Stepwise Pharmaceutical Subsidiary Signs Technology Transfer Agreement to Layout Traditional Chinese Medicine New Drug R&D for Post-Stroke Depression

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March 13, Shandong Buchang Pharmaceutical Co., Ltd. (Stock code: 603858, Stock abbreviation: Buchang Pharma) announced that its wholly owned subsidiary Shandong Danhong Pharmaceutical Co., Ltd. (hereinafter referred to as “Shandong Danhong”) plans to sign a “Technology Transfer and Scientific Research Cooperation Contract” with Hangzhou Hongyu Medical Technology Co., Ltd. (hereinafter referred to as “Hongyu Medical”) to collaborate on the preclinical research technology transfer and new drug development of “Yiqi Huoxue Jieyu Granules.” This transaction does not constitute a related-party transaction or a major asset restructuring. The relevant proposal has been approved at the 44th meeting of the fifth board of directors.

The announcement states that the transaction amount involved in the technology transfer is exempt from disclosure due to commercial secrets, in accordance with relevant regulations.

Overview of the Parties

Shandong Danhong, as a wholly owned subsidiary of Buchang Pharma, mainly engages in the production of large-volume injections, small-volume injections, and the planting and sales of Chinese medicinal materials. Financial data shows that the company achieved operating revenue of 1.331 billion yuan and net profit of 226 million yuan in 2024; from January to September 2025, revenue further increased to 1.402 billion yuan, with a net profit of 334 million yuan, maintaining steady growth.

Partner Hongyu Medical has a registered capital of 1 million yuan, with business scope including pharmaceutical technology development, medical research, and testing. In 2024, it achieved operating revenue of 6 million yuan and net profit of 1.7857 million yuan; from January to September 2025, revenue was 8 million yuan, with a net loss of 128,800 yuan.

Key Contract Details

According to the contract, Hongyu Medical will transfer its preclinical research technology (clinical approval notice number: 2025LP01696) and related intellectual property rights for “Yiqi Huoxue Jieyu Granules” to Shandong Danhong. This drug is a Class 1.1 new Chinese medicine drug, mainly used to tonify qi and activate blood, regulate qi and relieve depression, and resolve phlegm and open orifices. It is suitable for post-stroke depression and ischemic stroke complicated with mild to moderate depression, characterized by qi deficiency and blood stasis, liver qi stagnation.

The contract stipulates that Hongyu Medical will assist Shandong Danhong in completing subsequent research and registration applications until obtaining the “Drug Registration Certificate.” Additionally, Hongyu Medical is required, within 3-4 years after signing the contract, to publish no fewer than 10 high-level papers, apply for 1-2 invention patents, and conduct in-depth pharmacodynamic material research to support future development of component-based Chinese medicines.

Regarding intellectual property, the technical subject and any new成果 generated during contract performance will be exclusively owned by Shandong Danhong, with Hongyu Medical holding honorary rights. The contract explicitly prohibits Hongyu Medical from transferring or licensing the relevant technology to third parties and includes strict confidentiality clauses, with a confidentiality period of 20 years after the contract takes effect.

Risks and Impact

Buchang Pharma states that this cooperation will help enrich the company’s R&D pipeline and enhance market competitiveness, without adversely affecting the company’s financial condition or operating results. However, it also notes that pharmaceutical R&D involves long cycles and many uncertainties, and investors should be aware of the risks.

The company will fulfill its information disclosure obligations promptly based on project progress.

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