In recent years, Shanghai Pharmaceuticals Holding Co., Ltd. (SH PHARMA) has experienced a noticeable trend of increasing revenue without a corresponding growth in profits, prompting the company to optimize its structure.
On the evening of February 4th, Shanghai Pharmaceuticals Holding Co.,Ltd. announced its intention to transfer its entire 30% equity stake in Sino-American Shanghai Squibb Pharmaceuticals Co., Ltd. via a public listing process. The minimum listing price is set at no less than 1.023 billion yuan, with the final transaction price to be determined by the outcome of the public bidding.
The investment rationale for multinational pharmaceutical companies is undergoing adjustment. In September 2025, Bristol-Myers Squibb (BMS) announced plans to sell its 60% stake in Sino-American Shanghai Squibb to an affiliate of Hillhouse Capital Group. By December 2025, the transaction for the 60% equity had entered the anti-monopoly approval process, indicating that the change in control of the company is moving into a substantive implementation phase.
Founded in 1982, Sino-American Shanghai Squibb was the first Sino-American pharmaceutical joint venture established after China's reform and opening-up. It was jointly invested in by American Bristol-Myers Squibb Company, China National Medicines & Health Products Import & Export Corporation (whose equity was later assumed by China National Pharmaceutical Group Corp. Asset Management Co., Ltd.), and Shanghai Pharmaceutical (Group) Co., Ltd. (later integrated into Shanghai Pharmaceuticals Holding Co.,Ltd.), with a registered capital of USD 18.44 million. The company is primarily engaged in the production and sales of systemic antibacterial drugs, systemic antiviral drugs (specifically anti-hepatitis B virus drugs), cough and cold medicines, cardiovascular drugs, and various vitamin products, holding a significant historical position in the Chinese pharmaceutical market.
Regarding the shareholding structure, prior to this transaction, Bristol-Myers Squibb (China) Investment Ltd. held a 60% stake, making it the largest shareholder; Shanghai Pharmaceuticals Holding Co.,Ltd. held 30%, and China National Pharmaceutical Group Corp. Asset Management Co., Ltd. held the remaining 10%. The consecutive decisions by the two largest shareholders to divest their entire holdings suggest a comprehensive adjustment may be imminent for the equity structure of this joint venture with over forty years of history.
From the perspective of the multinational Bristol-Myers Squibb, this move represents an active strategy to divest non-core, mature assets and concentrate resources on high-value innovative pipelines. The company has explicitly stated that this transaction will not affect its innovative drug operations in China. It has been observed that since last year, the strategies of several foreign pharmaceutical companies in China have undergone adjustments. For instance, Xi'an-Janssen was fully acquired by Johnson & Johnson in 2023 and renamed Johnson & Johnson Innovative Medicine; Sino-American Tianjin Smith Kline & French was fully acquired by Haleon in July 2025.
Shanghai Pharmaceuticals Holding Co.,Ltd. is focusing its efforts on innovation. In its announcement, Shanghai Pharmaceuticals Holding Co.,Ltd. emphasized that following Bristol-Myers Squibb (China) Investment Ltd.'s intention to sell its 60% stake, a potential acquirer submitted a confirmatory offer in June 2025 after multiple rounds of bidding and negotiations, proposing to acquire 100% of Sino-American Shanghai Squibb for USD 480 million equivalent in RMB. The price corresponding to Shanghai Pharma's 30% stake within this offer is USD 144 million.
Shanghai Pharmaceuticals Holding Co.,Ltd. has faced a clear challenge of revenue growth without profit expansion in recent years and is actively optimizing its structure. In October 2025, Shanghai Industrial Investment (Holdings) Co., Ltd. adjusted its shareholding, increasing its stake in Shanghai Pharma from 23.303% to 38.487%. This consolidation of the largest shareholder's stake has enhanced the stability of the ownership structure and improved overall operational efficiency. Yunnan Baiyao Group Co., Ltd. is the second-largest shareholder of Shanghai Pharma, holding a 17.95% stake.
Following the equity reorganization, Shanghai Pharma's strategic direction has gradually become clearer, with the company beginning to intensify its efforts in the innovative drug sector. As of mid-2025, its new drug pipeline totaled 56 assets, including 44 innovative drug candidates. The New Drug Application (NDA) for its self-developed I001 tablet (SPH3127) for the hypertension indication has been accepted by the National Medical Products Administration (NMPA). Another key drug in its pipeline, the CD20 antibody drug B007 (subcutaneous injection), has completed patient enrollment for its Phase II clinical trials in myasthenia gravis and pemphigus, laying the groundwork for subsequent Phase III studies.
Furthermore, Shanghai Pharma is also engaging in "rational loss-cutting." In early December 2025, its wholly-owned subsidiary, Shanghai Xinyi Pharmaceutical Co., Ltd., formally terminated its cooperation agreement with Guizhou Shengnuo and its affiliates regarding the novel acid suppressant project X842. On December 5th, Shanghai Xinyi received the returned upfront payment and development/registration milestone fee totaling 110 million RMB from the counterparty. The X842 project targeted reflux esophagitis. At the time of the partnership signing in 2021, X842 had already entered Phase III clinical trials in China and subsequently received formal marketing approval in December 2024.
However, the market environment facing the X842 project has changed. For instance, the acid suppressant market is now highly competitive, with several established proton pump inhibitor (PPI) drugs dominating the market, while the development progress and market acceptance of novel acid suppressants may not have met initial expectations. For Shanghai Pharma, continuing to invest hundreds of millions of RMB required for subsequent commercialization carried significant uncertainty regarding achieving expected returns.
Financial reports indicate that for the first three quarters of 2025, Shanghai Pharma's operating revenue reached 215.072 billion RMB, a year-on-year increase of 2.60%; net profit attributable to shareholders of the parent company was 5.147 billion RMB, up 26.96% year-on-year; however, net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 2.699 billion RMB, a decrease of 26.79% year-on-year. Net cash flow from operating activities was 2.350 billion RMB, down 15.56% year-on-year. Shanghai Pharma is currently grappling with the dilemma of rising revenue without corresponding profit growth, with its revenue growth rate for the first three quarters of 2025 falling to the lowest level in recent years.