On the evening of September 6th, ZSM, a well-known eye drop brand recently flagged by the National Medical Products Administration for multiple batches failing quality inspections, convened an urgent online press conference to provide detailed explanations and address questions from the media. ZSM (Jiangxi) Pharmaceutical Co., Ltd. and Chengdu Qingshan Likang Pharmaceutical Co., Ltd., a subsidiary of Kelun Pharmaceutical, had a combined 23 batches of tobramycin dexamethasone eye drops deemed non-compliant, with issues spanning appearance, particle size, and sterility. This medication is widely used in ophthalmic practice to treat severe inflammation of external eye areas such as the eyelids and ocular surface, as well as post-surgical bacterial infections. The specific list indicates that ZSM's non-compliance primarily involved appearance and particle size, while Qingshan Likang's deficiencies were mainly related to sterility and particle size. ZSM operates as a subsidiary of Conba Pharmaceutical (600572.SH), while Qingshan Likang falls under Kelun Pharmaceutical (002422.SZ).

During the press conference, a ZSM representative emphasized that tobramycin dexamethasone eye drops are commonly used post-surgery for conjunctivitis bacterial infections, and that sterility failures represent a serious issue for both companies and consumers. However, the representative clarified that none of the 10 non-compliant ZSM batches involved sterility problems, with the primary deficiencies confined to appearance and particle size. The National Medical Products Administration has mandated that relevant companies suspend sales and usage, initiate product recalls, and implement risk control measures while investigations and rectifications proceed. Regulatory authorities are also launching probes into suspected violations and will publicly disclose enforcement outcomes in accordance with regulations.

In response to the findings, ZSM stated it has acted swiftly, halting production, sealing all batch inventories, stopping sales and usage, isolating affected products on-site, initiating recall procedures with partners and distributors, and conducting internal reviews, risk assessments, and corrective action planning. According to information obtained, ZSM first received inspection result notifications from the National Medical Products Administration starting April 10th, subsequently commenced recalls of affected products, and completed the process by May 30th with a 100% recall acceptance rate. No ZSM ophthalmic products currently remain in circulation, and production resumption will not occur until root cause analysis and corrective measures are finalized. During its self-investigation, ZSM discovered through internal analysis and examination of returned goods that the appearance and particle size deficiencies were likely linked to product orientation and temperature conditions during logistics.

Notably, the non-compliant products were transported via S.F. Holding Co.,Ltd. courier services to Beijing for testing, and failure to maintain upright storage at temperatures between 10 and 30 degrees Celsius during transit may have been the primary contributor to the appearance and particle size failures. In other words, ZSM attributes the inspection failures not to manufacturing processes but to abnormal handling during transportation. ZSM further emphasized that national and Jiangxi provincial drug regulators conduct routine annual inspections, and apart from the affected products, no other eye drops or medical device products have failed quality checks. ZSM Pharmaceutical, a longstanding Jiangxi-based ophthalmic enterprise, offers over 80 products including eye drops, steam eye masks, and skincare items, holding 52 drug approvals for eye drops alone.

When asked about the sales contribution of tobramycin dexamethasone eye drops and potential impacts on future sales, ZSM executives noted the product represents a relatively small share of overall revenue and will not affect the company's core business foundation. Conba Pharmaceutical (600572.SH), a listed traditional Chinese medicine company and Zhejiang provincial leader, currently holds a 29.318% direct stake as the largest and controlling shareholder. Over recent years, Conba has repeatedly reduced and divested its ZSM holdings to streamline operations and focus on its core Chinese medicine and health business, announcing plans as early as 2023 to spin off ZSM for an independent listing with a valuation of 3.7 billion yuan at that time.

Addressing inquiries about shareholder feedback and IPO status, ZSM representatives confirmed that while Conba remains the largest shareholder, ZSM operates as an independent entity and has fulfilled comprehensive disclosure obligations to all shareholders including Conba, with decisions guided primarily by ZSM's own judgment. Notably, ZSM's chairman Hu Bei is the son of Hu Jiqiang, chairman of the Conba Group, and concurrently serves as vice chairman of the Conba Group. In June, Conba disclosed on its investor interaction platform that ZSM had completed its joint-stock reform and would initiate Hong Kong IPO preparations at an opportune time based on regulatory conditions and capital market developments. ZSM officials confirmed the IPO plan is progressing routinely, and regarding potential impacts from the quality inspection findings, they stated the affected product's minimal sales share essentially rules out disruption to normal operations. When questioned about recall costs and potential effects on 2026 full-year profits, ZSM declined to provide specifics.

According to Conba's 2026 semi-annual report, ZSM Pharmaceutical is classified as a significant associate, with related transactions of 6 million yuan with Conba. ZSM Pharmaceutical revenue peaked at 1.1 billion yuan in 2021 but declined to 758 million yuan by 2025. In the first half of this year, ZSM generated approximately 365 million yuan in revenue, nearly flat year-over-year, while net profit reached around 59 million yuan, down 4.8%. As of June 2026, ZSM's total assets stood at approximately 993 million yuan with net assets of roughly 781 million yuan, and Conba's share of net assets amounted to about 229 million yuan. During the first half, Conba received approximately 13 million yuan in dividends from ZSM Pharmaceutical.