in its interim report that on july 29, 2024, the investigation committee hired fok law firm as hong kong legal advisor on behalf of the company and hired a&m forensic accounting consultants limited as independent investigation consultant.

on the date of this interim report announcement, shengnuo pharmaceutical stated, "the investigation is ongoing. based on currently available information, the first report on the results of the investigation is expected to be released in september 2024. this timetable is for reference only and may or may not be updated based on the progress and development of the investigation."

for the current sinopharm, capital injection is urgently needed to solve the company's predicament. in the interim report, it mentioned that the group relies on equity and debt financing as the main source of working capital.

the interim report shows that as of june 30, 2024, shengnuo pharmaceutical's bank loans were us$400,000. as of june 30, 2024, the company had no unused bank financing.

however, it remains a question whether shengno pharmaceuticals can obtain new financing.

seeking bd cooperation may be a way out, or it may be the only way out. in the interim report, shengnuo pharmaceutical said that it would selectively seek opportunities for synergy and maximize its potential.

"our strategy and business development team continues to actively explore global and local partnerships and collaboration opportunities with other industry players, especially for our lead products stp705, stp707 and our galahead™ clinical and preclinical assets, including but not limited to stp122g, stp125g and stp144g. the partnerships and collaboration opportunities are expected to help promote the development of a number of preclinical and clinical assets. such opportunities may include co-development, in-licensing and out-licensing arrangements," said sirna pharmaceuticals.

in april this year, damian bio, a subsidiary of shengnao pharmaceuticals, was awardedhualan biotechnology(002007.sz) for the exclusive rights to develop and commercialize rv-1770 in china. however, the announcement did not disclose the specific amount of the transaction.

in august this year, sirnac announced that it would establish a joint venture, sagesse bio, with gore range capital to jointly promote the development of local fat remodeling products. the transaction involved the transfer of sirnac's patents.

in the announcement, sirnac bio mentioned that the company would receive milestone payments. however, this also requires sagesse bio to complete fundraising.

"as of the date of this announcement, we have received a large number of term lists for future collaborations, including one from a large domestic pharmaceutical company from mainland china. potential areas of collaboration include but are not limited to our unique delivery platform, priority product pipelines that are already in the clinical stage, and preclinical products with huge market potential," said shengnuo pharmaceuticals in its interim report.

however, since the beginning of the year, the share price of sinopharm has plummeted by more than 90%. in the midst of a financial crisis, with its market value shrunk to less than hk$300 million, it is unclear how much bargaining power sinopharm still has when negotiating with its partners.