Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" (maintained) [1] Core Insights - The innovative drug industry is entering a rapid growth phase, with significant investment opportunities expected in the next 6-12 months [3] - The pharmaceutical sector is experiencing a shift from generic drugs to innovative drugs, with major companies showing robust performance and growth driven by internationalization and commercialization capabilities [5][14] - The optimization of centralized procurement policies and the support of commercial insurance are expected to benefit the pharmaceutical industry in the long term [6][31] Summary by Sections 1. Performance Overview - The pharmaceutical sector's performance in the first half of 2025 shows steady growth, with a transition from generic to innovative drugs. Key companies like Hengrui Medicine reported a revenue of 15.76 billion yuan (up 15.88% year-on-year) and a net profit of 4.45 billion yuan (up 29.67% year-on-year) [5][14] - China National Pharmaceutical Group also achieved double-digit growth, with a revenue of 17.58 billion yuan (up 9.8% year-on-year) and a net profit of 3.39 billion yuan (up 13.10% year-on-year) [5][14] - The innovative drug revenue for Hengrui Medicine exceeded 60%, with significant contributions from newly approved drugs [16] 2. Market Dynamics - The National Healthcare Security Administration has initiated adjustments to the national basic medical insurance and commercial health insurance drug directories, which are expected to enhance the market for innovative drugs [6][29] - The recent centralized procurement policies have shifted from broad price reductions to more refined management, which is anticipated to stabilize the expectations for generic drug businesses [6][34] 3. Recommended Stocks - Recommended stocks in the pharmaceutical and biotechnology sector include Hengrui Medicine, CSPC Pharmaceutical Group, East China Pharmaceutical, and others, which are expected to benefit from the ongoing transformation and innovation in the industry [7][30] 4. Innovation and Internationalization - The report highlights that many traditional pharmaceutical companies are undergoing innovation transformations, with significant R&D investments expected to yield results in the near future. For instance, Hengrui Medicine and CSPC Pharmaceutical Group are projected to exceed 5 billion yuan in R&D expenses [36] - The total amount of license-out transactions for Chinese innovative drugs reached nearly 66 billion USD in the first half of 2025, indicating a strong internationalization trend [36]

Core Insights - The competitiveness of the biopharmaceutical industry ultimately reflects the cluster effect [1][11] - The biopharmaceutical industry is a core track of global technological revolution and industrial transformation, serving as a key indicator of regional economic high-quality development [2] Industry Development - The Yangtze River Delta region, centered around Shanghai Zhangjiang and Suzhou BioBAY, has established a first-mover advantage in the biopharmaceutical field due to early policy layouts, dense research resources, and a complete industrial chain [2] - Guangzhou Huangpu District has not lagged despite being a latecomer; it has optimized its policy system, built talent aggregation platforms, and focused on breakthroughs in niche markets, gradually compensating for industrial chain shortcomings [2][12] Key Companies and Innovations - Yunzhou Biotech, founded by Dr. Lan Tian in Huangpu District in 2014, focuses on gene delivery, a critical link between basic research and clinical application [3] - The company developed the world's first intelligent design and ordering platform for gene carriers, integrating over 120 carrier systems and more than 2 million carrier components, significantly lowering the barriers for researchers [4][5] - Yunzhou Biotech has become the world's largest custom gene carrier supplier, serving over 7,000 institutions in more than 130 countries, with a cumulative delivery of over 1 million carriers by September 2024 [5][6] Market Position and Achievements - In 2023, Yunzhou Biotech achieved a valuation of 7 billion, becoming a unicorn and the first biopharmaceutical company in Guangzhou to reach this status [6] - The company has established a full-service capability in the gene drug development chain, including CRO and CDMO services, with its products approved for clinical trials in the U.S. [6][7] Competitive Landscape - Innovation in drug development is a core competitive advantage in the biopharmaceutical industry, with companies like Kangfang Biopharma emerging as leaders in the field [8] - Kangfang Biopharma has developed over 50 innovative drug candidates, with 24 products undergoing clinical trials, and has successfully commercialized 7 first-class new drugs [10] Ecosystem and Collaboration - Huangpu District's "bending overtaking" is not merely the success of a single enterprise but a result of creating a quality industrial ecosystem that fosters collaboration between leading external companies and local enterprises [12] - The presence of major companies like Hengrui Medicine and Nuocheng Jianhua in Huangpu has attracted a network of supporting enterprises, enhancing the regional industrial chain [13][14]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Insights - The company achieved a revenue of 15.76 billion yuan in H1 2025, representing a year-over-year growth of 15.88%, and a net profit attributable to shareholders of 4.45 billion yuan, up 29.67% year-over-year, slightly exceeding expectations due to a significant increase in licensing income [1][2] Summary by Sections Revenue and Profit Growth - The company's innovative drug sales and licensing income reached 9.56 billion yuan in H1 2025, accounting for 60.66% of total revenue, with innovative drug sales alone contributing 7.57 billion yuan. The clinical value of innovative drugs such as Rivoraxaban and Darsilene has been recognized by doctors, leading to rapid revenue growth [2] Business Development (BD) Achievements - In H1 2025, the company secured three external licensing agreements, including a 15 million euro upfront payment from Merck for an oral GnRH receptor antagonist, a 200 million USD upfront payment from MSD for an Lp(a) inhibitor, and a 500 million USD upfront payment from GSK for 12 new drugs. The total potential milestone payments and sales royalties from these agreements could reach up to 17.7 billion USD [3] Operational Efficiency - The company's management, sales, and R&D expense ratios were 8.15%, 27.85%, and 20.48% respectively, showing a year-over-year decrease of 0.48pp, 1.11pp, and 1.86pp, indicating effective cost control and improved operational efficiency. The net operating cash flow increased significantly by 41.80% to 4.30 billion yuan, reflecting strong cash generation capabilities [3] Profit Forecast and Valuation - The company is recognized as a leading player in China's innovative drug sector, with continuous investment in R&D. The net profit forecasts for 2025-2027 have been raised to 9.05 billion yuan, 9.48 billion yuan, and 10.60 billion yuan respectively, with corresponding P/E ratios of 48, 45, and 41 [4][5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5]. Core Insights - The company achieved a revenue of 15.76 billion RMB in H1 2025, representing a year-on-year growth of 15.88%, and a net profit attributable to shareholders of 4.45 billion RMB, up 29.67% year-on-year [2]. - The sales and licensing revenue from innovative drugs reached 9.56 billion RMB, accounting for 60.66% of total revenue, with significant contributions from new drugs such as Rivaroxaban and others [3]. - The company has successfully established multiple partnerships, generating substantial upfront payments, which have significantly enhanced its performance [3]. - R&D investment totaled 3.87 billion RMB in H1 2025, with a focus on over 100 innovative products undergoing more than 400 clinical trials [4]. - The company is expected to achieve revenues of 33.8 billion RMB, 38 billion RMB, and 42.6 billion RMB in 2025, 2026, and 2027 respectively, with net profits projected at 9 billion RMB, 10.5 billion RMB, and 12.1 billion RMB for the same years [5]. Summary by Sections Performance Review - In H1 2025, the company reported a revenue of 15.76 billion RMB, a 15.88% increase year-on-year, and a net profit of 4.45 billion RMB, reflecting a 29.67% growth [2]. Operational Analysis - The innovative drug sales and licensing revenue reached 9.56 billion RMB, with new drugs like Rivaroxaban and others showing strong growth [3]. - The company has successfully executed several high-value partnerships, including a 2 billion USD deal with MSD and a 750 million USD deal with IDEAYA, contributing to its revenue growth [3]. Research and Development - The company invested 3.87 billion RMB in R&D in H1 2025, with 6 new class 1 drugs approved, indicating a fruitful R&D phase [4]. - The company is conducting over 400 clinical trials for more than 100 innovative products, showcasing its commitment to innovation [4]. Profit Forecast and Valuation - The company is projected to achieve revenues of 33.8 billion RMB, 38 billion RMB, and 42.6 billion RMB in 2025, 2026, and 2027, respectively, with net profits expected to reach 9 billion RMB, 10.5 billion RMB, and 12.1 billion RMB [5].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容所產生或因依賴 該等內容而引致的任何損失承擔任何責任。 Jiangsu Hengrui Pharmaceuticals Co., Ltd. 江蘇恒瑞醫藥股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：1276） 海外監管公告 本公告乃根據香港聯合交易所有限公司證券上市規則第13.10B條刊發。 根據中華人民共和國的有關法例規定，江蘇恒瑞醫藥股份有限公司（「本公司」）在 上海證券交易所網站( www.sse.com.cn )刊發了以下公告。茲載列如下，僅供參閱。 承董事會命 江蘇恒瑞醫藥股份有限公司 董事長 孫飄揚先生 中國上海 2025年8月20日 於本公告日期，董事會成員包括(i)執行董事孫飄揚先生、戴洪斌先生、馮佶女 士、張連山先生、江寧軍先生及孫杰平先生；(ii)非執行董事郭叢照女士；及(iii) 獨立非執行董事董家鴻先生、曾慶生先生、孫金雲先生及周紀恩先生。 江苏恒瑞医药股份有限公司 2025 年半年度报告 公司代码：600276 ...

Core Insights - Sanofi has confirmed the cessation of the promotion of its PCSK9 inhibitor, Alirocumab, in the Chinese market due to global supply issues and a strategic upgrade in its cardiovascular product line [2][3] - The exit of Alirocumab from the market has opened opportunities for domestic pharmaceutical companies to enter the PCSK9 inhibitor space [1][3] Industry Overview - PCSK9 inhibitors are considered a milestone in lipid-lowering therapies, with significant implications for managing high LDL cholesterol levels, which are primarily influenced by genetic factors [1][3] - The understanding of lipoprotein(a) [Lp(a)] in cardiovascular diseases has led to increased interest in developing new lipid-lowering drugs targeting this specific marker [1][7] Market Dynamics - The market for lipid-lowering medications is competitive, with established statin drugs and newer PCSK9 inhibitors being used in combination for optimal patient outcomes [4][5] - There are currently seven approved PCSK9 inhibitors in China, including both imported and domestic products, with ongoing developments from various companies [5][6] Emerging Opportunities - Companies are actively pursuing the development of alternative medications in light of Alirocumab's market exit, indicating a robust interest in the PCSK9 inhibitor segment [3][6] - The market is also seeing advancements in therapies targeting Lp(a), with several multinational corporations engaged in clinical trials for new drugs aimed at lowering Lp(a) levels [7]

Core Viewpoint - Eli Lilly announced the acquisition of Verve Therapeutics for up to $1.3 billion, including nearly $1 billion upfront payment, which significantly boosted Verve's stock price by over 80% on the announcement day [1][3]. Group 1: Acquisition Details - Eli Lilly's acquisition of Verve Therapeutics aims to enhance its portfolio in the cardiovascular disease treatment sector, alongside its existing GLP-1 weight loss drug, expected to generate over $30 billion in total sales this year [3]. - Verve Therapeutics is developing a gene-editing therapy, Verve-102, targeting the PCSK9 protein to lower cholesterol levels, potentially transforming chronic cardiovascular disease treatment into a one-time therapy [1][3]. Group 2: Market Potential and Clinical Trials - Verve-102 is currently undergoing a Phase 1b clinical trial and has received Fast Track designation from the FDA, indicating its potential for significant market impact if proven effective [3]. - The gene therapy market for cardiovascular diseases may face skepticism regarding demand, as existing PCSK9-targeting drugs already meet a substantial portion of market needs [4]. Group 3: Competitive Landscape - The PCSK9 monoclonal antibodies have shown to reduce LDL cholesterol levels by over 50% compared to statins, with several products already available in the market, including a long-acting PCSK9 monoclonal antibody recently launched in China [4][5]. - Oral PCSK9 inhibitors from major pharmaceutical companies like Merck and AstraZeneca are expected to drive sales from approximately $4 billion to $12 billion by 2034, indicating a growing competitive landscape [6].

Core Viewpoint - Heng Rui Medicine reported record high revenue and net profit for Q1 2025, but the market reaction was lukewarm, with a slight decline in stock price despite strong financial performance [1][2]. Financial Performance - For Q1 2025, Heng Rui Medicine achieved revenue of 7.206 billion yuan, a year-on-year increase of 20.14% [1] - The net profit attributable to shareholders was 1.874 billion yuan, up 36.90% year-on-year [1] - The net profit excluding non-recurring items was 1.863 billion yuan, reflecting a 29.35% increase year-on-year [1] Licensing and R&D Investments - The company recognized a $75 million upfront payment from IDEAYA Biosciences as revenue, contributing to profit growth [2] - Heng Rui Medicine licensed the global development rights (excluding Greater China) for the antibody-drug conjugate SHR-4849 to IDEAYA Biosciences [2] - Cumulative R&D investment reached 46 billion yuan, with R&D expenses for Q1 2025 amounting to 1.533 billion yuan [2] New Drug Approvals and Management Changes - Six innovative products have been approved in 2025, including a new generation JAK1 inhibitor and the first PCSK9 inhibitor in the cardiovascular field [3] - In Q1 2025, the company received 28 clinical trial approval notices [3] - A significant management change occurred with the appointment of Feng Ji as the new president and COO, seen as a move towards accelerating innovation and transformation [3]

Core Insights - Heng Rui Pharmaceutical reported a significant increase in revenue and net profit for Q1 2025, with revenue reaching 7.206 billion yuan, a year-on-year growth of 20.14%, and net profit attributable to shareholders at 1.874 billion yuan, up 36.90% year-on-year [1][2] Financial Performance - The growth in profit is attributed to revenue recognition from licensing agreements, particularly a $75 million upfront payment from IDEAYA, which significantly boosted profits [2][5] - The net cash flow from operating activities was 555 million yuan, a decline of 55.75% year-on-year, primarily due to increased R&D investments, although cash received from sales still showed a 22% increase year-on-year [2][3] - R&D expenses for Q1 2025 reached 1.533 billion yuan, a 25.66% increase year-on-year, with cumulative R&D investments totaling 46 billion yuan [4] Innovation and Product Development - The company has received approval for 19 first-class innovative drugs and 4 second-class new drugs in China, with over 90 innovative products currently in clinical development [4] - Recent approvals include six innovative products this year, highlighting the company's strong pipeline in oncology and diabetes treatment [4][6] Licensing and Partnerships - Heng Rui's licensing business has become a key growth driver, with 14 licensing agreements for innovative drugs, including a recent $200 million licensing deal with Merck for the Lp(a) inhibitor HRS-5346 [5][6] - The company also granted exclusive commercialization rights for the oral GnRH receptor antagonist SHR7280 to Merck, further validating its innovative capabilities [6] Internationalization and Leadership - The appointment of Feng Ji as the new CEO is seen as a strategic move to accelerate innovation and international expansion, supported by his extensive industry experience [7] - The company has also strengthened its international strategy by hiring Jiang Ningjun to oversee global drug development and business expansion, leading to several overseas business development transactions [7] Compliance Challenges - Despite the positive growth and innovation, Heng Rui faces challenges regarding quality compliance, having received complete response letters (CRLs) from the FDA, indicating that it has not fully met the regulatory standards [8][9] - The company must address these compliance issues as it transitions from a hybrid model of generic and innovative drugs to a fully innovative global pharmaceutical enterprise [9]

Group 1 - Heng Rui Pharma appointed Ms. Feng Ji as President and Chief Operating Officer, responsible for company management, while former President Dai Hongbin became Vice Chairman [2] - Ms. Feng Ji has over 30 years of experience in the pharmaceutical industry, having worked at Shanghai Renji Hospital, Novartis, Amgen, and AstraZeneca, with a strong background in sales, marketing, and international business operations [2] - The appointment comes at a critical time as Heng Rui Pharma aims to enhance its international presence, having submitted its application to the Hong Kong Stock Exchange on January 6 [2] Group 2 - Heng Rui Pharma has been focusing on the oncology field but is increasingly expanding into chronic disease areas, with 47 innovative pipelines in non-oncology fields, surpassing the number of oncology products in development [2] - Since 2023, the company has accelerated the launch of non-oncology innovative drugs in China, with nine new drugs including Henggrelin, Aimabuxitin, and others covering various fields such as metabolism, cardiovascular, and neuroscience [3] - Industry insiders believe that Ms. Feng Ji's extensive experience in chronic disease will facilitate Heng Rui's rapid expansion in the non-oncology sector [3]