On July 12, Baheal Pharma (301015.SZ) announced the successful acquisition of Shanghai Baheal Pharma Co., Ltd. ("Baheal Pharma Co."), following the completion of business registration changes and handover procedures. Through this acquisition, Baheal Pharma now directly holds 60.199% of Baheal Pharma Co.'s shares, making it the controlling shareholder. As a result, Baheal Pharma Co.'s financial performance and status will be consolidated into Baheal Pharma's financial statements.

According to the announcement, Baheal Pharma acquired 60.199% of Baheal Pharma Co.'s shares through a cash transaction amounting to 880 million RMB. Both Baheal Pharma Co. and Baheal Pharma are core enterprises under the parent company, Baheal Pharma Group. They have accumulated extensive experience in the R&D, production, and commercialization of pharmaceutical products. This transaction is not only a significant move for internal resource integration within the group but also a crucial step in Baheal's transformation and upgrade.

In recent years, Baheal Pharma Group, acting as an "industry investor," has collaborated with research institutions to build a platform for translating scientific research into practical applications. The group focuses on nurturing pioneering innovations with "first-in-class" potential and breakthrough technologies. Following its transformation and upgrade, Baheal Pharma will synergize with the R&D and innovation strategies of its parent company, Baheal Pharma Group.

In recent years, Baheal Pharma Group, acting as an "industry investor," has collaborated with research institutions to build a platform for translating scientific research into practical applications. The group focuses on nurturing pioneering innovations with "first-in-class" potential and breakthrough technologies. After its transformation and upgrade, Baheal Pharma will create ecological synergy with the R&D and innovation strategies of its major shareholder, Baheal Pharma Group.

The company has established various levels of commercialization partnerships. Leveraging its strong brand advantage, Baheal Pharma achieved outstanding performance, with a revenue of 7.564 billion RMB and a net profit attributable to shareholders of 656 million RMB in 2023, marking a year-on-year increase of 29.55%. In the first quarter of 2024, the company reported a net profit attributable to shareholders of 166 million RMB, a year-on-year growth of 35.60%.

Baheal Pharma Co. specializes in the modernization of traditional Chinese medicine and the research and production of sustained-release formulations. Its core product, Fuzheng Huayu Tablets (capsules), is covered by the national medical insurance and essential drug list. It is also the only traditional Chinese medicine approved by the FDA to complete Phase II clinical trials in the United States for liver disease, holding a leading position in the anti-liver fibrosis field with annual sales nearing 500 million RMB. Under the strategy promoting the dual-antibody therapy for hepatitis B, Fuzheng Huayu has achieved a compound annual growth rate of 15% over the past three years. With the continuous improvement in hepatitis B treatment rates and the increasing validation and recognition of dual-antibody therapy in clinical practice, Fuzheng Huayu is poised for even broader market expansion.

Additionally, Baheal Pharma's technological prowess in the field of sustained-release formulations is formidable. Its once-daily antidiabetic drug, Metformin Hydrochloride Nida, is the first osmotic pump-controlled release formulation of metformin approved in China and was included in the national medical insurance catalog in 2023. Currently, it is in the market cultivation phase. Thanks to the market performance of its core products, Baheal Pharma achieved revenues of 635 million RMB in 2022 and 760 million RMB in 2023, with net profits of 109 million RMB and 135 million RMB, respectively.

Following this acquisition, Baheal Pharma will leverage Baheal Pharma Group's expertise in commercialization and its extensive marketing network to further increase the market share of its core products, maximizing their commercial value. Concurrently, Baheal Pharma Group is expanding its footprint in the pharmaceutical manufacturing market, enhancing overall market competitiveness and sustainable development, thereby delivering greater value to shareholders.

This milestone acquisition not only enriches Baheal Pharma Group’s product portfolio but also significantly extends its industrial chain layout. The Group will transform from a pharmaceutical commercialization platform to one that supports the industrialization of pioneering innovations. In the future, as innovative products developed by the Group move from the research phase to practical application, Baheal Pharma’s industrial value will become more pronounced. The company will have the opportunity to manage their manufacturing and commercialization, accelerating the adoption of medical innovations in clinical practice and benefiting patients.