Core Insights - The National Healthcare Security Administration (NHSA) has published the preliminary review results for the 2025 medical insurance and commercial insurance innovative drug directory, with significant changes in the approval status of six drugs compared to the previous version [1][2]. Summary by Categories Drug Approval Changes - Six drugs have had their approval status changed, with two drugs (Injectable Risperidone Microspheres and Injectable Triptorelin Acetate) being disapproved, while two others (Levodopa Injection and Calcium Gluconate Sodium Chloride Injection) have been approved [1][3]. - The oral suspension of Ursodeoxycholic Acid remains approved, but the conditions for approval have been adjusted [1][3]. Application Statistics - For the 2025 directory adjustment, the NHSA received 718 applications, involving 633 drug generic names, with 535 passing the preliminary review [1][2]. - The approval rate has increased significantly, reaching 84.52% this year, compared to 68.42% in 2023 and 76.66% in 2024 [2]. Notable Drugs - Levodopa Injection, used for Parkinson's disease, has been approved and is not an exclusive product, indicating its potential for broader market access [4]. - Injectable Ceftriaxone Sodium Sulbactam, another approved drug, is noted for its broad antibacterial spectrum and safety profile [4]. - The oral suspension of Ursodeoxycholic Acid has had its approval conditions modified to include rare disease categories [6]. Innovative Drug Directory - The commercial insurance innovative drug directory has been introduced alongside the basic medical insurance directory, with 141 applications received, of which 121 passed the preliminary review [2]. - A significant number of drugs in both directories are new, with 303 in the basic medical insurance directory meeting specific conditions for approval [7]. Rare Disease Drugs - The directories include a total of 37 rare disease drugs in the basic medical insurance directory and 35 in the commercial insurance innovative drug directory, with 19 drugs approved in both [10][11]. - Notable rare disease drugs include those from Merck and other companies, which have gained attention for their potential market impact [11][12]. Market Trends - The introduction of the commercial insurance innovative drug directory is expected to enhance market access for several high-profile drugs, including CAR-T therapies that have previously struggled to gain approval [9][12]. - The performance of rare disease drug companies has seen significant stock price increases, indicating strong market interest and potential for growth [13].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has officially announced the preliminary review results for the adjustment of the 2025 medical insurance and commercial insurance innovative drug catalog, indicating an increase in the number of drugs passing the review and the overall approval rate compared to previous years [1][2]. Summary by Relevant Sections Drug Review Changes - Six drugs underwent changes in their review status, with two drugs, injectable risperidone microspheres and injectable triptorelin, being disapproved, while injectable levodopa and calcium gluconate sodium injection were approved [1][5][6]. - The injectable risperidone microspheres, an exclusive product of Shengzhao Pharmaceuticals, was first launched in mainland China in February 2025 for treating mental disorders [6][7]. - The injectable triptorelin, also an exclusive product, was launched in 2023 for treating prostate cancer and precocious puberty [7]. Approval Statistics - A total of 718 applications were received for the 2025 catalog adjustment, involving 633 drug generic names, with 535 passing the preliminary review, resulting in an approval rate of 84.52% [1][2]. - The approval rates have shown a significant increase over the past three years, with 68.42% in 2023, 76.66% in 2024, and 84.52% in 2025 [2]. Innovative Drug Catalog - The commercial insurance innovative drug catalog was introduced for the first time, with 141 applications received, involving 141 drug generic names, and 121 passing the review [3]. - Among the drugs, 79 were submitted for both the basic medical insurance catalog and the commercial insurance innovative drug catalog [3]. Notable Products - Several notable products are highlighted, including CAR-T products that have previously failed to enter the medical insurance catalog but are now included in the commercial insurance innovative drug catalog [11][12]. - Unique products such as the first and only AKT inhibitor and the only Trop-2 ADC for breast cancer treatment are also included in the catalogs, indicating a focus on innovative therapies [13][14]. Rare Disease Medications - The review process has also included rare disease medications, with 37 drugs in the basic medical insurance catalog and 35 in the commercial insurance innovative drug catalog, of which 19 are approved in both [15][16]. - The approval of rare disease drugs is seen as a significant development, with companies like Beihai Kangcheng gaining attention for their innovative products [20].

Core Viewpoint - The credit rating agency maintains the credit rating of Lingkang Pharmaceutical Group Co., Ltd. at A- with a stable outlook, indicating a consistent assessment of the company's creditworthiness and financial stability [1][4]. Company Overview - Lingkang Pharmaceutical primarily engages in the research, production, and sales of chemical prescription drugs, with a diverse product range including cardiovascular, anti-infection, parenteral nutrition, and digestive system medications [4][12]. - As of March 2025, the company holds a total asset value of 1.23 billion yuan and equity of 0.75 billion yuan, with a debt-to-asset ratio of 39.00% [4][12]. Financial Performance - The company reported a significant increase in operating revenue and gross profit, achieving 3.80 billion yuan in revenue and 1.78 billion yuan in gross profit in 2024, reflecting a substantial year-on-year growth [11][13]. - The gross profit margin for the company was 46.88%, showing a slight decrease compared to previous periods due to pricing pressures from centralized procurement policies [11][13]. Market Position and Strategy - Lingkang's main products include the unique injection of Huperzine A, which maintains a competitive edge in the market, and the company has strengthened its R&D efforts to enhance product quality and clinical application value [4][12]. - The company has adjusted its sales strategy to increase the promotion of centrally procured products and expand sales channels in private hospitals, which has contributed to the growth of its revenue and gross profit [4][13]. Challenges and Risks - The company faces challenges such as low capacity utilization of production lines and ongoing losses in total profit due to the impact of centralized procurement policies on its anti-infection drug profitability [5][12]. - Lingkang has decided to terminate the construction of the "Lingkang Convertible Bond" fundraising project due to changes in industry policies and market conditions, leaving future funding plans uncertain [5][6]. Industry Analysis - The pharmaceutical manufacturing industry in China is experiencing growth driven by increasing demand due to rising disposable income and an aging population, with the industry expected to continue evolving under ongoing policy reforms [8][9]. - The overall revenue of the pharmaceutical manufacturing sector remained stable, while total profits saw a decline, indicating a challenging environment influenced by centralized procurement and pricing regulations [8][9].