Empowerment for Innovative Pharmaceutical Enterprises from the Fifth Set of the SSE STAR Market Listing Standards and Acceleration of the Formation of New Quality Productive Forces for Biomedicine

Source: Securities Daily

Reported by Tian Peng

Recently, Wu Qing, Chairman of the China Securities Regulatory Commission, proposed that the capital market should be more inclusive and adaptable to new industries, new business formats, and new technologies. As a "test field" for reform, the SSE STAR Market helps innovative pharmaceutical companies break through the financial bottleneck by implementing the fifth set of listing standards of "market value + R&D". In 2024, most of the core products of companies that went public according to the standards were launched to the market or their applications were accepted. The total annual revenue exceeded 14 billion yuan, and the net loss attributable to the parent company decreased by 3.8 billion yuan year on year. It is entering the realization period of R&D achievements.

Since the launch of the SSE STAR Market in 2019, 20 innovative biopharmaceutical enterprises have been listed according to the fifth set of standards, and another 3 unprofitable innovative drug enterprises have been listed as red chip enterprises. These enterprises focus on major diseases such as malignant tumors, autoimmune diseases, and AIDS to deploy cutting-edge technologies. Over the past three years, they have invested nearly 70 billion yuan in R&D. The R&D intensity reached 52% in the first three quarters of 2024, far exceeding the average level of the SSE STAR Market.

With high-level R&D investment, relevant companies have made a lot of innovations. In 2024, 9 innovative drugs were approved, of which 5 products were Class 1 new drugs (the first in the world). Since 2018, 17 Class 1 new drugs have been launched, accounting for about 12% of the total number of domestic innovative drugs approved during the same period. Enterprises such as BeiGene, Ltd. and Sichuan Biokin Pharmaceutical Co., Ltd. have also made significant achievements. Additionally, these enterprises have seen a faster industrialization and commercialization process. For example, the sales revenue of Furmonertinib of Shanghai Allist Pharmaceuticals Co., Ltd. reached 3.5 billion yuan in 2024, with a year-on-year increase of about 77%.

The SSE STAR Market has continued to innovate its systems, issuing the identification standard of "light assets and high R&D investment" in 2024 to support the companies to boost refinancing investment in R&D. Dizal (Jiangsu) Pharmaceutical Co., Ltd. became the first unprofitable enterprise with refinancing registration effective after the release of the "Eight Measures", raising funds for R&D and industrialization projects. In addition, the SSE STAR Market has created the Class II Restricted Stock system, and 13 companies have launched equity incentive plans to motivate talent with characteristic indicators such as clinical trial progress and drive R&D breakthroughs.

With the accelerated transformation of R&D results, the performance of unprofitable innovative pharmaceutical companies listed on the SSE STAR Market has improved significantly. The total revenue of the 23 companies in 2024 was about 48.4 billion yuan, with a year-on-year increase of 69%, and the net loss attributable to the parent company decreased by nearly 55% year on year. The revenue of 80% of the companies increased, the profit of 70% of the companies improved, and 3 companies are expected to get rid of the "U" mark in their stock codes this year. The revenue of BeiGene, Ltd. reached a new high in 2024 and the operating loss narrowed down. It is expected that the GAAP operating profit will be positive in 2025.

For more than five years, the SSE STAR Market has helped the development of innovative pharmaceutical companies with inclusive systems, capital empowerment, and policy coordination. In the future, the SSE STAR Market will continue to play its role as a core technology engine and promote China's biomedical innovation force to the peak of the global value chain.

The above information is provided for reference purposes only and does not constitute investment advice.