On April 29, Huaqian Biotechnology (Qingdao) Co., Ltd. (hereinafter referred to as "Huaqian Bio") submitted a prospectus to be listed on the main board of the Hong Kong Stock Exchange, with Huatai International and CITIC Securities as its joint sponsors.
According to the prospectus, Huaqian Biopharma is a China-based biopharmaceutical company focusing on protein drugs for indications with unmet medical needs and huge market opportunities, with a focus on discovering, developing and commercializing multifunctional therapies for wound healing.
At present, Huaqian Biotech has developed platelet-derived growth factor (PDGF) drugs. Among them, the core products Pro-101-1 and Pro-101-2 are recombinant human platelet-derived growth factor-BB (rhPDGF–BB) drugs, which are used for the treatment of burns and scalds and the treatment of diabetic foot ulcers (glycofoot), respectively.
Tianyancha App shows that Huaqian Biotechnology was established in April 2012 and was formerly known as Beijing Zhonghong Saisi Biotechnology Co., Ltd. At present, the registered capital of the company is about 100 million yuan, the legal representative is Jia Lijia, and the shareholders include Jia Lijia, Wang Kelong, Zhang Hongbo, Li Gewei, Qingdao Hi-Tech Industry Development Co., Ltd., etc.
According to the prospectus, Huaqian Biotech has entered the Phase IIb clinical trial of Pro-101-1 for the treatment of burns and scalds in China in December 2023, and is expected to complete the trial in the second quarter of 2025, and plans to start the phase III clinical trial in the third quarter of 2025, and complete the trial in the fourth quarter of 2026, and plans to launch the product in China in 2027.
At the same time, Huaqian Biotech also submitted a pre-IND communication application to the FDA in December 2021 for Pro-101-1 for the treatment of burns, and the FDA agreed with the company's recommendation to conduct clinical trials and submit Pro-101-1 for the treatment of burns and scalds through the innovative biologics approval pathway.
In addition, in February 2022, Huaqi Biopharma entered the Phase II clinical trial of Pro-101-2 for the treatment of glycosis in China. At present, the company has registered new product specifications and made several revisions to existing clinical trial protocols, and expects to launch the product in China in 2030.
To date, Huaqian Biopharma's pipeline includes 10 product candidates, including 7 PDGF product candidates, covering a wide range of wound healing indications, including burns, sugar feet, fresh wounds, pressure ulcers, radiation ulcers, dry eyes, corneal injuries, solar photodermatitis, hair loss, hemorrhoids and gastric ulcers.
However, Huaqian Biotech has not yet achieved commercialization. In 2022 and 2023, Huaqian Biotech's revenue will be RMB 0 and RMB 472,000, respectively, and its net loss will be RMB 85.926 million and RMB 105 million, respectively. Among them, the revenue in 2023 comes from providing research services related to the medical device project of wound healing to a single customer, which is not part of the company's core business.
According to the prospectus, the expenses of Huaqian Biotechnology are gradually increasing. In 2022 and 2023, the company's R&D expenses will be 34.818 million yuan and 39.915 million yuan, administrative expenses will be 44.223 million yuan and 42.117 million yuan, and financial costs will be 7.855 million yuan and 23.582 million yuan, respectively.
Bedo Finance understands that the cash reserves of Huaqian Biotechnology continue to grow. As of December 31, 2023, the company held cash and cash equivalents of 242 million yuan, a geometric increase from 15.765 million yuan at the end of 2022, mainly due to the financing obtained in 2023.
According to the prospectus, Huaqian Biotech received 300 million yuan in Series B financing in May 2023, which was subscribed by Qingdao Hi-Tech, with a post-investment valuation of about 3.3 billion yuan and a cost per share of 33 yuan. Previously, in 2021, CDH Investments, through Qingdao CDH and Jiaxing CDH, also participated in the investment in Huaqian Biotech, with a cost per share of 22.23 yuan.
In the past few years, the shareholder composition of Huaren Biotech has undergone earth-shaking changes. With the passage of time, the company's founding shareholders Li Desheng and Guo Jing both chose to withdraw. Among them, Guo Jing withdrew in January 2013 and transferred all 20% of the shares of Huaren Biotech to Jia Lijia, worth 2 million yuan.
In January 2013, Jia Lijia transferred 10% of the equity of Huaren Biotech to Luo Bin and "cashed out" 1 million yuan. In August of the same year, Jia Lijia transferred 20% of the equity of Huaren Biotech to Li Desheng and Li Gewei, totaling 2 million yuan. After the completion of the transfer, Li Desheng and Li Gewei each hold 10% of the shares, and Jia Lijia holds 35% of the shares.
In December 2013, Huaren Biotech carried out a capital increase, and the registered capital increased from 10 million yuan to 36 million yuan. At the same time, Zhang Hongbo invested 6 million yuan to enter the ranks of shareholders of Huaren Biotech. After the completion of the capital increase, Jia Lijia, Li Desheng, Li Gewei, Zhang Hongbo and Luo Bin held 29.17%, 29.17%, 16.67%, 16.67% and 8.33% of the shares respectively.
In January 2015, Luo Bin transferred all 8.33% of the equity of Huaren Biotech to Shao Yubo, a cousin of Wang Kelong (Jia Lijia's son), worth 3 million yuan. In February 2017, Shao Yubo transferred all this part of the equity to Wang Kelong's cousin Wang Shen, with a value of 3 million yuan.
In January 2018, Li Desheng transferred all 29.17% of the equity of Huaren Biotech to Wang Kelong, "cashed out" 10.5 million yuan, and completely withdrew. In October of the same year, Wang Kelong transferred this part of the equity to Jia Lijia's sister Jia Qiuli and Zhang Hongbo, worth 5.25 million yuan and 5.25 million yuan respectively.
In October 2020, in order to meet the needs of personal and family cash flow flexibility, Jia Qiuli transferred her 14.58% equity interest in Huaren Biotech to Jia Lijia for 5.25 million yuan. During the same period, Jia Lijia further transferred this part of the equity to Wang Kelong at a consideration of 5.25 million yuan.
In November 2020, Wang Shen transferred all 8.33% of the equity of Huaren Biotech to Jia Qiuli, with a value of 3 million yuan, which is the same price as when it was transferred in 2017 for 2 years. Subsequently, Jia Qiuli transferred this part of the equity to Jia Lijia, and further transferred it to Wang Kelong at a price of 3 million yuan.
After the completion of the transfer, Zhang Hongbo, Jia Lijia, Wang Kelong and Li Gewei held 31.25%, 29.17%, 22.92% and 16.67% of the shares respectively. In December 2020, Zhang Hongbo transferred 8% of his equity in Huaren Biotech to Song Jianqing, "cashing out" 2.88 million yuan, and the shareholding ratio dropped to 15.0%.
Also in December 2020, Qingdao Huaren, the employee shareholding platform of Huaren Biotech, invested 4 million yuan to participate in the capital increase of the company, and at the same time, the existing shareholders contributed 20 million yuan to subscribe for new shares. In May 2021, Huaren Biotech increased its capital again, and Hainan Chinese, an employee shareholding platform, joined.
In August 2021, Jia Lijia transferred part of the equity of Huaren Biotechnology to Qingdao CDH and "cashed out" 25 million yuan. At the same time, Qingdao CDH and Jiaxing CDH invested 35 million yuan and 40 million yuan respectively in Huaren Biotechnology. According to this calculation, CDH Investments invested a total of 100 million yuan to participate in the investment in Huaren Biotech.
Before the listing, Jia Lijia held 19.54% of the shares, Wang Kelong held 17.98% of the shares, Zhang Hongbo held 17.47% of the shares, and Li Gewei held 12.00% of the shares. According to the prospectus, the above-mentioned shareholders, acting in concert, are a group of controlling shareholders who control a total of 66.99% of the voting rights of Huaren Biotech.
At the same time, Qingdao Huaqian and Hainan Chinese, the employee shareholding platforms of Huaqian Biotech, hold 8.00% and 4.78% of the shares respectively, Qingdao Hi-Tech holds 9.09% of the shares, Song Jianqing holds 5.76% of the shares, CDH Investment holds 3.03% and 1.80% of the shares respectively through Qingdao CDH and Jiaxing CDH, and Zhang Hong holds 0.54% of the shares.
At present, Jia Lijia is the chairman of the board of directors (i.e., chairman) of Huaqian Biotech, Wang Kelong is the president of the company, vice chairman of the board of directors (i.e., vice chairman), and Zhai Junhui is the general manager. At the same time, Stanley Ho is the company's chief financial officer, vice president and secretary of the board of directors, Xu Zhenyu is the chief marketing officer and vice president, and Zhao Xinghui is the chief research and development officer.