Fosun Pharma Drops on Plan to Take Over Alzheimer's Drugmaker Green Valley for USD198.8 Million

(Yicai) Dec. 16 -- Shares of Fosun Pharmaceutical Group fell after the Chinese drugmaker unveiled plans to invest CNY1.4 billion (USD198.8 million) to gain control of Green Valley Shanghai Pharmaceuticals, known for its sodium oligomannate capsules used to treat Alzheimer's disease.Fosun Pharma [SHA: 600196] closed 4.2 percent lower at CNY26.75 (USD3.80) a share in Shanghai today. Its Hong Kong-listed stock [HKG: 2196] plunged 5.7 percent to HKD21.08 (USD2.71) as of 3.40 p.m.Fosun Pharma's subsidiary Fosun Pharmaceutical Industrial Development plans to buy equity and inject capital into Green Valley to acquire a 51 percent stake, the Shanghai-based parent firm announced late yesterday.Green Valley's flagship sodium oligomannate capsules, marketed as GV-971, are mainly used for the treatment of mild to moderate Alzheimer's disease, improving the cognitive function of patients. The drug was approved by the National Medical Products Administration in November 2019 and was included in the National Reimbursement Drug List in 2021.However, due to Green Valley not completing the mandatory confirmatory clinical trials for GV-971 after it hit the market, Chinese regulators denied the firm's application for the extension of the registration validity period last year, so it had to stop producing the drug in November that year.Fosun Pharma's investment in Green Valley is a significant move to intensify its layout in the field of central nervous system diagnosis and treatments, said Chief Executive and President Liu Yi. The company will support its new unit in advancing the post-marketing confirmatory clinical trials of sodium oligomannate capsules after the deal is closed, Liu added.The deal will help enrich Fosun Pharma's innovative product pipeline matrix in the central nervous system treatment area, improve its market layout, and create an integrated diagnosis and treatment, multi-technology path collaborative solution, according to the company.Impacted by ceasing GV-971 production, Green Valley posted a net loss of CNY67.6 million (USD9.6 million) in the first nine months of this year on operating revenue of CNY102 million (USD14.5 million), Fosun Pharma said. Its assets topped CNY805.8 million and liabilities reached CNY795.5 million as of Sept. 30.Alzheimer's disease is a degenerative disorder of the central nervous system that is very hard to treat. There is no cure, but early diagnosis and treatment can help slow its progression. In the past two decades, there have been very few new Alzheimer's drugs approved worldwide, with most mainly focused on improving clinical symptoms.Editor: Martin Kadiev