(Yicai Global) April 9 -- Huahai Pharmaceutical’s stock price continued sliding after the Chinese firm warned investors of declining gains and said that the impacts of lawsuits against it due to a cancer-causing drug ingredient are unforeseeable.

Huahai's share price [SHA: 600521] fell as much as 1.5 percent to CNY19.92 (USD3) this morning after slumping by the daily limit on April 7 and yesterday. The shares have lost more than a third of their value this year.

After deducting nonrecurring gains and losses, net profit will stand between CNY148 million and CNY168 million (as low as USD22.6 million) in the first quarter, a drop of at least 15 percent or as big as 25 percent from the same period of last year, the Zhejiang province-based active pharmaceutical ingredient maker said in a statement yesterday.

Before deducing one-offs, Huahai's net profit had gained as much as 20 percent to as high as CNY265 million from a year ago.

In May 2020, Switzerland's Sandoz Pharmaceuticals filed a USD115 million compensation claim after the Chinese firm's Valsartan, which is used to produce blood pressure-lowering drugs, was found to contain excessive carcinogenic impurities.

In 2018, US consumers filed class action lawsuits against Huahai regarding the same ingredient.

The Chinese company regained a qualification to export Valsartan to the European Union in December 2019. The EU had suspended the permit after detecting one impurity in the API in July 2018.

Editor: Emmi Laine, Xiao Yi