Changchun High-Tech Industry (Group) Co.,Ltd. (000661.SH), dubbed the "Northeast Pharma Moutai," continued its revenue and profit decline trend in the first half of this year, extending last year's performance downturn. The core subsidiary Changchun Jinsei Pharmaceutical Co., Ltd. (hereinafter referred to as "Jinsei Pharmaceutical") saw its net profit attributable to parent company drop 37.35%, while Changchun Baitech Biotechnology Co., Ltd. (hereinafter referred to as "Baitech Biotechnology") posted losses, becoming the main factors dragging down overall performance.

Jinsei Pharmaceutical, relying on growth hormone products, once achieved annual sales exceeding 10 billion yuan. However, with intensifying competition and volume-based procurement price pressures, Jinsei Pharmaceutical's performance growth has become challenging. To break free from path dependence on a single product, Changchun High-Tech Industry recently announced that Jinsei Pharmaceutical has introduced three house dust mite (HDM) allergen-specific immunotherapy products from Danish desensitization therapy company ALK-Abelló A/S (referred to as "ALK"), with an initial payment of 32.7 million euros, followed by registration milestones and sales milestones totaling over 145 million euros.

Entering the desensitization therapy track can be viewed as Changchun High-Tech Industry's transformation move. Whether the enormous potential of the desensitization therapy market can help Changchun High-Tech Industry achieve a remarkable performance turnaround remains to be observed.

**Advancing into Desensitization Therapy Track**

On September 17, Changchun High-Tech Industry announced that its controlling subsidiary Jinsei Pharmaceutical reached a cooperation agreement with ALK for allergen-specific immunotherapy (AIT) products. They will jointly develop and commercialize ALK's house dust mite (HDM) allergen-specific immunotherapy products in China, obtaining exclusive agency rights for ALK's three independently developed products in mainland China.

According to available information, ALK is a global specialty pharmaceutical company focused on allergy and allergic asthma fields, primarily developing, producing, and promoting allergen-specific immunotherapy products and other related products and services for allergy patients and allergists. Headquartered in Hørsholm, Denmark, with approximately 2,800 employees globally, its stock is listed on the Copenhagen Nasdaq Stock Exchange.

According to the cooperation agreement, Jinsei Pharmaceutical will obtain exclusive rights to ALK's three products in mainland China, including subcutaneous injection house dust mite allergen preparation (Alutard), mite allergen skin prick test kit (Anprick), and dust mite allergen sublingual tablet (ACARIZAX®), with cooperation rights lasting until December 31, 2039.

According to the announcement, Jinsei Pharmaceutical will pay an initial payment of 32.7 million euros. Based on the progress of clinical trial regulatory approvals by Chinese regional drug regulatory authorities for dust mite allergen sublingual tablet (ACARIZAX) adult, adolescent, and pediatric indications, Jinsei Pharmaceutical will subsequently pay registration milestone payments of 40 million euros. In the future, based on related product sales performance in the Chinese market, Jinsei Pharmaceutical may subsequently pay sales milestone payments of 105 million euros.

Globally, China has the largest number of dust mite allergy patients, but this market remains underdeveloped with significantly low penetration rates. It is estimated that currently fewer than 1 million patients receive allergen-specific immunotherapy, representing substantial unmet clinical needs, with the pediatric population bearing particularly heavy disease burden. ALK is the world's largest desensitization therapy company with over 45% global market share. From this perspective, this is indeed a blue ocean market awaiting development.

Changchun High-Tech Industry stated that the cooperation products will form deep product synergy with Jinsei Pharmaceutical's pediatric business, helping it further build competitive advantages in new pediatric fields beyond its core growth hormone domain.

The news triggered capital market excitement, with Changchun High-Tech Industry reaching an intraday high of 135.5 yuan per share on September 18, the highest this year, before retreating to 126.89 yuan per share on September 26.

**High Sales Expenses Squeeze Profits**

Currently, Changchun High-Tech Industry's main business involves research, development, production, and sales of biological pharmaceuticals and traditional Chinese medicines, supplemented by real estate development and other businesses. Through years of industrial layout and R&D investment, the company's business segments cover multiple pharmaceutical subdivisions including genetic engineering, biological vaccines, antibody drugs, high-end chemical drugs, and modern traditional Chinese medicine.

Under the influence of multiple internal and external factors, the pharmaceutical industry faces certain short-term revenue and profit pressures. According to authoritative data from the National Bureau of Statistics, from January to June 2025, China's above-scale industrial enterprises in pharmaceutical manufacturing achieved operating revenue of 1.2275 trillion yuan, a slight decrease of 1.2% compared to the same period last year; profits totaled 176.69 billion yuan in the same period, with a year-on-year decline of 2.8%, showing phased adjustment characteristics in short-term performance growth rates.

Changchun High-Tech Industry's performance aligns with industry trends. Financial reports show that in the first half of this year, Changchun High-Tech Industry achieved operating revenue of 6.603 billion yuan, down 0.54% year-on-year; net profit attributable to parent company was 983 million yuan, down 42.85% year-on-year; non-recurring item adjusted net profit declined 40.55% year-on-year to 1.033 billion yuan, continuing last year's revenue and profit decline pattern.

Various business segments of Changchun High-Tech Industry performed differently. In the first half of this year, genetic engineering drugs/biological drugs, traditional Chinese medicine, real estate, and service industries contributed 87.11%, 5.72%, 6.81%, and 0.36% of Changchun High-Tech Industry's total revenue respectively. As Changchun High-Tech Industry's largest business segment, genetic engineering drugs/biological drugs revenue declined 0.34% year-on-year to 5.752 billion yuan. Since operating costs increased more than revenue growth for this business, the gross margin decreased by 1.17 percentage points year-on-year.

According to financial reports, traditional Chinese medicine is Changchun High-Tech Industry's segment with the largest revenue decline. Changchun High-Tech Industry's traditional Chinese medicine mainly comes from Huakang Pharmaceutical, which primarily engages in R&D, production, and sales of traditional Chinese medicine and chemical drugs. Main products include Yinhua Miyan Ling tablets, Xueshuan Xinmailing tablets, Shuqing granules, Qingwei Zhitong micro-pills, covering traditional Chinese medicine anti-inflammatory, cardiovascular and cerebrovascular, pediatric, orthopedic, and other product lines. In the first half of this year, Huakang Pharmaceutical achieved revenue of 378 million yuan, down 3.4% from the same period last year; however, net profit attributable to parent company increased 4.12% year-on-year to 25 million yuan.

Regarding real estate business, revenue also declined 1.4% year-on-year to 450 million yuan in the first half of this year. Gaoxin Real Estate achieved revenue of 460 million yuan, up 0.76% from the same period last year; net profit attributable to parent company was 10 million yuan, down 70.34% from the same period last year.

In comparison, service industry was the only growing business, with revenue of 23.7534 million yuan in the first half of this year, up 17.78% year-on-year. However, due to the very low proportion of service industry revenue, it was difficult to offset the decline impact of other businesses.

Additionally, in the first half of this year, Changchun High-Tech Industry's sales expenses were 2.386 billion yuan, up 23.43% year-on-year. Changchun High-Tech Industry explained that the increase in sales expenses was mainly to continuously improve the sales talent team and compliance construction, further accelerating the promotion of key new product sales. From performance perspective, the significant increase in sales expenses failed to convert into actual profits, instead further squeezing profit margins.

**Core Subsidiary Jinsei Pharmaceutical Net Profit Drops Over 40%**

Jinsei Pharmaceutical is Changchun High-Tech Industry's core subsidiary, mainly engaged in R&D, production, and sales of large molecule, small molecule innovative drugs, and genetic engineering biological drugs. Current key products include growth hormone series products, follicle-stimulating hormone series products, Jinbeixin® (Vosoritide), among others.

Jinsei Pharmaceutical is best known for its growth hormone products. According to Frost & Sullivan data, China's growth hormone market size has rapidly grown from 4 billion yuan in 2018 to 11.6 billion yuan in 2023, with an annual compound growth rate of 23.9%, expected to reach 14.5 billion yuan in 2025 and continue growing to 28.6 billion yuan in 2030.

Against this backdrop, multiple companies are accelerating market entry. According to public information, Techpool Bio-Pharma's independently developed world's first Y-shaped 40kD polyethylene glycol long-acting growth hormone Yipei growth hormone injection (Yipei) was officially approved for market in May this year; Wison Pharma's long-acting growth hormone product Longpei growth hormone marketing application has been accepted, and based on past review timelines, it is expected to be approved in the second half of 2025; several other companies' long-acting growth hormone products are already in BLA or clinical stages.

With intensifying competition and volume-based procurement factors, product prices have declined. Previously, volume-based procurement in Zhejiang, Guangdong, and other regions reduced long-acting water injection prices from approximately 1,000 yuan per dose to 300 yuan per dose, a decrease of up to 70%, and Jinsei Pharmaceutical also faces profitability pressure. In 2024, Jinsei Pharmaceutical achieved revenue of 10.671 billion yuan, down 3.73% year-on-year; net profit attributable to parent company was 2.678 billion yuan, down 40.67% year-on-year. In the first half of this year, Jinsei Pharmaceutical achieved revenue of 5.469 billion yuan, up 6.17% year-on-year; net profit attributable to parent company was 1.108 billion yuan, down 37.35% year-on-year.

Industry insiders believe that under performance pressure, Jinsei Pharmaceutical is attempting to break the growth model driven by single products. Whether betting on the desensitization therapy track is a good business remains unknown.

It's worth noting that Changchun High-Tech Industry mentioned in its financial report that due to external environment influences, intensifying market competition, and declining vaccination willingness among recipients, shingles vaccine sales and usage numbers significantly decreased, putting sales revenue under pressure and impacting Baitech Biotechnology's overall operating revenue and net profit. In the first half of this year, Changchun High-Tech Industry's subsidiary Baitech Biotechnology achieved revenue of 285 million yuan, down 53.93% year-on-year; net profit attributable to parent company posted a loss of 74 million yuan.