On December 11, 2023, Zhejiang Yatai Pharmaceutical (002370.SZ) announced that at the 33rd meeting of the 7th Board of Directors and the 18th meeting of the 7th Supervisory Board held on December 11, 2024, the proposal to terminate the fundraising investment project for Convertible Bonds was approved.
1. Phase I and II of the Modern Pharmaceutical Formulations Project of Zhejiang Yatai Pharmaceutical.
The "Phase I and II of the Modern Pharmaceutical Formulations Project of Zhejiang Yatai Pharmaceutical" consists of two independent lyophilized powder injection workshops, a penicillin workshop, a solid dosage form workshop, a cephalosporin workshop (capsules and powder injections), a patch workshop, a raw material and finished product warehouse, a quality inspection workshop, a Sewerage center, a dormitory building, a hazardous materials warehouse, and auxiliary facilities. The construction of the "Phase I and II of the Modern Pharmaceutical Formulations Project of Zhejiang Yatai Pharmaceutical" is primarily aimed at improving the production capacity, production efficiency, and product quality of the company's existing generic products, and considers the industrialization needs of the reserved and researched generic and Innovative Drugs products. During the actual execution of the project, many changes occurred in the overall pharmaceutical Industry, especially with the deepening of the consistency evaluation process and the gradual promotion of centralized procurement, which raised higher requirements for the R&D capability, cost control ability, product reserve, and drug quality of pharmaceutical manufacturing companies. Currently, the first lyophilized powder injection workshop that has been built and put into production can meet the production capacity of the company's existing products, while the second lyophilized powder injection workshop and the patch workshop are still under construction. At the same time, the company's dexketoprofen sustained-release patches are still in the research stage, with significant uncertainty regarding product development progress and whether it can be approved for market release. If the project is implemented according to the expected schedule and becomes idle without reaching production capacity, it may face the risk of a significant increase in depreciation and amortization costs leading to a decline in operating performance. The company has decided to terminate this project.
2. R&D Platform Construction Project.
According to the development strategy and the continuous deepening of drug review and approval reform, the company strengthens the establishment of R&D projects, enhances project management and risk control, and reorganizes research varieties, appropriately adjusting the product development schedule of the project, and suspending or terminating the research and development of certain products. Therefore, after careful research and evaluation, the company has decided to terminate this project. The subsequent R&D investment for the remaining products of this project will be solved by the company through its own or self-raised funds.
3. Marketing Network Construction Project.
The "Marketing Network Construction Project" is based on the needs of business development. Currently, the company’s new product iteration is slow, and the gross profit of existing products is declining. The large-scale construction of outlets and the rapid growth of personnel will bring substantial cost pressure. In order to further improve performance, implement lean management, and continuously strengthen control over sales expenses, the company has decided to terminate this project after careful research and evaluation.
