Jolly Pharma to IPO on Shenzhen GEM
Shanghai. December 13. INTERFAX-CHINA - Zhejiang Jolly Pharmaceutical Co. Ltd. (Jolly Pharma) has received approval from the China Securities and Regulatory Commission (CSRC) to launch an initial public offering (IPO) on the Shenzhen Stock Exchange Growth Enterprise Market (GEM), the CSRC announced Dec. 10.
Jolly Pharma plans to issue 20 million shares, accounting for 25 percent of its total equity after the issuance, according to a prospectus released by the company Nov. 25.
With proceeds from the IPO, Jolly Pharma plans to expand production capacity for Wu Ling fungus active pharmaceutical ingredient (API) and Wu Ling capsules, with investments of RMB 92.38 million ($13.88 million) and RMB 29.91 million ($4.50 million), respectively.
The company also intends to deploy RMB 30 million ($4.51 million) to set up research and development (RD) center for medicinal fungi.
Jolly Pharma is a TCM manufacturer primarily engaged in the development, manufacture and distribution of Wu Ling Shen-derived drugs.
Wu Ling Shen, or Xylaria nigripes, is a fungus used in traditional Chinese medicine (TCM) treat insomnia and heart palpitations.
Wu Ling capsule is the first TCM to be used for the clinical treatment of neurasthenia, anxiety, depression and insomnia. The company's holds a patent on the drug valid until 2013, and is then eligible to apply for a seven year extension.
Based in Zhejiang Province's Huzhou City, Jolly Pharma reported sales revenue of RMB 215.35 million ($32.37 million) and net profit of RMB 31.58 million ($4.75 million) in 2009. Wu Ling capsule is the company's exclusive flagship product and accounted for 89.88 percent of its operational revenue last year, clocking sales of RMB 192.41 million ($28.92 million).