Recently, Zhifei Bio announced that in order to deepen the company's self-developed technology and product layout in biopharmaceuticals and create the goal of "a world-class biopharmaceutical company", the company signed a capital increase and share expansion agreement with Chongqing Chen'an Biopharmaceutical Co., Ltd. (referred to as "Chen'an Bio"), Chongqing Zhirui Investment Co., Ltd. (referred to as "Zhirui Investment"), and Zhanggaoxia on March 21, and will increase the capital of Chen'an Bio by approximately 593 million yuan in cash and acquire 51% of its equity.

After the completion of this capital increase, Chen'an Bio will become a holding subsidiary of the company.

593 million yuan to acquire 51% equity

This capital increase is based on the valuation results in the "Appraisal Report" issued by an asset appraisal agency with securities and futures business qualifications. It is determined through negotiation that the value of 100% equity of Chen'an Bio before this capital increase is 570 million yuan. Accordingly, the total amount of capital increase for this cash capital increase to acquire 51% equity is 593,265,306 yuan, of which 471,428,571 yuan is included in the registered capital of Chen'an Bio, and 121,836,735 yuan is included in the capital reserve of Chen'an Bio.

Zhifei Bio said that through this transaction, Chen'an Bio will be injected into the body, and the company's business will extend from vaccines to metabolic diseases. It will obtain several products close to the commercial stage, such as semaglutide injection (hypoglycemic) that has completed clinical phase III trials and semaglutide injection (weight loss) that has completed clinical phase III patient enrollment, expand the layout of self-developed pipelines in the fields of GLP-1 and insulin analogs, and enter the field of therapeutic biopharmaceuticals on this basis, and build a three-dimensional development system integrating "prevention & treatment".

This transaction is one of the company's strategic steps to focus on future sustainable development, enhance corporate innovation capabilities, and build new quality productivity, which is conducive to laying the foundation for the company's long-term and stable development.

Chen'an Bio was established in 2015

The announcement shows that Chen'an Bio was established in 2015, with a registered address of Building A, No. 818, Longchi Road, Mudong Town, Banan District, Chongqing. It was invested and incubated by Zhirui Investment Platform under Zhifei Bio's actual controller Jiang Rensheng. It is an innovative biopharmaceutical company relying on a recombinant protein technology platform and driven by independent research and development.

The current registered capital is 452.941176 million yuan, of which Zhirui Investment holds 85% and Zhang Gaofeng (General Manager of Chen'an Bio) holds 15%.

The company focuses on metabolic diseases such as diabetes and obesity, and has developed pipelines in the fields of GLP-1 analogs and insulin analogs.

So far, more than ten projects have been formed, among which: liraglutide injection is in the stage of application for listing; two candidate drugs, semaglutide injection (hypoglycemic) and degludec insulin injection, have completed clinical phase III trials; two candidate drugs, semaglutide injection (weight loss) and degludec insulin injection are in the clinical phase III stage; there are nearly 10 pipelines in the preclinical research stage, such as GLP-1/GIP dual-target receptor agonists and oral semaglutide tablets.

As of the end of 2024, the total investment in Chen'an Bio's R&D pipeline has reached nearly 700 million yuan. After years of technological accumulation, Chenan Bio has built a platform for the application of scientific research results and industrial transformation, and has mastered the technology of constructing high-expression recombinant protein strains. Through the directional transformation of yeast and Escherichia coli expression systems, it can achieve high-density fermentation and expression of recombinant human insulin and GLP-1 analog precursor proteins.

At the same time, it continues to build production bases to meet the needs of product development and large-scale production. It has built 1 preparation workshop and 3 raw material workshops, with an annual production capacity of 30 million finished preparations.

It is worth noting that this transaction plan also shows the confidence of all parties in the development of Chenan Bio and the protection of the interests of listed companies. Before Chenan Bio's semaglutide injection (diabetic hypoglycemic) (CA505) is approved for marketing in China, Zhirui Investment will not make any exit arrangements for the equity held; before semaglutide injection (weight loss) (CA507) is approved for marketing in China, the exit portion of the equity held by Zhirui Investment will not exceed 50%; Zhirui Investment agrees not to charge any interest on the loans previously used for Chenan's product research and development and the company's normal operations; core technical personnel will continue to serve as senior management of the company and stay for at least four years, and will make every effort to promote the listing of core pipelines.

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