Following the Federal Reserve's announcement of its first rate cut in September this year, the trend of global capital flowing toward emerging markets has become increasingly evident, potentially providing significant marginal support to Hong Kong's innovative drug sector, which is currently in a valuation recovery cycle. Combined with positive domestic signals encouraging the full-chain development of innovative drugs and "anti-involution" policies, the market widely anticipates that the Hong Kong innovative drug bull market will continue. For XUANZHUBIO-B (02575), which possesses commercialization "three pillars" and both sustainable cash generation and innovation capabilities, its Hong Kong listing comes at an opportune time.
As the core innovative drug platform under Sihuan Pharmaceutical, XUANZHUBIO-B officially listed on the Hong Kong stock market on October 15. The company's IPO was priced at HK$11.60 per share, raising approximately HK$780 million in total. On the listing day, XUANZHUBIO-B's stock price surged to a high of HK$31 in early trading, representing a gain of 167%.
As a representative of domestic innovative drug companies that "went public in the early commercialization stage," XUANZHUBIO-B was founded in 2008. After years of innovative R&D, the company has now built a comprehensive internal R&D platform supporting the development of a diversified and balanced pipeline covering three major areas: digestive system diseases, oncology, and non-alcoholic steatohepatitis (NASH). Through its "three pillars" product portfolio formed under the dual-wheel drive of digestive and oncology segments, XUANZHUBIO-B has filled clinical gaps domestically while continuously expanding broader indication markets through its strong commercialization capabilities, demonstrating the company's biopharma characteristics.
The listing fundraising aims to further consolidate the company's advantages in innovative R&D and commercialization, propel core products into the first tier of market competition, and rapidly enhance the company's revenue and profits. Against the backdrop of the ongoing Hong Kong innovative drug bull market, XUANZHUBIO-B undoubtedly serves as an important observation window for investors seeking high-value scarce innovative drug investments.
**Dual-Wheel Drive Nurtures Commercialization "Three Pillars"**
Supported by the dual-wheel drive in digestive and oncology sectors, 2025 marks XUANZHUBIO-B's commercialization breakthrough year: two core oncology drugs, Pilosulicabib Tablets and Deloralokib Tablets, received consecutive approvals, joining the previously approved core product Anellazine Sodium, forming the commercialization "three pillars" product matrix. This represents dual recognition from both the industry and market for the company's hardcore innovation and commercialization parallel development strategy.
In developing innovative products, XUANZHUBIO-B strategically selects large indication markets with unmet needs while emphasizing differentiated safety and efficacy characteristics. This strategy is prominently demonstrated in its core product development.
Taking Pilosulicabib as an example, on May 15 this year, XUANZHUBIO-B's fully proprietary CDK4/6 inhibitor Pilosulicabib received marketing approval and garnered widespread industry attention. The reason lies in that, targeting the onset characteristics of breast cancer patients in China, Pilosulicabib's clinical trial data demonstrates significant clinical value. Research data shows that the median age of onset for breast cancer patients in China is earlier than in Western countries, with higher proportions of Luminal B tumors, primary resistance, and chemotherapy populations, resulting in relatively poor prognosis. Pilosulicabib's clinical studies precisely matched China's treatment landscape: 23.9% of patients in the study group had previously received advanced chemotherapy, 25.6% had primary endocrine resistance, 37% were premenopausal, and 68.2% had visceral metastases. Combination therapy achieved a median progression-free survival of 14.7 months for second-line treatment patients (investigator assessment), with the Blinded Independent Review Committee (BIRC) assessment reaching 17.5 months.
Notably, this drug achieved breakthrough single-agent later-line treatment application, with patient progression-free survival reaching 11 months, setting a new global record for similar therapies and providing an superior treatment option for global advanced breast cancer later-line treatment.
From a commercialization perspective, driven by the wave of new CDK4/6 inhibitors entering the market and being included in the National Reimbursement Drug List, China's CDK4/6 inhibitor market grew from RMB 100 million in 2018 to RMB 3 billion in 2024, with a compound annual growth rate of 78.8%, and is expected to reach RMB 13 billion by 2032. Since Pilosulicabib is not only a comprehensive solution for advanced HR+/HER2- breast cancer across all treatment lines (including first-line, second-line, etc.), but also one of the few Chinese candidate drugs simultaneously exploring potential as adjuvant therapy for early breast cancer treatment, it possesses enormous market commercialization potential and development prospects.
Actually, Pilosulicabib is not an isolated case of XUANZHUBIO-B's focus on differentiated safety and efficacy in pipeline products. For example, the company's first commercialized product, Anellazine Sodium (KBP-3571), is an innovative proton pump inhibitor (PPI) for treating digestive system diseases and the first and only PPI independently developed by a domestic company. This drug received approval in June 2023 for treating duodenal ulcers.
From market demand perspective, China's peptic ulcer patient population increased from 71.4 million in 2018 to 74.3 million in 2024, and is expected to grow to 81.2 million by 2032. Approximately 75% of peptic ulcer cases are duodenal ulcers. PPIs are the most common choice for peptic ulcer patients; however, existing PPIs face challenges of unpredictable metabolic characteristics, significant burden on liver and kidney function, slow onset and short duration, significantly reducing patient compliance. In contrast, XUANZHUBIO-B's Anellazine Sodium has different metabolic characteristics, can reduce kidney burden, lower drug-drug interaction (DDI) risks, and provide rapid and sustained gastric acid suppression. Additionally, in head-to-head trials, Anellazine Sodium demonstrated better safety compared to the widely used PPI rabeprazole.
Currently, the company is seeking to expand Anellazine Sodium's indications to treat adult reflux esophagitis, officially launching Phase III clinical trials in the third quarter of this year. As indication markets continue expanding, XUANZHUBIO-B is expected to deeply cultivate China's RMB 10 billion oral PPI market, continuously mining commercialization increments.
As XUANZHUBIO-B's third approved core product, Deloralokib is a next-generation anaplastic lymphoma kinase (ALK) inhibitor independently developed by the company, primarily targeting ALK-rearranged advanced non-small cell lung cancer (NSCLC) indications. According to CIC data, ALK-positive NSCLC patients increased from 68,400 in 2018 to 91,200 in 2024, with a compound annual growth rate of 4.9%, expected to reach 121,700 by 2032, corresponding to a market size approaching RMB 10 billion.
ALK-positive advanced NSCLC patients now have a 5-year survival rate exceeding 60%, making both efficacy durability and safety particularly important. As one of the few ALK inhibitor candidates exploring potential as NSCLC adjuvant therapy in China, Deloralokib has higher selectivity and stronger binding affinity in molecular structure compared to first-generation ALK inhibitors (crizotinib), being effective not only against sensitive mutations but also covering some second-generation drug resistance mutation sites. Additionally, this drug has good central nervous system penetration, demonstrating outstanding efficacy in brain metastasis control. Therefore, Deloralokib's future sales growth potential is equally impressive.
**Perfecting Integrated Innovation Loop, Strengthening Development Foundation**
Beyond building "three pillars" for scaled commercialization, XUANZHUBIO-B has been committed to perfecting its integrated "R&D-commercialization" innovation loop, continuously strengthening its development foundation.
On the R&D front, XUANZHUBIO-B confirmed R&D investments of RMB 239 million and RMB 186 million in 2023 and 2024 respectively, with sustained R&D investment providing robust support for the company's innovative R&D capabilities. The company is currently accelerating differentiated innovation, with biopharma value receiving further validation.
XUANZHUBIO-B has established three major technology platforms including small molecule drug R&D platform, biologics R&D platform, and clinical development platform, helping the company efficiently advance the full R&D process from early discovery to clinical validation. These three innovative technology platforms not only support current pipeline development but also provide systematic guarantee for continuously producing innovative drug candidates.
Currently, XUANZHUBIO-B has over ten drug assets in active development, covering digestive system diseases, oncology, and non-alcoholic steatohepatitis (NASH). Beyond the aforementioned commercialized "three pillars," the company's innovative pipeline includes one drug project in NDA registration stage, one in Phase III clinical trials, four in Phase I clinical trials, and five with IND approvals, forming a "stepped, focused breakthrough, multi-product reserve" R&D structure.
In commercialization deployment, XUANZHUBIO-B excels at formulating flexible and targeted commercial strategies based on pipeline products, aiming to maximize advantages of each product and target market. As of March 31, 2025, the company has over 90 distributors covering more than 1,500 hospitals nationwide. The company manages distributors through distribution agreements, policies, and measures to ensure sales reflect genuine market demand and comply with distribution agreement terms and conditions.
Anellazine Sodium has achieved RMB 48 million in sales from commercialization through June 30, 2025, initially proving the company's commercialization capabilities while demonstrating that the drug's significant clinical value and product strength are gradually gaining terminal market recognition.
Recent domestic innovative drug support policies have repeatedly mentioned establishing preferential payment mechanisms for innovative drugs in medical insurance, promoting increased innovative drug usage scale. This significantly benefits companies like XUANZHUBIO-B holding highly innovative drugs. Since entering the commercialization stage, XUANZHUBIO-B has actively positioned itself in national medical insurance channels. Anellazine Sodium received approval in June 2023 and was included in the National Reimbursement Drug List in December of the same year, demonstrating the company's efficient commercialization execution and laying a solid foundation for subsequent commercialized innovative products to gain medical insurance inclusion.
**Refined Management Enhances Safety Margin**
With efficient commercialization execution and progressive channel expansion, XUANZHUBIO-B's commercialization achievements are gradually reflecting in the company's financial statements. In the first half of 2025, the company achieved revenue of RMB 17.89 million, a year-over-year increase of approximately 12%.
An important milestone for innovative drug companies evolving into biopharma is switching the company's cash circulation pillar from financing cash flow to operating net cash flow. This requires not only cash cow products but also refined daily management.
For XUANZHUBIO-B, operating expenses reached RMB 341 million and RMB 588 million in 2023 and 2024 respectively. However, since 2025, XUANZHUBIO-B has achieved stable to declining operating expenses through refined management. In the first half of 2025, company operating expenses were only RMB 125 million.
On the R&D front, overall R&D expenditures were RMB 401 million and RMB 239 million in 2022 and 2023 respectively, decreasing to RMB 186 million and RMB 83.705 million in 2024 and the first half of 2025. This trend reflects that XUANZHUBIO-B's innovative R&D has transformed into fruitful commercialization results. As core products continue scaling commercialization, the company is expected to rapidly cross the break-even point toward scaled profitability.
**Conclusion**
Unlike many 18A companies and numerous domestic innovative drug companies without revenue, through differentiated innovation and efficient commercialization execution, XUANZHUBIO-B has successfully entered the innovative commercialization stage and is expected to continuously generate abundant cash flow, with significant growth certainty. As core products progressively land and scale up, XUANZHUBIO-B is expected to continuously release its biopharma value, further opening valuation ceilings, and in the current sustained innovative drug bull market, enjoy valuation premiums as a Hong Kong "innovative drug dark horse."