Innovative pharmaceutical company Lingke Pharma (Zhejiang) Co., Ltd. (hereinafter referred to as "Lingke Pharma"), which focuses on the autoimmune and inflammatory disease sector, is charging towards the Hong Kong stock market amidst "aspirations for a billion-dollar market" and "multiple harsh realities." On one hand, the global JAK inhibitor market is projected to reach a scale of $40 billion, with its core product LNK01001 touted as a potential "best-in-class" second-generation JAK1 inhibitor carrying high hopes for a breakthrough. On the other hand, the company faces a brutal operational reality: losses exceeding 700 million yuan over two and a half years, relentless R&D spending, and a net outflow of 550 million yuan in operating cash flow over the same period.
It has been noted that the development of Lingke Pharma's core product, LNK01001, lags behind commercially available competing products. Furthermore, as the company has not established its own sales team, its commercialization strategy relies on the promotion efforts of Simcere Pharmaceutical Group Limited (hereinafter referred to as "Simcere"). Just before submitting its application, a shareholder suddenly transferred equity at a low price, with a significant discrepancy between this transfer price, other contemporaneous transfer prices, and subsequent capital increase prices. This has prompted serious inquiries from the China Securities Regulatory Commission (CSRC) regarding potential利益输送 (benefit transfer) and the compliance of capital contributions, casting significant uncertainty and suspense over Lingke Pharma's listing journey.
Over the past two and a half years, Lingke Pharma has incurred losses exceeding 700 million yuan. The company is a developer of innovative and differentiated small-molecule inhibitors for autoimmune and inflammatory diseases. Its clinical pipeline primarily concentrates on the Janus kinase-signal transducer and activator of transcription (JAK-STAT) signaling pathway, featuring three clinical-stage drug candidates: LNK01001, LNK01004, and LNK01006.
Among these, LNK01001 is currently undergoing multiple Phase III clinical trials. It is expected to enter the New Drug Application (NDA) stage for atopic dermatitis in the first half of 2026, for rheumatoid arthritis in the second half of 2026, and for ankylosing spondylitis in the second half of 2027. LNK01004 completed its Phase II trial for atopic dermatitis in China in July 2025, with plans to initiate its Phase III trial in the first half of 2027. The key product, LNK01006, is currently in the investigational new drug stage. The company has submitted an Investigational New Drug (IND) application in the US and received FDA approval for the IND in November 2025.
Data shows that during the periods of 2023, 2024, and the first nine months of 2025 (hereinafter referred to as the "Reporting Period"), Lingke Pharma generated revenues of 20.573 million yuan, 16.978 million yuan, and 54.78 million yuan, respectively. The company has not derived any revenue from the commercialization of its drug candidates; the aforementioned income primarily stems from government grants and bank interest income.
Lingke Pharma is not only unprofitable but has also sustained continuous net losses. During the Reporting Period, the company recorded net losses of 260 million yuan, 312 million yuan, and 145 million yuan, respectively, amounting to over 700 million yuan in losses over two and a half years, with the majority attributable to R&D expenses. From 2023 to 2024 and through the first nine months of 2025, Lingke Pharma's R&D expenditures were 186 million yuan, 223 million yuan, and 121 million yuan, respectively, with nearly 70% allocated to preclinical research and clinical trial-related costs.
The insufficiency in its ability to generate internal funds is also reflected in a continuously deteriorating cash flow situation. During the Reporting Period, the net cash flow from operating activities was -228 million yuan, -241 million yuan, and -86 million yuan, respectively, resulting in a combined net outflow of 550 million yuan over two and a half years. As of the end of September 2025, Lingke Pharma's cash and cash equivalents stood at a mere 147 million yuan. Given the ongoing substantial investments, concerns have been raised externally about whether this level of cash can sustain the smooth progression of its R&D activities.
Lingke Pharma, however, stated that the company possesses sufficient working capital to cover at least 125% of its costs for the 12 months following the document date, including R&D expenses, administrative expenses, finance costs, and other expenditures.
The commercialization of Lingke Pharma's core product relies on Simcere Pharmaceutical Group. According to Frost & Sullivan data, the global JAK inhibitor market has rapidly expanded from $5.5 billion in 2019 to $13.9 billion in 2024, and is projected to reach $25.6 billion by 2028, with potential to exceed $40.8 billion by 2033. Growth in the Chinese market is particularly significant, surging from 400 million yuan in 2019 to 3.8 billion yuan in 2024, and is expected to reach 17.1 billion yuan by 2028, further climbing to 46.5 billion yuan by 2033.
Despite the enormous clinical demand and commercial prospects, competition in this sector is intensely fierce. In 2019, when LNK01001 initiated preclinical studies, only Pfizer's first-generation JAK inhibitor, tofacitinib, was marketed in China. In the subsequent years, JAK inhibitors accelerated their market entry. As of the prospectus disclosure date, the number of JAK inhibitors approved in China for treating autoimmune diseases had increased to eight, while ten JAK inhibitors had been approved globally.
Reportedly, the therapeutic application of first-generation JAK inhibitors is limited by their less selective pharmacological properties. Simultaneously inhibiting multiple JAK subtypes (JAK1/2/3 and TYK2) can lead to clinically significant off-target effects: JAK2 inhibition can cause hematological toxicities such as anemia and thrombocytopenia, while JAK3 inhibition increases the risk of infections, particularly the reactivation of the herpes zoster virus. These mechanism-related adverse events necessitate strict safety monitoring, limiting their widespread use in clinical practice and highlighting the urgent need for more selective treatment options. Second-generation JAK inhibitors represent a significant advancement in targeted immunomodulation, achieving more precise therapeutic effects by enhancing selectivity for specific JAK subtypes.
Lingke Pharma claims that its core product, LNK01001, has the potential to become a best-in-class second-generation JAK1 inhibitor. However, two second-generation JAK inhibitor products, upadacitinib and abrocitinib, have already been successfully commercialized.
Moreover, Lingke Pharma's LNK01001 is not expected to submit its first New Drug Application (for atopic dermatitis) until the first half of 2026 at the earliest. With LNK01001 already lagging in development progress, whether Lingke Pharma can meet its expectations remains to be seen.
It has been noted that in 2022, Lingke Pharma entered into a collaboration agreement with Simcere. According to this agreement, the former granted the latter exclusive commercialization rights for LNK01001 in mainland China for the rheumatoid arthritis and ankylosing spondylitis indications. Simcere is responsible for product promotion activities following relevant regulatory approvals. The consideration for this agreement includes an upfront payment of 125 million yuan. After the product is launched, the two parties will share sales proceeds according to an agreed ratio.
However, this collaboration has sparked controversy regarding dependency. As Lingke Pharma has not yet established its own sales team, if Simcere's promotion efforts fall short of expectations, it could directly impact the product's performance post-launch.
Shortly before submitting its application, a shareholder transferred equity at a low price, facing intense scrutiny. Lingke Pharma was established in 2017 with an initial registered capital of 10 million yuan. Since its inception, the company has undergone multiple rounds of financing, including angel, Series A, A+, B, and C rounds, leading to a steadily increasing valuation.
In March 2020, investors such as Dejia Chengyu, Zheshang Fund, and Liangyi Mifang participated in a capital increase at a price of 19.71 yuan per share, valuing the company at 425 million yuan. By September 2023, investors including Yantong Investment and Jingyan Investment participated in a capital increase at a price of 93.24 yuan per share, further elevating the company's valuation to 3.422 billion yuan.
It has been noted that in contrast to this significant valuation increase, a phenomenon of shareholders transferring equity at low prices occurred just before Lingke Pharma filed its application. In July 2025, Xiamen Jinyuan Mifang Health Phase I Relay Venture Investment Fund Partnership (Limited Partnership) (hereinafter referred to as "Jinyuan Mifang") acquired 86,800 yuan and 87,100 yuan of registered capital from Yiyuan Mifang and Liangyi Mifang, respectively, for considerations of 5.7671 million yuan and 5.7891 million yuan. This transfer price equated to 66.43 yuan per share.
During the same period, Taikun Investment acquired 168,900 yuan, 32,200 yuan, and 13,400 yuan of registered capital from Wan Zhaokui, Wang Jun, and Lingxin Partnership, for considerations of 7.875 million yuan, 1.5 million yuan, and 625,000 yuan, respectively. Additionally, Quzhou Haibang Zhanyou Venture Investment Fund Partnership (Limited Partnership) acquired identical amounts of registered capital from the same parties for the same considerations. These two acquisition prices equated to 46.62 yuan per share, significantly lower than the contemporaneous acquisition by Jinyuan Mifang and nearly halved compared to the September 2023 capital increase price.
In response, the China Securities Regulatory Commission (CSRC) required Lingke Pharma to provide supplementary explanations regarding: the reasons for the discrepancies among these share entry prices; whether there were abnormal considerations for the share entries; whether there was any利益输送 (benefit transfer); whether capital contributions were fully paid-in; and whether there were instances of failure to fulfill contribution obligations, withdrawal of capital contributions, or flaws in the methods of capital contribution.
Furthermore, the CSRC also demanded that Lingke Pharma supplementarily explain the pricing basis for the share entry prices of shareholders added within the 12 months preceding the submission of the overseas listing application, the reasons for the differences compared to the pricing of contemporaneous capital increases and their合理性 (rationality), as well as the income tax payment status of the relevant transferors in the aforementioned equity transfer process, and to provide a clear conclusive opinion on whether利益输送 (benefit transfer) occurred.
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