Gout medication company New Element Pharmaceuticals files for listing on the Hong Kong Stock Exchange: the company's valuation reaches 3.6 billion yuan, but after years of research and development "long-distance running," its core products are still not on the market.

Does a Secondary IPO Solve the Funding Dilemma Caused by New Element Pharmaceuticals’ Ongoing Losses?

Every Day Economic News Reporter: Kong Zesi Every Day Editor: Zhang Yiming

Recently, the innovative pharmaceutical company founded by overseas returnee doctor Shi Dongfang—Hangzhou New Element Pharmaceuticals Co., Ltd. (hereinafter referred to as New Element Pharmaceuticals)—submitted a secondary listing application to the Hong Kong Stock Exchange. Focused on the gout medication field, the company has obtained multiple rounds of financing before its IPO (initial public offering), and its post-investment valuation reaches 3.6 billion yuan.

However, beneath the spotlight, New Element Pharmaceuticals has still not launched any products for sale, and continues to record substantial losses. Its core product development progress lags behind some domestic peers, and it also faces funding and commercialization challenges. Judging from this, the current IPO will be a crucial battle for New Element Pharmaceuticals to sustain R&D and replenish cash flow.

Overseas returnee doctor plunges into the new gout medication market

New Element Pharmaceuticals was founded by a returning Ph.D. doctor. According to media reports, its founder, Shi Dongfang, obtained a Ph.D. in medicinal chemistry and organic chemistry from the University of Nottingham in the UK in 1995, where he studied under Malcolm F.G. Stevens, a professor and a fellow of the Royal Society of the UK and the inventor of anti-brain tumor drugs.

In 1996, he went to the United States to begin his postdoctoral program in medicinal chemistry, and later worked as a senior researcher at Gen labs biopharmaceutical company in California and at Metabolex Pharmaceuticals, respectively, in the United States. He engaged in R&D of First-in-Class (globally pioneering) innovative drugs in fields including anti-tumor, anti-hepatitis C (HCV), antifungal infections, and type 2 diabetes.

After accumulating more than ten years of experience in innovative drug R&D, Shi Dongfang realized the gap between domestic innovative drugs and those overseas. In 2012, he returned to China to establish New Element Pharmaceuticals, and put the focus of its R&D on chronic gout treatment.

At present, New Element Pharmaceuticals’ core product is ABP-671 for treating chronic gout. In its prospectus, the company states that this drug avoids the benzofuran skeleton commonly found in traditional drugs, preventing the formation of toxic metabolites associated with liver injury, thereby minimizing the risk of hepatotoxicity while maintaining effective uric acid-lowering efficacy. In addition, ABP-671 has higher targeted selectivity, making its uric acid-lowering effect even more compelling.

Judging from the data, the future application market for new gout drugs is relatively large.

New Element Pharmaceuticals’ prospectus states that the number of gout patients globally increased from approximately 53.3 million in 2019 to approximately 66.2 million in 2024, and is expected to reach approximately 91.6 million by 2033. In addition, the global gout drug market size is expected to reach 9.3 billion dollars by 2033, with a compound annual growth rate (CAGR) of 14.9% from 2024 to 2033.

It is reported that during gout attacks, patients suffer excruciating pain “like knife-stabbing bone marrow.” A 2023 research report by Southwest Securities states that existing gout medications have safety risks, and patients urgently need long-term safe drugs.

Core product clinical progress lags behind

Despite the broad market prospects, New Element Pharmaceuticals still faces a series of severe challenges.

First is the lag in the clinical progress of its core product. The company’s key asset ABP-671 is conducting Phase 2b/3 clinical trials for gout treatment simultaneously in the United States and China. The company claims it is expected to become a Type 1 innovative URAT1 inhibitor that best targets the frontline treatment market.

However, in the increasingly competitive URAT1 inhibitor track, New Element Pharmaceuticals no longer has a speed advantage. Hengrui Pharmaceutical’s Rasburicase Sodium Tablets for primary gout with hyperuricemia (SHR4640) are expected to be available as early as 2026; Yipin Hong’s AR882 is undergoing pivotal Phase Ⅲ clinical trials; and some products from unlisted companies are also in Phase Ⅲ clinical trial stage.

In addition, a highly selective URAT1 inhibitor product—Duloxetine Tablets (Youlesi)—has already been launched in China. This means that even if ABP-671 succeeds in launching in the future, it will face fierce competition from similar products in the same category.

As is well known, innovative drug R&D cycles are long and require a lot of funding. Continuous “burning money” for R&D has pushed New Element Pharmaceuticals deep into losses. Since its products have not been marketed, the company has no commercialized products and no pharmaceutical sales revenue; most of its income comes from government subsidies and the like. In 2024 and 2025, New Element Pharmaceuticals’ R&D expenses were 338 million yuan and 180 million yuan, respectively. In the same period, the company incurred losses of 434 million yuan and 535 million yuan, respectively.

Ongoing losses have also consumed a large amount of the company’s funds. Since its establishment, New Element Pharmaceuticals has received six rounds of equity financing totaling approximately 1.178 billion yuan. As of the end of 2025, New Element Pharmaceuticals’ total bank balances, cash, and cash equivalents were 206 million yuan.

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