Core Viewpoint - Tianjin Pharmaceutical Industry Co., Ltd. has responded to the Shanghai Stock Exchange's inquiry regarding its 2024 annual report, particularly focusing on the prepayment of research and development (R&D) funds and the collaboration with its controlling shareholders' affiliated enterprises [1][2]. Summary by Sections R&D Project Payments - The company reported a total prepayment of approximately 20 million yuan for R&D projects in 2024, with repayments from major shareholders and their affiliates totaling about 70 million yuan, leaving a balance of approximately 160 million yuan at the end of the period [1]. - The company emphasized the necessity of collaborating with its controlling shareholders' affiliates for R&D, citing advantages such as resource integration, risk control, and enhanced R&D efficiency [1]. R&D Project Details - The company has engaged in various R&D projects, including high-end hormone and amino acid APIs, sterile lyophilized preparations, nasal sprays, eye drops, and inhalation preparations. The total prepayment for these projects in 2024 was 18.30 million yuan, with repayments amounting to 68.31 million yuan [1]. - Specific details of R&D projects were provided, including project codes, budget totals, prepayment amounts, and repayment reasons, indicating a structured approach to managing R&D expenditures [1]. Financial Management and Compliance - The company has established a milestone payment mechanism to reduce upfront financial pressure, ensuring that any excess R&D costs beyond the contract amount are borne by the R&D institutions [1]. - The annual audit confirmed that the prepayment of R&D funds is part of the company's normal business operations and does not constitute non-operating fund occupation by related parties [1][8]. Project Status and Challenges - The company is actively managing its R&D projects, which are in various stages of development. Some projects have faced challenges due to technical difficulties and regulatory changes, leading to costs exceeding initial estimates [1][8]. - The company maintains close communication with its R&D partners to address any issues and ensure the smooth progress of projects, with a focus on achieving the necessary regulatory approvals [1][8].