Kangyuan Pharmaceutical's Core Improved Variety Approval Faces Obstacles, Heat-Toxin-Ning Granules Market Launch Delayed

Recently, the National Medical Products Administration (NMPA) issued a notification regarding drug delivery information. Jiangsu Kangyuan Pharmaceutical Co., Ltd. (referred to as “Kangyuan Pharmaceutical”) has a product listed—Heat Toxin Ning Granules, a formulation improved over many years of research. This means the product’s market approval application has not been granted. Kangyuan Pharmaceutical attributes the rejection to approval process issues and has promptly resubmitted the application.

Core Product Approval Faces Obstacles

The unapproved Heat Toxin Ning Granules are a key improved new drug developed by Kangyuan Pharmaceutical over many years. It is classified as a Category 2.1 traditional Chinese medicine new drug, positioned as an oral alternative to the company’s flagship injection product, Heat Toxin Ning. Its indication is for influenza, aiming to break through the development bottleneck of traditional injections.

Public information shows that Heat Toxin Ning Injection has been a core product of Kangyuan Pharmaceutical for over twenty years. At its peak, annual sales approached 1.3 billion yuan, accounting for over 60% of the company’s total revenue. Due to its clinical advantages in influenza treatment, it has long been a leading respiratory system injectable Chinese medicine.

In 2017, adjustments to the national medical insurance catalog impacted the traditional Chinese medicine injection industry, limiting reimbursement for nearly 40 products. Heat Toxin Ning Injection was restricted to severe cases in secondary and higher-level medical institutions. Although the company expanded its promotion from pediatrics to adult departments, sales in 2019 were 52.26 million units, a nearly 10% decline year-over-year. The COVID-19 pandemic further caused sales to plummet. Even after the 2023 adjustment to the national insurance catalog, which expanded coverage to “secondary and higher-level medical institutions” and removed restrictions for severe cases, sales did not return to previous levels.

Kangyuan Pharmaceutical initiated the development of an oral formulation of Heat Toxin Ning to extend the product lifecycle and create new growth points. In 2020, Heat Toxin Ning Granules received clinical approval. At that time, preclinical pharmacodynamic studies showed that the granules had effects comparable to the injection in fever reduction, anti-inflammatory, and antiviral actions. If approved, it would complement the clinical use of the injection.

However, on March 10 of this year, Heat Toxin Ning Granules received a non-approval notice from the NMPA. Kangyuan Pharmaceutical responded to the media that the rejection was due to procedural issues at the Center for Drug Evaluation (CDE) approval process, unrelated to the drug’s efficacy or safety. The company has already resubmitted the application and is awaiting further review.

Declining Performance and Cross-border M&A for Breakthrough

Behind the approval setback is Kangyuan Pharmaceutical’s worsening operational performance. Under pressure from the decline of core Chinese medicine injections, the company’s performance has been deteriorating in recent years, with increasing operational stress.

Financial reports show that in 2024, Kangyuan Pharmaceutical experienced its first double decline since 2021, with total revenue of 3.898 billion yuan, a sharp decrease of 19.86% year-over-year; net profit attributable to shareholders was 392 million yuan, down 15.58%. In 2025, performance continued to decline, with the first three quarters recording total revenue of 2.343 billion yuan, down 24.59%, and net profit of 200 million yuan, down 35.63%.

The main reason for the decline is the performance of core injection products. Heat Toxin Ning Injection and Ginkgo Biloba Sesquiterpene Lactone Amine Injection were significant revenue sources. However, under stricter medical insurance cost controls and centralized procurement policies, market competition intensified, leading to sharp drops in sales. Although Kangyuan Pharmaceutical states that it is actively developing products like Jinzhen Oral Liquid, Xingbei Cough Granules, Shenwu Yishen Tablets, and Sanjie Pain Relief Capsules, these new products have not yet compensated for the losses of core products.

To overcome the bottleneck in traditional Chinese medicine, Kangyuan Pharmaceutical has also diversified into biopharmaceuticals, attempting to shift from reliance on Chinese medicine injections. In 2024, Kangyuan Pharmaceutical completed a 100% acquisition of China-Singapore Medical, making it a wholly owned subsidiary. China-Singapore Medical focuses on developing recombinant human cytokines, fusion proteins, and antibody biologics. Kangyuan believes this acquisition deepens its biopharmaceutical layout and helps build a comprehensive industry structure integrating Chinese medicine, chemical drugs, and biopharmaceuticals.

However, this cross-border acquisition carries many uncertainties and operational risks. In the short term, it may not boost performance and could increase operational burdens. As of September 30, 2024, China-Singapore Medical was in continuous loss, with audited net assets of -423 million yuan, and owed Kangyuan Group a total of 479 million yuan in principal and interest. Its core pipeline still requires about 400 million yuan in clinical R&D investment. Kangyuan must continue to bear significant R&D and debt repayment costs, which will put ongoing pressure on cash flow and profitability. Additionally, the core biopharmaceutical products under development face risks such as delayed R&D progress compared to competitors and potential failure.

How Kangyuan Pharmaceutical will accelerate the approval of Heat Toxin Ning Granules, balance the development of its traditional Chinese medicine core business with new biopharmaceutical ventures, and manage acquisition risks remain ongoing concerns. The Beijing News will continue to follow these developments.

Beijing News Reporter: Zhang Zhaohui

Proofreader: Liu Baoqing