1 billion in R&D investment, why is XinNuoWei "losing money" but still moving forward?

Ask AI · How does Nuowei’s R&D spending affect its long-term market value?

Produced by | China Interview Network

Reviewed by | Li Xiaoyan

On March 17, Nuowei (300765.SZ) disclosed its 2025 annual report. The data show that the company achieved full-year operating revenue of 2.158 billion yuan, up 8.93% year over year. While revenue scale continued to expand steadily, its net profit attributable to shareholders turned into a loss of 241 million yuan, down 548.80% year over year, and net profit attributable to shareholders after deducting non-recurring items recorded a loss of 294 million yuan, down 795.33% year over year. This performance has drawn widespread attention from the market. However, a deeper analysis through the data indicates that this “scorecard” is not simply the result of an operational setback. Instead, it is a necessary reflection of the company’s strategic transformation in a critical period—making proactive investment to seize the high ground in the biopharmaceutical industry, carrying out structural adjustments, and laying out for long-term value. The near-term pressure on performance precisely reflects the company’s firm resolve and clear path to transform into an innovative biopharmaceutical company, and its long-term development value deserves to be reassessed by the market.

Innovation is the core competitive strength of the biopharmaceutical industry, and it is also the core engine behind Nuowei’s transformation. In 2025, the company continued to increase its R&D investment. Full-year R&D expenses reached 1.036 billion yuan, up 23.01% year over year. R&D spending accounted for 48.01% of operating revenue. This huge investment is not an aimless burn, but rather a precise allocation to cutting-edge technology fields such as antibody drugs, ADCs (antibody-drug conjugates), and mRNA vaccines, providing key support for building its differentiated competitive barriers.

In terms of its R&D pipeline layout, Nuowei has formed a complete industry-chain pattern integrating “R&D—production—commercialization.” By the end of 2025, the company had more than ten major drug candidates at clinical or late-stage development, with fruitful R&D results. Among them, after Enlangsubai monoclonal antibody injection (Enshuxing®) and omarzalumab injection (Enyitan®) were approved for marketing in 2024, they entered the stage of commercialization sales rapidly in 2025, becoming a core growth point for its biopharmaceutical business, with full-year biopharmaceutical revenue of 257 million yuan.

Drug innovation R&D has industry characteristics of long cycles, high risk, and long return periods. Large-scale R&D spending in the short term may not quickly translate into profit, but it lays the groundwork for a future burst in performance. In 2025, nine products of the company obtained approval for clinical trials in China, four products obtained approval for clinical trials from the U.S. FDA, and two ADC products entered Phase III clinical development, with multiple R&D achievements reaching key breakthroughs. For example, SYS6010 (EGFR ADC) obtained U.S. FDA breakthrough fast track designation, intended for the treatment of drug-resistant non-small cell lung cancer. Clinical data show that its objective response rate in drug-resistant patients is 63.2%, far exceeding the 20% of traditional chemotherapy. Ustunimab injection and pertuzumab injection have submitted marketing applications and are expected to be approved gradually within the next two years, becoming new profit growth points. These developments not only demonstrate the company’s R&D strength, but also signal the enormous potential for future performance release.

While fully pushing forward its innovation-drug transformation, Nuowei’s traditional businesses still play the role of a “stabilizing anchor,” providing steady cash flow and resource support for the transformation. In 2025, the company’s functional raw materials and health food business achieved sales revenue of 1.857 billion yuan, accounting for 86.08% of total revenue, and remains the absolute mainstay of the company’s revenue.

As the world’s largest producer of chemically synthesized caffeine, Nuowei, leveraging designated production qualification, large-scale production capacity, and cost advantages, continues to consolidate its leading position in the industry. The company’s caffeine production capacity reached 18,000 tons per year in 2025, and its sales volume was 18,192 tons. It is a core supplier for Coca-Cola, PepsiCo, and Red Bull—the three major international beverage giants—with its global market share holding the number-one position. Although in 2025 caffeine-related products were affected by factors such as industry oversupply, intensifying homogenized competition, rising costs, and weak downstream demand, and the gross margin of caffeine-related products fell by 4.85 percentage points year over year to 34.88%, the company maintained its business fundamentals by increasing sales volume, optimizing processes, expanding application scenarios, and other measures.

In addition, the company’s “Guofukang” series health foods, as a “Well-Known Trademark in China,” have a sales network covering nearly 200 chain pharmacies nationwide, giving them strong brand influence in end-consumer markets. Raw materials businesses such as acarbose and anhydrous glucose have also developed steadily, serving as an important supplement to the functional raw-materials segment. The steady operation of traditional businesses not only provides the company with continuous cash flow and alleviates funding pressure on innovative R&D, but also accumulates valuable resources and experience for transforming into an innovative drug company, which is an important source of confidence for the company to cope with uncertainties during the transformation period.

In 2025, a key action in Nuowei’s industrial layout—acquiring 29% minority equity of Jushi Bio—raised the company’s ownership ratio from 51% to 80%, becoming an important strategic move to drive its transformation. Jushi Bio focuses on cutting-edge areas such as antibody drugs, ADCs, and mRNA vaccines, and it has a mature technology platform and a rich R&D pipeline, which highly aligns with Nuowei’s transformation direction.

Although Jushi Bio recorded a net loss of 904 million yuan in 2025, and its profit and loss for the period had a significant impact on the company’s consolidated financial statements’ net profit attributable to shareholders, from a long-term strategic perspective, this acquisition further improves the company’s layout in the biopharmaceutical field and strengthens its core competitiveness. More worth noting is that in January 2026, Jushi Bio and AstraZeneca signed a strategic cooperation agreement to collaborate on innovation polypeptide drug discovery and a long-acting delivery technology platform. Jushi Bio will receive an upfront payment of USD 420 million and is expected to obtain up to USD 13.8 billion in sales milestone payments and royalties. This cooperation not only means that Jushi Bio’s innovative achievements have received recognition from a top-tier international pharmaceutical company, but will also bring Nuowei sustained cash inflows, optimize the company’s cash flow structure, accelerate the recovery of R&D investment, and provide stable funding support for the development of subsequent innovation-drug pipeline R&D.

This cooperation is an important milestone in Nuowei’s internationalization strategy. It indicates that the company’s innovation-drug business is beginning to integrate into the global industrial chain. In the future, it is expected to further enhance brand influence and market share through more international collaborations, achieving leapfrog development.

Nuowei’s performance loss in 2025 is, in essence, the inevitable “pain” it experiences during the process of innovation-drug transformation. It reflects, in a concentrated way, short-term investment versus long-term value, structural adjustments versus strategic upgrades. From industry patterns, during the early stages of advancing an innovation-drug pipeline and commercialization, innovation-drug companies often face performance pressure. This is a common industry characteristic rather than a corporate operational misstep.

From the financial data, the company’s revenue continues to grow by 8.93%, showing the resilience of its core business and support from market demand. Although short-term profits declined, the company has been pushing forward a dense R&D pipeline, with commercialization results gradually taking shape, and it has achieved breakthroughs in international cooperation—these long-term value factors have not yet been fully reflected in current-period performance. At the same time, while the company’s asset operation efficiency still has room for improvement, as innovative drug products are gradually launched, gross margins of traditional business stabilize, and gains from international cooperation are gradually realized, performance is expected to improve step by step.

For investors, they should not evaluate Nuowei’s transformation value solely based on short-term performance data, but instead focus on long-term driving factors such as its core competitiveness, pipeline progress, and effectiveness of its industrial layout. As a company that combines advantages in traditional business with potential in innovative drugs, Nuowei is in a critical stage of transforming from a traditional functional raw-materials company into a leading innovative pharmaceutical enterprise. The short-term pains are the necessary path toward long-term value.

The performance pressure in 2025 is a true reflection of Nuowei’s transformation push in a critical period. It is also an inevitable choice for the company to implement its innovation-driven strategy and to lay out the future of biopharmaceuticals. The company is advancing steadily by centering on R&D investment, supported by its traditional businesses, and using M&A cooperation as a lever to achieve its remarkable shift from a “raw-materials supplier” to an “innovative drug company.”

As the innovation-drug pipeline gradually enters the harvest period, as gains from international cooperation are gradually realized, and as traditional businesses stabilize and rebound, Nuowei is expected to achieve a performance reversal in the coming years and unlock long-term growth potential. For the market, it should also take a rational view of performance fluctuations during the transformation period, focusing on building the company’s core competitiveness in the biopharmaceutical track and creating value, and waiting for its transformation outcomes to become fully visible. After all, in the biopharmaceutical “golden track,” companies that firmly invest and sustain their strategic deployment will ultimately reach the moment when value blossoms.