Hengrui Pharmaceuticals' generic drug segment has not yet bottomed out, but innovative drugs continue to drive performance growth

Why is the growth rate of Hengrui Medicine’s non-oncology innovative drugs far exceeding that of oncology products?

On the evening of March 25, Hengrui Medicine (600276.SH; 01276.HK) announced its annual report, showing the company’s performance continued to maintain double-digit growth.

In 2025, Hengrui Medicine achieved an annual revenue of 31.629 billion yuan, a year-on-year increase of 13.02%; net profit attributable to shareholders of the listed company was 7.711 billion yuan, up 21.69%; net profit excluding non-recurring gains and losses was 7.413 billion yuan, up 20.00%.

The growth in performance is mainly driven by revenue from the innovative drug sector.

The annual report shows that in 2025, sales revenue from Hengrui’s innovative drugs reached 16.342 billion yuan, a 26.09% increase, accounting for 58.34% of total drug sales revenue.

Among Hengrui’s innovative drug sales, there are both anti-tumor and non-tumor products, with the former making up the majority, but the latter growing faster. Specifically, the company’s anti-tumor product revenue was 13.24 billion yuan, up 18.52%, accounting for 81.02% of total innovative drug sales; non-tumor product revenue was 3.102 billion yuan, up 73.36%, accounting for 18.98%.

In 2025, Hengrui Medicine had 20 products/indications included in the new national medical insurance catalog, with 10 products entering the insurance for the first time. From the annual report, some innovative drugs that entered the insurance saw significant sales growth. Among tumor products, the sales of the insured innovative drugs Rivaroxaban (second-generation AR antagonist) and Dalcibine (CDK4/6 inhibitor) continued to grow strongly. Additionally, among non-tumor products, drugs like Henggliflozin (SGLT2 inhibitor) and Remazolam (GABAa receptor agonist) achieved rapid growth in 2025 through effective clinical advantages conveyed by insurance coverage.

Besides sales of innovative drugs, licensing out innovative drugs is a routine part of Hengrui’s business, generating revenue of 3.392 billion yuan in 2025, which is also an important component of the company’s total revenue.

Although Hengrui has been intensifying its transformation into an innovative drug company in recent years, its generic drug segment has not yet recovered from the impact of domestic centralized procurement policies. The company stated that during the reporting period, the overall revenue from generics experienced a slight decline.

Currently, Hengrui has no innovative drugs approved for listing overseas. The company said it is actively promoting overseas independent development and registration. During the reporting period, the company established a new clinical R&D and collaboration center in Boston, USA. At present, the company has set up 15 R&D centers across Asia, Europe, the US, and Australia, and several innovative drugs have initiated their first overseas clinical trials during this period.

(This article is from First Financial)