Universe Pharmaceuticals IPO: The First Chinese Patent Medicine Manufacturer Listed On Nasdaq
Traditional Chinese medicine manufacturer Universe Pharmaceuticals (NASDAQ: UPC) will debut on the Nasdaq Capital Market under the ticker symbol “UPC” on Tuesday, March 23.
The China-based company aims to raise $25 million by offering 5 million shares at a price of $5.00 per ordinary share. In addition, Universe Pharmaceuticals has granted its underwriters a 45-day option to purchase up to an additional 750,000 ordinary shares at the public offering price, less underwriting discounts.
Based on the company’s SEC filing, proceeds from the offering will be used for upgrading and expanding the Company’s manufacturing facilities, conducting research and development, branding, advertising and marketing, and for working capital and general corporate purposes.
Universe Pharmaceuticals was founded in 1998 in Jiangxi Province, China. The company manufactures, markets, and distributes traditional Chinese medicine derivative (TCMD) products targeting the elderly. It currently produces 13 varieties of TCMD products, which are sold in approximately 261 cities and 30 provinces in China.
In addition, through its subsidiary Universe Trade, the company also sells biomedical drugs, medical instruments, Traditional Chinese Medicine Pieces, and dietary supplements manufactured by third-party pharmaceutical companies.
In terms of its financial performance, according to the SEC filing, the company booked $30.70 million in revenue and $7.56 million in net income for the 12 months ended September 30, 2020. The gross profit margin and net income margin are 45.9% and 24.6% respectively in the fiscal year 2020.
According to the National Bureau of Statistics of China, it is forecasted that the Chinese population aged 65 or above will reach 208.0 million by the end of 2023, accounting for 14.7% of the total population in China. Demand for healthcare products and services is also increasing rapidly due to the aging population and the rise of chronic diseases such as arthritis, asthma, diabetes and etc.
Meanwhile, traditional Chinese medicine (TCM) has been widely accepted and used in the PRC for thousands of years to treat wounds and diseases, with the use of traditional Chinese medicine such as herbs, herbal materials, herbal preparations, and finished products. According to the Frost & Sullivan Report in 2018, in spite of the continuously aging population and rising awareness of healthcare, the market size of Chinese patent medicine in the PRC is anticipated to increase at a CAGR of approximately 6.0% in the next five years, from RMB668.8 billion in 2019 to RMB844.3 billion by the end of 2023.
Immersed in such a huge market and fast-growing industry, Universe Pharmaceuticals sets its mission to provide solutions to the physical conditions of the elderly during their aging process and to promote their general well-being.
Currently, it is the fifth biotech and pharmaceutical-related Chinese IPOs in 2021, and Universe Pharmaceuticals becomes the first Chinese patent medicine manufacturer listed on Nasdaq.
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