Hengrui Medicine's "A+H" layout reports an annual net profit of 7.7 billion yuan; overseas business expansion transactions total over $27 billion.

Yangtze Business Daily reports ●Yangtze Business Daily reporter Wang Jing

Betting on innovative drugs, Hengrui Pharmaceutical (600276.SH, 01276.HK) has set a new record high in its performance.

On the evening of March 25, Hengrui Pharmaceutical released its annual report. In 2025, the company achieved operating revenue of 31.629 billion yuan, up 13.02% year over year; attributable net profit to shareholders was 7.711 billion yuan, up 21.69% year over year.

Hengrui Pharmaceutical said that in 2025, the company’s performance growth was mainly driven by the efficient enabling of innovative achievement transformation and that innovative drug sales led the performance growth. At the same time, the overseas expansion results of innovative drugs have been remarkable, becoming a new engine for performance growth through external licensing.

Yangtze Business Daily reporter noted that Hengrui Pharmaceutical, which was built on generic drugs, has firmly shifted toward innovative drugs in recent years. And amid the two-year surge in domestic innovative drug BD deals and overseas expansion, Hengrui Pharmaceutical, as a leading pharmaceutical company, has also gained substantial returns. Since 2023, Hengrui Pharmaceutical has completed 12 overseas business expansion transactions, including different models such as external licensing, NewCo, and strategic alliances, with a potential total transaction value of more than $27 billion.

According to its annual report, external licensing of innovative drugs, as a normalized business for the company, generated revenue of 3.392 billion yuan in 2025, and has become an important component of operating revenue.

Meanwhile, in 2025, Hengrui Pharmaceutical successfully listed on the Hong Kong Stock Exchange to achieve an “A+H” listing, raising HKD 11.374 billion in funds. This was the largest IPO in the Hong Kong-listed pharmaceutical sector in the past five years, marking a new milestone in internationalization.

Revenue and net profit hit new highs

On the evening of March 25, Hengrui Pharmaceutical disclosed its annual report. In 2025, the company achieved operating revenue of 31.629 billion yuan, up 13.02% year over year; attributable net profit to shareholders was 7.711 billion yuan, up 21.69% year over year. Both revenue and net profit set new historical highs.

Hengrui Pharmaceutical said that during the reporting period, facing opportunities and requirements in a new stage, the company stayed patient-centric, accelerating the R&D and commercialization process for innovative products with clinical value; it focused on upgrading its commercialization system to ensure innovative achievements efficiently benefit a broad range of patients; and it vigorously expanded overseas authorization cooperation, actively integrating into the international pharmaceutical innovation system.

Yangtze Business Daily reporter’s review found that Hengrui Pharmaceutical started out with generic drugs. Before 2021, its main revenue sources were generic drugs. Historical data show that from 2005 to 2020, over 16 consecutive years, the company’s revenue and net profit each continued to grow. By 2020, the company’s operating revenue and attributable net profit reached 27.735 billion yuan and 6.328 billion yuan, respectively.

However, as centralized procurement compressed profits and competition in the pharmaceutical industry gradually intensified, in 2021 Hengrui Pharmaceutical experienced its first decline in operating revenue and attributable net profit since it listed. It recorded operating revenue of 25.91 billion yuan and attributable net profit of 4.53 billion yuan, down 6.59% and 28.41% year over year, respectively. In 2022, the decline in revenue further widened: operating revenue fell to 21.28 billion yuan, and attributable net profit to 3.906 billion yuan, down 17.87% and 17.77% year over year, respectively.

As a result, Sun Piaoyang, the founder who had stepped back for just a year and a half, had to return to the front stage. In July 2021, Sun Piaoyang again assumed the role of chairman, and resolutely planned to cut 60% of its generic drug R&D projects, putting all saved resources into innovative drugs.

In 2023 and 2024, Hengrui Pharmaceutical’s operating performance returned to a growth track. The company’s operating revenue was 22.82 billion yuan and 27.98 billion yuan, respectively; attributable net profit to shareholders was 4.302 billion yuan and 6.337 billion yuan, respectively.

By 2025, Hengrui Pharmaceutical’s innovative drug sales revenue had already reached 16.342 billion yuan, up 26.09%. It accounted for 58.34% of drug revenue, becoming the biggest highlight.

Among innovative drug sales revenue, the company’s anti-tumor product revenue was 13.240 billion yuan, up 18.52%, accounting for 81.02% of total innovative drug sales; non-anti-tumor product revenue was 3.102 billion yuan, up 73.36%, accounting for 18.98% of total innovative drug sales.

To achieve significant profitability, Hengrui Pharmaceutical also plans to distribute generous dividends. Under the proposal, the company intends to pay cash dividends of 2 yuan per 10 shares to all shareholders (including tax). Based on the current total share capital, the total cash dividend is expected to be approximately 1.326 billion yuan. Combined with the 978 million yuan share buyback implemented in 2025, the total cash dividends for 2025 would be approximately 2.304 billion yuan, accounting for 29.88% of the net profit attributable to shareholders of the listed company for the year.

It is worth noting that in 2025, Hengrui Pharmaceutical successfully listed on the Hong Kong Stock Exchange to achieve an “A+H” listing, raising HKD 11.374 billion. This was the largest IPO in the Hong Kong-listed pharmaceutical sector in the past five years, as internationalization moved toward a new milestone.

Innovative drug external licensing generated annual revenue of 3.392 billion yuan

In recent years, domestic innovative drug BD transactions have continued to develop. As an industry leader, Hengrui Pharmaceutical is no exception.

It is understood that innovative drug BD refers to strategic business actions by pharmaceutical companies to achieve business growth and market expansion through business development activities, such as strategic cooperation, licensing transactions, mergers and acquisitions, and so on.

In its annual report, Hengrui Pharmaceutical stated that in recent years, the company has continued to accelerate global expansion to fully realize the potential of its product portfolio and technology platforms. The company has established 15 R&D centers in Asia, Europe and the Americas, and Australia; during the reporting period, multiple innovative drugs initiated their first overseas clinical trials.

In addition, the company has obtained approximately 20 registration approvals overseas, including for injectables, oral formulations, and inhaled anesthetic agents. Its products have been commercialized in more than 50 countries. The company has reached external licensing transactions with well-known multinational pharmaceutical companies such as MerckKGaA, MSD, and GSK, and has also obtained equity interests from several cooperation partners, greatly enhancing the company’s global influence and industry recognition.

Since 2023, Hengrui Pharmaceutical has completed 12 overseas business expansion transactions, including different models such as external licensing, NewCo, and strategic alliances, with a potential total transaction value of more than $27 billion.

Hengrui Pharmaceutical said that innovative drug external licensing, as a normalized business, generated revenue of 3.392 billion yuan in 2025, and has become an important component of the company’s operating revenue.

Among them, the strategic alliance reached with GSK stands out particularly. The two sides jointly developed up to 12 innovative drugs, including the PDE3/4 inhibitor HRS-9821; Hengrui received a $500 million upfront payment and options exercise fees and milestone payments totaling approximately $12 billion, along with corresponding sales royalties.

Being able to achieve results like this is also due to Hengrui Pharmaceutical’s own investment in innovation.

In 2023 and 2024, its R&D expenditures were 6.150 billion yuan and 8.228 billion yuan, respectively. In 2025, its R&D expenditures were 8.724 billion yuan, accounting for 27.58% of operating revenue, including 6.961 billion yuan of R&D expenditures that were expensed.

In 2025, Hengrui Pharmaceutical’s innovative achievements have reaped plentiful results. During the year, a total of 7 Class 1 innovative drugs were approved and launched, including elucanidimab for injection (recastuximab), emamXitini sulfate tablets, rickagliptin metformin tablets (I) and (II), and rac-onco trastuzumab for injection, among other major products; in addition, 1 Class 2 innovative drug and 6 newly approved indications of already approved innovative drugs were approved for commercialization, covering multiple therapeutic areas such as oncology, metabolism, cardiovascular, and immunology.

By the end of 2025, Hengrui Pharmaceutical had 24 Class 1 innovative drugs approved for marketing in China and 5 Class 2 new drugs, and more than 100 self-developed innovative products were under clinical development. Over 400 clinical trials are being conducted domestically and internationally, forming an industry-leading and highly differentiated portfolio of innovative products.

Editors: ZB

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