Hangzhou New Element Pharmaceuticals pushes again for Hong Kong Stock Exchange listing: Over 1 billion yuan loss in three years, with research-stage gout medication losing its first-mover advantage

Recently, Hangzhou New Element Pharmaceutical Co., Ltd. (hereinafter referred to as “New Element Pharmaceutical”) has submitted its filing to the Hong Kong Stock Exchange again.

The latest prospectus update shows that New Element Pharmaceutical’s loss scale continues to grow year by year, and its cash flow remains tight. Even among companies that are planning to list under Hong Kong’s 18A provisions, New Element Pharmaceutical’s loss scale is relatively large. In addition, the company has further disclosed the highly anticipated status of its patent litigation, as well as the latest progress on its core product ABP-671.

Finance News has noticed that although the company has continued to raise funds right before listing, given that it has recorded losses exceeding RMB 1 billion over the past three years, the funding issues it faces have become increasingly severe.

As of the end of 2025, New Element Pharmaceutical had only RMB 185 million in bank balances and cash on its books. Meanwhile, according to the cash flow statement it disclosed, the net cash used in operating activities for the full year of 2025 was -RMB 119 million, while this figure was -RMB 368 million for 2024. This means that these on-book funds may be enough to sustain the company’s operations for only about one year.

In terms of financing, New Element Pharmaceutical completed an RMB 180 million Series B financing in 2020, completed a RMB 300 million Series C financing in 2022, and only completed a RMB 552 million Series D financing at the end of August 2025. It also completed an RMB 100 million financing in November 2025, with a post-investment valuation of RMB 3.6 billion and a cost per share of RMB 75.6.

Loss scale still expanding year by year

New Element Pharmaceutical mainly focuses on R&D of innovative drugs for diseases in the areas of metabolic disorders, inflammation, and cardiovascular conditions. It currently has 66 employees, and more than 70% of them are R&D personnel. With no revenue yet generated, ongoing R&D spending has kept the company in a state of losses.

Between 2023 and 2025, New Element Pharmaceutical recorded losses of RMB 97 million, RMB 434 million, and RMB 534 million, respectively, still increasing year by year; over the same period, its R&D expenses were RMB 177 million, RMB 338 million, and RMB 180 million, respectively.

Regarding the decline in R&D expenses in 2025, New Element Pharmaceutical explained that in 2024, the R&D spending for ABP-671 was higher, mainly because the company focused on patient recruitment and conducted Phase 2b/3 clinical trials in China and the United States. In 2025, however, the company’s work priorities mainly shifted to data analysis, research wrap-up, and preparation for regulatory communications related to the later stage of the trial.

Finance News has noticed that this loss scale of New Element Pharmaceutical compared with other loss-making healthcare companies planning to list under Hong Kong’s 18A provisions, is at a relatively high level. Taking 2024 as an example, data from the Tonghuashun iFinD shows that among the biopharmaceutical companies planning to list or already listed under the Hong Kong 18A provisions that also generated no revenue in 2024, only Reko Biotech-B (02179.HK), Tiancheng Biopharma-B (02137.HK), and Xianweida Biotech-B had loss scales exceeding New Element Pharmaceutical’s; the losses of the other at least 35 companies were lower.

For unprofitable biopharmaceutical companies, the quality of their in-development pipeline is a decisive factor for their future development. The innovative drug ABP-671 for treating gout is New Element Pharmaceutical’s most core in-development product. The prospectus shows that ABP-671 is a self-developed small-molecule urate transporter 1 (URAT1) inhibitor designed specifically for first-line treatment of gout. Currently, ABP-671 is conducting Phase 2b/3 clinical trials in the United States and China at the same time for treating gout. The company claims that this product has the potential to become the best-in-class innovative URAT1 inhibitor targeting the first-line treatment market.

New Element Pharmaceutical’s R&D pipeline Source: the company’s official website

As the product with the fastest R&D progress at present, ABP-671’s significance for New Element Pharmaceutical, which has not generated any revenue, is self-evident. According to New Element Pharmaceutical’s September 2025 update, the global Phase IIb/III clinical trial of ABP-671 has reached all the primary endpoints and secondary endpoints.

In-development competitors terminate R&D early

It should be noted that although this field appears promising, domestically there are already companies that have filed listing applications for similar products first, and multiple other products are also in development—competition is not optimistic.

According to a research report by Caitong Securities, gout is caused by persistent hyperuricemia, and there are many patients. Monitoring data on chronic diseases and risk factors in China from 2018 to 2019 show that the prevalence of hyperuricemia among Chinese adult residents is 14%. Some patients with hyperuricemia progress to gout. According to TheLancet’s latest research, the number of gout patients in China in 2025 will approach 18 million. With 17.4% of the world’s population, China accounts for more than 30% of the world’s gout patients.

However, existing drugs have side effects such as hypersensitivity reactions, cardiovascular risks, and hepatonephrotoxicity, making demand for more efficient and safer new urate-lowering drugs increasingly prominent.

As a new-generation URAT1 inhibitor that promotes uric acid excretion in a targeted way, the mechanism is clear, efficacy is outstanding, and safety is good, with strong clinical potential, making it a hot spot for new drug R&D.

According to a research report by Minsheng Securities, globally only one new-generation URAT1 target drug has been approved for market, which is Eisai’s dotinurad (brand name: dotinurad). Dotinurad was approved in Japan on January 23, 2020 for the treatment of gout and hyperuricemia. At present, only Japanese sales data have been disclosed: JPY 2.2 billion in 2022 and JPY 3.3 billion in 2023 (approximately RMB 160 million). On December 10, 2024, dotinurad was approved by China’s National Medical Products Administration (NMPA) for the indication of gout with hyperuricemia.

For domestic products in development, Hengrui Medicine (600276.SH) (01276.HK) Ruzinurad (SHR4640) has already submitted a listing application in China. In addition to ABP-671, six drugs have entered Phase III or Phase II/III clinical stages, including YL-90148 from Jingli Pharmaceutical, AR882 from Yiphong/Arthrosi, HP501 from Hicre, XNW3009 from Xinnowei, and Epaminurad from Simcere Pharmaceutical (02096.HK).

However, the R&D progress of URAT1 target drugs by some of the aforementioned companies does not appear to be smooth. In August 2025, Hicre adjusted the investment in a sub-project of its fund-raising projects and no longer planned to invest the proceeds into the HP501 project. Regarding the reasons for the adjustment, Hicre explained that currently, there are already pharmaceutical companies in China whose products targeting the URAT1 target have been approved for market, and multiple Phase III clinical studies around this target are ongoing. Therefore, the company expects that competition in the URAT1 target field in the future will be relatively intense.

Xinnowei also terminated the Phase IIb/III development of XNW3009 in October 2025. The reason given was “strategic development adjustment or that clinical data did not meet expectations, etc.”

Unresolved core patent litigation with former potential cooperation partners

It is worth noting that the termination of Xinnowei’s product development is related to New Element Pharmaceutical. According to the prospectus, in 2024, New Element Pharmaceutical filed a lawsuit in the Shanghai Intellectual Property Court in China against Suzhou Xinnowei Pharmaceutical Technology Co., Ltd. (i.e., “Xinnowei”) for alleged trade secret infringement.

New Element Pharmaceutical said that in 2017 it discussed potential investment and cooperation opportunities with Xinnowei’s co-founder, but no actual cooperation was conducted and no R&D activities were advanced. To fully communicate with the court regarding administrative matters, in November 2025 the company withdrew the case and re-submitted it, and in the same month it received a notice of acceptance from the court.

The prospectus shows that the first substantive hearing regarding evidence exchange and cross-examination was held on November 27, 2025. The second trial was held immediately afterward on January 29, 2026. Currently, the case is under review and no verdict has been issued. In New Element’s view, XNW3009 is precisely the result of the above-mentioned “infringement.”

Xinnowei is also in the IPO stage, targeting the STAR Market. According to Xinnowei’s prospectus, in August 2025, Xinnowei filed a suit against Hangzhou New Element and its statutory representative and actual controller, Shi Dongfang, with the Shanghai Intellectual Property Court, alleging an infringement-related liability dispute arising from its maliciously filing an IP litigation. Xinnowei claimed that New Element’s lawsuit lacked grounds and exceeded the statute of limitations, constituting malicious litigation, and requested that the defendants jointly compensate for economic losses and reasonable rights-protection expenses totaling RMB 50.00 million, apologize publicly in national media, and bear all litigation costs. In September 2025, the Shanghai Intellectual Property Court accepted the above case.