Core Viewpoint - Hongxu Biopharmaceutical Technology (Beijing) Co., Ltd. has filed a lawsuit against Medici, claiming significant losses due to Medici's failure to meet contractual and industry standards in their service delivery [2][4]. Group 1: Lawsuit Details - The lawsuit stems from a technical service contract signed on December 18, 2020, where Medici was to conduct non-clinical safety evaluations for Hongxu's Class I biopharmaceuticals [4]. - Hongxu claims that Medici failed to deliver the required safety evaluation reports on time, leading to delays in obtaining clinical trial approvals from both domestic and U.S. regulatory bodies [4][5]. - Hongxu is seeking approximately 159 million yuan in damages, including 150 million yuan for various losses incurred due to Medici's alleged breach of contract [5]. Group 2: Financial Performance of Medici - Medici reported a total revenue of 540 million yuan for the first half of the year, but still faced a net loss of 13 million yuan [6][7]. - The company has been in a loss position for two consecutive years, with a total profit of -21 million yuan this year [6][8]. - Medici's accounts receivable stood at approximately 540 million yuan, representing 37.24% of its current assets as of June [8]. Group 3: Industry Context - The pharmaceutical industry in China categorizes companies based on their research and registration capabilities, with a significant portion relying on Contract Research Organizations (CROs) like Medici for specialized services [3]. - The transition to a strong research and registration capability is challenging and costly, making the use of CROs a common practice among many pharmaceutical companies [3].