Recently, the State Food and Drug Administration announcement showed that Wuhu Luye Pharmaceutical Co., Ltd. (hereinafter referred to Wuhu green leaves) due to the acquisition of substandard Ginkgo biloba extract for the production of Ginkgo biloba capsules by the Anhui Provincial Food and Drug Administration confiscated more than 364 million yuan.

It is noteworthy that, in February, the company due to two batches of children cough Ling particle traits do not meet the requirements, the local Wuhu Food and Drug Administration imposed two administrative penalties.

The reporter of China Business newspaper found that Wuhu Luye was a company controlled personally by Liu Dianbo, chairman of Hong Kong-listed Greenery Pharmaceutical (02186.HK), while Luye Pharma granted Wuhu Luye a trademark of "Luye" with an authorization fee of 50,000 yuan per year. Wuhu Greenery has promised to indemnify Greentree for any loss or damage suffered as a result of its use of the trademark. Ginkgo biloba leaf green leaves of the pharmaceutical business "good reputation" affect the goodwill? Luye Pharmaceutical did not make any public disclosure about this.

Notice of punishment showed that two batches of ginkgo leaf capsules produced and sold in Wuhu green leaf were tested and the test items of sophoridine were not in conformity with the regulations and were classified as fake medicines. The batches of 17 batches of ginkgo leaf capsules produced and marketed were tested and free quercetin , Shan Su Su, isorhamnetin check items do not meet the requirements, Qualitative as inferior drugs.

In view of Wuhu green leaves can take the initiative to report the self-test failed and so on, and no grave plot, in accordance with relevant laws and regulations, Anhui Food and Drug Administration for its confiscation of unlawfully produced products and illegal gains and fines, administrative penalties and fines totaling 364.28 Million. According to Anhui Province Food and Drug Administration Information Disclosure Administrative Dispute Case (No. 2, 2016) shows that the council has confiscated 2,015,583 boxes of Wuhu green leaf ginkgo leaf capsule.

According to Wuhu Food and Drug Administration February 2016 administrative penalties information disclosure table shows that Wuhu greenery drug children cough Ling granules (batch number 140707) tested, traits do not meet the requirements, the value of the amount of 14,600 yuan, The council for its administrative punishment is the confiscation of illegal income 14,600 yuan, 14,600 yuan fine. Its production of medicine children cough Ling granules (lot number 140626) after testing, the traits do not meet the requirements, the value of the amount of 14500 yuan, also confiscated illegal production of drugs, confiscated illegal income of 10,500 yuan, a fine of 14,500 yuan.

Leaf Leaf Pharmaceutical's previous prospectus showed that Wuhu Green Leaf was established on April 16, 2001 and Greenery Investment Group and Wuhu Evergreen Pharmaceutical Information Consulting Co., Ltd. (an independent third party) owns 90% and 10% respectively. Liu Dianbo, the founding shareholder of Luye Pharm, owns 70% of Luye Investment Group, Yang Rongbing and Yuan Huixian each owns 15% of the shares of Luye Investment Group (each of the above three is an executive director). Wuhu Luye is principally engaged in the manufacture and sale of Chinese medicines, covering a wide range of therapeutic areas including cardiovascular and cerebrovascular, neurology, neuropsychiatric and hepatology.

Prospectus also said that Greenery Pharmaceutical Co., Ltd., Shandong Luye Green Leaf has been authorized to use green leaves Wuhu trademark, since March 24, 2014 for a period of three years, the license fee of 50,000 yuan per year. Wuhu Green Leaf has also undertaken that it will indemnify us for any loss or damage that we may suffer as a result of its use of the mark. At present, Wuhu green leaves for those taken rectification measures? Greenery did not respond formally to reporters' requests for an interview.

And an investment banker in Shanghai said that it is debatable whether the license fee of 50,000 yuan per year is public or not. If there is any impact on goodwill in the agreement signed between the two parties, priority will be given according to the agreement.

The market highly coincides

Greenery Pharmaceutical Prospectus has said that in preparation for the listing, the directors of the Company have considered whether to acquire the interests of Luye Investment Group in Luhu Lvye. However, after due consideration and for the reasons stated below, the directors of the Company consider that it is not in the best interests of the Company to incorporate the business of Wuhu Luye into the Group.

Since its establishment in 2001, Wuhu Green Leaf has been mainly focused on the production and sale of non-proprietary Chinese medicines that have been extracted from herbal medicines based on basic technologies. The main products of Luye Investment Group are all chemical products except Xuezhikang. Xuezhikang is a kind of traditional Chinese medicine which is developed by advanced technology and protected by many patents. Wuhu Green Leaf and Green Leaf Investment Group adopt different operation and management modes in drug development and production, procurement, sales and marketing strategies. Wuhu Luye and the Group's major products, approved by the Food and Drug Administration, are used to treat different diseases and are registered under different categories. From such reasons as Green Leaf Pharmaceutical, the business of the Group and Green Leaf of Wuhu has been operating separately since its establishment in 1994 and 2001 respectively.

In addition, Green Leaf Pharmaceutical said that Wuhu Green Leaf has a different business focus. Wuhu green leaves mainly focus on the production and sale of Chinese medicine. The three products of Wuhu greenery, namely Ginkgo biloba, Yinao capsule and Yiganling soft capsule (accounting for about 53%, 17% and 8% of the total revenue of Wuhu greenery in 2013), are listed in the "China Pharmaceuticals Catalog "Are included in the lower category. Wuhu Luye's products are not exclusive to the market and face fierce competition from other drug makers who produce similar products. In addition, Wuhu green leaves did not engage in any research and development activities.

In contrast, Luye Investment Group, in addition to Xuezhikang, all the major products of the Group are chemicals (non-traditional Chinese medicine). Although Xuezhikang is a traditional Chinese medicine, it is classified as a higher category in the "Drug Catalog of China" of the Food and Drug Administration, namely, three types of traditional Chinese medicines (a new substitute for one ingredient). Green Leaf Pharmaceutical said its products and Wuhu green leaf products are used to treat different diseases, and its market does not overlap.

However, Wuhu green leaf official website has shown that the company operates green leaf brand drugs. The company has 57 drug approval number, a number of products are included in the national essential medicines and health insurance directory, of which the yuan of the Ginkgo biloba capsule selected 2012 national essential medicines directory; lung Thai capsule for the exclusive national pulmonary medicine, the country Three types of new drugs; Maier Paracetamol Min San extract capsules for the country's exclusive Medicare, OTC varieties. "Yuan of Ginkgo biloba capsule" "lung Thai capsule" "Younesi Yiganling soft capsule" "Xiaoyanlidan dripping pill" and other 8 products won the national invention patent. Obviously, Wuhu green leaves the official website and prospectus are not the same.

Reporter noted that the main products of Wuhu green leaf indications market and green leaf medicine under the jurisdiction of "Peking University letter" and "green leaf Baoguang" main products of the indications market highly coincident.

In this connection, Luye Pharmaceutical said that although Ginkgo biloba, the main product of Wuhu green leaves, can be regarded as a product in the field of cardiovascular treatment (the same therapeutic area as Xuezhikang), Xuezhikang and Ginkgo biloba capsules do not compete.

Greenery staff also told reporters on the phone, Wuhu green leaves and listed companies do not constitute leafy competition with the industry.