Innovative pharmaceutical player SIMCERE PHARMA (02096.HK), with a market cap of over 30 billion yuan, recently secured a massive order potentially worth up to $1.06 billion (approximately 7.4 billion yuan).

According to an announcement from SIMCERE PHARMA, its subsidiary, Simcere Zaiming, entered into an exclusive licensing agreement with France's Ipsen for the ADC candidate new drug SIM0613. This deal, with a maximum value of $1.06 billion, is equivalent to ten times SIMCERE PHARMA's net profit from the previous year.

An analysis reveals that after experiencing a performance trough in 2022 and 2023, SIMCERE PHARMA's financial results began a gradual recovery starting last year.

In the first half of this year, SIMCERE PHARMA achieved revenue of 3.585 billion yuan, a year-on-year increase of 15.14%; it recorded a net profit attributable to shareholders of 604 million yuan, surging 32.2% compared to the same period last year.

However, behind this recovery, SIMCERE PHARMA faces other challenges. As of the end of the first half of the year, the company's asset-liability ratio stood at 42.61%, an increase of 4.02 percentage points from the end of the previous year.

In the capital markets, SIMCERE PHARMA has performed exceptionally well this year. As of the market close on December 25th, SIMCERE PHARMA's share price was HK$12.77 per share, having risen over 80% since the start of the year, with a latest market capitalization of HK$33.147 billion.

Benefiting from the company's strong market performance, the wealth of founder Ren Jinsheng has surged accordingly. In the "2025 Hurun Rich List" published at the end of October, the Ren Jinsheng family ranked 382nd with a fortune of 17 billion yuan, which skyrocketed by 127% compared to the previous year.

Subsidiary Signs "Mega-Deal," Potentially Receiving Up to $1.06 Billion On December 22nd, SIMCERE PHARMA announced that on December 19th, its subsidiary Simcere Zaiming signed an exclusive licensing agreement with Ipsen Pharma SAS.

Under the terms of the agreement, Ipsen will obtain the global exclusive rights for the development, production, and commercialization of SIM0613—an antibody-drug conjugate (ADC) targeting LRRC15 developed by Simcere Zaiming—outside Greater China.

According to the agreement terms, SIMCERE PHARMA is eligible to receive payments totaling up to $1.06 billion, including an upfront payment of $45 million, along with development, regulatory, and commercial milestone payments, plus tiered sales royalties.

This marks the third early-stage research project licensed out by Simcere Zaiming this year. As of December this year, the SIMCERE PHARMA Group has achieved out-licensing of proprietary innovative drug patent technologies for four self-developed drugs, with cumulative licensing transaction amounts nearing $3.4 billion.

The announcement introduced that SIM0613 is a novel ADC targeting Leucine-Rich Repeat-Containing 15 (LRRC15).

Reportedly, LRRC15 is highly expressed on the surface of various solid tumors and cancer-associated fibroblasts (CAFs), but is rarely expressed in normal cells.

After binding to LRRC15, SIM0613 is internalized into tumor cells, where it releases its cytotoxic payload, thereby killing the tumor cells while minimally affecting normal cells.

SIM0613 is specially designed to penetrate deeply into tumors and CAFs, demonstrating significant tumor regression effects in various preclinical in vivo models.

Both companies involved in this transaction are significant players in the pharmaceutical field. SIMCERE PHARMA, founded in 1995, is an innovation and R&D-driven pharmaceutical company.

SIMCERE PHARMA primarily focuses on neuroscience, oncology, autoimmune diseases, and anti-infectives, while also proactively laying the groundwork for disease areas with major future clinical needs.

Ipsen, on the other hand, is a French biopharmaceutical company founded in 1929, dedicated to three therapeutic areas: oncology, rare diseases, and neuroscience.

Ipsen's R&D pipeline is driven by both internal and external innovation, supported by nearly a century of R&D experience and global R&D centers located in the US, France, and the UK.

Leveraging teams in over 40 countries and regions and a network of partners worldwide, Ipsen can make its medicines available to patients in more than 100 countries and regions.

First-Half Performance Recovers, Asset-Liability Ratio Rises For SIMCERE PHARMA, the potential payment of up to $1.06 billion (approx. 7.4 billion yuan) from the transaction with Ipsen is undoubtedly a substantial sum.

This figure not only exceeds the company's total revenue of 6.635 billion yuan for the entire previous year but is also more than ten times its net profit from last year.

The upfront payment alone, amounting to $45 million (approx. 315 million yuan), constitutes over half of SIMCERE PHARMA's net profit of 604 million yuan for the first half of this year.

Analysis shows that in 2022 and 2023, SIMCERE PHARMA's net profit experienced negative growth for two consecutive years, with profit size halving from 1.499 billion yuan in 2021 to 714 million yuan in 2023.

In 2024, SIMCERE PHARMA finally halted the decline in net profit, achieving a net profit of 733 million yuan, a slight increase of 2.69% year-on-year. During the same period, the company's revenue grew marginally by 0.41% to 6.635 billion yuan.

Entering 2025, SIMCERE PHARMA's performance showed a comprehensive recovery. In the first half of the year, the company achieved revenue of 3.585 billion yuan, up 15.14% year-on-year, and recorded a net profit attributable to shareholders of 604 million yuan, a significant increase of 32.2%.

According to SIMCERE PHARMA, the company's revenue primarily stems from its focused therapeutic areas. Revenue from the neuroscience领域 reached 1.249 billion yuan in the first half, accounting for 34.8% of total revenue and growing 37.3% year-on-year.

During the same period, the oncology领域 generated revenue of 874 million yuan, constituting 24.4% of total revenue and increasing by 41.1% year-on-year. The autoimmune disease领域 contributed 878 million yuan in revenue, representing 24.5% of total revenue, with a growth of 3.3%.

However, revenue from SIMCERE PHARMA's other areas declined by 20.5% year-on-year to 584 million yuan in the first half.

SIMCERE PHARMA stated that the company has consistently adhered to a "differentiated, more effective, blockbuster product" R&D strategy to achieve high-quality development.

The interim report shows that SIMCERE PHARMA's R&D investment includes R&D expenses and the newly added portion of intangible assets from acquired licensing rights.

In the first half, the company's total R&D investment reached 1.028 billion yuan, a substantial increase of 68% year-on-year. R&D investment as a percentage of revenue was 28.7%, up 9 percentage points from the same period last year.

Specifically, R&D expenses were 632 million yuan, an increase of 11.7% year-on-year, accounting for 17.6% of revenue, down 0.6 percentage points year-on-year.

During the same period, the newly added value from intangible assets related to acquired licensing rights was 396 million yuan, an increase of 46 million yuan year-on-year, accounting for 11% of revenue, up 9.5 percentage points year-on-year.

In the first half, within its focused areas, SIMCERE PHARMA had ten innovative drugs approved for market sale. By the end of the first half, the company's products had been included in guidelines and consensuses issued by over 100 authoritative professional societies, with more than 45 products included in the National Reimbursement Drug List (NRDL).

Regarding marketing and promotion, SIMCERE PHARMA has also been generous. The company stated in its interim report that, leveraging its nationwide marketing network and leading commercialization capabilities, it will continue to strengthen its specialized marketing capabilities and improve drug coverage and accessibility.

According to a disclosure by SIMCERE PHARMA on October 20th, the actual transaction amount under the exclusive promotion services cooperation agreement for the first nine months of this year had already reached approximately 59.71 million yuan.

SIMCERE PHARMA's board estimated that the initially revised annual caps for the fiscal years ending December 31, 2025, and 2026, would be insufficient to meet the group's actual operational needs.

Consequently, the board resolved to further revise the annual caps for the exclusive promotion services cooperation agreement for 2025 and 2026, raising the original caps of 65 million yuan and 100 million yuan to 100 million yuan and 150 million yuan, respectively.

It is noteworthy that as of the end of the first half, SIMCERE PHARMA's total liabilities stood at 5.371 billion yuan, at a relatively high level in recent years; the asset-liability ratio increased to 42.61%, up 4.02 percentage points from the end of the previous year.

From Pharmaceutical Factory Technician to Helmsman of a 30 Billion Yuan Pharma Enterprise The growth of SIMCERE PHARMA into a domestic pharmaceutical giant with a market cap exceeding 30 billion yuan is closely linked to the entrepreneurial choices of its founder, Ren Jinsheng.

Public information shows that Ren Jinsheng was born in 1962. In 1982, he graduated from Nanjing University of Chinese Medicine (formerly Nanjing College of Traditional Chinese Medicine) with a junior college diploma in Chinese Materia Medica. He later obtained a Master's degree in Business Administration from Nanjing Normal University in 1996.

After graduating in 1982, Ren Jinsheng was assigned to work at Qidong Pharmaceutical Factory (now Gaitianli Pharmaceutical Holding Group Co., Ltd.). Over ten years, he rose from an ordinary technician on the workshop floor to Deputy Factory Manager in charge of operations, successfully building the "Gaitianli" brand nationwide.

In 1992, Ren Jinsheng, along with six colleagues, plunged into the entrepreneurial wave. The seven individuals pooled 50,000 yuan to contract the New Specialty Drug Business Department of Jiangsu Pharmaceutical Industry Company, pioneering the "general distributor" and "general agent" business models in China.

At that time, the children's oral penicillin "Zailin," for which they held the general distributorship, saw its sales exceed the 100 million yuan mark by the end of its second year on the market. Both sales revenue and profits surpassed those of Jiangsu Pharmaceutical Industry Company, making Ren Jinsheng widely known.

According to recollections by his son, Ren Yong, he once asked his father why he gave up an "iron rice bowl" job to choose entrepreneurship. Ren Jinsheng replied that as a child, he often looked up at the stars from the farmland, pondering his future and desperately wanting to change his destiny, stating, "He is simply a person with considerable ambition."

In March 1995, Jiangsu Pharmaceutical Industry Company underwent restructuring. Ren Jinsheng became the General Manager of the newly established Jiangsu Chengong Pharmaceutical Co., Ltd., which became the predecessor of SIMCERE PHARMA.

In 1999, Jiangsu Chengong Pharmaceutical underwent a second restructuring, transforming into an enterprise primarily led by private capital.

In 2001, Simcere transitioned from a pharmaceutical commercial company to a pharmaceutical manufacturing company through a capital operation involving the acquisition of Hainan Fuhai.

In 2006, SIMCERE PHARMA successfully acquired Yantai Medgenn Company for 200 million yuan, thereby entering the new field of oncology.

Corporate records show that in 2007, SIMCERE PHARMA listed on the US stock market, becoming China's first biological and chemical pharmaceutical company to be listed on the New York Stock Exchange.

However, due to the US market's valuation of SIMCERE PHARMA failing to meet expectations and in pursuit of better development opportunities, Ren Jinsheng made the decisive move to take the company private and delist from the US market.

Subsequently, under his impetus, SIMCERE PHARMA successfully listed on the Hong Kong Stock Exchange in 2020.

Reviewing SIMCERE PHARMA's development path, the company initially focused on high-barrier generic drugs, boasting several star products with annual sales exceeding 100 million yuan, such as Zailin, Anqi, and Yintaiqing.

However, Ren Jinsheng was not content with the status quo. He keenly recognized the limitations and developmental bottlenecks of the generic drug market. Under his leadership, SIMCERE PHARMA strategically planned a transition "from generics to innovation."

Through persistent efforts, SIMCERE PHARMA has now successfully transformed into an innovation and R&D-driven pharmaceutical company.

In the first half of this year, revenue from SIMCERE PHARMA's innovative drug business reached 2.776 billion yuan, accounting for 77.4% of total revenue, an increase of 26% compared to 2.203 billion yuan in the same period of 2024.

Following the securing of this potential $1.06 billion (approx. 7.4 billion yuan) "mega-deal," can Ren Jinsheng achieve new heights of wealth? The developments will continue to be monitored.