INNOGEN-B has become the first domestic company to commercialize a long-acting GLP-1 drug following the approval of its Esupaglutide α injection in 2025. One year later, the company released its first financial report featuring significant revenue: 132 million yuan in revenue, an 89% gross margin, and a net loss of 341 million yuan.

While the capital market had high hopes for domestic GLP-1 therapies, these figures reveal a harsher reality: product approval does not guarantee commercial success. Caught between multinational giants and a wave of generic competitors, INNOGEN-B faces three major structural risks.

First, the company's gross margin appears artificially high, as actual production costs are obscured by accounting practices. Although INNOGEN-B reported an impressive 89% gross margin in 2025, a closer look at its financial statements shows this metric is inflated. According to notes in the financial report, all pre-approval production costs were classified as R&D expenses, meaning the current cost of sales only includes expenses such as filling and transportation. As the company's own production capacity comes online, full costs including depreciation, labor, and raw materials will be incorporated into the cost of sales, likely causing a significant decline in the gross margin. If product prices also face downward pressure at that time, the company's profit model will be squeezed from both sides.

Second, a 73-fold surge in sales expenses highlights an unsustainable "sell more, lose more" dynamic. INNOGEN-B's sales and distribution expenses reached 177 million yuan in 2025, compared to just 2.39 million yuan in the same period of 2024. The sales team has expanded to 89 people, led by former AstraZeneca executive Xu Wenjie. While such investment is understandable during the brand-building phase, the problem is that current revenue is insufficient to cover both sales and R&D expenditures. The company's net loss widened by 95.4% year-over-year to 341 million yuan in 2025, demonstrating a classic pattern of revenue growth without profit improvement. More concerningly, Esupaglutide α is currently only approved for type 2 diabetes, a market characterized by intense competition and high price sensitivity. Unless the company can quickly expand into higher-value indications like weight management, the efficiency of its current sales investment will face severe challenges.

Third, the market landscape is poised for dramatic change, with a price war imminent. The domestic GLP-1 market remains dominated by Eli Lilly and Novo Nordisk. In the first three quarters of 2025, Lilly's tirzepatide achieved global sales of $24.837 billion, surpassing the former "drug king" Keytruda. Meanwhile, Novo Nordisk's semaglutide continues to hold a strong market share in China. However, semaglutide's core patent expired on March 20, 2026. To date, marketing applications for biosimilar versions have been accepted for about 10 companies including Jiuyuan Gene, Huadong Medicine, Livzon Pharmaceutical Group, and Qilu Pharmaceutical. This means domestic generic versions will soon flood the market, putting tremendous pressure on GLP-1 pricing. As an originator company, INNOGEN-B must compete against both the brand strength of multinational corporations and the price competition from generics. Esupaglutide α has yet to establish clear differentiation—whether its "ultra-long-acting" feature can support a price premium remains to be proven by the market.

In conclusion, the GLP-1 story in China is just beginning. While INNOGEN-B has taken the first step in commercializing a domestic long-acting GLP-1 drug, that step has been challenging. Breaking the 100 million yuan revenue mark is a starting point, not a finish line. Under pressure from margin compression, high sales expenses, and intensifying market competition, whether the company can successfully report top-line data for the weight management indication in 2026 and thereby open a second growth curve will be crucial to escaping the "sell more, lose more" dilemma. For investors, INNOGEN-B's financial report sends a clear signal: the GLP-1 narrative has shifted from "having a product" to "being able to profit." The latter challenge is far more demanding than the former.