End of 2024: Major Adjustments to Pharmaceutical Fundraising Projects – 7 Notable Cases Draw Attention

As 2024 comes to a close, several A-share listed pharmaceutical companies have made significant adjustments to their existing fundraising investment projects, with “project termination” becoming a notable aspect of these strategic changes.

On December 12, Asia-Pacific Pharmaceutical announced plans to terminate all projects corresponding to its previously issued convertible bonds (Asia-Pacific Convertible Bonds). The net amount of funds raised through these bonds was 953 million yuan, of which 689 million yuan remains unused, accounting for 72.36% of the net raised funds. Asia-Pacific Pharmaceutical decided to keep this unused portion in the dedicated account for future use in repurchasing, conditional redemption, or maturity redemption of the bonds. Once the bonds are delisted, the remaining funds will be transferred out of the account to permanently supplement working capital. Previously, the main fundraising projects for these bonds included Phase I and Phase II of modern pharmaceutical preparation, a research and development platform project, and a marketing network project, all of which have now been terminated.

On December 11, Dashenlin announced adjustments to its fundraising project titled “Nanchang Dashenlin Industrial Base Project (Phase I).” The original investment was set at 128 million yuan, but only 67.26 million yuan was utilized. The remaining funds will be permanently used to supplement working capital. Dashenlin explained that due to the slowdown in the pharmaceutical retail market and the slower expansion of direct-operated stores, the completed industrial base meets current needs and aligns with the company’s development plan for the next 3 to 5 years in the Jiangxi region. Therefore, it was deemed appropriate to scale down the investment and conclude the project.

On December 10, Porton Pharma Solutions issued an announcement stating that due to significant changes in the feasibility of the original fundraising project, the remaining funds as of November 30 (totaling 198 million yuan) will be permanently used to supplement working capital. Porton Pharma explained that with the completion of a major order delivery in 2023, its current R&D and production capacity meets current business needs. Continuing to invest in these projects would lead to higher fixed and operating costs, impacting financial health and profitability. Given the increasingly complex and uncertain macro environment, the company needs to reserve funds to address future uncertainties.

On November 27, Shouxian Valley announced it would reallocate funds originally planned for the Shouxian Valley Health Industry Park Phase II Health Food Project (production line construction) to the Smart Park Upgrade Project. The reallocation involves 80.53 million yuan. The company explained that due to market research and product order conditions, the growth momentum of tablet products has slowed in the short term. To mitigate potential declines in market size and project profitability, the investment in these production lines was temporarily halted.

On December 9, Weili Medical announced the conclusion of its “Marketing Center Construction Project” funded by a 2021 private placement and terminated the “Disposable Alloy-Coated Anti-Infection Catheter Production Project.” The remaining funds will be used to permanently supplement working capital. Weili Medical noted that recent policy changes have made it more difficult to promote new products in hospitals. The disposable alloy-coated catheters are a first-of-its-kind product in China, requiring a 1-3 year promotion period. Current production capacity meets demand for the next 1-3 years, so terminating the project improves fundraising efficiency. The company plans to use its own funds to upgrade production equipment and increase capacity when necessary.