Core Viewpoint - The recent announcement by the National Medical Products Administration, National Health Commission, and National Administration of Traditional Chinese Medicine regarding the post-marketing research and evaluation of traditional Chinese medicine (TCM) injections marks the strictest regulatory measures in history, aiming to enhance the safety and efficacy of these products for patients [1][2][3]. Group 1: Regulatory Changes - The new policy mandates that all TCM injections approved before the 2019 revision of the Drug Administration Law must undergo post-marketing research, which includes proactive evaluations, mandatory assessments, and legal eliminations of certain products [1][2]. - The policy's implementation is a response to the frequent severe adverse reactions associated with TCM injections, which have raised public concerns about their safety [3][12]. Group 2: Market Impact - The market for TCM injections was over 100 billion in public medical institutions in 2016, but has since halved due to regulatory and reimbursement policies [7][11]. - The new regulations may lead to a significant reshaping of the TCM injection industry, potentially eliminating low-quality products and companies that cannot meet the new standards [13]. Group 3: Safety Concerns - Adverse reactions from TCM injections account for 12% of all reported adverse reactions, with a quarter of these stemming from injections, highlighting the serious risks involved [2]. - The complexity of TCM injection components and their direct intravenous administration increase the likelihood of severe allergic reactions compared to oral TCM [2][6]. Group 4: Research and Evaluation Challenges - Companies face challenges in conducting post-marketing research due to high costs and unclear guidelines for evaluating efficacy, which complicates the process of proving the effectiveness of TCM injections [7][8][11]. - The evaluation process will require a clear understanding of adverse reactions and their causes, as well as the establishment of quality management throughout the production process [12][13]. Group 5: Historical Context - The call for re-evaluation of TCM injections has been ongoing for nearly two decades, with previous attempts failing due to various industry challenges [11][12]. - The establishment of an expert working group in December 2023 signifies a renewed commitment to addressing the safety and efficacy of TCM injections [12].

Core Viewpoint - The recent regulatory measures for traditional Chinese medicine (TCM) injection solutions aim to enhance safety and efficacy research, addressing public concerns over adverse reactions and ensuring better patient outcomes [2][4][19]. Regulatory Changes - The National Medical Products Administration, National Health Commission, and National Administration of Traditional Chinese Medicine issued a draft requiring post-marketing studies for TCM injection solutions that were approved before the 2019 revision of the Drug Administration Law [2][19]. - This marks the strictest regulatory approach to TCM injection solutions, which have historically been linked to serious adverse reactions [2][4]. Industry Background - TCM injection solutions emerged during the wartime period, with over 130 varieties currently available, some generating annual sales exceeding 1 billion [2][3]. - Despite their prevalence, TCM injection solutions have faced scrutiny regarding their safety and efficacy, with 12% of adverse reactions attributed to TCM, a quarter of which are linked to injection solutions [3][4]. Adverse Reactions - Serious adverse reactions, including anaphylactic shock and acute liver failure, have been reported, raising public concern and prompting calls for stricter regulations [3][4][19]. - Notable cases include a patient who died after receiving a TCM injection, highlighting the potential risks associated with these products [3][4]. Market Dynamics - The market for TCM injection solutions has seen a decline, with a drop from over 100 billion in 2016 to half of that figure in recent years due to regulatory and reimbursement pressures [11][19]. - Companies are now facing challenges in adapting to the new regulatory landscape, with many unsure about how to conduct post-marketing studies effectively [11][19]. Research and Evaluation - The post-marketing research will involve both non-clinical and clinical studies, focusing on safety and efficacy evaluations [11][12]. - The complexity of TCM formulations poses challenges for clinical trials, as traditional metrics for efficacy may not apply [13][14]. Future Implications - The new regulations are expected to lead to a significant reshaping of the TCM injection market, potentially eliminating low-quality products and companies that cannot meet the new standards [19]. - The establishment of a dedicated expert group for TCM injection evaluation signifies a commitment to improving the quality and safety of these products [18][19].

Core Viewpoint - Shenwei Pharmaceutical (02877) reported a decline in revenue and profit for the first half of 2025, indicating challenges in the market due to rising raw material costs and pricing pressures from centralized procurement [1] Financial Performance - Revenue for the first half of 2025 was 1.653 billion RMB, a decrease of 20.8% year-on-year [1] - Profit for the period was 615 million RMB, down 1.89% compared to the previous year [1] - Basic earnings per share were 0.81 RMB, with an interim dividend proposed at 0.11 RMB per share [1] Profitability Metrics - The group's gross profit margin decreased from 75.3% in the same period last year to 72.2% [1] - Despite the decline in sales and gross margin, net profit only slightly decreased by 1.9%, with the net profit margin increasing from 30.0% to 37.2% [1] Cost Management - The company managed to reduce selling and distribution costs and administrative expenses by approximately 20.7% and 12.9% respectively compared to the previous year [1] - Increased investment income contributed positively to the overall financial performance [1] Product Segment Performance - Oral formulations accounted for 65.8% of total sales in the first half of 2025, while injectable products made up 34.2% [1] - Total sales of injectable products decreased by 27.4% year-on-year, with significant declines in sales for specific products such as Qingkailing and Shenmai injections, which fell by 50.1% and 21.0% respectively [1]

Core Viewpoint - Shenwei Pharmaceutical (02877) reported a decline in revenue and profit for the first half of 2025, with total revenue at 1.653 billion RMB, down 20.8% year-on-year, and net profit at 615 million RMB, down 1.89% year-on-year [1] Financial Performance - The company's gross profit margin decreased from 75.3% in the same period last year to 72.2%, primarily due to rising raw material costs and the impact of centralized procurement on drug prices [1] - Operating profit for the first six months of 2025 also decreased compared to the same period last year, but net profit only slightly decreased by 1.9% due to increased investment income and cost control measures [1] - Sales and distribution costs and administrative expenses were reduced by approximately 20.7% and 12.9% respectively compared to the same period last year, resulting in a net profit margin increase from 30.0% to 37.2% [1] Product Sales Breakdown - Oral products accounted for 65.8% of total sales in the first half of 2025, while injectable products made up 34.2% [1] - Total sales of injectable products decreased by 27.4% year-on-year, with significant declines in sales for specific products such as Qingkailing injection and Shenmai injection, which fell by 50.1% and 21.0% respectively [2] - Other injectable products, including Shuxue Ning injection, Guanzhong Ning injection, and Danshen injection, also experienced sales declines of 6.3%, 9.6%, and 24.6% respectively [2]

Core Viewpoint - *ST Longjin (002750.SZ) has been announced for delisting by the Shenzhen Stock Exchange due to continuous financial losses and failure to meet revenue thresholds [1][7]. Company Overview - *ST Longjin, officially known as Kunming Longjin Pharmaceutical Co., Ltd., was established in September 1996 and listed on the Shenzhen Stock Exchange in 2015. The company focuses on the development, research, production, and sales of therapeutic drugs for cardiovascular and metabolic diseases, with its main product being the Longjin injection of Ligusticum chuanxiong [5]. - The company experienced stable revenue growth in its first three years post-listing, with revenues of 181 million, 224 million, and 304 million yuan, and net profits of 54 million, 58 million, and 19 million yuan respectively from 2015 to 2017. However, since 2018, the company's profitability has sharply declined, with net profits remaining negative from 2019 onwards [5][7]. Financial Performance - In 2024, *ST Longjin reported annual revenue of 66 million yuan, a year-on-year decline of 23.25%, marking five consecutive years of revenue below 100 million yuan. The net loss was 41 million yuan, although this represented a 41.58% improvement year-on-year. However, the company still reported a non-recurring net loss of 50 million yuan [7]. - The company's reliance on a single product, the Longjin injection, has been detrimental, as this product has consistently accounted for over 90% of its revenue. Following regulatory changes and price reductions, the sales volume of this product dropped significantly, leading to a devastating impact on the company's financial health [8][9]. Market Challenges - The Longjin injection's sales fell by nearly 20% in 2017 due to regulatory warnings about severe allergic reactions. In 2021, the product's price was drastically reduced by 67% during a procurement process, leading to a further decline in sales [8]. - The company has attempted to diversify its product offerings and explore new markets, including industrial hemp, but these efforts have largely failed. The industrial hemp initiative faced regulatory challenges and a reduction in planting area, while the development of cardiovascular generic drugs has been slow, with the first product only receiving approval at the end of 2024 [10][11]. Industry Context - Since 2025, three other traditional Chinese medicine injection companies have also faced delisting from the A-share market due to similar financial struggles, highlighting a broader trend of challenges within the industry [12].

Core Viewpoint - The safety concerns surrounding traditional Chinese medicine (TCM) injection solutions, particularly the case of a patient who died after receiving a Schisandra injection, have reignited discussions about the risks associated with these products and the need for improved regulatory oversight [1][3][11]. Industry Overview - The market for TCM injection solutions has seen a significant decline, with total market size dropping from 831.3 billion in 2015 to 479.8 billion in 2023, a nearly 50% reduction [7]. - Major companies in the sector, such as ST Longjin and Dali Pharmaceutical, have faced severe financial difficulties, with ST Longjin's revenue declining by 36.19% to 0.48 billion in 2024 [8][9]. - Despite the challenges, some companies remain optimistic about the potential for TCM injections, with predictions that products like Kanyuan Pharmaceutical's Hot Toxic Ning injection could benefit from increased insurance coverage and expanded indications [5]. Regulatory Environment - The National Medical Products Administration (NMPA) has been actively revising the instructions for TCM injections, adding warnings about severe allergic reactions and requiring monitoring after administration [11][12]. - Recent changes in the 2023 medical insurance drug directory have relaxed some payment restrictions on TCM injections, allowing for broader use in clinical settings [13][14]. - However, the existing risk management system still has shortcomings, such as delayed implementation of revised instructions and insufficient training for medical staff on proper medication use [12]. Safety Concerns - Reports indicate that adverse reactions to TCM injections, particularly allergic reactions, are common, especially among older patients [3][6]. - The complexity of TCM injection formulations and the potential for contamination during production contribute to safety risks [6][10]. - The industry faces ongoing scrutiny regarding the quality control of TCM injections, with calls for stricter regulations and better monitoring of adverse reactions [10][15]. Future Outlook - The TCM injection industry must navigate its way out of the current downturn by focusing on product upgrades, regulatory compliance, and enhancing safety monitoring systems [10][16]. - Companies are encouraged to adopt modern scientific methods to assess the safety of TCM injections and to implement stricter quality control measures [16].

Core Viewpoint - *ST Longjin is facing the risk of delisting due to continuous financial losses and regulatory challenges in the traditional Chinese medicine injection market, particularly affecting its main product, the injection of lamp flower extract, which previously accounted for over 90% of its revenue [1][4][11]. Company Overview - Longjin Pharmaceutical was established in September 1996 and listed on the Shenzhen Stock Exchange in 2015, focusing on the development, research, production, and sales of therapeutic drugs for cardiovascular and metabolic diseases, with its leading product being the injection of lamp flower extract [3][4]. - The company was the first in China to produce and list the injection of lamp flower extract, achieving sales of 34.52 million bottles in 2013. However, since 2018, the company's profitability has sharply declined, with continuous losses from 2019 to the present [3][5]. Financial Performance - The 2024 performance forecast indicates that Longjin Pharmaceutical expects a net profit loss of between 29.82 million yuan and 44.38 million yuan, with a non-deductible net profit loss ranging from 38.00 million yuan to 56.56 million yuan. This is attributed to a 67% price drop of the lamp flower extract due to centralized procurement policies [4][5]. - From 2019 to 2023, the company's net profit has been negative for five consecutive years, with losses of 39.89 million yuan, 2.53 million yuan, 1.03 million yuan, 57.34 million yuan, and 81.10 million yuan respectively [5]. Market Challenges - The injection of lamp flower extract has seen a significant decline in sales, dropping from 2.858 million bottles in 2017 to 1.278 million bottles in 2021, largely due to stricter regulations and limitations on its use in medical insurance [7][8]. - The traditional Chinese medicine injection industry is experiencing a downturn, with the market size for hospital use of traditional Chinese medicine injections plummeting over 50% from 2016 to 2022, from 88.06 billion yuan to 40.61 billion yuan [11]. Regulatory Environment - The regulatory landscape has tightened, with the National Medical Insurance Directory limiting the reimbursement and usage of traditional Chinese medicine injections, particularly affecting the lamp flower extract [8][11]. - The company has faced challenges such as safety re-evaluation pressures, market competition, and public trust issues due to adverse reactions associated with traditional Chinese medicine injections [13][14]. Strategic Adjustments - Experts suggest that traditional Chinese medicine companies should enhance product quality through re-evaluation, strengthen clinical research, and optimize product structures to adapt to market demands and regulatory changes [15][16]. - Longjin Pharmaceutical has attempted to diversify its product offerings and increase research and development investments, but has yet to find new growth points [9][16].