Core Viewpoint - The recent surge in drug notification letters from the National Medical Products Administration (NMPA) indicates a tightening of approval processes for generic drugs in China, with a significant increase in rejected or withdrawn applications in December 2023 compared to previous months [3][9]. Summary by Sections Drug Application Status - In December 2023, 167 drug notification letters were issued, with 102 related to generic drug applications, marking a doubling of rejections or withdrawals compared to November [3][4]. - The rejected or withdrawn applications include a variety of therapeutic areas such as cardiovascular, metabolic diseases, and oncology, with notable drugs like Sacubitril/Valsartan and Levofloxacin involved [6][8]. Industry Response - Some companies, like Jiutian Pharmaceutical, have publicly stated reasons for their withdrawal, citing the need for further data improvement after discussions with the NMPA [7]. - Issues primarily stem from raw material quality rather than the formulations themselves, as reported by some rejected applicants [7]. Regulatory Environment - The approval process for chemical generic drugs is tightening, as indicated by new drafts released by the NMPA that outline stricter criteria for approval, including the rejection of applications based on existing documentation without the need for additional submissions [9][10]. - The new guidelines aim to clarify significant deficiencies in bioequivalence studies, which have been a common reason for application failures [10]. Market Dynamics - China remains a major player in the generic drug market, but increasing competition and the inclusion of more innovative drugs in the medical insurance catalog are pressuring profit margins for generics [12][13]. - The market for chemical generics is projected to maintain a 50% share of the overall pharmaceutical market in 2024, with a notable increase in the number of approved generic varieties [13]. Competition and Industry Trends - The number of generic drug varieties has surged, leading to intensified competition and market saturation, with a significant rise in the number of products with five or more manufacturers [13]. - Concerns about low-level duplication in the generic drug sector have prompted calls for regulatory reforms to enhance the quality and efficiency of the approval process [15].

Core Viewpoint - The recent surge in drug notification letters from the National Medical Products Administration indicates a tightening of approval processes for generic drugs in China, with a significant increase in rejected or withdrawn applications in December compared to November [1][5]. Group 1: Drug Approval Trends - As of December 19, 2023, a total of 167 drug notification letters were issued, with 102 related to generic drug applications, marking a doubling in rejections or withdrawals compared to November [1]. - The therapeutic areas affected include cardiovascular, metabolic diseases, nervous system, respiratory, anti-infection, oncology, ophthalmology, dermatology, and digestive systems, with specific drugs like sacubitril/valsartan and sitagliptin/metformin among those impacted [1]. - Multiple manufacturers faced challenges with the same drug, such as the allergy treatment bilastine, which had six companies involved in unsuccessful applications [2]. Group 2: Reasons for Rejections - Some companies, like Jiutian Pharmaceutical, have publicly stated that their withdrawal was due to the need for further data refinement after discussions with the National Drug Review Center [3]. - Manufacturers of rejected generic drugs indicated that the primary issues were related to raw materials rather than the formulations themselves [3]. Group 3: Regulatory Changes - The approval process for generic drugs is tightening, as indicated by the recent drafts of guidelines from the National Medical Products Administration, which outline significant deficiencies in pharmaceutical research and bioequivalence studies [5][6]. - The new guidelines suggest that applications with major deficiencies will not be allowed to supplement their materials, leading to more rejections based on existing documentation [5]. Group 4: Market Dynamics - The Chinese generic drug market is facing increased competition, with a significant number of companies vying for approval of similar products, leading to market saturation [7]. - The report from the Chinese Academy of Medical Sciences indicates that by 2024, generic drugs will still account for 50% of the overall pharmaceutical market, with a notable increase in the number of approved generic varieties [7]. - The market concentration remains low, with the top ten companies holding around 22% of the market share, indicating ongoing challenges for profitability in the generic sector [7]. Group 5: Industry Insights - Industry experts have noted that the increasing number of generic drug projects, often with lower development costs compared to innovative drugs, contributes to market saturation and competition [8]. - Concerns about "internal competition" in the generic drug sector have prompted calls for regulatory adjustments to optimize the approval process and reduce unnecessary resource expenditure [8].

Core Viewpoint - The National Medical Products Administration (NMPA) has rejected 118 drug listing applications over three days, including 13 first-generic products, indicating a trend towards stricter drug approval processes [1][27]. Group 1: Drug Approval Rejections - The NMPA denied applications for several first-generic drugs, including indomethacin gel patches from Jiutian Pharmaceutical and meloxicam nano-crystal injections from Health元药业 [1][27]. - The rejection of these applications poses a risk to pharmaceutical companies that have made significant investments in these products [1][27]. Group 2: Market Impact and Competition - Jiutian Pharmaceutical, known for its core product, the Loxoprofen sodium gel patch, faced a setback with its indomethacin gel patch application, which had a market share of only 0.16% compared to Nipro Pharma's indomethacin patch, which has over 45% market share and annual sales exceeding 110 million yuan [4][10]. - Four companies have submitted applications for the indomethacin gel patch, with three already receiving clinical approval, indicating a competitive landscape [5][10]. Group 3: Other Drug Applications - Other first-generic applications, such as for bilastine oral solution and brivaracetam orally disintegrating tablets, were also rejected, reflecting the stringent review process [1][27]. - The market for amlodipine besylate, a cornerstone drug for hypertension, remains strong, with sales exceeding 3.6 billion yuan in 2024, despite the influx of generic competitors [11][14]. Group 4: Future Opportunities - The failure of Jiutian Pharmaceutical and Dongyangguang Pharmaceutical in their respective applications highlights the need for companies to focus on quality and clinical needs rather than merely following trends in drug formulation [27]. - The approval of alternative formulations, such as the dry suspension and orally disintegrating tablets, suggests that there are still opportunities for innovation in the market [20][21].

Core Viewpoint - Jiutian Pharmaceutical has received approval from the National Medical Products Administration to withdraw its drug registration application for indomethacin gel patch due to the need for further improvement of related experimental data [1] Group 1 - The company announced the withdrawal of its drug registration application for indomethacin gel patch on December 17 [1] - The decision to withdraw the application was made after communication with the National Medical Review Center [1] - The company plans to supplement and improve the relevant research before restarting the registration application process [1]

Group 1: Investor Relations Activity - The investor relations activity involved a meeting with representatives from Taikang Asset and China Post Securities, held on July 30, 2025 [2] - The meeting was led by the Deputy General Manager and Board Secretary, Zeng Lei, along with the Securities Affairs Representative, Gan Rong [2] Group 2: Product Development and Market Strategy - The company is currently in the information reporting stage for the collection of the eleventh batch of the drug Loxoprofen Sodium Gel Patch, with no specific price reduction estimates available yet [2] - The company has six external preparations already on the market and expects to gain approval for additional products, including Indomethacin Gel Patch and Flurbiprofen Gel Patch in 2025, and Ketoprofen Patch and others in 2026 [2][3] - The company has made progress in export development, with 46 clients engaged, including successful exports of Nitazoxanide Tablets to Ecuador and preparations for the registration of Ketoprofen Gel in Costa Rica [4] Group 3: Sales Expectations and Brand Strategy - The Ketoprofen Gel Patch was approved for market entry in 2023 and is included in the national medical insurance directory, with optimistic market prospects and a new sales strategy focusing on outpatient markets [5] - The company aims to strengthen its internal sales team assessments to enhance the "Jiu Yue" brand of patches [5] Group 4: Innovation and R&D Investment - The company is developing a Class 1 innovative drug, Pepper Seven Pain Relief Gel Patch, and has entered into a technology transfer agreement for antibacterial and anti-inflammatory peptides [6] - In 2024, the company plans to invest CNY 261 million in R&D, representing 8.91% of its revenue, with a commitment to maintain this investment ratio for sustained innovation and market competitiveness [7]

Group 1: Company Advantages - The company has a complete industrial chain layout, allowing it to independently produce active pharmaceutical ingredients and key excipients, ensuring product quality while effectively controlling costs [2] - A full-channel coverage system has been established, particularly in the outpatient market, which has become a new engine for revenue growth [2] - Continuous high investment in R&D to innovate and expand the product line, with a focus on strengthening the "JiuYue" brand in the transdermal drug delivery field [2] Group 2: Product Expectations and Market Strategy - The ketoprofen gel patch was approved for market in 2023 and has entered the national medical insurance directory, being the first generic product in the domestic market [3] - The company is optimistic about the market prospects for the ketoprofen gel patch and has developed new sales strategies focusing on outpatient market resources and internal sales team assessments [3] Group 3: Financial Projections - The company expects a revenue growth of 10-20% year-on-year for 2025, with a similar growth forecast for net profit excluding non-recurring items [4] - There are risks associated with achieving these targets due to market conditions, operational environment, and industry policies, which may introduce significant uncertainties [4] Group 4: Product Development Progress - The indomethacin gel patch is currently undergoing supplementary data review, while the pepper and musk gel patch has completed supplementary research and is awaiting registration application [5] - Differences between the loxoprofen sodium gel patch and the anti-inflammatory plaster include active ingredients, indications, and prescription attributes, with loxoprofen being a prescription drug for musculoskeletal pain [6]

Group 1: Company Strategy and Market Positioning - The company is focusing on three key areas for future strategic planning: expanding sales channels, increasing R&D efforts, and optimizing production processes to enhance operational efficiency and shareholder value [2] - The company aims to strengthen its presence in the outpatient market while enhancing brand influence, particularly for the "JiuYue" transdermal patch brand [3] - The company plans to launch several transdermal products, including Lidocaine Gel Patch and Indomethacin Gel Patch, expected to be approved in 2025, and Ketoprofen Patch and Flurbiprofen Patch in 2026 [4] Group 2: Product Development and Competition - The company believes that the market for external anti-inflammatory drugs is currently underserved, and the two products, Loxoprofen Sodium Gel Patch and Ketoprofen Gel Patch, will complement each other rather than compete [7] - The Loxoprofen Sodium Gel Patch has a high drug loading of 100mg per patch and is suitable for a wide range of conditions, while the Ketoprofen Gel Patch offers better drug permeability and efficacy for osteoarthritis [5] Group 3: Financial Projections and Market Risks - The company projects a revenue growth of 10-20% for the fiscal year 2025, with a similar expectation for net profit excluding non-recurring items [11][12] - The company acknowledges that its operational plans and product sales depend on various factors, including market conditions and industry policies, which introduce significant uncertainty [12] Group 4: Cost Management and Procurement Strategy - The company plans to reduce sales expenses by optimizing marketing strategies and expanding outpatient market reach [2] - The company maintains an integrated development strategy for raw materials and finished products, ensuring quality control and cost management through in-house production [10]