Securities code: Jiangsu Aidea Pharmaceutical Co.Ltd(688488) securities abbreviation: Jiangsu Aidea Pharmaceutical Co.Ltd(688488) Announcement No.: 2022033 Jiangsu Aidea Pharmaceutical Co.Ltd(688488)
Application for withdrawal of registration of metformin hydrochloride sustained release tablets
Announcement of project termination
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Jiangsu Aidea Pharmaceutical Co.Ltd(688488) (hereinafter referred to as “the company”) decides to terminate the project of metformin hydrochloride sustained release tablets (specification: 500mg) (hereinafter referred to as “the project”) after careful consideration in accordance with the relevant policies of generic drug approval and in combination with the current situation of the project under research. The company has submitted the application for withdrawal of drug registration to the State Drug Administration (hereinafter referred to as the “State Drug Administration”), voluntarily applied for withdrawal of the registration application of metformin hydrochloride sustained-release tablets (specification: 500mg) (hereinafter referred to as the “withdrawal application”), and recently received the notice of termination of drug registration application from the State Drug Administration, agreeing to terminate the registration procedure.
The relevant information is hereby announced as follows:
1、 Basic information of drugs
Common name: metformin hydrochloride sustained release tablets
Specification: 0.5g
Registration classification: chemical drugs 4
Drug registration application acceptance No.: cyhs1900359
Notice on termination of drug registration application No.: 2022l00044
Conclusion of the notice of termination of drug registration application: according to Article 89 of the measures for the administration of drug registration and the application for withdrawal of drug registration submitted by the applicant, it is agreed to withdraw the registration application of this product (metformin hydrochloride sustained release tablets) and terminate the registration procedure.
2、 Drug research and registration application
Metformin Hydrochloride Sustained Release Tablets systems is developing generic pharmaceutical products, mainly for the treatment of diabetes. In March 2017, the company signed the technology transfer (technical secret) contract (hereinafter referred to as the “technology transfer contract”) with Guangzhou bositao controlled release pharmaceutical Co., Ltd. (hereinafter referred to as the “technology transferor”) for the project of metformin hydrochloride sustained release tablets (specification: 500mg). According to the technology transfer contract, the company has paid 4.5 million yuan to the technology transferor to obtain the preparation technology of the industrialized production of the project consistent with the quality and curative effect of the original drug preparation.
The company carried out the bioequivalence test of the project in November 2018, submitted the registration application of the project to the State Food and Drug Administration on April 30, 2019, and was accepted on May 17 of the same year.
As of December 31, 2021, the company has invested 9.4567 million yuan in this project with its own funds; According to the relevant accounting standards for business enterprises and the company’s accounting policies, 8.4077 million yuan has been capitalized and included in the development expenditure account, and 1.049 million yuan has been expensed and included in the profit and loss of the corresponding accounting period (the above data has not been audited).
3、 Reasons for project termination and relevant arrangements
The project has not been approved for listing since its implementation, and there are still major uncertainties in the approval according to the current situation of the project, which does not meet the expectations of the company and the technology transferor for the project; Therefore, the company and the technology transferor decided to terminate the transfer and R & D of the project through negotiation.
After friendly negotiation, the company and the technology transferor reached an agreement and signed the conditional termination agreement for the technology transfer contract of metformin hydrochloride sustained release tablets (specification: 500mg) (hereinafter referred to as the “termination agreement”) for the project in December 2021. According to the termination agreement, according to the technology transfer contract, the technology transferor will return the technology transfer fee of 4.5 million yuan paid by the company in the early stage and compensate the company’s early R & D investment of 404965 million yuan in the form of settlement recognized by both parties, with a total amount of 854965 million yuan; The company agrees to apply to the State Food and Drug Administration for withdrawing the registration application of the project. The termination agreement shall take effect from the date when both parties sign and seal and receive the reply from the State Food and Drug Administration for approving the company to withdraw the registration application of the project. The settlement form agreed by both parties in the termination agreement is specifically RMB 854965 million from the technology transferor, which is opposite to the research and development expenses of other compound preparation projects payable by the company to the technology transferor.
In February 2022, the company submitted the withdrawal application to the State Food and drug administration, and received the notice of approval from the State Food and Drug Administration on March 28.
4、 Relevant accounting treatment
In view of the fact that the company has signed the termination agreement with the technology transferor on the project, and according to the technology transfer contract, the company has accounted for the early-stage investment of 8.4077 million yuan included in the development expenditure in 2021, of which 4.5 million yuan of technology transfer fee returned by the technology transferor is converted into prepayment and reported as other non current assets, and the remaining 3.9077 million yuan is converted into current R & D expenses; The compensation receivable from the technology transferor of 404965 million yuan is included in non operating income and reported as other non current assets; The net impact of this event on the profit and loss of 2021 is to increase the pre tax profit by 1419500 yuan (the above data are Unaudited).
The opinions of Rongcheng Certified Public Accountants (special general partnership) on the accounting treatment of the above matters are as follows: the company’s accounting treatment related to the above termination agreement complies with the relevant provisions of the accounting standards for business enterprises.
5、 Impact of project termination and risk tips
The company has signed a termination agreement with the technology transferor on the project and agreed on the corresponding compensation arrangements. In view of the early negotiation stage of the compound preparation project to be followed up by both parties, it is expected to be implemented in the next 1-2 years, and the R & D project involves many links and long cycle, so there is still some uncertainty in the development of new cooperation projects.
According to the corresponding arrangements after the termination of the project, the company withdraws the application for registration of metformin hydrochloride sustained-release tablets and terminates the generic drug project, which is not expected to have a significant impact on the company’s current and future production, operation and performance.
In addition, the company’s R & D strategy focuses on the R & D of new drugs in the field of anti HIV and preparations in the field of human protein. Therefore, the termination of this project will not affect the company’s established development strategy.
The company attaches importance to drug R & D and strictly controls the R & D cost. However, drug R & D has high risk, long cycle and many uncertainties. Please make careful decisions and pay attention to investment risks.
It is hereby announced.
Jiangsu Aidea Pharmaceutical Co.Ltd(688488) board of directors March 30, 2022
