Fosun Acquires Green Valley in Bid to Revive Alzheimer's Drug

Shanghai Fosun Pharmaceutical Group Co. is moving forward with a bold strategy to revive a controversial Alzheimer's drug that had been put on hold by Chinese regulators. The company announced plans to acquire a 53% stake in Green Valley Pharmaceutical Co., the developer of sodium oligomannate, a treatment initially approved in 2019 before its conditional marketing license lapsed this year. Fosun Pharma aims to complete post-marketing confirmatory trials and gather regulatory data to revalidate the drug's efficacy.

Sodium oligomannate, derived from seaweed, was once hailed as a breakthrough in Alzheimer's care in China. The drug, known as GV-971, was praised for addressing a long-standing treatment gap when it first received conditional approval in 2019. However, its results in clinical trials came under scrutiny, with some experts questioning its long-term effectiveness and the limited positive outcomes in secondary endpoints.

Despite these concerns, Fosun sees potential in the drug and in the broader market. China's aging population is expected to drive demand for dementia treatments, with government officials aiming to improve care by 2030. CEO Yi Liu emphasized that Alzheimer's is a key component of the national strategy to address an aging demographic, calling the initiative a reflection of Chinese scientific innovation.

A Test of Science and Market Confidence

The decision to acquire Green Valley and take control of GV-971 comes as Fosun faces a challenging competitive landscape. New Alzheimer's therapies from Eisai and Eli Lilly have gained traction in China, particularly after being included in the country's first catalog of innovative drugs recommended for private insurance coverage. These drugs target amyloid plaques in the brain, a well-established pathway in Alzheimer's research, while Fosun's seaweed-derived compound represents a more unconventional approach.

Green Valley's drug works by modifying gut microbiota, which scientific research suggests has a direct link to brain function. This mechanism sets it apart from amyloid-targeting drugs and highlights Fosun's focus on exploring alternative therapeutic pathways. The company's commitment to this strategy reflects a broader ambition to establish a global reputation for innovation in neuroscience.

Regulatory Hurdles and Financial Risks

Fosun will now have to navigate the regulatory hurdles that led to the suspension of GV-971's license in the first place. Green Valley had already begun post-marketing trials in 2020, but the global phase 3 study was terminated due to financial and logistical challenges. Fosun will need to not only fund new trials but also convince regulators that the drug delivers consistent, measurable benefits.

The financial burden is not insignificant. Green Valley reported a net loss of 67.61 million yuan in the first nine months of 2025, with revenue at 101.68 million yuan. Fosun's 1.41 billion yuan investment will likely require additional capital, and the company will need to demonstrate a clear path to profitability. The drug's inclusion in China's national reimbursement scheme since 2022 is a positive sign, but market access will depend on its ability to meet evolving regulatory expectations.

A Wider Scientific Gamble

Fosun's gamble is not just about a single drug but also about the future of Chinese medical science. CEO Yi Liu positioned the move as a continuation of scientific exploration originating from China, a country that has increasingly sought to establish itself as a leader in pharmaceutical innovation. The success of GV-971 could serve as a validation of China's ability to develop and commercialize novel therapies.

At the same time, the drug's unconventional pathway has drawn skepticism from some experts. While the gut-brain axis is a growing area of interest in neurology, the lack of robust evidence from long-term trials has raised questions about the drug's true potential. Fosun will need to address these concerns with high-quality data from well-designed studies.

Market Implications and Investor Outlook

For investors, Fosun's move represents both opportunity and risk. The Alzheimer's market in China is expanding rapidly, and Fosun's acquisition of Green Valley gives it a stake in a potentially high-growth segment. However, the uncertainty around GV-971's efficacy and the competition from amyloid-targeting therapies make the path to success uncertain.

The company's partnership with Eisai and Lilly in China's growing Alzheimer's market could offer some stability. Both companies have already secured insurance coverage for their drugs, which could help Fosun's drug gain similar recognition. Still, Fosun will need to differentiate its offering and build a strong case for its drug's unique mechanism of action.

What Analysts Are Watching

Analysts will be closely watching how Fosun executes its strategy over the next 12 to 18 months. Key milestones include the initiation of new clinical trials, the submission of updated regulatory data, and the drug's performance in post-marketing studies. Success in these areas could restore confidence in GV-971 and bolster Fosun's reputation as a leader in neurology.

Failure, on the other hand, could raise questions about Fosun's ability to deliver on its ambitious goals. Given the high stakes involved, the pharmaceutical sector in China-and beyond-will be watching closely to see if the drug lives up to its early promise.