New Stock Preview | Exploring the Potential of Live Bacteria in Disease Treatment, How Does Zhi Yi Bio's Scarce Pipeline Stand Out?

Recently, another innovative pharmaceutical company focusing on 18A categoriesGuangzhou Zhiyi Biotechnology Co., Ltd. (referred to as "Zhiyi Biotech")has submitted its listing application to the Hong Kong Stock Exchange. Notably, the company's focus on live biotherapeutic products (LBP) is in an emerging sector where, currently, no second-generation products have been approved in the domestic market. If the company's core product is successfully launched, it is expected to achieve a "breakthrough of zero." Public information indicates that the company has completed eight rounds of financing, attracting participation from several prominent investors, including Shenzhen Capital Group, Red Soil Ventures, Qidi Jin Xin, Qingkong Jin Xin Capital, and Guotou Venture Capital. In the C-3 round of financing in March 2026, Qiongcheng Tian'an Ma and Zhuhai Lehong completed this round of investment at a price of 45.74 yuan per share, with a post-investment valuation set at 1.403 billion yuan. From the perspective of its pipeline, Zhiyi Biotech's R&D progress is ahead and its differentiated positioning is clear. However, as the "first to take a crab" in the industry, it often means facing the unknowns of regulatory evaluations, the challenges of commercialization, and the lengthy process of market education alone. In this IPO, whether Zhiyi Biotech can convince the secondary market to take on the risks and imagination of this pioneer remains a suspense. As subsidies decline, profitability pressures become evident. The prospectus shows that Zhiyi Biotech is a clinical-stage biopharmaceutical company focused on the LBP field, covering gastrointestinal diseases, tumors, oncology-related complications, metabolic diseases, and autoimmune diseases. In the fiscal years 2024 and 2025, the company recorded revenues of 721,000 yuan and 2.407 million yuan (RMB, the same below), mainly derived from R&D services and probiotic raw material sales, totaling less than 3.13 million yuan over the two years. The gross profit for the same periods was 298,000 yuan and 231,000 yuan, while annual losses were 63.998 million yuan and 69.393 million yuan, with cumulative losses exceeding 130 million yuan over the two years. With its core products yet to be approved for market launch, the company is simultaneously advancing its next-generation probiotic (NGP) business and implementing a dual-drive strategy. Its proprietary AKK AM06 strain, sourced from healthy human breast milk, is one of the first two breast milk-derived Akkermansia strains globally recognized by the FDA. As a representative strain in the NGP field, Akkermansia's abnormal abundance is closely associated with various metabolic diseases, and it has already been approved as a novel probiotic raw material in Europe and North America, experiencing rapid market acceptance and expansion. However, the company admits that R&D services and NGP raw materials are not its core business and are insufficient to support its operations. In 2024, 94.4% of the companys "other net income" was government subsidies (approximately 21.97 million yuan), which decreased to 8.164 million yuan in 2025, a reduction of 13.806 million yuan. It has been noted that, with the decline in subsidies, the company has reduced its expenditures, with R&D expenses decreasing from 67.57 million yuan in 2024 to 61.941 million yuan in 2025, and general and administrative expenses from 19.307 million yuan to 15.838 million yuan. As of April 30, 2026, the company had cash and cash equivalents totaling 49.065 million yuan and no bank loans. Holding Multiple Global First Innovatively Developed Drugs Zhiyi Biotech focuses on the LBP field and has built a product portfolio that includes six candidate drugs, including the core product SK08, a key product SK10, and four other products, covering gastrointestinal diseases, oncology, cancer treatment-related complications, metabolic disorders, and autoimmune diseases; however, most products are still in the preclinical or early clinical stages. The core product SK08 is a live biotherapeutic based on fragile Bacteroides, primarily indicated for diarrhea-predominant irritable bowel syndrome (IBS-D), and it is currently in Phase III clinical trials. According to Frost & Sullivan, SK08 is the first fragile Bacteroides LBP to enter clinical trials globally, the only investigational biopharmaceutical in the IBS-D field in late-phase clinical trials globally, and the first LBP to receive registration for clinical trial approval from the National Medical Products Administration and the FDA. If approved, it is expected to be the first product launched for this indication. IBS is a common chronic functional gastrointestinal disorder, and IBS-D accounts for about 70% of IBS patients. By 2025, the number of IBS patients in China will reach 165.8 million, with a diagnosis rate of 25.0%. The market size for IBS-D drugs in China in 2025 is estimated at 4 billion yuan, projected to reach 5.1 billion yuan by 2030. It is noted that among the seven clinical phase IBS candidate drugs currently in China, only two have entered Phase III, both targeting IBS-D, with SK08 being the only biotherapeutic, which has a differentiated advantage. It is worth noting that while SK08 met the dual endpoints of improving abdominal pain and diarrhea symptoms in Phase II clinical trials with good safety, the limited sample size leaves uncertainty about whether the efficacy can be replicated in the larger Phase III trials. As a functional gastrointestinal disease, IBS-D symptom evaluations are subjective, and the placebo effect is generally high, adding variability to the clinical success. The company expects the Phase III clinical trials for SK08 to complete recruitment in Q3 of 2027, with primary efficacy endpoint evaluation in Q4, and NDA submission in the second half of 2028. In addition to IBS-D, SK08 has four additional indications: pediatric rotavirus diarrhea (Phase II approved, expected to start in Q3 of 2027), ulcerative colitis (Phase II approved in China and the U.S., expected to start the Chinese trial in Q4 of 2027), combined with PD-1/L1 treatment for advanced solid tumors (previous IND expired, plans to re-submit and start in Q4 of 2028). Among these, the indication for pediatric rotavirus diarrhea is the only LBP candidate currently in clinical stages globally, and the indication for solid tumors is the first live biopharmaceutical approved in China to conduct registration clinical trials for tumor patients. Zhiyi Biotech's other key product, SK10, is an orally administered inactivated LBP, developed internally from a new type of fragile Bacteroides, intended for the prevention and treatment of chemotherapy-induced diarrhea (CID). According to Frost & Sullivan, SK10 is the first fragile Bacteroides-based candidate LBP approved by the FDA for clinical development and the world's first candidate LBP applying for CID. Chemotherapy-induced diarrhea is a common and tricky adverse reaction in cancer treatment that can lead to reduced chemotherapy doses, delays, or termination, and in severe cases, can be life-threatening. Currently, there are no approved drugs specifically for the treatment or prevention of CID; existing supportive treatments pose safety issues and lack preventive interventions, indicating a long-standing unmet clinical need. SK10 precisely addresses these pain points, offering multiple advantages: regarding safety, it has a lower adverse reaction rate than live bacterial preparations and is suitable for immunocompromised cancer patients; in terms of commercialization, it can be stored and transported at room temperature, reducing costs; and in terms of treatment mode, it can be administered preventively before or during chemotherapy, shifting management from symptom-based to proactive prevention. Currently, SK10 has completed Phase I clinical trials in the U.S., with 50% of participants being of Chinese descent, and all adverse events have been mild, with no moderate or severe events and serious adverse events, indicating good safety and tolerance. The company plans to initiate the Phase II trial in China in Q4 of 2026, with the U.S. Phase II trial expected to start in 2028 and complete in 2029. In addition, the company also has four preclinical candidate drugs in the pipeline, including TP2, a bacterial component for the treatment of autoimmune diseases; SK16, an LBP for treating oral mucositis (OM); SK12, an LBP for treating atopic dermatitis (AD) and psoriasis; and ZY19, an LBP for treating metabolic diseases. Entering the Emerging LBP Sector, Commercialization May Pose Challenges Live biotherapeutic products (LBP), also known as live microbial drugs or next-generation probiotics, are active microbial preparations made from normal microorganisms or their promoting substances. Before 2010, the first-generation LBP, represented by bifidobacterium quadruple live tablets, had been widely used in China; however, a unified regulatory definition had not been established, remaining mostly at the level of traditional microbial ecological preparations, lacking clear indications and systematic clinical verification. In recent years, as the indications for LBP expand from traditional gastrointestinal diseases to oncology, metabolic and neurological diseases, and extend from clinical prescriptions to outpatient management, this field has become an emerging, high-potential sub-sector in the global biopharmaceutical industry. However, even if SK08 progresses smoothly in clinical trials, Zhiyi Biotech still faces multiple challenges in transitioning from R&D to commercialization. On the manufacturing side, the production of live biotherapeutic products is significantly more challenging than that of traditional drugs, involving strain stability, live bacterial content control, contamination prevention, and cold chain storage and transportation, making batch consistency difficult to guarantee. To address this, Zhiyi Biotech has established a GMP-standard 5000-liter fermentation production line, capable of producing approximately 15 million bags of powder and 100 million capsules annually, and has overcome technical bottlenecks in high-density fermentation of anaerobic and aerobic bacteria, achieving fermentation densities of up to 10 CFU/mL; concurrently, its proprietary lyophilization and formulation process has resolved the issue of storage at room temperature, ensuring product stability and reducing reliance on cold chains, which helps expand market coverage and lower logistics costs. From a commercialization standpoint, as a pioneer in the second-generation LBP field in China, Zhiyi Biotech holds a first-mover advantage in terms of R&D and market launch timelines, but current regulatory and review policies still require improvement. There is considerable uncertainty regarding whether SK08 will be granted approval, how the range of indications will be defined, and whether pricing can be included in medical insurance. Furthermore, the concept of "using bacteria as drugs" remains poorly understood among clinical doctors and patients, making market education a significant challenge. It is noted that, to date, there are only four approved second-generation LBP products globally, with nine more in later stages (Phase III and above). While China has approved 17 LBP products, all are first-generation products launched before 2010, while 16 second-generation products remain in clinical stages. On the medical insurance payment front, multiple mainstream drugs for IBS-D (such as ondansetron hydrochloride, loperamide hydrochloride, montmorillonite powder, etc.) have been included in medical insurance, being inexpensive. In contrast, SK08, as an innovative biopharmaceutical, comes with a higher price, which will directly impact its market penetration. Additionally, when innovative drugs are included in centralized procurement, significant price reductions are common, which will continue to apply pressure on the company. Holding a globally innovative core product that has entered Phase III clinical trials, if successfully listed on the Hong Kong Stock Exchange, Zhiyi Biotech is likely to become the first listed company for live biotherapeutic products. However, while the story is imaginative, the essence of innovative drugs is that they are long-cycle assets; from clinical trials to approval and then to sales ramp-up, each phase requires time for validation. Whether Zhiyi Biotech can truly become a pioneer in this sector remains to be seen in the future.