Chengdu Kanghua Biological Products Co., Ltd. (300841.SZ) recently filed an announcement stating that it plans to acquire 100% equity interest in Nameixin (Shanghai) Biotech Co., Ltd. (hereinafter referred to as "Nameixin") in phases through capital increase, equity transfer and other means, thereby obtaining a complete mRNA technology platform and refining the strategic layout of its biopharmaceutical industry.
"This transaction is essentially the layout of the mRNA vaccine industry by local state-owned asset investors through a listed company platform," a pharmaceutical industry expert in Beijing told reporters from the Economic Information Daily on February 1st. Despite the transaction plan incorporating investment risk hedging measures, two major risks cannot be underestimated: first, LNP (Lipid Nanoparticle) patents form the core bottleneck in the industrialization of mRNA technology, and these patents are held by international giants such as Canada-based Arbutus Biopharma; if Nameixin fails to break through these patent barriers, the entire investment rationale will collapse. Second, the biggest obstacle hindering the expansion of mRNA technology from vaccine development to cancer therapy: the "liver trap" and lack of tissue targeting associated with LNPs.
Patent Issues Determine the Success or Failure of the Investment
According to the announcement, Kanghua Biological Products Co., Ltd. (300841.SZ) will acquire Nameixin (Shanghai) Biotech Co., Ltd. in three milestone-based phases, subject to the results of Nameixin’s clinical trials, with the corresponding pre-investment valuation of Nameixin capped at RMB 320 million, RMB 440 million and RMB 830 million for each phase respectively. In the first phase, Kanghua plans to invest RMB 120 million to subscribe for RMB 7.41 million of Nameixin’s increased registered capital, and will hold a 27.2727% equity stake in Nameixin upon the completion of the capital increase. Kanghua has paid an earnest money of RMB 20 million to Nameixin. If the clinical data of Nameixin’s RSV vaccine is unsatisfactory, Kanghua’s initial investment may be lost without return – the company will lose control of Nameixin and be unable to consolidate its financial statements.
Kanghua’s foray into the mRNA track is destined to be a tough journey, and most of the earlier market entrants in this field have ended in failure.
Going back to 2020, the global success of mRNA vaccines led to a frantic influx of capital into the sector. Stemirna Therapeutics, one of China’s three leading mRNA vaccine developers (alongside Abogen Biosciences and Lifanada Biotech), became a darling of the capital markets with its narrative of a "full-chain mRNA technology platform" and "worldwide exclusive patents for the LPP delivery system". From 2020 to 2023, in just over three years, Stemirna completed several rounds of financing with a total amount exceeding RMB 1.3 billion, backed by top-tier institutions including Sequoia China, WuXi AppTec, Greenwoods Asset Management and China Merchants Health, with its valuation once surging to RMB 7 billion. However, Stemirna was ultimately ordered by a court to enter bankruptcy liquidation in June 2024 due to hurdles in technology commercialization and a broken capital chain. In addition, Abogen Biosciences – once valued at a staggering RMB 19 billion with an investment from Watson Biologics (300142.SZ) – and Lifanada Biotech, which was heavily acquired by Amarex Vaccine (06660.HK), both ended up in failure.
A key reason for the downfall of China’s three major mRNA players lies in the significant technological gap between them and international peers. Despite adopting different R&D paths, all three companies were plagued by two common challenges: overseas patent walls and insufficient clinical validation resources. The core of mRNA drug R&D lies in sequence design and delivery systems. Developing mRNA drugs is like flying a kite: sequence design is the frame and material of the kite itself, while the LNP delivery system is the string holding the kite – if the string breaks or the kite is damaged, it can never take flight. Thanks to early and substantial R&D investment in mRNA technology, foreign pharmaceutical companies hold distinct advantages in five core dimensions: original innovation, delivery systems, industrial chains, clinical validation and global operation capabilities. Take LNP patents as an example: the early LNP patents held by Arbutus and Genevant have created high barriers around specific cationic lipid structures and ratios. Latecomers must either design entirely new lipids or pay patent licensing fees to mitigate infringement risks.
On its official website, Nameixin claims to have made breakthroughs in key industry technical challenges with its independently intellectual property rights in non-coding region sequences and codon optimization algorithms, AI- and deep learning-based antigen design and optimization, circRNA purification processes, and LNP lyophilization processes. However, these stated technological advantages all focus on peripheral optimization of the delivery system, with no mention whatsoever of the core innovation in cationic lipid structures. Investors cannot judge from public information whether Nameixin is capable of breaking through the LNP patent barriers. In contrast, companies such as Weisijin Biotech and Rongcan Biotech have explicitly announced that they have overcome the global LNP patent barriers.
Kanghua stated that Nameixin is a biotech enterprise focused on the R&D of novel mRNA vaccines and drugs, having built a full-chain mRNA drug technology system covering "sequence design - delivery system - manufacturing process".
In terms of its R&D pipeline, Nameixin mainly focuses on clinical unmet needs for Respiratory Syncytial Virus (RSV) and Herpes Simplex Virus (HSV), while also laying out research in therapeutic areas such as metabolic diseases and cancer. At present, Nameixin’s self-developed lyophilized formulation mRNA vaccine for RSV has entered the Phase I clinical trial stage.
Although Nameixin intends to leverage mRNA technology to expand into cancer and other therapeutic areas, it cannot avoid the core contradiction in the application of mRNA technology: the "liver trap" of the LNP delivery system constitutes an insurmountable structural barrier to upgrading mRNA from vaccine development to therapeutic drug development. This is the reason why mRNA technology is basically applied to vaccine development – which has relatively low targeting requirements – rather than the development of cancer therapeutic drugs, which demand high targeting ability and precision. In other words, the threshold for the mRNA therapeutic field cannot be simply overcome with massive capital investment; it requires 0-to-1 original innovation in LNP targeting capability. Without this core technology, all narratives about "mRNA immunotherapy" will remain unachievable.
On its official website, Nameixin claims that the company will leverage the advantages of its mRNA technology platform to focus on addressing unmet clinical needs for vaccines and immunotherapies that require urgent improvement of existing technologies or have no approved products on the market. Yet its technical descriptions completely avoid the core issue of targeted delivery.
According to media reports, Nameixin plans to advance its RSV vaccine to Phase II clinical trials in 2026 and continue to deepen research on new pipelines such as HSV vaccines. Its longer-term goal is to start from biological mechanisms, through original innovation, leverage the advantages of its mRNA technology platform to solve clinical pain points for undruggable and hard-to-drug targets, and truly realize an innovative platform, innovative R&D and affordable innovative drugs.
To achieve these goals, Nameixin will need to invest a huge amount of capital in R&D.

Local State-owned Asset Investors May Achieve Multiple Objectives with One Move
Kanghua Biologics’ investment in Nameixin is regarded by the industry as a move by local state-owned asset investors to incubate the vaccine business through a listed company platform.
The affiliation between local state-owned asset investors and Kanghua Biologics was made public on July 21, 2025. Wang Zhentao, the former controlling shareholder and actual controller of Kanghua Biologics, transferred the company’s control to Shanghai Wankexin Biotech Partnership (Limited Partnership) (hereinafter referred to as "Wankexin Biotech") via an agreed equity transfer plus voting right entrustment. The consideration for the equity transfer totalled RMB 1.851 billion, corresponding to 28.466638 million shares at a price of RMB 65.0266 per share. Wankexin Biotech thus became the controlling shareholder of Kanghua Biologics, and its general partner (GP) is Shanghai Shangshi Biopharmaceutical Management Consulting Co., Ltd. (hereinafter referred to as "Shanghai Shangshi Biopharma"). As no single shareholder of Shanghai Shangshi Biopharma can control its shareholders’ meeting and board of directors, the company has no actual controller – and consequently, Wankexin Biotech also has no actual controller.
Nevertheless, among the two major limited partners (LPs) of Wankexin Biotech, Shanghai Pharmaceutical (Group) Co., Ltd. (SPH) holds a 19.79% stake, with its actual controller being the Shanghai State-owned Assets Supervision and Administration Commission (SASAC); Shanghai Biopharmaceutical M&A Private Equity Fund Partnership (Limited Partnership) holds an 80.209% stake, whose ultimate LPs after equity penetration include numerous state-owned asset platforms such as SPH (601607.SH) and Shanghai Zhangjiang Venture Capital. After taking control of Kanghua Biologics, Wankexin Biotech reorganized the listed company’s board of directors in November 2025.
A department head of a Beijing-based private equity (PE) investment institution told reporters that Kanghua Biologics is the first holding project of the Shanghai Biopharmaceutical M&A Fund, undertaking the mission of exploring a "new model of state-owned fund M&A and integration". It serves as an incubation and integration platform for Shanghai’s biopharmaceutical industry, particularly the vaccine sector. When Wankexin Biotech took control, the market paid close attention to its integration pace.
From reorganizing the board of directors to investing in Nameixin, the Shanghai Biopharmaceutical M&A Fund has moved quickly. In the view of industry insiders, Kanghua Biologics’ investment in Nameixin enables local state-owned asset investors to achieve multiple objectives with one move: first, it further boosts Nameixin’s capital reserve and provides sufficient financial support for subsequent R&D investment; second, it broadens Nameixin’s financing channels, diversifies the investment risks of its original shareholders, and further lifts the company’s overall valuation; third, through the phased investment in Nameixin, Kanghua Biologics expands its technical and product pipelines to realize the company’s transformation and upgrading.

However, while local state-owned asset investors have structured the deal with phased payments, milestone binding, valuation adjustment mechanism (VAM) and downside protection to achieve multiple goals of risk isolation, valuation surge and platform integration, the entire layout is founded on Nameixin’s LNP delivery technology. This critical information, yet, is a risk inadequately disclosed by Kanghua Biologics.
More crucially, Kanghua Biologics itself is facing development difficulties. The company has a single product structure, with most of its revenue relying on the rabies vaccine alone and lacking a second growth curve. Since its listing in 2020, the company’s net profit hit a peak in 2021 and has been on a steady decline ever since, affected by vaccine volume-based procurement (VBP), tightened price regulation and the emergence of numerous competitors. In 2025, the company expects its net profit attributable to shareholders of the listed company to reach RMB 191 million to RMB 233 million, a year-on-year decline of 41.55% to 52.09%. The decline in performance is mainly due to an approximate 11% year-on-year drop in the company’s vaccine sales revenue under the impact of industrial policy adjustments and market competition, which led to a decline in sales profit margin; in addition, the company’s recombinant six-valent norovirus vaccine failed to generate overseas licensing revenue.
Furthermore, when Wankexin Biotech took control, a VAM agreement was signed, stipulating that the cumulative net profit attributable to parent company shareholders after deducting non-recurring gains and losses of Kanghua Biologics in 2025 and 2026 (the "commitment period") shall be no less than RMB 720 million; and the total R&D expenditure in the two years of the commitment period shall be no less than RMB 260 million.
Based on the 2025 performance forecast, Kanghua Biologics’ adjusted net profit (after deducting non-recurring gains and losses) in 2026 should reach RMB 498 million to RMB 520 million. Given the company’s current predicament, investors can hardly find any positive signals that it will meet this target.
This transaction constitutes a connected transaction. Kanghua Biologics is required to pay an earnest money of RMB 20 million to Nameixin within three trading days after the letter of intent takes effect. The company stated that Nameixin owns a complete mRNA technology platform; if the transaction is substantially advanced in the follow-up, it will further improve the strategic layout of the company’s biopharmaceutical industry, accelerate the construction of cutting-edge technology platforms and enhance core competitiveness. At the same time, the transaction will help exert the synergistic effects between the company and Nameixin in R&D, clinical trials, production and commercialization, speed up the industrialization process of investigational drugs and optimize the efficiency of resource allocation.
"Despite being a phased transaction, Kanghua Biologics is making a venture capital investment," a financial professional specializing in capital operations in Sichuan’s capital circle said on February 2. Nameixin’s R&D pipeline is still in the early clinical stage, which is more suitable for cultivation in a fund incubator until it matures, before bringing Kanghua Biologics in as an investor. Considering that Wankexin Biotech acquired control of Kanghua Biologics with leveraged funds and the latter’s sluggish secondary market performance recently, investors need to carefully identify the real motives behind Kanghua Biologics’ investment in Nameixin.