XianSheng Pharmaceuticals' 2025 performance is impressive, but there are gaps to address under the hundred-billion target

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Xiansheng Pharmaceutical’s 2025 performance is outstanding; under its $10 billion revenue target, gaps still need to be addressed

Wang Lin

In 2025, Xiansheng Pharmaceutical turned in its brightest annual performance in recent years.

On the evening of March 25, Xiansheng Pharmaceutical (02096.HK) released its 2025 full-year results report. For the full year of 2025, operating revenue reached RMB 7.731 billion, up 16.52% year over year; net profit attributable to shareholders was RMB 1.344 billion, up 86.15% year over year; and adjusted net profit was RMB 1.28 billion, up 27.1% year over year. Revenue from innovative drugs reached RMB 6.304 billion, up 27.9%, and its share of total revenue surpassed 80%, reaching 81.5%.

Against the broader backdrop of China’s pharmaceutical industry continuously deepening its shift toward innovation, shrinking profit margins for generic drugs, and the normalization of reimbursement cost controls, Xiansheng Pharmaceutical—thanks to years of innovation-focused development and commercialization execution—achieved high growth in both revenue and profit, completing its strategic transformation from a generic-drug company to an innovation-driven pharmaceutical company.

It is also notable that, alongside the performance announcement, another important personnel change was disclosed: company founder Ren Jinsheng stepped down as CEO, continuing to serve as Chairman to steer strategic direction; Zhou Yunsu, a seasoned figure in the pharmaceutical industry, took over the role. At the results meeting on March 26, Zhou Yunsu formally released the 2026 targets: operating revenue to grow 30% year over year, challenging RMB 10 billion; adjusted net profit to grow 30% year over year, reaching RMB 1.6 billion.

These highly ambitious targets not only reflect management’s confidence in the company’s development, but also imply multiple pressures stemming from industry competition and the company’s own progress.

Double-digit growth in both revenue and profit

In 2025, Xiansheng Pharmaceutical completely shook off the performance drag from its prior generic drug business. All key financial metrics achieved steady yet high-quality growth, and the company moved into a brand-new development stage.

On the revenue side, the company’s full-year revenue surpassed the RMB 7.7 billion mark, reaching RMB 7.731 billion, up 16.52% year over year. The growth rate further improved versus 2024, and the revenue scale continued to expand.

Group revenue mainly comes from its focused therapeutic areas. Specifically, revenue from neuroscience was RMB 2.753 billion, accounting for 35.6% of total revenue and up 26.6% year over year; revenue from oncology was RMB 1.987 billion, accounting for 25.7% and up 53% year over year; revenue from autoimmune diseases was RMB 1.892 billion, accounting for 24.5% and up 4.5% year over year; and revenue from other areas was RMB 1.099 billion, accounting for 14.2% and down 18.7% year over year.

Profit performance was even more impressive. Profit attributable to the company’s equity holders was RMB 1.344 billion, with a year-over-year increase as high as 86.15%, nearly doubling. Adjusted profit attributable to equity holders was RMB 1.28 billion, up 27.1% year over year.

Xiansheng Pharmaceutical’s high growth in revenue and profit in 2025 mainly stemmed from two core factors: first, the ongoing increase in the share of the innovative drug business. High-gross-margin innovative drugs replaced low-gross-margin generics as the core source of revenue, leading to a significant improvement in overall gross margin; second, the gradual emergence of scale effects, along with thicker profit scale from revenue from external BD (business development) cooperation licensing and investment gains within non-recurring gains and losses.

The company’s financial position was also solid. As of end-2025, net cash from operating activities was RMB 2.014 billion, versus RMB 1.391 billion in the same period last year, mainly because there was an increase in authorization license revenue received in 2025. Cash and cash equivalents amounted to RMB 3.512 billion, versus RMB 1.953 billion in the same period last year. The current ratio (calculated as total current assets divided by total current liabilities) was 220.9%, versus 201.3% in the same period last year. The asset-liability ratio (calculated as total liabilities divided by total assets) was 36.1%, versus 38.5% in the same period last year.

Innovative drug revenue share surpasses 80%

From a business-structure perspective, Xiansheng Pharmaceutical’s innovation transformation results have taken hold: innovative drugs have replaced generics as the core source of revenue, which is also the key logic behind the company’s high revenue growth.

Data show that in 2025, Xiansheng Pharmaceutical’s innovative drug business generated revenue of RMB 6.304 billion, up 27.9%, and its share of total revenue surged to 81.5%, up from 74.3% in 2024. The company has basically completed its transition from a leading generic-drug player to an innovative-drug company. Looking back, the share of the company’s innovative drug revenue rose from 45% in 2020 and doubled over five years, establishing the leading role of its innovation business.

By the end of 2025, the company had expanded its commercialized innovative drug portfolio to 10 products, forming a product matrix covering four core therapeutic areas: neuroscience, oncology, autoimmune diseases, and anti-infectives. Among them, the neuroscience area is the largest business segment. The Xinbi Xin (系列) remains the core product supporting that segment. Keivoke, which was approved for listing in China on June 17, 2025, becomes a new growth engine for this segment. It is used to treat adult insomnia patients characterized by difficulty falling asleep and difficulty maintaining sleep, and it is not controlled as a mental-health drug.

Oncology is the company’s second-largest revenue segment today, and its performance support is no longer limited to a single legacy product. In addition to Ende (恩度), Enzeshu was approved for listing in June 2025 and entered the National Reimbursement Drug List in its first year after launch; Enlitou was approved for listing in June 2024 and was included in the National Reimbursement Drug List in November of the same year. These two new products were rapidly commercialized, driving a surge in the segment’s performance.

Autoimmune diseases are the third-largest revenue segment, but growth has been weak, with only a modest 4.5% year-over-year increase in 2025. Revenue from this segment still mainly relies on Aidesing, an older product approved in 2012. This is the world’s first approved aramod drug (艾拉莫德). Although it has a place in the treatment of active rheumatoid arthritis, it faces dual pressure from centralized procurement and competitor products, leaving the segment with insufficient growth momentum.

In the anti-infectives area, the product Xinnoxin (先诺欣) was converted from conditional approval to standard approval in July 2024, becoming the first orally administered innovative anti-COVID drug in China to receive standard approval.

Besides continued expansion in innovative product sales volumes, backed by a dual-engine model of internal R&D and BD, external authorization license revenue and net fair value gains of its investment portfolio increased significantly, becoming another important driver of performance growth.

Since 2025, the company has completed four pipeline licensing authorizations to external parties, including: SIM0500 (BCMA/CD3/GPRC5D triple antibody) with an equity license option signed with AbbVie; SIM0505 (CDH6ADC) with collaboration reached with NextCure; SIM0613 (LRRC15ADC) with collaboration reached with Ipsen; and SIM0709 (TL1A/IL-23 bispecific antibody) with collaboration reached with Boehringer Ingelheim. These collaborations not only brought milestone upfront payments in the tens of millions of dollars, but also validated the value of its R&D platform.

R&D innovation is the core competitive strength of a pharmaceutical company. In 2025, Xiansheng Pharmaceutical continued to increase its R&D investment. R&D expenses were RMB 2.076 billion, up 35.6% year over year, accounting for 26.8% of total revenue. Over the past decade, cumulative R&D investment exceeded RMB 10 billion.

Challenges behind the RMB 10 billion revenue goal

On the evening of March 25, in addition to the release of the 2025 performance report, a CEO change announcement was also published. Xiansheng Pharmaceutical founder Ren Jinsheng stepped down as CEO, continuing to serve as Chairman and Executive Director; Zhou Yunsu formally took over as the new CEO.

In this appointment announcement, Xiansheng Pharmaceutical devoted substantial space to introducing Zhou Yunsu’s background: he has more than 30 years of experience in R&D and commercialization within the pharmaceutical industry. From August 2022 to October 2025, he served as a full-time advisor at Innovent Biologics, mainly responsible for providing professional guidance to Innovent’s market strategy and commercialization. From August 1995 to July 2021, he held multiple positions at Hengrui Medicine, including but not limited to being a member of the foreign trade department, the section chief and deputy director of the development department, vice general manager, general manager, and chairman.

At the results meeting on March 26, Zhou Yunsu also formally released the 2026 targets: operating revenue to grow 30% year over year, challenging RMB 10 billion; adjusted net profit to grow 30% year over year, reaching RMB 1.6 billion. He also further outlined targets for 2030: revenue to exceed RMB 20 billion, adjusted net profit to exceed RMB 3 billion, and R&D investment to exceed RMB 4 billion.

He emphasized that Xiansheng Pharmaceutical’s current 10 innovative drugs are expected to have combined peak sales totaling over RMB 15.5 billion. Combined with subsequent newly approved products and BD introductions, this is expected to support the company’s medium- to long-term growth.

Management divides these 10 innovative drugs into five cornerstone products for steady growth and five new products currently in a rapid sales ramp-up period. Among them, Ende (恩度), Aidesing (艾得辛), Enweida (恩维达), Xinbi Xin (injection) (先必新（注射剂）), and Xinnoxin (先诺欣) are categorized as steady-growth cornerstones, with combined peak sales totaling about RMB 7 billion; Keisela (科赛拉), Enlituo (恩立妥), Keivoke (科唯可), Xinbi Xin (tablets) (先必新（片剂）), and Enzeshu (恩泽舒) are categorized as fast ramp-up products, with combined peak sales totaling about RMB 8.5 billion. In particular, the next-generation insomnia drug Keivoke (“科唯可”) and the first domestically developed platinum drug-resistant ovarian cancer drug Enzeshu (“恩泽舒”) are highlighted: the former has consumer-driven attributes, while the latter fills a clinical blank.

External licensing is also becoming a new source of revenue growth for Xiansheng Pharmaceutical. As disclosed in the results briefing, in 2025 the company received a total of USD 154 million in external license upfront payments and milestone payments, of which about USD 63.5 million was recognized as revenue in the same year. Management stated at the results meeting that more high-quality products can enable external licensing to become a regular practice, providing new momentum for the company’s growth.

However, challenges cannot be overlooked either. Although Xiansheng Pharmaceutical has an innovative-drug pipeline of more than 60 items, most are still at early clinical stages. Whether it can replicate past success remains unknown. R&D investment efficiency still lags behind top innovative-drug companies.

Even though the company’s innovative-drug product matrix is gradually improving, product concentration remains relatively high. Growth is overly dependent on a small number of core products in the neuroscience segment: revenue from the neuroscience area accounts for more than 35% of total revenue, and the contribution from a single segment and single products is high. Growth in the autoimmune segment has slowed: in 2025, it increased only 4.5% year over year, and still mainly relies on the core product Aidesing (艾得辛). Compared with China’s leading innovative-drug companies, which typically pursue balanced multi-track layouts to drive synergies, Xiansheng Pharmaceutical’s product diversification remains insufficient, and the overall business balance needs further improvement.

The domestic innovative-drug market in China is becoming increasingly competitive. With ongoing reimbursement cost controls, going overseas has become an important path for innovative-drug companies to break through growth bottlenecks. In 2025, Xiansheng Pharmaceutical’s performance growth relied mainly on the domestic market, while overseas market revenue had a low share. Compared with leading pharmaceutical companies such as Hengrui Medicine and BeiGene, the company’s internationalization gap is clear.

As the share of the innovative-drug business continues to rise, Xiansheng Pharmaceutical’s generics business continues to shrink. Although the company has gradually divested low-gross-margin generics, the remaining legacy business still faces risks of profit compression. During the transformation transition period, issues left over such as business handover and resource integration may weigh to some extent on overall operating efficiency.

In response to opportunities and challenges, in its 2025 performance report Xiansheng Pharmaceutical stated that in 2026 it will firmly advance its Innovation Strategy 2.0, focusing on pipeline layout of “differentiation and greater effectiveness,” and actively promote global expansion and overseas clinical development. Under the backdrop of continuously improving policies, technological progress, and deepening international cooperation, the Group will accelerate the transformation of innovative drugs from R&D to clinical use and the market, continuously enhance the clinical value and global competitiveness of its products, and continuously provide more patients with safe and effective innovative treatment options.

As Zhou Yunsu said at the results meeting: “The 2026 targets are very challenging. Changes in the pharmaceutical industry are happening day by day, and we must achieve high-speed growth to truly make progress. Past experience and success do not mean future outcomes. Only by continuously learning, continuously changing, and working together with one heart can we achieve rapid corporate development.”■