(Yicai) March 11 -- Shares of Shuangcheng Pharmaceuticals sank by their daily trading limit after the underperforming Chinese drugmaker said it had failed in a bid to buy Aura Semiconductor, a deal that would have marked the firm’s entry into the chip sector.

Shuangcheng [SHE: 002693] fell 10 percent to close at CNY12.43 (USD1.70) a share, deepening its year-to-date loss to 32 percent. The stock had soared sevenfold in less than a month after it resumed trading on Sept. 11 last year, following the announcement of the Haikou-based firm’s bid for Aura. It hit a record high of CNY40.98 on Oct. 29.

Shuangcheng said late yesterday that it would terminate its bid to buy Ningbo-based Aura after failing to agree terms with the chipmaker's shareholders, despite many rounds of negotiations.

Shuangcheng had planned to shift its core business from chemically synthesized peptide drugs to chip design through the acquisition, seeking new profit drivers amid slumping pharmaceutical revenues, according to its earlier filings.

China's centralized drug procurement program, which aims to lower costs for patients, has drastically cut the prices of Shuangcheng's products since 2018, leading to deepening losses. The firm expects an annual net loss of between CNY55 million and CNY80 million (USD7.6 million to USD11 million) for last year, compared with CNY50.7 million in 2023.

Shuangcheng has said that the Shenzhen Stock Exchange is likely to warn the company after its 2024 financial report is published that it is at risk of being delisted. Under exchange rules, two straight years of losses and revenue below CNY300 million (USD41.4 million) trigger such an alert.

Aura specializes in clock chips, power management chips, sensor chips, and radio frequency chips, which are used in data centers, the Internet of Things, and the automotive industry.

Editor: Emmi Laine