On October 24, peptide API manufacturer Nuotai Biotech (SH688076, share price 55.71 yuan, market value 12.24 billion yuan) once approached the fall limit after the opening, stabilized and rebounded intraday, as of the close of 55.71 yuan / share, down 8.11%.

On the news side, on the evening of October 23, Nuotai Biotech issued an announcement saying that due to suspected illegal information disclosure, Zhao Dezhong, one of the company and one of the actual controllers, recently received the "Notice of Case Filing" from the China Securities Regulatory Commission. Nuotai Biotech disclosed in the announcement that after self-examination, it believes that the case may involve matters related to technology transfer of Nuotai Biotech in 2021.

As for how much impact the case will have on the company, Nuotai Bio said in the announcement that as of the disclosure date of this announcement, the company has not received the final investigation conclusion of the China Securities Regulatory Commission, and the final result of the investigation will be subject to the conclusion issued by the China Securities Regulatory Commission, and the company's current business situation is normal. In this regard, Nuotai Biotech also told reporters that the details of the incident are being investigated internally, which may be "3 years ago".

Zhao Dezhong had previously been punished for the issue of letter disclosure

According to the data, Nuotai Biotech is a biomedical enterprise focusing on peptide drugs and small molecule chemical drugs, combining independent research and development with customized research and development and production.

From the perspective of business income structure, according to the semi-annual report previously disclosed by Nuotai Bio, in the first half of the year, the company's self-selected products achieved operating income of 545 million yuan, a year-on-year increase of 119.76%; Customized products and services achieved operating income of 286 million yuan, a year-on-year increase of 88.16%.

According to the explanation and definition of Nuotai Biotech in the announcement, in terms of technology service transfer, the company adopts the internationally accepted "milestone model" to provide technical services according to different customer needs, mainly including: simple technology development services, joint projects, technology transfer services with subsequent terms, and technical services for the transfer of part or all of the rights of the product listing holder after obtaining approval.

Nuotai Bio's 2021 semi-annual report disclosed that in recent years, the projects involved in its technical services and transfer business mainly include atorvastatin calcium tablets project, amlodipine atorvastatin calcium tablets project, apsite API and preparation technology transfer project, norfloxacin API pharmaceutical research project, icodextrin and peritoneal dialysate pharmaceutical research project, fulvestrant injection pharmaceutical research project, etc.

Nuotai Biotech disclosed in the announcement that after self-examination, it believed that the case may involve matters related to technology transfer of Nuotai Biotech in 2021, but did not disclose more details, and the specific matters are unknown. The reporter of "Daily Economic News" also interviewed Nuotai Biotech on this matter, and the company responded: "This does have regulatory requirements, and we have worked very hard to communicate yesterday and made a certain elaboration on the filing of the case in the content of the announcement." ”

According to public information, Zhao Dezhong, one of the actual controllers of Nuotai Biotechnology, invested in Hangzhou Nuotai Pharmaceutical Technology Co., Ltd. (transferred, now renamed Hangzhou Arno Biomedical Technology Co., Ltd.) in September 2004 and began to set foot in the field of peptide drugs; After the overall change of Nuotai Biotech into a joint-stock company, he served as the vice chairman of the company until May 2022; Since April 2009, he has served as a director of Nuotai Biotech. According to the research report of Soochow Securities, as of the first half of 2024, the actual controllers of Nuotai Biotech are Zhao Deyi and Zhao Dezhong, who are brothers and directly and indirectly control a total of 30.88% of the company's shares.

In 2019, before Nuotai Biotech landed on the Science and Technology Innovation Board, Zhao Deyi and Zhao Dezhong were punished by the National Equities Exchange and Quotations Company for information disclosure and corporate governance violations.

Specifically, in 2016, Nuotai Biotech and Hangzhou Aosaino Biotechnology Co., Ltd. carried out a major asset restructuring, and there were undisclosed related parties in the counterparty, and Zhao Deyi and Zhao Dezhong, the affiliated directors and shareholders, did not abstain from voting when considering the above proposals. The amount of related party transactions in the restructuring was 79 million yuan, which was 1.08 times of the net assets in 2015.

Zhao Deyi, the then chairman and actual controller of Nuotai Biotech, and Zhao Dezhong, the then director and actual controller, as affiliated directors and shareholders, did not abstain from voting, nor did they guarantee the truthfulness, accuracy, completeness and timeliness of the company's information disclosure. Therefore, the national stock transfer system decided: to take self-regulatory measures of issuing a warning letter to Nuotai Bio; Self-discipline and supervision measures were taken against Zhao Deyi and Zhao Dezhong, who issued warning letters.

Net profit in the first three quarters increased nearly 3 times year-on-year, but the growth rate of performance slowed down

In recent years, GLP-1 (glucagon-like peptide-1) weight loss drugs represented by semaglutide have not decreased in popularity, and as an upstream API company, Nuotai Biotech has also benefited a lot from it, and its performance has achieved "leapfrog growth". According to the previously disclosed 2024 semi-annual report, Nuotai Biotech signed a CDMO (pharmaceutical outsourcing service) long-term supply contract with a large European pharmaceutical company with a total amount of 102 million US dollars in May 2023, and the company has begun to deliver in the second quarter of this year, and the company expects to greatly accelerate the pace of delivery from the second half of this year.

On October 22, Nuotai Biotech disclosed that in the third quarter of 2024, during the reporting period, the company achieved revenue of 1.252 billion yuan, a year-on-year increase of 76.51%; the net profit attributable to the parent company was 350 million yuan, a year-on-year increase of 281.9%; The net profit after deducting non-profits was 355 million yuan, an increase of 301.43% year-on-year.

Soochow Securities said in the research report: "Nuotai Bio's current production capacity is more than 1.5 tons, and we expect that the construction of 601 and 602 workshops will be completed from the end of 2024 to the first quarter of 2025, and the production capacity of peptide APIs will reach 11.6 tons by the end of 2025, the first in China; We expect peptide APIs to continue to maintain high growth and become the main driver of the company's performance. ”

In the third quarter of 2024, Nuotai Biotech's revenue was 421 million yuan, a year-on-year increase of 36.31%, and the net profit attributable to the parent company was 123 million yuan, a year-on-year increase of 146.86%. From a quarter-on-quarter perspective, compared with the second quarter, which rose amazingly, the revenue and net profit of Nuotai Biotech in the third quarter fell by 11.55% and 23.47% respectively from the previous quarter.

For the quarter-on-quarter decline in the net profit of Nuotai Biotech in the third quarter, Soochow Securities pointed out three major reasons: first, more CDMO orders were confirmed in the second quarter, resulting in a higher base; Second, the demand for oseltamivir declined slightly in the third quarter due to the seasonal impact; Third, more expenses were provided in the third quarter, and the sales expense rate, management expense rate, R&D expense rate, and financial expense rate increased by 1.29 percentage points, 3.56 percentage points, 4.53 percentage points, and 2.27 percentage points respectively.

Cover image source: Visual China