On August 19, Hengrui Pharma (01276) delivered a resilient first-half earnings report. During the period, the company recorded operating revenue of RMB 15.456 billion, with net profit attributable to shareholders reaching RMB 4.465 billion, as innovative drug revenue climbed to account for over 63% of total pharmaceutical sales.
Beneath the surface of these financial figures lies a more profound declaration of qualitative transformation—the era of expansive innovation in pharmaceuticals has only just begun. What deserves closer attention is the shifting composition of Hengrui's growth drivers. In the first half, revenue from non-oncology innovative drugs reached RMB 2.545 billion, surging 73.97% year-on-year and further elevating its share of total innovative drug sales to 28.89%.
Innovative products in metabolic, autoimmune, and cardiovascular therapeutic areas are accelerating their commercial rollout, steadily reinforcing growth momentum beyond oncology. A "second growth curve" led by non-oncology innovative drugs is rapidly taking shape. Simultaneously, ongoing global collaborations are opening additional pathways for the worldwide development and value realization of innovative assets. Meanwhile, a multi-billion-dollar strategic global partnership is extending the company's value frontier from China to the global stage, unlocking new dimensions of international value.
The simultaneous realization of these three structural breakthroughs underscores Hengrui Pharma's evolutionary trajectory. Market analysts suggest that China's biopharmaceutical industry is undergoing a transition from a "valuation trough" to a "value exporter." This transition will neither occur at a uniform pace nor across the board. It will first materialize in companies bold enough to define themselves by global standards and embrace the global ecosystem through collaborative engagement.
Hengrui Pharma stands as a prime example. What it reveals extends far beyond a single company's financial performance—it is a vivid illustration of China's innovative drug leader transitioning from a "follower" to a "co-builder." Those capable of completing this transformation will define the next decade of China's biopharmaceutical industry.
Crossing the Inflection Point: Innovative Drugs Lead the Quality-Driven Transition with 63% Share
The figure of 63.16% represents the proportion of innovative drug revenue to pharmaceutical sales revenue at Hengrui Pharma in the first half of 2026. The realization of this number signals the gradual establishment of a new revenue structure with innovative drugs as the absolute core. This is a proactive transition executed with strategic rhythm.
During the reporting period, generic drug revenue stood at RMB 5.139 billion, down 16.1% year-on-year, with its share of pharmaceutical sales revenue declining from 44.7% in the prior-year period to 36.8%. Revenue from butorphanol and sevoflurane declined due to regional centralized procurement impacts, while albumin-bound paclitaxel and other contract renewal products contracted further following price reductions. The company also strategically reduced resource allocation to certain generic drugs. These three factors combined are driving the orderly and controlled exit of the generic drug business from the revenue center.
Yet this is not merely a passive response to pressure—it is a deliberate strategic choice to redirect finite commercialization resources toward high-clinical-value innovative products. The innovative drug business, now assuming the mantle of primary growth driver, has fulfilled its mission with strength. Innovative drug revenue reached RMB 8.809 billion, up 16.37% year-on-year.
Anti-tumor products remain the foundational pillar. First-half revenue from anti-tumor innovative products totaled RMB 6.265 billion, growing 2.58% year-on-year and accounting for 71.11% of innovative drug sales. Among these, core products covered by medical insurance, including rezerodine (a second-generation AR antagonist) and dalpiciclib (a CDK4/6 inhibitor), maintained robust growth, while trastuzumab deruxtecan biosimilar (HER2 ADC), newly added to the National Reimbursement Drug List, achieved rapid uptake.
The true highlight, however, emerges from the non-oncology segment. First-half non-oncology innovative drug sales reached RMB 2.545 billion, surging 73.97% year-on-year and comprising 28.89% of innovative drug revenue. In the metabolic field, henagliflozin (an SGLT2 inhibitor) has become the second-highest market share SGLT2 inhibitor domestically. Autoimmune products ivarmacitinib (a JAK1 inhibitor) and vunakizumab (an IL-17A inhibitor), along with the cardiovascular product recaticimab (a PCSK9 inhibitor), have all achieved rapid growth after being newly included in the National Reimbursement Drug List. A dual-engine growth pattern is gradually taking form.
As the share of innovative drug sales continues to rise, the company's revenue structure is increasingly tilting toward innovation, and this optimization has substantively translated into improved profitability. The transition between old and new growth drivers has not only been completed in aggregate terms but has also been validated in quality. Underpinning the long-term stability of this structure is the depth of the pipeline and the intensity of R&D investment.
In the first half, Hengrui Pharma invested RMB 4.605 billion in R&D, up 18.96% year-on-year, representing 29.8% of revenue. As of the end of the reporting period, the company had nine marketing applications accepted by the National Medical Products Administration and 17 clinical studies advanced to Phase III. From ADCs and bispecific antibodies to small-molecule targeted therapies, a diversified technology platform and differentiated target layout have built a sustainable innovation output mechanism, ensuring that the 63% share possesses continued upward momentum.
The significance of an inflection point is that once crossed, it is irreversible. As innovative drugs formally transition from incremental supplement to primary revenue source, Hengrui Pharma has completed its identity reshaping from a generic drug giant to an innovative drug leader. Future changes in the innovative drug revenue share will depend on existing product growth and the continued conversion of the R&D pipeline.
Expanding the Growth Surface: Non-Oncology Segment Builds a Multi-Polar Growth Structure with 74% Growth
The innovative drug share surpassing 63% once again validates the strategic shift of Hengrui Pharma's revenue center from generics to innovative drugs. Meanwhile, the 73.97% growth rate of the non-oncology segment validates the structural upgrade of the company's growth model from single-product concentration to portfolio-driven expansion, opening room for the market to reprice its growth ceiling from a single-therapy valuation to multi-therapy synergistic premiums.
For an extended period, market perception of Hengrui Pharma has been anchored to the anti-tumor field. While this label highlights the company's core competitive advantages, it has also obscured the large-scale value realization currently underway in expansive therapeutic areas such as metabolism, autoimmune diseases, and cardiovascular conditions. In the first half of 2026, non-oncology innovative drug revenue accounted for approximately 30% of total innovative drug revenue—a structural shift signifying that Hengrui's growth equation is being comprehensively restructured from "oncology single-pole driving" to "multi-polar synergistic development."
Examining sub-sectors, three major growth poles are forming a combined force. The metabolic field has entered a phase of scaled harvesting. Henagliflozin (an SGLT2 inhibitor) has become the second-highest market share product of its class domestically, while henagliflozin/metformin extended-release tablets and retagliptin (a DPP-4 inhibitor) are achieving rapid growth through precise communication of clinical advantages. Diabetes represents one of China's largest chronic disease markets, and Hengrui Pharma is advancing its market share in this field from "category supplement" to "mainstream competitor," with commercial value on an accelerated release trajectory.
Autoimmune and cardiovascular products are scaling rapidly following inclusion in medical insurance. Ivarmacitinib (a JAK1 inhibitor), vunakizumab (an IL-17A inhibitor), and recaticimab (a PCSK9 inhibitor) were all newly added to the National Reimbursement Drug List in 2026 and are rapidly expanding market access by virtue of clear efficacy advantages. Both autoimmune and cardiovascular therapeutic areas represent markets exceeding RMB 100 billion, traditionally dominated by foreign brands. The rapid penetration of Hengrui Pharma's products marks substantive breakthroughs by domestic innovative drugs in these fields.
The anesthesia and analgesia segment continues to grow steadily, with products such as remimazolam and fumarate tegileridine consistently contributing revenue and further diversifying the non-oncology revenue composition. The 73.97% growth does not stem from a single product but from the collective contribution of multiple therapeutic areas including metabolism, autoimmune diseases, cardiovascular conditions, and anesthesia/analgesia. Henagliflozin has become the second-highest market share SGLT2 inhibitor domestically, while ivarmacitinib, vunakizumab, and recaticimab have achieved rapid growth after inclusion in the National Reimbursement Drug List, further broadening the commercialization foundation of non-oncology innovative drugs.
When multiple therapeutic tracks—metabolism, autoimmune, cardiovascular, and anesthesia/analgesia—simultaneously enter their harvesting phases, Hengrui Pharma's growth logic upgrades from "single-track driven" to "portfolio returns realized." The 73.97% growth rate is the direct quantitative expression of this new paradigm.
Reshaping the Valuation Anchor: Multi-Billion-Dollar Global Partnership Opens New International Value Space
If the 73.97% growth of the non-oncology segment completed the "structural upgrade" of Hengrui Pharma's growth poles from singular to plural, then the deepening of its globalization strategy has initiated a "systematic migration" of the company's valuation framework from domestic leader premium to global innovative asset pricing—shifting the valuation anchor from domestic market growth expectations to synergistic value reassessment within the global industrial ecosystem.
The multi-billion-dollar strategic partnership marks a landmark event in this value reshaping. In May 2026, Hengrui entered into a global strategic collaboration with BMS, jointly advancing 13 early-stage programs with a potential aggregate transaction value of approximately USD 15.2 billion. The collaboration model has evolved from "single-asset licensing" to "platform-level strategic synergy," signaling that Hengrui Pharma's early-stage R&D capabilities have received systematic recognition from top-tier global pharmaceutical companies.
Out-licensing collaborations have evolved from occasional transactions into a recurring revenue stream. During the reporting period, out-licensing revenue of RMB 1.422 billion was recognized, with sustained overseas BD transactions validating the steadily rising international recognition of the company's innovative pipeline. The "NewCo" model constitutes the second pathway for global value release.
In the NewCo model, Hengrui's NewCo partner Kailera Therapeutics listed on Nasdaq in April 2026, becoming one of the largest IPOs in the biotechnology sector at that time. According to the report, fair value changes on the company's equity holdings generated gains of RMB 821 million during the reporting period. Meanwhile, another NewCo partner, Braveheart Bio, also listed on Nasdaq in August 2026. The significance of the NewCo model lies in the company's potential to share in the global development and commercialization value of products through multiple channels, including licensing payments, milestone payments, sales royalties, and equity interests.
When the valuation logic for domestic pharmaceutical companies shifts from "domestic market growth expectations" to "global innovative asset pricing," the value ceiling is redefined. In summary, China's biopharmaceutical industry is undergoing a transition from a "valuation trough" to a "value exporter." The completion of this transition will not be evenly distributed but will first materialize in companies that define R&D by global standards and integrate into the global industrial ecosystem through collaborative engagement.
Hengrui Pharma has demonstrated through this half-year report that it is precisely such an example—from the qualitative transformation of revenue structure to the reconstruction of growth drivers and the global migration of valuation logic, its evolutionary path clearly points to one conclusion: when a domestic pharmaceutical company can price its innovative assets on a global scale, its value boundary is no longer defined by a single market.