Buying platforms, selling pipelines: Deconstructing China's biopharmaceutical innovation logic

Sinobio’s innovation-driven drug development has taken a different path.

On March 26, China Biopharmaceutical (01177.HK) released its full-year 2025 results. Revenue was RMB 31.83 billion, up 10.3% year over year. Adjusted attributable net profit was RMB 4.54 billion, up 31.4% year over year. Four consecutive reporting periods saw double-digit growth, with its growth rate ranking among the top domestically among large pharma companies.

But the numbers are just the surface. What the market truly cares about is that Sinobio is charting a growth trajectory that is completely different from other major domestic pharmaceutical companies.

Over the past year or so, Sinobio has done three major things.

In July 2025, it wholly acquired Lixin BioPharma for $950 million, securing a world-leading ADC technology platform and multiple potential FIC assets such as Claudin 18.2 ADC and CCR8 monoclonal antibody.

In January 2026, it acquired Hejiya for RMB 1.2 billion, securing the world’s first clinically validated “once-a-year injection” ultra-long-acting siRNA delivery platform, entering the trillion-dollar chronic disease market in one step.

In February 2026, it reached a global licensing collaboration with Sanofi on rovalcitinib, totaling $1.53 billion, setting the highest record for an outbound license in China’s transplant field.

Buying in platforms while selling out pipelines.

By rapidly filling core technology platforms and pipeline depth through acquisitions, and then pushing its in-house innovation to global markets via BD, this “acquisition + BD” two-way play is almost impossible to find a second example of among China’s large pharmaceutical companies.

At a performance briefing, the chairman of the board, Xie Qirun, put it plainly: “Outbound licensing will be our most core performance achievement to be achieved internally for BD going forward.”

The meaning of this statement is clear: starting in 2026, Sinobio’s internationalized revenue should become a visible number on its financial statements.

Innovative products surpassing RMB 15 billion

First, let’s look at the fundamentals.

For full-year 2025, Sinobio’s innovative product revenue reached RMB 15.22 billion, up 26.2%, and its share of total revenue rose to 47.8%. This share is only one step away from 50%.

Over the past three years (2023 to 2025), the company cumulatively received approvals for 16 innovative products, including 7 Class 1 innovative drugs in China. The volume expansion effect brought by the dense approvals is the key driving force behind the company’s continuous double-digit growth in performance.

Worth mentioning is the gross margin. In 2025 it reached 82.1%, up 0.6 percentage points year over year.

In an environment where centralized procurement is normalized and medical insurance negotiations continue to pressure prices downward, the fact that gross margin can still move higher indicates that the rising revenue share of innovative products is truly improving the company’s profitability structure.

Its selling and administrative expense ratio also fell from 42.1% to 41.3%, and per-capita output increased from RMB 1.5 million in 2019 to RMB 3.0 million.

At a performance briefing, CEO Xie Chengrun revealed a key detail: even after excluding the impact of the KeXing dividend, the growth rate of core attributable net profit in 2025 still reached 15%. Moreover, this growth rate does not include any contribution from license out revenue.

In other words, when Sanofi’s $135 million upfront payment and future milestone payments start to flow into the financial statements, Sinobio’s profit growth rate still has additional upside.

Another easy-to-overlook figure is cash reserves.

By the end of 2025, the company’s net cash (including wealth management) was RMB 16.9 billion. After completing large-scale acquisitions, the money on the balance sheet does not decrease but actually increases. The safety buffer on the capital side is thick enough to mean there is still ammunition for further acquisitions or license in.

The two-way strategy of buying in and selling out

Sinobio’s acquisition logic is clear: besides pipelines, it also needs to buy platforms.

By acquiring Lixin BioPharma, it gained antibody discovery and ADC technology platforms. Two of Lixin’s core assets have already been licensed to AstraZeneca and Merck & Co., with total transaction value of nearly $4 billion.

Lixin’s founder Qin Ying now serves as Sinobio’s Group Chief Scientist for the oncology field, responsible for early-stage discovery and project initiation for large oncology molecules. The integration of this acquisition has been completed, with the core team fully incorporated into Sinobio’s system.

By acquiring Hejiya, it obtained an siRNA delivery platform.

The biggest highlight of this platform is its ultra-long-acting dosing capability. The company’s Lp(a) siRNA product Kylo-11 shows in Phase 1 data that with a single low-dose administration, the Lp(a) reduction exceeds 90%. With mid-to-high doses, the effect can be maintained for more than a year. Globally, there are currently no approved and marketed drugs specifically for lowering Lp(a), so the space in this track is wide open.

At a performance briefing, board chairman Xie Qirun specifically emphasized the platform’s extensibility: “The small-nucleic-acid platform can not only be used for liver-in delivery, but also for extrahepatic delivery. It can cover metabolism, cardiovascular and cerebrovascular diseases, liver disease, kidney disease, and respiration, including the CNS. The safety window is high and the dosing frequency is low—its future potential is very large.”

Meanwhile, the collaboration with Sanofi marks the formal opening of the “sell-out” line.

Rovalcitinib is the world’s first approved JAK/ROCK dual inhibitor. The upfront payment was $135 million, the total transaction value could reach $1.53 billion, plus double-digit sales royalties.

The significance of this deal is that it proves Sinobio can license its in-house FIC products at competitive prices to global Top 10 MNCs.

At a performance briefing, CEO Xie Chengrun also made an important clarification: due to accounting standards and settlement timing, the $300 million milestone payments received by Lixin from Merck that are related to delivery were not included in Sinobio’s consolidated financial statements for 2025, but the cash has already been fully received.

Going forward, all collaboration payments from Lixin will be 100% included in the listed company’s financial statements. This means that starting in 2026, BD revenue will formally become an independent growth source on the financial statements.

On the eve of pipeline explosion

At a performance briefing, Xie Qirun provided a set of clear numeric expectations: from 2026 to 2028, it is expected that nearly 20 Class 1 innovative drugs may be approved and launched. By the end of 2028, the total number of innovative products listed will reach nearly 40.

From the perspective of pipeline structure, the oncology segment has the densest highlights.

The Phase 3 trial for three-line gastric cancer of Claudin 18.2 ADC (LM-302) has completed all patient enrollment, making it the first target-matched ADC worldwide to complete registration clinical trial enrollment. The Phase 3 trial for second-line gastric cancer of CCR8 monoclonal antibody (LM-108) has entered Phase 3. This year, ESMO will read out Phase 2 data for first-line gastric cancer and first-line pancreatic cancer.

Both products are derived from the acquired Lixin and both have global FIC potential, serving as core reserves for the next step of BD overseas expansion.

At the performance briefing, Qin Ying also focused on the EGFR/c-Met bispecific antibody. In Phase 1 data, in patients with third-generation EGFR resistance, ORR reached 64.7%, the 6-month PFS rate was 79%, and the incidence of adverse events of Grade 3 or above was 52.6%, far below the 87% of competing products targeting the same mechanism. The data will be officially released at the European Lung Cancer Congress at the end of this month, with Phase 3 planned to start within the year.

The layout in the chronic disease segment is also accelerating.

In addition to Kylo-11 (Lp(a) siRNA mentioned earlier, there is an APOC3 siRNA program planned to start Phase 2 in the second half of this year, and a PCSK9 dual-target siRNA is expected to initiate clinical trials this year.

In the weight-loss space, a diversified matrix is taking shape: oral options (GLP-1 small molecules, THR-β) combined with injections (GIP/GLP-1 bispecific antibodies, ActRIIA/B, INHBE siRNA).

Xie Qirun used a vivid expression: “From five dimensions—route of administration, frequency, muscle retention, weight-loss efficacy, and safety—there is a comprehensive improvement in the weight-loss experience.”

In the respiratory immunology and autoimmune area, three products are advancing into Phase 3 clinical trials, including PDE3/4 inhibitors (COPD), TSLP monoclonal antibody (asthma), and ROCK2 inhibitors (pulmonary fibrosis). For the psoriasis Phase 2 data of a TYK2 inhibitor, it is planned to be released at EADV this year. Xie Qirun said its efficacy is “significantly better than other TYK2/JAK inhibitors, and even comparable to biologics.”

At the end of the performance briefing, Xie Qirun summarized the cadence since 2026: in January, it acquired Hejiya; in February, it reached licensing agreements with Sanofi; in March, it released full-year performance. Every month there is action. She said, “We hope that from now on, there will be good news every month for us to keep sharing with everyone.”

On the earnings call, Xie Qirun also announced a development: the stock short name of Sinobio has officially been changed from Sino Biopharm to SBP Group, using this as a new starting point, and to place greater focus on the strategy of innovation and internationalization.

To become more focused on innovation, clearly relying on the China market alone is not enough. Sinobio’s chosen path is very clear: use acquisitions to build a thick pipeline and technology platforms as the foundation, and use BD to take innovative products to global markets.

Whether this path will work is going to be validated most critically by the BD implementation cadence in 2026 and 2027.