Amid production halts and regulatory setbacks for its core product, Fosun Pharma's planned controlling stake acquisition of Green Valley Pharma has sparked intense market attention.
Even before the deal is finalized, the Shanghai Stock Exchange has issued a regulatory inquiry letter. The acquisition is now under close examination regarding regulatory approvals, product prospects, and operational realities.
1. Controlling Stake Acquisition Under Scrutiny Yesterday evening, Fosun Pharma (600196.SH, 02196.HK), controlled by business tycoon Guo Guangchang, announced an investment plan.
The investor is Fosun Pharma Industrial, a subsidiary of Fosun Pharma, while the target is Green Valley (Shanghai) Pharmaceuticals ("Green Valley Pharma").
According to the announcement, Fosun Pharma Industrial plans to invest approximately 1.412 billion yuan to gain control of Green Valley Pharma.
This includes 143 million yuan to acquire 20.15 million registered capital held by two founder-controlled entities and 1.269 billion yuan to subscribe to newly issued shares.
To accommodate Green Valley Pharma's existing employee stock incentives and buyback arrangements, the deal will involve a special purpose vehicle (SPV) jointly established by Fosun Pharma Industrial and the founder.
Post-acquisition, Fosun Pharma will hold a combined 53% stake in Green Valley Pharma through its subsidiary and the SPV, consolidating the latter's financials.
Notably, the agreement stipulates that if the transaction fails to close by January 31, 2026, Fosun Pharma Industrial may unilaterally terminate the deal.
This morning, the Shanghai Stock Exchange issued a regulatory inquiry regarding the investment, though specifics remain undisclosed.
Following the news, Fosun Pharma's A-shares fell 4.22% to 26.75 yuan, while its H-shares dropped 5.81% to HK$21.06.
2. Debt Nears 800 Million Yuan Founded in October 2018, Green Valley Pharma specializes in neurodegenerative disease treatments, with its flagship product being Oligomannate capsules (branded as "Jiuyi," code: GV-971).
Approved conditionally in November 2019 and included in China's national reimbursement list in 2021, the drug initially saw rapid adoption as a domestic "miracle treatment" for Alzheimer's.
However, regulatory pressures emerged when Green Valley Pharma failed to complete required post-market clinical trials by November 2024, leading to production halts and plummeting revenues.
Audited financials show 2024 revenue of 572 million yuan (net profit: 70.77 million yuan), while Q1-Q3 2025 saw revenue crash to 102 million yuan (net loss: 67.61 million yuan).
As of September 2025, total assets stood at 806 million yuan against liabilities of 795 million yuan, leaving equity at just 10.36 million yuan.
Operational cuts followed, with reports indicating closure of production facilities and termination of 80% of sales staff by July 2025.
Compliance issues also surfaced—in October, Green Valley Pharma was fined 400,000 yuan for alleged commercial bribery in drug promotion activities between 2022-2024.
3. Controversial Domestic Alzheimer's Drug Oligomannate's fate remains pivotal to the deal's success. Developed over two decades by Chinese researchers, its 2019 conditional approval was hailed as a breakthrough.
While a 2021 study in Alzheimer's Research & Therapy reported cognitive benefits in 818 patients, critics note the 36-week trial duration may be insufficient for chronic disease assessment.
The drug's international Phase III trial was terminated prematurely in May 2022. Regulatory re-approval efforts since May 2024 have stalled, with August 2025 records showing rejection (reasons undisclosed).
Patient demand persists—over 9,300 medication requests and 1,200 physician appeals for supply restoration were logged by June 2025. Previously serving 500,000 patients, gray market prices reportedly exceeded 800 yuan per box post-shortage.
Meanwhile, global competitors like Leqembi and Donanemab have entered China, intensifying market competition.
4. Conclusion Fosun Pharma's acquisition represents a high-stakes gamble on an unproven innovative drug. While regulatory hurdles and clinical uncertainties pose challenges, unmet patient needs leave room for potential upside.
The deal's completion hinges on regulatory approvals and clinical data—whether Fosun's backing can accelerate Green Valley's post-market trials remains critical.
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