Xi'an Xintong Pharmaceutical Research Co., Ltd., which previously halted its IPO after its registration approval expired, has recently restarted its application to list on the STAR Market. The Shanghai Stock Exchange website shows its latest review status has been updated to "under inquiry."
The company's initial IPO journey was marked by complications. Its application was first accepted in December 2021, followed by a deferred review during its first hearing in December 2022. Approval was granted in a second hearing in January 2023, and registration became effective in April of the same year. However, the one-year validity period for the registration approval lapsed before the company could complete the offering.
A key difference in this new IPO attempt is the commercialization of Xintong's core product. The company's liver-targeting Class 1 new drug, Prafovir Mesylate Tablets (brand name: Xin Shu Mu®), was approved for market launch in China in October 2024. It is the world’s first Class 1 innovative hepatitis B treatment developed using the HepDirect technology platform.
Despite this achievement, Xintong's second IPO bid faces multiple risks, including a smaller fundraising target, persistent losses, a sharp decline in R&D spending, and heightened market competition. Its path to the STAR Market remains challenging and uncertain.
**Unstable Revenue, Halved R&D, and Reduced Fundraising** In its latest application, Xintong again opted for the STAR Market’s fifth listing standard, which requires an estimated market value of at least RMB 4 billion, approval from relevant authorities for core products, large market potential, and significant progress—such as at least one core product entering Phase II clinical trials for pharmaceutical companies.
This choice reflects the company’s ongoing lack of profitability and its reliance on capital markets for future development. Financial data show Xintong has not yet achieved profitability. According to its prospectus, from 2022 to 2024 and the first half of 2025, the company reported revenues of approximately RMB 1.1003 million, RMB 11.9782 million, RMB 3.0187 million, and RMB 9.767 million, respectively, indicating unstable revenue performance.
Net losses attributable to shareholders during the same periods were RMB -53.871 million, RMB -62.2925 million, RMB -79.3555 million, and RMB -13.2036 million, showing a trend of expanding losses. As of the end of June 2025, the company’s accumulated uncovered losses stood at RMB 346.7587 million.
R&D investment is a key indicator of innovation capability for STAR Market applicants, yet Xintong’s R&D expenses fell sharply in 2024. R&D costs were RMB 53.2317 million in 2022, RMB 62.096 million in 2023, RMB 26.0841 million in 2024, and RMB 12.6862 million in the first half of 2025—a 57.99% year-on-year drop in 2024. The company attributed the decline mainly to reduced trial fees, depreciation, amortization, and material costs.
Specifically, trial fees decreased by 73.17% in 2024, partly because the Hipronovir Fumarate Tablets project completed Phase Ic/IIb trials, with Phase II/III seamless registration trials scheduled to begin in the second half of 2025 after discussions with regulatory authorities. Additionally, R&D costs for Prafovir Mesylate Tablets were capitalized as development expenditures after the new drug application was submitted in May 2023 and approved in October 2024, leading to lower recorded trial fees.
Depreciation and amortization expenses also declined significantly, mainly due to the expiration of non-patented technology related to MB07133 in October 2023, and the capitalization of amortization for Prafovir Mesylate Tablets' non-patented technology from May 2023 to October 2024.
While these accounting explanations are valid, the sharp reduction in R&D spending raises concerns about the company’s sustainable innovation capacity and long-term growth potential.
Although Xintong’s cumulative R&D investment from 2022 to 2024 exceeded RMB 80 million, meeting the STAR Market’s quantitative threshold, the average annual R&D expenditure of less than RMB 50 million may be insufficient to support the advancement of its eight candidate products, several of which are in mid-to-late-stage clinical development.
The company now plans to raise RMB 900 million in this IPO, down RMB 379 million or nearly 30% from the previous target of RMB 1.279 billion. The fundraising projects remain unchanged, but allocated amounts have been adjusted: the core "New Drug R&D Project" allocation dropped from RMB 899 million to RMB 500 million, while the "Innovative Drug Industrialization Base Construction Project" increased slightly from RMB 180 million to RMB 200 million.
**Fierce Competition and Pricing Pressure Cloud Commercial Outlook** Xintong focuses on major liver diseases, including hepatitis B, liver cancer, and metabolic dysfunction-associated steatohepatitis (MASH), with a comprehensive pipeline targeting liver disease treatment. However, a large market often implies intense competition, and Xintong’s commercial prospects appear challenging.
In the hepatitis B treatment sector, antiviral drugs—mainly nucleos(t)ide analogs (NAs) and interferon-α—are used to suppress viral replication, with NAs accounting for about 80% of the market.
As of June 30, 2025, five first-line NAs were approved for sale in China: Bristol Myers Squibb’s Entecavir (ETV), GSK’s Tenofovir Disoproxil Fumarate (TDF), Gilead’s Tenofovir Alafenamide (TAF), Hansoh Pharma’s Tenofovir Amibufenamide (TMF), and Xintong’s Prafovir Mesylate (PDF).
Xintong’s product is the latest entrant in this competitive landscape. Moreover, ETV, TDF, and TAF are already included in China’s national volume-based procurement program, leading to significant price reductions. Against established, low-cost originator and generic drugs, Xin Shu Mu® must demonstrate clear advantages in efficacy, safety, or pricing to gain market acceptance—a considerable challenge.
Additionally, the product faces pricing pressure from potential inclusion in China’s National Reimbursement Drug List. The company expects Xin Shu Mu® to be included in the NRDL in 2025, with sales at negotiated prices starting in 2026. While lower prices may boost volume, it remains uncertain whether this will cover costs and improve profitability in the short term.
Another risk is the company’s reliance on externally sourced core technology. The prospectus discloses that Xin Shu Mu®, the Phase II/III candidate MB07133 injection, and the underlying HepDirect platform were acquired through the purchase of Kaihua Company in 2015.
Under related agreements, Xintong holds exclusive licensing rights for these products in China but must pay milestone fees, royalties, and patent maintenance fees to U.S.-based Ligand Pharmaceuticals. This means a significant portion of future product revenue will be shared with a third party, potentially squeezing profit margins. It also highlights dependence on externally introduced technology, raising questions about the sustainability and independence of Xintong’s in-house R&D.
Beyond Xin Shu Mu®, the company has several candidates in development. MB07133 injection, for advanced primary liver cancer, is in Phase II/III seamless registration trials. Hipronovir Fumarate Tablets, a second-generation liver-targeting hepatitis B drug, is also in Phase II/III trials. XTYW001, a hepatitis B virus core protein inhibitor for functional cure, has completed Phase Ia trials. XTYW007, for MASH, has an IND application submitted. Three additional liver disease candidates are in preclinical stages.
These products remain years from market launch, and with R&D spending sharply reduced, the pace of pipeline advancement may slow, potentially affecting the company’s future competitiveness.
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