Chinese winery that hires two American Nobel laureates to lead R&D fails to impress investors

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Recently, Qinghai Spring, China’s famous expensive liquor company, said it had hired two American Nobel laureates as co-heads of research.

Qinghai Spring announced on July 14 that during a three-year term, the scientists will not only be responsible for the company’s scientific research, talent training, recommendation and introduction of high-level talents. level, but will also participate in company-related public relations activities to promote the company’s image.

Qinghai Spring is known in China for its high-priced products. Currently, the company mainly sells its “Tinghua Liquor”, which is priced at 58,600 yuan (about $8,700) a bottle in its boutique collection, and 5,860 yuan (about $870) in its standard range, although more than China’s most famous liquor, Moutai. , the Chinese national drink.

The use of alcohol in traditional medicine began long ago in China. Nowadays, companiesinfuse herbs into white liquor (baijiu) to make healing remedies with alcohol considered a catalyst.

Before switching to alcoholic products, Qinghai Spring marketed the famous Chinese herbal medicine Cordyceps Sinensis in the form of powder or lozenges. Its flagship “Jicao series”, which stands for Highest Quality Cordyceps, sold for 29,888 yuan (about $4,439) per box in 2009. With an average of 1,054 yuan per gram (about $157), it was well above the price of gold at the time.

The recently hired Nobel laureates are Ferid Murad, an American pharmacologist and professor at the University of Houston, Texas, who won the Nobel Prize in Physiology or Medicine in 1998, and Arieh Warshel, a biochemist and biophysicist and fellow at USC Norris Comprehensive Cancer Center and Distinguished Professor at USC Los Angeles who won the 2013 Nobel Prize in Chemistry.

Murad won the Nobel Prize for his discovery that nitric oxide can promote cardiovascular dilation. This discovery then led to the development and production of Viagra for the treatment of male erectile dysfunction, and is widely used in China. Murad has thus been dubbed “father of Viagra” by the Chinese, although he is not too enthusiastic about this title because the application of his discovery goes far beyond Viagra in the research and development of new drugs for cardiovascular, nervous system, cancer and joint treatment. .

Murad discovered that nitric oxide (NO) free radicals play an important role in the study of atherosclerosis, hypertension, diabetes, lung disease, mental illness, and tumors, and may also have anti-aging effects.

In response to his contract with Qinghai Spring, Murad said he was very eager to [exploring] the ability of alcohol to alter the formation and role of nitric oxide in human tissues, and other relevant experiments.

According to Qinghai Spring, the two professors will strengthen the company’s R&D capabilities “in improving alcohol health from various angles” and promote the upgrading and internationalization of related products.

Murad will guide the R&D team in studying how the brewing process can promote nitric oxide production and its effects on human health, and to pursue the company’s dual goals of harm reduction. and increased profits.

Many people on social media were skeptical and felt that the company was simply using innovative marketing to endorse its exorbitantly priced booze in order to boost sales.

On July 14, the day of the announcement of the hiring, Qinghai Spring also announced its half-year report, indicating that the estimated revenue in the first half of this year was 100 to 110 million yuan (about 15 to 16 million dollars). ), a 113-134% year-over-year increase.

Last year and 2020, Qinghai Spring lost 250 million yuan and 320 million yuan (about $37 million and $48 million) respectively.

The hiring of American Nobel laureates did not attract a flood of investors.

On the second day of the announcement, July 15, Qinghai Spring shares fell 10.0% and fell another 2.8% on July 18.

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Jennifer Bateman is a China-focused journalist.

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