(Yicai) Jan. 21 -- Chinese innovative pharmaceutical company Kawin Technology plummeted today after withdrawing its registration application for a potentially groundbreaking hepatitis B drug.

Kawin [SHA: 688687] closed down 13 percent at CNY22.76 (USD3.27), the steepest drop in the mainland stock market today.

Following the latest review recommendations from the National Medical Products Administration, Kawin said it decided to proactively withdraw its application after careful consideration. It will now work to add supplementary clinical case studies as required by the regulators before resubmitting the application, the Beijing-based firm announced yesterday.

Peginterferon Alfacon-2 Injection is a long-acting interferon drug developed independently by Kawin. It was previously approved in 2018 for the treatment of chronic hepatitis C in adults, but other drugs for hepatitis C have become available in China in recent years, increasing the competition. This prompted Kawin to shift its focus to drug development in the hepatitis B field.

In September 2024, Kawin submitted a new application to the NMPA for the use of Peginterferon Alfacon-2 Injection in combination with Tenofovir Alafenamide Fumarate tablets to treat chronic hepatitis B in adults. According to the company, this was the world's first clinical study attempting to use long-acting interferon in combination with nucleoside analogs to cure chronic hepatitis B.

Hepatitis B is a significant global public health issue. Acute hepatitis B, if not thoroughly cured, can develop into chronic hepatitis B. If the latter is not promptly controlled, it may progress to cirrhosis or even liver cancer. Currently, there are no drugs available worldwide that can achieve a complete cure for chronic hepatitis B; treatment can only control viral replication and slow disease progression.

Kawin said it has fully provided for asset impairment related to the project's development expenses, which will result in a reduction of CNY111.3 million (USD16 million) in the company's profits for 2025, according to yesterday's announcement.

This provision does not mean it has abandoned the project, an employee from Kawin told Yicai, saying it was a precautionary measure, in line with the practices of other pharmaceutical companies.

Founded in 2008, Kawin is primarily engaged in the research and development of innovative drugs for viral and immune diseases. The company's net profit for the first three quarters of last year declined by 5 percent year-on-year to CNY103 million (USD14.8 million), while revenue fell by 8 percent to CNY927 million, according to its latest financial report.

Editors: Dou Shicong, Tom Litting