Core Viewpoint - Huazhang Biotech has submitted its third IPO application to the Hong Kong Stock Exchange, despite being in a "three no" state: no commercial products, no stable revenue, and no profit [2][4][12] Company Overview - Established in April 2012, Huazhang Biotech focuses on developing protein drugs for clinical needs, particularly in the wound healing treatment area [3][4] - The company has a pipeline of ten candidate products, with two core products, Pro-101-1 and Pro-101-2, currently in clinical research stages [3][4] Product Development - Pro-101-1, aimed at treating burns, has completed Phase IIb clinical trials and is expected to start Phase III trials in Q4 2025, with a goal to be approved in China by Q4 2027 [4][5] - Pro-101-2, targeting diabetic foot ulcers, is in Phase II trials and aims for market introduction by 2030 [4][5] Financial Performance - The company has reported minimal revenue, with figures of 472,000 RMB, 261,000 RMB, and 0 RMB for 2023, 2024, and the first five months of 2025, respectively [7][8] - Losses have significantly increased, with amounts of 105.2 million RMB, 212.3 million RMB, and 72.4 million RMB for the same periods [7][8] Funding and Valuation - Huazhang Biotech has completed three rounds of financing, with valuations increasing from approximately 805 million RMB in May 2021 to 3.3 billion RMB in October 2023 [9][10] - The company faces stringent conditions from investors, including a requirement to complete its IPO by the end of 2026, or face share buyback obligations [11][12] Challenges Ahead - The transition from Phase II to III clinical trials is fraught with high failure rates, and the company has not yet validated its core products through Phase II trials [5][11] - The company’s liquidity is tightening, with a current ratio dropping from 20.9 in 2023 to 4.9 by May 2025, indicating potential cash flow issues [9][11]

Core Viewpoint - Huazhang Biotech has submitted its third IPO application to the Hong Kong Stock Exchange, despite being in a "three no" state: no commercial products, no stable revenue, and no profit. The company faces a buyback pressure from investors if it fails to go public by the end of 2026, highlighting a critical race against time for its survival [1][10]. Group 1: Company Overview - Established in April 2012, Huazhang Biotech focuses on developing protein drugs for clinical needs, particularly in the wound healing treatment area. The company has a pipeline of ten candidate products, with two core products, Pro-101-1 and Pro-101-2, currently in clinical research [2][3]. - Pro-101-1, aimed at treating burns, has completed Phase IIb trials and plans to start Phase III trials in Q4 2025, targeting market approval in 2027. Pro-101-2, for diabetic foot ulcers, is in Phase II trials, expected to complete in Q2 2027, with a market launch aimed for 2030 [3][4]. Group 2: Financial Performance - The company has reported minimal revenue, with figures of 472,000 RMB, 261,000 RMB, and 0 RMB for 2023, 2024, and the first five months of 2025, respectively. Losses have escalated to 105.2 million RMB, 212.3 million RMB, and 72.4 million RMB during the same periods, primarily due to rising R&D and administrative costs [6][7]. - R&D expenditures were 39.9 million RMB, 91.3 million RMB, and 32.1 million RMB for the respective years, with administrative expenses sometimes exceeding R&D costs [6][7]. Group 3: Investment and Financing - Huazhang Biotech has completed three rounds of financing, with valuations increasing from approximately 805 million RMB in May 2021 to 3.3 billion RMB in October 2023. However, the financing agreements include strict terms requiring the company to complete its IPO by the end of 2026, or face buyback obligations [8][9]. - The company's liquidity has deteriorated, with the current ratio dropping from 20.9 in 2023 to 4.9 by May 2025, indicating a tightening cash flow situation [8]. Group 4: Challenges and Risks - The transition from Phase II to Phase III trials is fraught with challenges, often referred to as the "valley of death" due to high failure rates. The company faces significant uncertainty regarding the efficacy and marketability of its products [4][10]. - The pressure from investors for rapid progress in clinical trials and the IPO poses a risk of compromising data quality, which could lead to a failed market entry if timelines are not met [10][11].