A Beijing-based innovative drug IPO has gone public, with a valuation of 4 billion, and Tongchuang Weiye participated as an investor.

Why are natural drugs attracting attention in the Hong Kong stock market’s biotech IPOs?

The biopharmaceutical sector has been a hot industry for IPOs in the Hong Kong stock market in recent years.

As of March 2026, there have been a total of 153 companies listed in the biopharmaceutical and healthcare sectors on the Hong Kong stock exchange over the past seven and a half years, with 85 of them being 18A listings, accounting for 55.6%.

According to iFind data, as of March 19, 2026, there are 375 IPO applications under processing at the Hong Kong Stock Exchange (excluding confidential submissions), of which 95 are from the biopharmaceutical and healthcare sectors, making up 1/4 of the current total queue, with 43 applications under the 18A rules.

Recently, another innovative pharmaceutical company has sought to list on the Hong Kong Stock Exchange.

According to Gelonghui, Beijing Wuhua Biao Pharmaceutical Co., Ltd. (abbreviated as Wuhua Biao) submitted its application to the Hong Kong Stock Exchange on February 27, seeking to list on the Main Board under the 18A rules, with Huatai International as its sole sponsor.

Unlike many innovative pharmaceutical companies focusing on biopharmaceuticals or chemical drugs, most of Wuhua Biao’s core pipeline consists of natural drugs, registered as traditional Chinese medicine.

01

Valuation of 4.038 billion, co-invested by Tongchuang Weiye

Wuhua Biao was established in 2010 and became a joint-stock company in March 2021, headquartered in Daxing District, Beijing.

As of February 18, 2026, Huang Yuesheng, Hu Dingfei, Yu Xiecai, Wuhua Tongyuan No. 1, Wuhua Tongyuan No. 2, Wuhua Tongyuan No. 3, Jiujiang Ruida, and Jiujiang Ruihe jointly form a group of controlling shareholders, collectively entitled to exercise 55.67% of the company’s voting rights.

Since its establishment, Wuhua Biao has completed multiple rounds of financing, with a total fundraising amount of approximately 1.1 billion yuan. In the B+3 financing round in September 2025, the company’s post-investment valuation was approximately 4.038 billion yuan.

The company’s main institutional investors include Beijing Pharmaceutical Fund, Lanxess Group, Longpan Investment, Ningbo Gaoling, Shanghai Tianzi, Tongchuang Weiye, Northern Light Venture Capital, Kexiya Holdings, ICBC Capital, Qingsonghai Industrial Investment, Daxing Industrial Development Fund, Keling An Pharmaceutical, Hefei Guojun, Zhonghe Huijin, and Tianju Zhuo Investment.

Financing history, source: prospectus

Wuhua Biao’s board of directors consists of nine members, including two executive directors, four non-executive directors, and three independent non-executive directors.

The company’s executive director and chairman, Huang Yuesheng, is 61 years old and obtained a senior MBA from Nankai University in June 2014. In addition to holding key positions at Wuhua Biao, Huang Yuesheng also serves as the executive director and general manager of Beijing Jiasilong Apparel Trademark Weaving Co., Ltd.

Another executive director, Ms. Jin Yiqun, is 55 years old and also serves as the general manager. She has obtained a bachelor’s degree in traditional Chinese medicine engineering from Heilongjiang University of Commerce and an EMBA degree from Northeast University of Finance and Economics.

Before joining Wuhua Biao, Jin Yiqun worked at Harbin Pharmaceutical Group Shiyi Hall Pharmaceutical Factory, Harbin Yizhou Pharmaceutical Co., Ltd., Heilongjiang Jiren Pharmaceutical Co., Ltd., Harbin Children’s Pharmaceutical Factory Co., Ltd., and Harbin Peiqilong Biopharmaceutical Co., Ltd.

The executive director situation of the company, source: prospectus

Wuhua Biao has positioned itself as a natural drug innovation company since its inception, focusing on the research and development, industrialization, and commercialization of original new drugs.

Natural drugs refer to natural medicinal substances and their formulations used under the guidance of modern medical theories. According to the classification framework for drug registration in China, natural drugs are registered following the classification path of traditional Chinese medicine.

Nature is a vast “molecular library,” and natural products are a valuable source for innovative drugs. In China, the National Medical Products Administration defines natural drugs as natural medicinal substances and their formulations used under the guidance of modern medical theories, sourced from plants, animals, and minerals.

Plants produce secondary metabolites through secondary metabolic pathways—such as alkaloids, flavonoids/polyphenols, and terpenoids—to resist pests and pathogens, enhance stress tolerance, repair damage, and delay aging. These metabolites are primarily small molecular compounds characterized by complex structures, high diversity, and species specificity, exhibiting a wide range of pharmacological activities.

In China’s natural medicinal resources, over 80% come from plants. Compared to single-component drugs, plant “effective component groups” are more beneficial in exerting multi-target and multi-pathway regulatory effects, providing a clinical advantage for treating major chronic diseases with complex pathogenesis.

However, the separation, enrichment, structural analysis, and quality control of “effective component groups” pose high technical barriers. Research on pharmacokinetics (PK), pharmacodynamics, and regulatory mechanisms is also more complex. This directly leads to the scarcity of successfully developed and marketed multi-component natural drugs. To date, fewer than 20 natural drugs have been approved globally.

02

Commercialized products for type 2 diabetes, facing significant competitive pressure

Wuhua Biao has developed one commercialized product and eight candidate drugs under research, specifically including:

1. One commercialized product, Sangboen, for type 2 diabetes;

2. Three core products including WH007 for polycystic ovary syndrome (PCOS); WH006 for obesity; and WH002 for neoadjuvant therapy for breast cancer;

3. Five other candidate drugs.

The research and development status of the product pipeline, source: prospectus

Commercialized product—Sangboen

Sangboen is a natural drug for treating type 2 diabetes, categorized as a class 1.2 innovative drug according to traditional Chinese medicine registration classification. According to Zhaosheng Consulting, Sangboen is the first and only original natural drug for blood sugar control in China and the world’s first plant-derived natural drug for blood sugar control based on a clearly defined active component.

Sangboen is developed using total alkaloids from mulberry branches (SZ-A) as its active pharmaceutical ingredient (API).

Sangboen received approval for its new drug application (NDA) from the National Medical Products Administration of China in March 2020 and was included in the national medical insurance drug list the same year.

In recent years, the market for type 2 diabetes drugs in China has garnered increasing attention. By 2024, the global market size for type 2 diabetes drugs is estimated to be approximately 80.3 billion yuan, expected to grow to 118.9 billion yuan by 2032.

Global and China type 2 diabetes drug market sizes, source: prospectus

Currently, there is only one approved natural drug for the treatment of type 2 diabetes in China, which is Sangboen, listed in 2020. Additionally, there are no other natural drugs for treating type 2 diabetes currently in clinical trials in China.

Despite this, the competitive environment faced by the company is not optimistic. Global giants such as Novo Nordisk (semaglutide) and Eli Lilly (liraglutide) dominate this market, while domestic companies, in addition to established insulin firms like Ganli Pharmaceutical and Tonghua Dongbao, include innovative pharmaceutical companies such as Innovent Biologics, Xianthone Biologics, Hansoh Pharmaceutical, and Heng Rui Medicine, all of which have established positions in the GLP-1 field.

Main types of type 2 diabetes drugs in China, source: prospectus

Core product—WH007

WH007 is a natural drug candidate developed with SZ-A as the active pharmaceutical ingredient (categorized as traditional Chinese medicine class 2.3) intended for the treatment of polycystic ovary syndrome (PCOS). WH007 obtained a clinical trial notification from the National Medical Products Administration in December 2025, approving it to conduct phase II clinical trials.

According to Zhaosheng Consulting data, the estimated prevalence of PCOS among women of childbearing age in China is approximately 7.8%, translating to 34.4 million patients.

Current clinical treatments primarily focus on symptomatic relief and do not address the fundamental pathophysiological mechanisms of PCOS. According to Zhaosheng Consulting data, there are currently no approved drugs specifically targeting PCOS indications worldwide.

WH007 targets its core pathological mechanism by regulating the hypothalamic-pituitary-ovarian axis (HPO axis) in PCOS. Preclinical studies have shown that WH007 can significantly improve estrous cycles, polycystic ovarian morphology, and metabolic abnormalities, regulating hormone levels and significantly restoring fertility.

Core product—WH006

WH006 is a natural drug candidate developed with SZ-A as the active pharmaceutical ingredient (categorized as traditional Chinese medicine class 2.3), intended for adult weight loss. WH006 initiated phase II clinical trials in August 2025.

Core product—WH002

WH002 is a paclitaxel-cholesterol-conjugated tumor-targeting lipid emulsion (classified as chemical drug class 2.2). The company plans to focus WH002 on neoadjuvant therapy for luminal breast cancer. WH002 completed phase II clinical trials in November 2025 and is expected to start phase III clinical trials in 2026.

03

Revenue generated but still operating at a loss, high customer concentration

In recent years, Wuhua Biao’s revenue has come from the sales of the commercialized product Sangboen.

For the years 2024 and the first nine months of 2025 (reporting period), the company’s revenues were 208 million yuan and 207 million yuan, with net losses of 110 million yuan and 45.72 million yuan, respectively.

Investing in pharmaceutical or biotechnology companies carries high uncertainty, requiring significant upfront capital expenditures and facing major risks that candidate drugs may not receive regulatory approval or achieve commercial success. During the reporting period, the company’s R&D costs were 58 million yuan and 41.5 million yuan, respectively.

As of the end of September 2025, the company had formed a dedicated R&D team of 89 members, led by Dr. Liu Zhihua, who is also the director of the Pharmaceutical Innovation Research Institute and the senior director of the new drug R&D center.

All of Wuhua Biao’s customers are distributors of Sangboen. During the reporting period, the revenue generated from the company’s five largest customers accounted for over 80%, with the largest customer contributing over 40%, indicating a high level of customer concentration.

Given this concentration of distributor customers, the company’s business and financial performance are relatively dependent on the continued purchases of these customers and the relationships with them. If customers change their purchasing volume or terminate cooperation for various reasons, it will pose challenges to the company’s operations or finances.

Key financial data, source: prospectus

During the reporting period, Wuhua Biao’s net cash used in operating activities was 87.06 million yuan and 22.53 million yuan, respectively. As of the end of September 2025, the company’s cash and cash equivalents amounted to 162 million yuan.

Comprehensive cash flow statement, source: prospectus

Overall, Wuhua Biao has achieved revenue through the commercialized product Sangboen, but the type 2 diabetes market it operates in is highly competitive, facing challenges from both domestic and international giants, with potential limitations on future sales growth; the other products in development are still far from commercialization.

In the future, whether the company can maintain cash flow and successfully advance R&D will continue to be monitored by Gelonghui.

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