On the evening of November 12, Zhejiang Huahai Pharmaceutical Co., Ltd. (600521) issued an announcement regarding the progress of litigation involving the company and its subsidiaries.
The announcement stated that the company recently received a judgment from the U.S. District Court for the District of New Jersey concerning valsartan-related lawsuits in the U.S. involving the company and its subsidiaries, Prinston Pharmaceutical Inc. and Shouke Health USA. Previously, some U.S. consumers had filed lawsuits in various state courts, alleging trace amounts of NDMA (N-nitrosodimethylamine) in valsartan active pharmaceutical ingredients and seeking legal liability from the company and other defendants. Most of these lawsuits were consolidated in the U.S. District Court for New Jersey.
Regarding the latest progress, the court selected five personal injury cases as "bellwether cases" (lead cases for early trials). Among them, the Smalls and Lee cases were voluntarily dismissed by plaintiffs. The remaining three cases included Gaston Roberts, which was chosen as the first bellwether case. On November 11, 2025, the company received court documents indicating that Chief Judge Renée Marie Bumb ruled in favor of the company, dismissing all claims in the Gaston Roberts case.
According to the company’s U.S. legal team, plaintiffs have 30 days to decide whether to appeal the judgment. The company noted that Prinston Pharmaceutical, a wholly-owned subsidiary of Huahai (USA) International Inc., focuses on generic drug R&D, registration, and sales in North America, while Shouke Health, a subsidiary of Prinston, handles international drug sales.
The company stated that the Gaston Roberts judgment is a first-instance ruling, and the final impact on financial performance remains uncertain pending potential appeals or further case developments. Currently, most other valsartan-related lawsuits in the U.S. remain in early inactive stages, with outcomes still undetermined. The company emphasized that each case differs in plaintiffs, claims, and factual details, meaning the Gaston Roberts ruling does not predict results for other lawsuits.
Zhejiang Huahai Pharmaceutical has engaged professional legal teams to address the litigation and will disclose updates per regulatory requirements. Investors are advised to exercise caution.
The company specializes in R&D, production, and sales of generic drugs, biologics, and APIs. Key products include irbesartan-hydrochlorothiazide tablets, losartan potassium tablets, and osimertinib capsules.
In its Q3 2025 report, the company posted revenue of RMB 6.41 billion (down 11.6% YoY) and net profit of RMB 380 million (down 63.1% YoY). Operating cash flow fell 65.3% to RMB 652 million. Q3 revenue dropped 10.7% to RMB 1.89 billion, with a net loss of RMB 29.13 million (down 110.3% YoY).
The profit decline was attributed to: 1. Increased R&D spending (up ~54% YoY) for biopharmaceutical innovation under strategic upgrades. 2. Domestic generic drug sales pressure due to centralized procurement policies and fierce competition. 3. Lower U.S. sales and profits amid tariffs and market competition. 4. API segment challenges from oversupply, pricing pressure, and delayed commercialization of new projects.
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