BESUNYEN (00926) increases investment in ERX to maintain a 3% stake, supporting the innovative research and development of non-GLP-1 weight loss therapies.

BESUNYEN (00926) announced that the company expects to incur a significant fair value loss of approximately RMB 16.3 million on its investment in ERX Pharmaceuticals Inc. (a clinical-stage biopharmaceutical company registered under the laws of Delaware). The fair value loss is mainly due to recent changes in the US capital market environment, with investors showing a clear preference for technology sectors such as artificial intelligence (AI), leading to a decline in financing activities for traditional drug development and clinical research, resulting in a lack of external funding for ERX's new drug development activities. This financing difficulty has put pressure on ERX's short-term valuation, resulting in a significant decrease in ERX's valuation. The Board of Directors believes that the fair value loss will not have any significant adverse impact on the company's existing business, operations, or financial condition. The group's liquidity remains strong, and its overall financial and operational condition is stable. ERX focuses on the discovery and clinical development of innovative drugs for the treatment of obesity and obesity-related metabolic diseases, which generates synergies with the company's core business divisions. As of the investment and the date of this announcement, ERX and its ultimate beneficiaries are independent of the company and its related parties. ERX recently proposed a capital increase of $6 million to strengthen its financial position and provide funding for ongoing operations. To prevent further dilution of its investment value, the Board of Directors decided to participate in this capital increase on December 12, 2025, to maintain its existing stake of approximately 3% in ERX. The Board believes that further investment will be in the overall interest of the company and shareholders for the following reasons: Further investment can avoid dilution and prevent immediate erosion of the book value of the company's investment. Considering that ERX's weight-loss drug is a leading non-GLP-1 therapy, providing a solution for patients who do not respond well to or experience adverse reactions to semaglutide therapy, and demonstrating significant potential in combination therapy regimens, despite short-term market headwinds, the Board remains confident in ERX's long-term development. In addition, as of the date of this announcement, ERX's drug for Prader-Willi syndrome has obtained orphan drug designation and fast track designation from the US Food and Drug Administration. Therefore, the Board believes that this capital increase will provide necessary resources for ERX to advance its key clinical research, a crucial step in restoring and enhancing ERX's medium to long-term value, thus mitigating the negative financial impact of the current fair value loss. Maintaining this stake will retain important strategic partnerships for the company in its core business areas, ensuring continued consistency and utilization of shared technology, supply chain, and market opportunities, which will benefit the company's strategic development and long-term growth. Further investment demonstrates the Board's continued confidence in ERX's long-term strategy and future prospects, as well as its commitment to protecting and enhancing the company's economic interests.