Dizhe Pharmaceuticals makes another attempt at a Hong Kong IPO twice a year! Why does it continue to be favored by investors?

Listing | Zhongfang.com

Review | Li Xiaoyan

Recently, Dizhe Pharmaceutical officially submitted its listing application to the Hong Kong Stock Exchange, aiming for a dual “A+H” capital platform. As an innovative drug company originating from AstraZeneca Asia R&D Center and rooted in the STAR Market, the company launched its Hong Kong listing less than a year after its A-shares private placement, reflecting the high capital demand for R&D and global expansion of innovative drug companies, as well as its strategic commitment to move from domestic innovation to global competition. Although it remains in a short-term loss cycle with phased challenges in growth and cash flow, supported by four core pillars—world-first new products, expanded medical insurance coverage, progressive R&D pipeline, and overseas approvals—Dizhe Pharma is at a critical turning point in commercialization and globalization, with long-term value that the market should view rationally.

The capital path of Dizhe Pharma exemplifies the typical journey of Chinese innovative drug companies from startup to scale, from domestic to global. In December 2021, the company listed on the STAR Market, raising 2.103 billion yuan to fund R&D and commercialization; in April 2025, it completed a targeted private placement, raising approximately 1.773 billion yuan net. Together, these two equity financings totaled nearly 3.8 billion yuan, and with other financing channels, the company has raised about 5.778 billion yuan in total since listing, providing solid support for ongoing R&D and market expansion. The current Hong Kong listing is not merely “capital replenishment,” but a strategic choice to build a dual domestic and international financing system.

The STAR Market, focused on domestic support, provides the company with local capital backing and industry recognition; Hong Kong, as a global financial hub, connects to long-term international capital and enhances global brand influence, aligning with overseas commercialization and multi-center clinical trials for products like Shuwozhe and Gaoruzhe. As of the end of September 2025, the company held 1.014 billion yuan in cash and equivalents, and 911 million yuan in financial assets, enough to cover operations for the next 12 months, with clear financial safety margins. With the successful landing of Hong Kong financing, the company can effectively mitigate risks from single-market fluctuations and strengthen its capital base for long-term R&D and global expansion.

In terms of performance, Dizhe Pharma has moved beyond the initial “R&D burning money” stage into commercialization. In 2025, the company’s revenue is expected to reach about 800 million yuan, a 122.28% year-over-year increase, driven by market penetration and insurance coverage expansion of two core products. Shuwozhe, used for EGFR exon 20 insertion mutations in non-small cell lung cancer, and Gaoruzhe, the world’s first JAK1 inhibitor for relapsed or refractory peripheral T-cell lymphoma, both entered national medical insurance in January 2025, enabling rapid market access through clinical necessity and insurance coverage.

Data shows that in the first three quarters of 2025, Shuwozhe generated 422 million yuan in revenue, up 47.72% year-over-year; Gaoruzhe earned 164 million yuan, a 211.56% increase, jointly pushing total revenue to 586 million yuan. Although insurance coverage led to slight price reductions, gross margin remained high at 95.7%, demonstrating strong pricing power and cost control of innovative drugs. The scale effect is evident, with sales expense ratio dropping sharply from 230% in early stages to 72.27%, significantly improving expense efficiency. Despite a slight quarter-on-quarter revenue decline in Q4 due to channel and insurance rollout adjustments, the overall high growth trend remains intact, validating the company’s commercialization capability.

The core value of innovative pharmaceutical companies lies in continuously producing new drugs with clinical value. Since its founding in 2017, Dizhe Pharma has invested over 4.7 billion yuan in R&D, with 2025 R&D expenses expected to reach 860 million yuan, an 18.84% increase, with R&D costs accounting for over 100% of revenue. This “heavy R&D” investment is not blind spending but focused on precise unmet clinical needs.

The founding team, originating from AstraZeneca Asia R&D Center, has a global drug development perspective. Both core products are first-in-class: Shuwozhe fills a treatment gap for EGFR exon 20 insertion mutations; Gaoruzhe breaks through treatment bottlenecks for peripheral T-cell lymphoma. The R&D pipeline is progressing in stages: Shuwozhe has completed phase III global trials for first-line treatment, with plans for simultaneous US-China submission in 2026, potentially opening larger markets; Birelentinib has initiated international multi-center phase III trials; the fourth-generation EGFR TKI DZD6008 plans to start registration trials in 2026, enriching the product matrix. Short-term, high R&D investment results in accounting losses, but fundamentally it builds technological barriers and patent moat, laying the foundation for long-term profitability—an industry norm for global innovative drug companies.

Dizhe Pharma’s core competitiveness extends beyond the domestic market to global innovation and internationalization. In July 2025, Shuwozhe received FDA accelerated approval, becoming China’s first independently developed, globally first-in-class drug approved in the US, included in the NCCN guidelines for non-small cell lung cancer, marking a leap from “following” to “leading” in Chinese innovation. Gaoruzhe also received FDA fast-track designation, with overseas registration progressing steadily.

Although overseas commercialization teams are still being built and their short-term contribution is limited, FDA approval signifies international recognition of the company’s R&D quality and clinical data, paving the way for future global expansion. Leveraging the dual A+H platform, the company can better connect with global clinical resources, partners, and capital markets, advancing the strategy of “China R&D, global benefits.” As Shuwozhe’s first-line indications are commercialized and overseas markets gradually open, the market space will extend from China to the world, significantly expanding growth potential.

Amid rapid growth, Dizhe Pharma faces phased challenges: from 2018 to 2024, cumulative losses reached 4.659 billion yuan; in 2025, net loss attributable to parent is about 770 million yuan, with non-recurring loss expanding to 850 million yuan; core product indications face market size limits, and high revenue concentration from a few clients; key executives reduced holdings before IPO, creating valuation uncertainties in Hong Kong. These are common features of early-stage commercialization for innovative drug companies, not fundamental risks.

The industry follows the “high investment, long cycle, high return” pattern. Losses stem from early R&D and commercialization investments, not poor management. As revenue scales, R&D proportion decreases, and overseas income contribution increases, losses are expected to narrow, with an approaching profitability inflection point. Executive share reductions are personal financial arrangements and do not affect company strategy or R&D pace; Hong Kong valuation, aligned with international standards, emphasizes innovation and global prospects, with long-term value returning to fundamentals.

Dizhe Pharma’s Hong Kong listing exemplifies the coordinated advancement of R&D, commercialization, globalization, and capital deployment for Chinese innovative drug companies. Short-term losses are part of growth; high R&D investment is the foundation of value; expanded insurance coverage and overseas approvals are growth engines; dual A+H platforms support strategic development. In a context where unmet clinical needs remain widespread, pioneering companies like Dizhe Pharma are reshaping China’s innovative drug landscape through technological breakthroughs and global vision. For the market, rather than fixating on short-term financials, focus should be on core dimensions of innovation capability, commercialization realization, and globalization potential, witnessing the industry’s leap from domestic to global innovation.