IPO Insight | Mufemilast commercialization begins, Hemei Pharmaceutical's 18A listing enters countdown

Title context: IPO Insight | Mufemilast commercialization begins, Hemei Pharmaceutical's 18A listing enters countdown Text: As of the first half of 2026, a cumulative 94 companies had listed through Chapter 18A, with 93 still on the market; in the first half, 11 pre-profit biotech companies raised approximately HK$12.5 billion in IPOs, signaling a recovery in financing activity. However, Hong Kong healthcare IPOs slowed significantly in the third quarter, with only 2 non-18A healthcare companies listing and both breaking issue price on their first day, narrowing the issuance window. Over the same period, the Hang Seng Biotech Index rose 17.4% in the first three quarters and 31.7% in the third quarter alone, outperforming the Hang Seng Index. The contrast between recovering secondary-market valuations and a cooling primary issuance market highlights the scarcity of commercialized 18A companies, with market evaluation criteria shifting toward clinical data quality, differentiated mechanisms, and commercialization execution. Against this backdrop, Ganzhou Hemei Pharmaceutical Co., Ltd. (referred to as "Hemei Pharmaceutical") has successfully passed the listing hearing for the Main Board of the Hong Kong Stock Exchange and plans to list under Chapter 18A of the Listing Rules, with Guotou Securities International as the sole sponsor. This innovative drug company, which has autoimmune diseases and oncology for over two decades and has achieved commercialization of its first core product, is leveraging Hong Kong's international capital market platform to enter a new development stage driven by both R&D and commercialization. So, at a time when the 18A sector is increasingly polarized and commercialization capability has become the core valuation anchor, what product pipeline and financial foundation enable Hemei Pharmaceutical to stand out among numerous biotech companies? Can the differentiated advantages and multi-indication expansion potential of its core product Mufemilast support the market's long-term expectations for this newly listed 18A company? Industry Prospects Promising It is understood that autoimmune diseases and oncology are the two therapeutic areas with the greatest growth potential in the global pharmaceutical market. According to a Frost & Sullivan report, the global autoimmune disease drug market has grown from US$101.69 billion in 2019 to US$154.9 billion in 2025 and is expected to further climb to US$240.7 billion by 2032. China's market growth is even more significant, expanding from US$2.4 billion in 2019 to US$5.3 billion in 2025, with a compound annual growth rate of 14.5%, and is expected to reach US$26.5 billion by 2032. In oncology, the global oncology drug market reached US$278.2 billion in 2025, with targeted therapies accounting for approximately 60%. China's oncology drug market is also dominated by targeted drugs, which accounted for 50.3% of the total market in 2025. Among these, for psoriasis, a key indication in the autoimmune field, China's moderate-to-severe plaque psoriasis drug market reached RMB 8.6 billion in 2025 and is expected to grow to RMB 16.5 billion by 2028 and RMB 27.2 billion by 2032, with a compound annual growth rate of 24.5% from 2025 to 2028. Meanwhile, indications such as Behet's disease and ulcerative colitis still have substantial unmet clinical needs in China. To date, no targeted drug has been approved in China for the treatment of Behet's disease, and traditional therapies for ulcerative colitis face pain points such as low mucosal healing rates and poor long-term safety. This market landscape provides broad market space for innovative small-molecule drugs with differentiated mechanisms of action and favorable safety profiles, and creates a favorable growth environment for companies like Hemei Pharmaceutical that focus on independent discovery and development. Core Product Approved for Commercialization According to the prospectus, Hemei Pharmaceutical was founded in 2002 and is a biopharmaceutical company dedicated to the discovery and development of independently discovered and independently developed small-molecule drugs for autoimmune diseases and oncology. To date, the company has built a product pipeline comprising one approved drug, Mufemilast, and five small-molecule drug candidates, covering multiple indications with unmet medical needs, including psoriasis, Behet's disease, ulcerative colitis, atopic dermatitis, chronic obstructive pulmonary disease, Crohn's disease, psoriatic arthritis, and advanced breast cancer. Three of the drug candidates have entered Phase II or Phase III clinical trials, covering a total of nine indications. Among them, the core product Mufemilast is the company's strategic pillar. The drug is a novel small-molecule phosphodiesterase 4B (PDE4B) protein expression blocker and PDE4 inhibitor with broad therapeutic potential for autoimmune diseases. It does not cause vasculitis and does not easily cross the blood-brain barrier, thereby reducing central nervous system side effects such as depression and suicidal tendencies. In September 2025, Mufemilast received NDA approval from the National Medical Products Administration for the treatment of moderate-to-severe plaque psoriasis, becoming the company's first product to achieve commercialization. Mufemilast's clinical data demonstrate significant differentiated advantages. In its pivotal Phase III clinical trial, the PASI-75 response rate at Week 16 was 53.6%, significantly better than the 16.0% in the placebo group; the PASI-90 response rate was 32.5%, and the sPGA improvement rate was 31.3%. More importantly, the drug demonstrated a favorable safety profile, with no deaths or drug-related depression cases reported in clinical trials. Most adverse reactions were Grade 1 or Grade 2 and occurred mainly in the first week of dosing. Of particular note, among 105 psoriasis patients who tested positive for latent tuberculosis infection, no active tuberculosis cases were observed after 52 weeks of treatment, making Mufemilast the only drug that can be directly used in psoriasis patients with latent tuberculosis infection with safety supported by Phase III clinical data, representing outstanding clinical value in China, which has a high tuberculosis burden. In addition to psoriasis, the multi-indication expansion of Mufemilast is progressing steadily. Pivotal Phase III clinical trials for Behet's disease and ulcerative colitis are ongoing; a Phase II clinical trial for chronic obstructive pulmonary disease has been initiated; the Phase II clinical trial report for atopic dermatitis has been finalized; and an adaptive Phase II/III clinical trial for psoriatic arthritis and a Phase II clinical trial for Crohn's disease are in preparation. The company has obtained orphan drug designation from the FDA for Mufemilast in the treatment of Behet's disease and plans to engage in formal communication with the FDA before the end of December 2026 to explore the feasibility of directly conducting Phase III clinical trials in the United States. Key product Hemay022 is an EGFR/HER2 dual-target small-molecule irreversible inhibitor intended as a second-line and later therapy for advanced ER+/HER2+ breast cancer. Its Phase Ib clinical trial showed an objective response rate of 29.1% among 55 evaluable patients, a clinical benefit rate of 56.4%, and a median progression-free survival of 9.0 months. The drug is currently undergoing a Phase III combination therapy clinical trial in China, and the company plans to submit an NDA in December 2028. Key product Hemay181 is a -GU-targeted SDC drug and the first SDC drug in China to be activated by -GU in the tumor microenvironment and to be in clinical stages. It is currently undergoing a Phase I clinical trial in China and has received FDA approval to conduct a Phase I clinical trial in the United States. In terms of commercialization, the company adopts a model combining an internal commercial team, third-party distributors, and contract sales organizations. With the Ganzhou production facility and Xiajiang production facility passing GMP compliance inspections in March 2026 and April 2026, respectively, the company began commercial sales of Mufemilast in July 2026. To date, the company has supplied a total of 2,000 boxes of Mufemilast to nine distributors, with distribution covering Shaanxi, Jiangxi, Beijing, Shandong, Sichuan, Henan, Ningxia, and Guangdong. The company's internal sales team consists of eight members, and it has entered into agreements with 11 distributors and eight contract sales organizations, initially building a commercialization network covering multiple provinces. The First Year of Commercialization Begins However, it should be noted that as an 18A biotech company in the early stages of commercialization, Hemei Pharmaceutical, which has no stable source of revenue, is already carrying a heavy burden. It is understood that in 2024, 2025, and the four months ended April 30, 2026, the company had not yet generated revenue from product sales, mainly because Mufemilast only received NDA approval in September 2025 and began commercial sales in July 2026. The company's loss before tax was RMB 123 million, RMB 130 million, and RMB 32.4 million in 2024, 2025, and the first four months of 2026, respectively. The losses mainly came from R&D expenses and general and administrative expenses, which is consistent with the common characteristics of 18A biotech companies in the early stages of product commercialization. Notably, the loss in the first four months of 2026 narrowed significantly compared with the same period in 2025, mainly due to phased optimization of R&D expenses and effective control of administrative expenses. To continuously advance R&D, Hemei Pharmaceutical has also spent considerable financial and material resources in recent years. In 2024, 2025, and the first four months of 2026, the company's R&D expenses were RMB 96.987 million, RMB 90.275 million, and RMB 20.1 million, respectively, accounting for 74.0%, 65.8%, and 61.8% of operating expenses in the same periods. The company acknowledged that it must continue to invest substantial human and capital resources to develop or acquire technologies that enhance the scope and quality of clinical trials, and that if it fails to successfully develop, enhance, or adapt new technologies and obtain adequate intellectual property protection and regulatory approvals for such technologies, it may face the risk of technological obsolescence, which could harm its business and prospects. This may be precisely the intent behind the company's active pursuit of a Hong Kong IPO. The company expects that as Mufemilast commercialization advances and pipeline products are approved successively, it will gradually generate operating cash inflows. Overall, as an 18A biotech company with independent discovery capabilities, a commercialized core product, and multi-indication expansion potential, Hemei Pharmaceutical is establishing a unique competitive advantage in the autoimmune disease treatment field through Mufemilast's differentiated dual mechanism of action, solid clinical data, favorable safety profile, and clear multi-indication development strategy. As its Hong Kong listing process advances, the company is expected to leverage the capital market to accelerate product commercialization ramp-up and global layout, bringing more innovative treatment options to patients worldwide and creating long-term value for investors.