Xin Lang Cai Jing·2025-12-16 09:15Core Viewpoint - Fosun Pharma announced plans to invest approximately 1.412 billion yuan to acquire a controlling stake in Green Valley Pharmaceutical, focusing on the controversial Alzheimer's drug "Jiuyi Yi" (Guanlu Sodium Capsules) amidst Green Valley's negative net profit and production halt due to expired drug registration [1][6]. Financial Summary - As of the valuation reference date, Green Valley's total assets amounted to 806 million yuan, with liabilities of 795 million yuan, resulting in a mere equity of 10.36 million yuan [2][7]. - Fosun Pharma's total investment of 1.412 billion yuan will grant it a 53% stake in Green Valley, with the latter's valuation reaching 1.674 billion yuan post-transaction [2][7]. Regulatory and Compliance Issues - Green Valley has faced regulatory penalties for commercial bribery, with a fine of 400,000 yuan for conducting 587 illegal meetings to promote drug sales, involving a total of 833,400 yuan [2][7]. Market Reaction - Following the acquisition announcement, Fosun Pharma's stock fell by 5.81% in Hong Kong and 4.22% in A-shares, indicating investor skepticism regarding the acquisition [3][8]. Strategic Considerations - The Alzheimer's market presents significant potential, with nearly 17 million patients in China and a lack of effective treatment options. Fosun Pharma aims to enhance its pipeline in the central nervous system sector through this acquisition [4][10]. - Prior to its production halt, "Jiuyi Yi" had benefited hundreds of thousands of patients, with some doctors having practical prescription experience, suggesting a potentially high market acceptance if the product can be relaunched [4][10]. Risks and Challenges - The acquisition carries substantial clinical and regulatory risks, as "Jiuyi Yi" is still under conditional approval and must complete post-marketing confirmatory clinical trials to resume production [4][10]. - Financial and integration pressures are significant, with Green Valley on the brink of insolvency and Fosun Pharma needing to invest further in clinical trials while managing potential R&D failures [4][10]. - The drug has been embroiled in controversy, with doubts about its efficacy, which could impact Fosun Pharma's overall strategy and brand reputation in the central nervous system domain if regulatory approval is not achieved [5][11].