Core Viewpoint - The Shanghai Municipal Medical Procurement Management Office announced the suspension of procurement qualifications for certain drugs due to non-compliance with price adjustment requirements, affecting multiple companies including Shutaishen and Baili Pharmaceutical [1][2]. Group 1: Impact on Shutaishen - Shutaishen's product, Compound Polyethylene Glycol (3350) Quality Vitamin C Powder, is set to be launched on October 9, 2024, as the first domestic generic, aimed at bowel cleansing before medical procedures [1]. - Shutaishen has experienced a continuous decline in revenue for three years and has reported losses for five consecutive years, totaling over 1 billion yuan [2]. - In the first half of 2025, Shutaishen reported revenue of 126 million yuan, a year-on-year decline of 31.14%, with a net profit of -24.64 million yuan [2]. Group 2: Impact on Baili Pharmaceutical - Baili Pharmaceutical's product, Oral Solution of Enalapril Maleate, is also included in the suspended procurement list [2]. - Baili Pharmaceutical reported revenue of 113 million yuan in the first half of 2025, accounting for 66% of its parent company Baili Tianheng's revenue, with a net profit of -23.48 million yuan [2]. - Baili Tianheng's revenue has been declining due to falling sales in its chemical and traditional Chinese medicine product segments, which are crucial for supporting innovative drug research and development [2]. Group 3: Other Affected Products - Other drugs affected by the procurement suspension include Vancomycin Capsules, Betamethasone Ointment, Calcium Acetate Oral Solution, and several others from various pharmaceutical companies [3].

Group 1 - Shanghai Sunshine Pharmaceutical Procurement Network announced that starting from September 16, 2025, certain drug procurement qualifications will be suspended due to non-compliance with price adjustment requirements by some companies [1] - A total of 10 drugs, including 15 specifications, are affected, involving 11 companies such as Shutaishen and Sichuan Baili Pharmaceutical [1] - Shutaishen's product, Compound Polyethylene Glycol (3350) Quality Vitamin C Powder, is set to be launched on October 9, 2024, as the first domestic generic, aimed at bowel cleansing before medical procedures [1] Group 2 - Shutaishen has experienced a continuous revenue decline for three years and has reported losses for five consecutive years, accumulating over 1 billion yuan in losses [2] - In the first half of 2025, Shutaishen reported revenue of 126 million yuan, a year-on-year decline of 31.14%, with a net profit of -24.64 million yuan [2] - Sichuan Baili Pharmaceutical's oral solution of Enalapril Maleate is also included in the suspended procurement list, with Baili Pharmaceutical reporting revenue of 113 million yuan in the first half of 2025, accounting for 66% of its parent company's revenue [2] Group 3 - Other drugs affected by the procurement suspension include Vancomycin Capsules, Betamethasone Ointment, Calcium Acetate Oral Solution, and several others from various pharmaceutical companies [3]

Core Viewpoint - The innovative drug sector has become a focal point in the A-share market, with Shuyou Shen (300204.SZ) emerging as a standout performer, experiencing significant stock price increases despite ongoing operational challenges [1][5]. Stock Performance - On June 4, Shuyou Shen opened high but closed at 30.79 CNY per share, down 3.18% from the previous day. The stock price surged from 11.04 CNY to 31.80 CNY between May 20 and June 3, marking a 188.04% increase over 10 trading days. From a low of 5.90 CNY on April 9, the stock has risen by 438.98% [2][11]. - The company's market capitalization increased by approximately 12.4 billion CNY due to the stock price surge [15]. - Institutional investors played a significant role in the stock's rise, with substantial buying activity noted on multiple trading days [13][14]. Financial Performance - Despite the stock price increase, Shuyou Shen's operational performance remains under pressure, with a 33.45% year-on-year decline in revenue for Q1. The net profit attributable to shareholders was -2.34 million CNY, although this represented a 38.05% reduction in losses compared to the previous year [2][19]. - The company has reported cumulative losses exceeding 1 billion CNY over five consecutive years from 2020 to 2024 [3][19]. - In 2024, the company’s revenue from its main products, Shutaqing and Sutai Sheng, declined, with sales of Shutaqing at 1.79 billion CNY (down 8.20%) and Sutai Sheng at 1.34 billion CNY (down 17.30%) [19]. Research and Development - Shuyou Shen's R&D investment dropped significantly to 162 million CNY in 2024, a decrease of 63.84% year-on-year [4][20]. - The company has reduced its R&D personnel by 14.75%, with R&D staff now comprising 21.14% of the total workforce [20]. - Despite the decline in R&D spending, the company has multiple I-class innovative biological drugs in clinical trials and is focused on advancing projects in areas such as neurological diseases and infectious diseases [20].