Tempus AI surges 36% in five days: Is AI healthcare entering the monetization phase?

TenNor Therapeutics

joined discussion ·

Dano Pharma 2026 Interim Results Briefing

[AI Key Takeaways]

Financial Performance

- Total expenditures for the first half of 2026 amounted to approximately RMB 64 million, comprising RMB 31 million in R&D expenses, RMB 15 million in administrative expenses, and RMB 17 million in IPO-related expenses.

- R&D expenses accounted for 67.5% of total costs excluding IPO-related expenses, reflecting an expenditure structure centered on research and development.

- As of June 30, 2026, cash and cash equivalents totaled approximately RMB 715 million, primarily derived from HKD 593 million raised through the Hong Kong stock listing in May.

- Net cash outflow from operating activities in the first half of 2026 was approximately RMB 59 million, representing an 18% year-on-year reduction in losses, while R&D expenses increased by approximately 19% year-on-year.

Business Progress

- Lefortinazole has completed Phase III clinical trials and submitted a New Drug Application (NDA) to the National Medical Products Administration (NMPA), marking it as the first new molecular entity candidate discovered globally since the identification of Helicobacter pylori.

- Obtained the Drug Manufacturing License from the National Medical Products Administration (NMPA) and signed a Commercial Sales Organization (CSO) cooperation agreement with Grand Pharma Life Sciences.

- The rifamycin derivative is the only new molecular entity drug globally in late-stage clinical trials for the treatment of infections associated with implanted medical devices.

- TNP2092 oral formulation achieved clinical proof-of-concept in treating hepatic encephalopathy in patients with liver cirrhosis.

Next Quarter Guidance

- Lefortinazole is expected to receive marketing approval in the second half of 2026 and to initiate Phase IIb clinical studies in the United States.

- Plans to initiate international multi-center Phase 2b clinical trials in 2027 to achieve commercialization outside China

- Top-line results from the Rifampicin Quinone Phase 2a proof-of-concept study are expected shortly, and Phase 2b clinical trials are being launched

- TNP2092 oral formulation plans to initiate an international multi-center Phase 2b study in 2027

Opportunity

- The global market for Helicobacter pylori is projected to grow from USD 6.9 billion in 2024 to USD 16.1 billion in 2035, while the Chinese market is expected to expand from RMB 5.5 billion to RMB 12.6 billion

- A multi-target conjugate molecule technology platform developed to create innovative drugs targeting bacterial infections and diseases related to bacterial metabolism

- Commercial collaboration with Grand BioScience; currently discussing global commercialization partnerships with multiple pharmaceutical companies

- Plans to put self-built GMP production facilities into operation in 2028 to enhance production and quality control capabilities

[AI Conference Transcript]

Operator

After the disclaimer has been read, we invite the moderator to begin speaking. Thank you. This meeting is a CITIC Securities whitelist event, restricted to invited clients only. Without written permission from CITIC Securities and the speakers, no institution or individual may publish, forward, repost, disseminate, copy, edit, modify, or otherwise distribute the meeting content and related information in any form. CITIC Securities reserves the right to pursue legal liability against any parties engaging in such violations.

Chu Yuxi

Good morning, respected investors and analysts. Thank you for joining Dannuo Pharmaceuticals' 2026 interim results conference call. I am Chu Yuxi from Investor Relations. First, please allow me to introduce the company executives attending the meeting: Dr. Ma Zhengkun, Founder, Chairman of the Board, Executive Director, and CEO; and Ms. Chen Rongping, Executive Director, CFO, and Board Secretary.

We would like to thank CITIC Securities for hosting this conference, and also extend our gratitude to CICC, Industrial Securities, China Securities, Guotai Junan, Haitong Securities, Huatai Securities, Huafu Securities, Southwest Securities, Northeast Securities, Tianfeng Securities, Kaiyuan Securities, GF Securities, Soochow Securities, China Post Securities, Sinolink Securities, China Merchants Securities, East Money Pharmaceutical, Shenwan Hongyuan, and Huaxi Securities for their strong support of our conference call. To begin, we invite management to provide a brief overview of the company. Please welcome our founder, Dr. Ma.

Ma Zhengkun

Good morning, investors. I am Ma Zhengkun, Founder, Chairman of the Board, and CEO of Danuo Pharma. I will now present the interim results on behalf of the company. Here is our disclaimer. Our presentation is divided into the following sections: first, a company overview; second, an introduction to our product pipeline; third, a financial overview; and finally, our corporate development strategy.

First, I would like to provide a general overview of the company. Danuo Pharma is a global biotechnology company approaching commercialization. We focus on unmet clinical needs in the fields of bacterial infections and diseases related to bacterial metabolism, dedicated to providing patients with optimal first-line treatment solutions.

There are three main market opportunities in this field. The first is the increasingly severe problem of antimicrobial resistance. In 2019, approximately 1.27 million people worldwide died from drug-resistant bacterial infections, a figure projected to reach 10 million by 2050. The second market opportunity lies in emerging types of infections and new challenges, such as infections associated with implanted medical devices and non-tuberculous mycobacterial infections.

The third area involves significant scientific breakthroughs related to gut bacterial metabolism. The relationship between gut bacterial metabolism and central nervous system diseases as well as metabolic disorders is becoming increasingly clear, providing new directions and solutions for developing novel therapies. These are the three key market opportunities we focus on in this field.

Danuo Pharma boasts a highly international and experienced team comprising management, R&D, and advisory personnel. Our management team possesses a global perspective and extensive experience in global new drug development, with years of deep expertise in bacterial infections and bacterial metabolism. Our team features an organic integration of a Chinese R&D team and a US-based advisory team, leveraging complementary advantages to conduct new drug development globally, particularly in China and the United States.

In addition, we have a Scientific Advisory Committee composed of four internationally renowned experts who provide strategic empowerment to the company. Regarding our product pipeline, we utilize a multi-target conjugate molecule technology as a differentiated platform for new drug development. We focus on indications with significant unmet clinical needs, including Helicobacter pylori infection and prosthetic joint infections.

Currently, our product pipeline includes eight innovative assets: one is nearing commercialization and is in the stage of filing for marketing approval; two are in late-stage clinical trials; and five are in early clinical and preclinical development stages. The company's overall development strategy focuses on global product development, backed by global intellectual property protection. Furthermore, we select indications with broad market prospects and a lack of effective treatments, aiming to develop first-line therapies. This summarizes the current status of our company.

Let me briefly introduce the company's development history. Founded in 2013, we have progressed through approximately five stages. The initial startup phase lasted from 2013 to 2016, involving team formation and project initiation. During our establishment, US shareholders participated by contributing intellectual property rights, which we refer to as our Series A financing. Subsequently, we completed Series B financing, raising over RMB 43 million, led primarily by Wuxi Apptec United Holdings, with participation from several US shareholders.

In 2016, the company's first product entered clinical trials. During this phase, we completed Series C and C+ financing rounds, led by Northern Light Venture Capital, raising RMB 176 million. Starting in 2019, we initiated global development efforts, particularly conducting clinical studies in China and the United States. Several of our core products have since advanced to pivotal Phase II clinical trials.

Between 2019 and 2023, we completed Series D and D+ financing rounds, raising RMB 210 million, co-led by Yan Capital and Gao Te Jia Investment. Since 2023, our first product has completed Phase III clinical trials and begun preparations for market launch. During this period, the company also completed its Series E (Pre-IPO) financing round, co-led by AMR Fund and Zhongshan Investment Holdings, raising over RMB 300 million.

We completed our IPO in Hong Kong on May 22 of this year, with total proceeds exceeding HKD 600 million. This summarizes the company's overall development status. Our management team possesses extensive international experience, with deep expertise in bacterial infections and bacterial metabolism.

I hold bachelor's and master's degrees from Peking University. After completing my Ph.D. in the United States, I have been engaged in new drug R&D in the anti-infective field, including leading Abbott Laboratories' (now AbbVie) anti-infective projects. I later participated in founding biotechnology companies and most recently focused on global health investments at TB. The five individuals shown in the bottom left are members of our core management team, all of whom have rich industry backgrounds; I will not introduce them individually here.

Our team structure primarily consists of two parts. First, our China-based R&D team currently comprises over 40 members with an average of more than ten years of experience, over 50% of whom hold master's or doctoral degrees. Complementing this is our U.S.-based advisory team, with over 20 contracted advisors. These American advisors are top experts in indications and disease areas relevant to our pipeline. This combination allows for organic integration and complementary strengths between our domestic and international teams, facilitating efficient global new drug development.

The bottom right shows four members of our Scientific Advisory Board, including Academician Wang Xiaodong, Academician Stephen McNight, Academician Rich Losick, and a renowned gastroenterology expert. All possess profound industry backgrounds and high reputations. Our company currently has three core products.

The first is Livotinidazole, which has completed Phase III clinical trials and submitted a New Drug Application to the National Medical Products Administration (NMPA). This product is the first new molecular entity candidate globally for treating Helicobacter pylori since its discovery. It features a unique multi-target synergistic mechanism, offering the advantage of overcoming resistance and reducing the frequency of drug resistance. We aim for it to replace the current first-line therapy model requiring susceptibility testing and personalized treatment, becoming a first-line eradication regimen that seamlessly integrates with current diagnostics, particularly urea tests.

Regarding commercialization, we have closed the loop by signing a Commercial Sales Organization (CSO) cooperation agreement with Grandlife Sciences. In terms of manufacturing, we have obtained the Drug Manufacturing License from the NMPA. We also plan to establish our own GMP-compliant manufacturing facility, expected to be operational by 2028.

Our second core product is Rifloquinone, currently in late-stage clinical trials. It is the only new molecular entity candidate globally in late-stage clinical development for treating infections associated with implanted medical devices. It features a unique triple-target synergistic mechanism, with advantages in overcoming resistance and reducing resistance frequency, demonstrating excellent eradication efficacy, particularly against biofilm infections related to implants.

It is the first candidate drug capable of achieving bactericidal activity against implant-associated biofilm infections at clinically feasible doses. We hope the successful development of this product will disrupt the current surgery-dominant treatment paradigm and become the first-line therapy for treating implant infections.

Our third major product is the oral formulation of TNP2092, which is currently in Phase II clinical trials. It is the world's first multi-target candidate drug for treating diseases related to gut bacterial metabolism. Compared with existing therapies, it demonstrates a lower frequency of drug resistance and offers better selectivity and safety for probiotics. We have completed three Phase I clinical trials and one Phase II clinical trial in China, achieving proof-of-concept for the treatment of hepatic encephalopathy in patients with liver cirrhosis.

On the right is our company's proprietary technology, known as Multi-Target Conjugate Molecule Technology. This approach utilizes pharmacophores already validated in clinical settings, linking them via covalent bonds to create new molecular entities with multi-target capabilities, thereby achieving synergistic effects. This technology is a core competency of our company, and several of our key products have been developed using this platform.

Here is an overview of our current R&D pipeline. In addition to the three core products mentioned earlier, we have a series of projects in mid-stage, early-stage, and preclinical development. Our pipeline is aligned with our overall product development strategy, which aims to address unmet clinical needs and establish our products as first-line therapies upon launch. This is the primary objective behind the design of our product portfolio.

The product lineup includes a topical formulation of TNP2092, indicated for diabetic foot infections. TNP1232 is a narrow-spectrum candidate drug specifically targeting Helicobacter pylori infection; it is currently in the preclinical development stage, and we plan to submit an Investigational New Drug (IND) application this year. We also have TNP-BI-2, a multi-target conjugate molecule primarily targeting non-tuberculous mycobacterial infections, which is currently in the preclinical trial stage.

In the area of bacterial metabolism, we are developing TNP-BM-1 using our technology platform. This product aims to treat metabolic disorders such as obesity and non-alcoholic fatty liver disease (NAFLD) and is currently in the preclinical stage. The most recently initiated project, listed at the bottom, is TNP-BM-2. This project leverages our multi-target conjugate molecule technology to develop treatments for degenerative central nervous system diseases, such as Alzheimer's disease, by inhibiting gut bacterial metabolism.

This summarizes our company's product portfolio. Our development strategy focuses on creating first-line therapies. We hold global intellectual property rights, with 42 granted patents and 87 patent applications to date. Our key research findings have been published in prestigious, high-impact journals. For instance, the early preclinical studies on rifotinazole for the treatment of Helicobacter pylori were published in the Journal of Medicinal Chemistry.

The early clinical studies (Phase I and II trials) were published in The Lancet Infectious Diseases, and our pivotal Phase III clinical trial results were also recently published in The Lancet Infectious Diseases. Furthermore, we delivered an oral presentation on this project at DDW 2025, the most important international conference in the field of digestive diseases, where it was selected as a major highlight of the conference.

In addition to focusing on first-line therapies, our company operates globally, with product development primarily concentrated in China and the United States. Our specific development strategies are tailored to the characteristics of each product and indication. For example, the primary market for rifotinazole, used to treat Helicobacter pylori, is China, driven by the need for gastric cancer prevention, as China has one of the highest incidence rates of gastric cancer worldwide.

Therefore, the main driver and market for this product are in China, so our development strategy is to launch in China first before expanding globally. In contrast, the second core product, rifamycin quinone, is indicated for prosthetic joint infections. Given the surgical requirements and associated hospitalization costs, its primary markets are the United States and other developed countries. Consequently, our strategy for this product is global development. Early-stage clinical trials were primarily conducted in the US, and we intend to conduct a pivotal international multi-center trial to enable parallel commercialization in both China and the US.

Our products have received regulatory recognition and support. Both core products, rifotinazole and rifamycin quinone, have been supported by the National Major Scientific and Technological Special Project for Significant New Drugs Development. Rifamycin quinone also won the top prize at the National Disruptive Technology Innovation Competition. In the US, both products have received Orphan Drug Designation, Qualified Infectious Disease Product (QIDP) designation, Fast Track designation, and Priority Review. This provides an overview of the company.

Next, I will provide a more detailed introduction to the company's core products. The first product is Lifortinidazole, a new molecular entity drug developed specifically to target Helicobacter pylori (H. pylori). As many of you may know, the infection rate of H. pylori in China is very high, at approximately 44%, and about 80% of gastric cancer cases are associated with H. pylori. Among all pathogenic agents in China, H. pylori ranks first.

We obtained the drug manufacturing license for this product in June 2025. We are currently building our own cGMP-compliant production facilities, which are scheduled to become operational in 2028. For the commercialization of this product, we have signed a Commercial Sales Organization (CSO) cooperation agreement with Grand Pharma Life Sciences to promote its market launch through this partnership.

The H. pylori market is currently experiencing rapid growth, with diagnosis and treatment rates continuing to rise. We estimate the global market size was approximately USD 6.9 billion in 2024 and is projected to reach USD 16.1 billion by 2035. In China, the market size was RMB 5.5 billion in 2024 and is expected to reach RMB 12.6 billion by 2035.

The primary pain point in current H. pylori treatment is antibiotic resistance. Although H. pylori was discovered in 1982, no new drugs specifically targeting this bacterium have been launched since then. Current treatment methods mainly involve combination therapies using older, broad-spectrum antimicrobial drugs—originally approved for other infections—alongside acid suppressants.

In China, the primary first-line therapy is Bismuth Quadruple Therapy (BQT). However, due to severe resistance issues with BQT and its complex administration regimen, high-dose dual therapy and other adjunctive treatments are increasingly being recommended. In the United States, BQT is also the main first-line therapy, but there is a growing recommendation for bismuth-based triple therapy and other alternative regimens.

The core challenge with these first-line therapies is the need for personalized treatment. Since each patient’s H. pylori strain exhibits different resistance profiles to various antibiotics, international guidelines generally recommend susceptibility-guided personalized therapy. This means determining a patient's resistance profile first to decide on an appropriate treatment plan.

Due to the lack of effective drug susceptibility testing methods, particularly in China where the number of infected individuals is vast, current susceptibility testing primarily relies on endoscopic sampling followed by laboratory culture. This approach is expensive, inefficient, and difficult to scale for widespread use. Consequently, implementing personalized treatment in China remains challenging, representing a key pain point in this field.

While first-line therapies require personalized treatment, the absence of accessible drug susceptibility testing tools hinders rational treatment decisions. This leads to the irrational use of antibiotics, creating a vicious cycle of increasing resistance and treatment failure for many patients, ultimately resulting in refractory infections.

To address these issues, we have developed Lifortinidazole. Leveraging its novel multi-target synergistic mechanism, this product aims to overcome current resistance problems and serve as the cornerstone of a simpler, new treatment regimen. Since all patients are susceptible to this regimen, it can be seamlessly integrated with current diagnostic methods, primarily urea tests. Thus, all H. pylori-positive patients can be treated with a unified, simpler protocol. This addresses the core pain point and primary issue we aim to resolve in this field.

We have completed Phase III clinical trials for this product and submitted our marketing application. It is the first new drug globally specifically targeting H. pylori. In our head-to-head Phase III study against Bismuth Quadruple Therapy (BQT), involving 700 subjects across 40 centers, we achieved an eradication rate of over 92% in treatment-naïve patients. Our eradication rate exceeded that of BQT by more than four percentage points, demonstrating non-inferiority approaching superiority.

Among patients with multidrug-resistant infections, this segment accounts for 46% of all first-line treatment cases. In this population, we demonstrated superiority and achieved a 90% eradication rate. Regarding safety profile, our adverse event incidence is significantly lower than that of bismuth quadruple therapy (BQT). Therefore, this product addresses key pain points in current first-line treatments, including antibiotic resistance, and offers seamless integration with existing diagnostic workflows, providing a simpler and better-tolerated regimen.

Consequently, we aim for this regimen to rapidly become a first-line therapy post-launch, gaining broader recommendation in clinical guidelines. This is our first core product, Rifotinazole.

Our second core product is Rifoxone Injection, the only novel antimicrobial candidate globally in late-stage clinical trials for treating infections associated with implanted medical devices. As you may know, the use of implanted medical devices—such as artificial joints, artificial hearts, and invasive brain-computer interfaces—is becoming increasingly prevalent. The core challenge here is infection risk.

Implant-associated infections are currently very difficult to treat, with surgery being the primary intervention. This is because bacteria can colonize the surface of implants and form biofilms, against which traditional antimicrobials have poor eradication efficacy. Since pharmacological treatment alone cannot achieve eradication, current management of implant infections primarily relies on debridement surgery or replacement, supplemented by drug therapy.

Therefore, treatment inevitably requires surgery, involving complex hospitalization processes and high costs. There is an urgent need to develop more effective therapeutic agents to reduce or avoid surgical interventions. Our primary focus in this field is initially on periprosthetic joint infections (PJI). The rate of artificial joint replacement surgeries is rising rapidly in both China and the United States.

The infection rate is approximately 2%. In the U.S., the annual incidence is currently over 40,000 cases, but it is projected to double by 2030–2035. Globally, we estimate the market size at $3.3 billion in 2024, reaching $13.1 billion by 2035. In China, the incidence of artificial joint infections is also increasing rapidly. The current market size for pharmacological treatment (excluding surgery) is approximately RMB 1.1 billion, expected to reach RMB 4.4 billion by 2035.

As noted, the primary current treatment for artificial joint infections is surgical, due to the difficulty of eradicating infections with medication alone. For early acute infections, a conservative approach known as Debridement, Antibiotics, and Implant Retention (DAIR) is typically used. However, its success rate is relatively low, at just over 60%, with a failure rate of nearly 30–40%.

For patients who fail DAIR or present beyond the early acute infection stage, two-stage revision surgery is generally required. This involves removing the infected joint, followed by long-term antibiotic therapy, and then a second surgery to implant a new joint. This remains the standard of care for periprosthetic joint infections globally, including in China and the U.S.

As you can see, treatment involves multiple surgeries, prolonged hospitalization, and drug therapy, often resulting in loss of joint function requiring nursing care. It is a devastating diagnosis for patients; some even compare contracting an artificial joint infection to having cancer.

To address this unmet need, we developed Rifoxone. Our primary objective is to eradicate bacteria colonizing the implant surface through pharmacological treatment, thereby reducing or avoiding the need for surgery.

Regarding this product, as shown on the right, we have validated its efficacy in a series of preclinical models, including bacterial biofilm infection models. Rifamycin derivative TNP2092 demonstrates superior eradication of biofilm infections compared to current standard antimicrobial therapies, such as rifampin (often considered the best single agent), fluoroquinolones, the combination of rifampin and fluoroquinolones, vancomycin, and daptomycin. It is currently the only product capable of eradicating biofilm infections at clinically achievable dosages.

Beyond prosthetic joint infections, this product holds broad prospects for indication expansion. We are currently developing a new Phase II clinical trial protocol primarily targeting prosthetic heart valve infections. The incidence of such infections is very high and represents a leading cause of mortality among patients with prosthetic heart valves. We are actively communicating with regulatory authorities and expect to submit our Phase II clinical trial protocol within the next few months.

Additionally, there are opportunities for indication expansion into other implantable medical devices, such as the prevention of prosthetic joint infections. This constitutes our second core product, TNP2092.

Our third core product is the oral formulation of TNP2092. This product targets another strategic focus of our company: diseases related to gut bacterial metabolism. The gut microbiome is associated with many conditions; as many may know, its correlation with central nervous system, digestive, and metabolic diseases is primarily mediated through metabolites. Specifically, the absorption of gut bacterial metabolites leads to a series of symptoms.

Therefore, our strategy is to achieve therapeutic goals at the molecular level by inhibiting these metabolic pathways. The primary indications for this product are hepatic encephalopathy and diarrhea-predominant irritable bowel syndrome (IBS-D). While I will not spend too much time detailing the market size, both indications currently represent significant unmet clinical needs.

We have completed multiple clinical trials for this product. In a Phase II proof-of-concept clinical trial, we demonstrated that treatment with oral TNP2092 effectively reduces the incidence of hyperammonemia, which is a key biomarker for hepatic encephalopathy. This highlights another important direction for our company’s product pipeline: treating central nervous system and metabolic-related diseases by inhibiting gut bacterial metabolism.

Chen Rongping

Hello, investors and securities analysts. I will now present an overview of the company's financials. In the first half of 2026, the company's total expenditures were approximately RMB 64 million. This included R&D expenses of about RMB 31 million, general administrative expenses of about RMB 15 million, and IPO-related expenses of about RMB 17 million. Excluding one-off IPO costs, R&D expenses accounted for 67.5% of total operating costs. Our cost structure remains centered on R&D expenditure, reflecting our focus on advancing the development pipeline.

As of June 30, 2026, the company held cash and cash equivalents of approximately RMB 715 million. This was primarily due to the completion of our Hong Kong stock listing in May 2026, which raised approximately HKD 593 million. In terms of cash burn, the net cash outflow from operating activities in the first half of 2026 was approximately RMB 59 million, mainly used to fully support the NDA review for Rifotinil and to accelerate clinical trial activities for TNP2092.

Overall, the net loss for the period decreased by approximately 18% year-over-year, while R&D expenses increased by about 19% year-over-year. Benefiting from the aforementioned Hong Kong listing and the receipt of proceeds, the company's total cash and cash equivalents and total equity increased significantly compared to the end of 2025. The debt-to-asset ratio declined from 32.2% in the previous year to 13.9%, significantly strengthening our overall liquidity and capital structure. This summarizes our key financial highlights.

The next slide outlines the use of proceeds from our IPO. Approximately 71% will be allocated to clinical trials, registration, and commercialization of our core product, lifotinizole, as well as R&D for the injectable formulation of rifloquinone. The remaining ~14% will primarily cover R&D expenses for other products, such as the oral formulation of TNP2092 and other pipeline candidates. About 15% is designated for capital expenditures related to self-built manufacturing facilities and general corporate working capital. This summarizes our overall financial allocation.

Chu Yuxi

Before we proceed to the final section, let’s pause briefly to address questions from online investors and analysts. We will then move on to the concluding part. I would like to ask the conference assistant to first explain the procedure for submitting questions.

Operator

Hello everyone. Investors joining via the web can click the 'Raise Hand' button to connect via microphone and wait their turn to ask questions, or submit their queries in the text chat box. Investors joining by phone, please press the asterisk (*) key followed by the number 1 key to ask a question. Thank you.

Zhou Gongyin

Good day, everyone. Can you hear me clearly? Excellent. Thank you for the opportunity to ask questions. I am Zhou Gongyin, an analyst at CITIC Securities. Joining me online is our Chief Analyst, Mr. Li Anfei. We are pleased to see the smooth progress of the company’s various pipelines, as introduced earlier by Mr. Ma. In particular, our next-generation core product for Helicobacter pylori treatment, lifotinizole, is nearing approval.

We would like to inquire about the subsequent commercialization plans with our partners, as well as strategies regarding the sales team and promotion. We appreciate the management team’s insights on these matters.

Ma Zhengkun

Thank you for your question. As many investors may already know, and as we mentioned earlier, the commercialization of lifotinizole is being conducted through a CSO (Contract Sales Organization) agreement with Grand Life Sciences. Currently, together with Grand’s marketing team, we are carrying out comprehensive preparations for commercialization, primarily focusing on the following areas.

First, we aim to include the product in the National Reimbursement Drug List (NRDL) in 2027, which is next year, and we are currently preparing for this. Our NRDL preparation strategy focuses on value demonstration across five dimensions: unmet clinical needs, innovation, efficacy, safety, and equity. Together with the Grand team, we are highlighting our product’s core value along these five dimensions. We have also initiated pharmacoeconomic analyses for NRDL access in collaboration with domestic health economics experts. Therefore, we are accelerating our preparations for the NRDL negotiation process targeted for 2027.

Secondly, we aim to have our product included as a first-line therapy in China's clinical guidelines for the diagnosis and treatment of Helicobacter pylori (H. pylori) shortly after its market launch. To this end, we have conducted multiple rounds of seminars with gastroenterology experts. As many of you may know, our key research findings were published in The Lancet Infectious Diseases, a top-tier journal, and were also presented at major international conferences such as Digestive Disease Week (DDW). Our product has received widespread recognition from experts both domestically and internationally.

Therefore, we are rapidly advancing these efforts and hope to be included in the next edition of the H. pylori diagnosis and treatment guidelines soon after listing. Regarding hospital access, we are proceeding in two phases. In the first phase, during the first year post-launch before inclusion in the National Reimbursement Drug List (NRDL), we will primarily focus on gaining access to influential hospitals.

We are focusing on several categories of hospitals. The first category comprises the 40 centers that participated in our Phase III clinical trials; we hope a significant portion of these hospitals will adopt our product early on. The second category includes the 231 H. pylori diagnosis and treatment demonstration centers in China, which are highly influential in this field. These centers are also a key focus for our initial market entry strategy.

The third category consists of approximately 100 hospitals that have strategic collaborations with Yida and Yida Life Sciences. Beyond these, we have identified around 700 target major hospitals that can play a strong leading and demonstrative role. Our goal is to have approximately 180 hospitals start using our product in the first year, prior to NRDL inclusion. These early adopters will serve as benchmarks and help drive rapid volume growth in the second phase. This is part of our market access work being conducted jointly with Yida Group.

In addition, we are exploring an integrated diagnosis and treatment marketing strategy, primarily seeking win-win cooperation opportunities with testing centers and H. pylori diagnostic companies to mutually promote growth. We are currently designing and conceptualizing these initiatives together with Yida Life Sciences. These represent a series of commercialization efforts for our first product. I hope this answers your question.

Zhou Gongyin

That was very clear. Thank you, Mr. Ma, for the introduction. I have no further questions. Please allow other analysts to ask their questions.

Huang Yan

Good day, executives. I am Huang Yan from Huafu Securities' healthcare team. Thank you very much for giving me this opportunity to ask questions. I would like to ask management: Mechanistically, how does rifamycin derivative explain its superior efficacy in eradicating biofilm bacteria compared to older antibiotics like rifampin? Additionally, based on current data, to what extent do you expect the success of this drug to change treatment paradigms in the field of prosthetic joint infections? Thank you.

Ma Zhengkun

Thank you for your question. Rifampin is widely recognized in clinical practice as a legacy drug and remains one of the most effective treatments currently available for biofilm-associated implant infections. This is reflected in numerous Chinese and international guidelines that recommend its use. Its high efficacy is largely attributed to its mechanism of action, which targets RNA polymerase.

However, it has significant limitations. While there are other first-line therapies for implant infections, such as the widely used vancomycin and daptomycin—primarily employed to overcome resistance issues—a major challenge with these agents is their inability to achieve eradication at clinically feasible doses. Consequently, they must be combined with surgical debridement or replacement procedures to achieve stable cure rates. This represents a current limitation of rifampin-based regimens and other antimicrobial therapies.

In contrast to rifampin, rifamiquone is a multi-target molecule. While it incorporates the mechanism of action of rifampin, its design philosophy aims to address the latter's primary drawbacks using the most effective existing mechanism. A key issue with rifampin is the rapid development of resistance during treatment. Through a conjugation approach, we have designed rifamiquone as a triple-target agent that synergistically inhibits not only RNA polymerase but also DNA gyrase and topoisomerase IV.

This design yields two main benefits: first, enhanced bactericidal activity against biofilm infections through synergistic effects; second, prevention of resistance development. Due to these dual mechanisms, rifamiquone appears to be the only product capable of eradicating bacteria colonizing implant surfaces at clinically achievable doses. It is also the only candidate with the potential to completely avoid or replace surgical intervention through pharmacological treatment alone.

These represent the key mechanistic differences between rifamiquone and rifampin, as well as their potential clinical implications. Having outlined how rifamiquone could transform clinical practice, our company’s primary development focus is currently on prosthetic joint infections.

The current standard of care for early and acute prosthetic joint infections involves meticulous surgical debridement, which is highly invasive and requires physical cleaning of all implant surfaces. This process entails prolonged hospitalization, long-term antibiotic therapy, and rehabilitation, similar to joint replacement surgery. Furthermore, the failure rate remains high, ranging from 30% to 40%.

Following treatment failure, patients typically undergo a two-stage revision arthroplasty, involving two major surgeries and extended loss of joint function. This remains the prevailing standard of care, even when rifampin and other antibiotics are utilized. We aim to leverage rifamiquone to eliminate the need for debridement and replacement surgeries, thereby bringing about a disruptive change in the treatment of prosthetic joint infections.

Consequently, pharmacological therapy is poised to become the preferred first-line treatment for all patients in the future. We are currently exploring both intravenous and intra-articular injection routes for administration. We anticipate publishing substantial clinical data in the future to validate the efficacy of these different delivery methods and their eradication outcomes.

Our ultimate goal is to establish pharmacological treatment as the first-line therapy for prosthetic joint infections, thereby avoiding surgery, hospitalization, and prolonged rehabilitation. This would bring about a highly disruptive transformation to this field. Thank you again for your question.

Zhou Gongyin

I also noticed a question from Mr. Song at CICC in our online session. Let me relay it on his behalf. He would like to understand the market value proposition of Rifabutin in the context of prosthetic joint infections, particularly regarding the pace of overseas development. Specifically, is there potential for collaborative development models during the future international multi-center clinical trials and commercialization process? We invite management to respond. Thank you.

Ma Zhengkun

Thank you. Regarding the clinical development of Rifabutin, we have focused on the U.S. market from the outset, as it is our most critical market. We have currently completed six clinical trials, five of which were conducted in the United States. Additionally, we included a pharmacokinetic comparative study between Chinese and U.S. populations, aiming to ensure the product can be widely used across diverse demographic groups.

Therefore, our strategic positioning for this product emphasizes global development, and we are proceeding according to this roadmap. We are currently wrapping up a Phase II proof-of-concept clinical trial involving intra-articular injection to treat prosthetic joint infections, thereby avoiding surgical intervention. We expect to read out and publicly release the data from this study in the near future.

Based on these results, we are planning to initiate a multi-center Phase IIb clinical trial to further determine the optimal dosing regimen and frequency. We have also requested a formal meeting with the U.S. FDA, scheduled for late September, to discuss the protocol for our Phase III clinical trial.

Our plan is to accelerate the development of this product, with the goal of launching an international multi-center study globally by 2027. Based on our current projections—subject to further discussions with the U.S. FDA and China's National Medical Products Administration (NMPA)—we estimate the enrollment period will last approximately two years, followed by a 12-month observation period. Consequently, we anticipate submitting a marketing application around 2030. This outlines our global development plan for the product.

Regarding market positioning, particularly in the U.S., extensive research indicates that the treatment cost per patient for prosthetic joint infection approaches $400,000. This figure encompasses multiple surgeries, repeated hospitalizations, long-term nursing care, rehabilitation, and other associated expenses. The two primary cost components are surgical fees and hospitalization costs.

According to our current Phase II clinical trial design, we administer the drug via intra-articular injection to avoid any surgical debridement. Furthermore, this administration method can be performed entirely in outpatient or home-care settings, eliminating the need for hospitalization. This approach completely saves on both surgical and hospitalization costs, offering significant savings for payers.

For patients, this significantly reduces suffering associated with multiple surgeries, prolonged hospital stays, and the need for caregiving and rehabilitation. Therefore, we believe this product offers substantial benefits across all stakeholders. This value proposition also provides us with considerable pricing power. I am not sure if there are any further questions.

Ma Zhengkun

If there are no further questions for now, Dr. Ma will provide an outlook, including upcoming catalysts, and present a report to everyone. Next, I will introduce the company's next-stage development strategy and key milestones for the coming years.

The company's overall development strategy encompasses several aspects. First, we will accelerate the clinical development, regulatory approval, and commercialization of our core and primary products. This includes the two main core products mentioned earlier, Lifotinib and Rifloquinone, aiming to achieve final marketing approval and commercial launch, as well as completing important international multi-center clinical trials to realize global market entry.

Second, we will leverage our existing multi-target conjugate molecule technology to accelerate the development of our other innovative drug pipelines. We have a strong reserve of projects. As you can see, we have robust layouts in areas such as difficult-to-treat bacterial infections and diseases related to bacterial metabolism. We hope to rapidly advance these products to achieve proof-of-concept and ultimately realize commercialization in the future.

The third direction is to actively seek opportunities to introduce complementary and synergistic assets to expand our product pipeline. This is a key initiative we are currently pursuing from a Business Development (BD) perspective. The fourth direction is to further strengthen our production and quality control capabilities, including quality management for CDMOs. As the Marketing Authorization Holder (MAH) for our first product, the company is responsible for its entire production and quality assurance.

Looking ahead, we are currently establishing our own GMP-compliant production capabilities, transitioning into a company with independent manufacturing capacity. Finally, and importantly, we aim to explore opportunities for commercialization partnerships. This includes addressing the earlier question regarding how our core products will be commercialized overseas.

Regarding our Helicobacter pylori product, we are currently in discussions with multiple pharmaceutical companies about global commercialization partnerships. For prosthetic joint infections, I apologize for not addressing your question earlier; we intend to initiate communications and exchanges after our proof-of-concept data is released. While we have received some requests for partnership discussions, we prefer to wait for further data before engaging in these conversations. This outlines the company's development strategy.

Over the next two years, we have several key milestones. For Lifotinib, we hope to obtain marketing approval within the next few months. In the second half of 2026, we plan to launch our Phase 2b clinical study in the United States. We are also developing a new tablet formulation and hope to optimize our regimen to initiate a treatment course with a shorter duration.

In 2027, we will commence international multi-center Phase 2b clinical trials for the treatment of Helicobacter pylori. Ultimately, we aim to achieve global commercialization of this product, with the United States as the core market, extending to a global rollout.

For Rifloquinone, we are currently conducting a Phase 2a proof-of-concept study. We expect the primary top-line results to be available soon and will report them to everyone. Additionally, we are launching a Phase 2b clinical trial for the treatment of prosthetic joint infections via intra-articular injection, which is currently underway.

Furthermore, we are preparing a clinical trial protocol for treating infections associated with Left Ventricular Assist Devices (LVADs). We plan to submit our Investigational New Drug (IND) application and Phase 2 clinical trial protocol to the US FDA and China's National Medical Products Administration (NMPA) in the second half of this year. This is another very important core product that we will accelerate for global development over the coming years, with the hope of initiating international multi-center Phase 3 clinical trials by 2027.

Regarding oral formulations, we are currently developing an oral solid dispersion formulation for TNP2092. We plan to initiate a Phase 2b international multicenter study in 2027. Additionally, the pipeline includes TNP-BM-2, a project we have just launched. This program targets neurodegenerative diseases, such as Alzheimer's disease, by inhibiting gut bacterial metabolic pathways to treat central nervous system degeneration.

There is also TNP1232, a narrow-spectrum candidate for treating Helicobacter pylori infection, featuring a unique mechanism of action and chemical structure. We are currently conducting preclinical preparations and aim to complete our Investigational New Drug (IND) application filing by the end of this year. These represent key milestones for the company's important products. That concludes my introduction.

Chu Yuxi

Alright, time has flown by. This concludes today's interim results presentation. If investors and analysts have any further questions, please feel free to contact our Investor Relations department at any time. Thank you all for attending today's conference. I wish you all a pleasant life. Goodbye.

More details:TENNOR THERAP-B IR

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