Revenue and net profit both hit new highs upon listing, HengRui Medicine accelerates innovation and internationalization to deliver results

Driven by the dual engines of “technological innovation + internationalization,” Hengrui Medicine (600276.SH, 01276.HK) continues to achieve performance growth, setting new records in revenue and net profit attributable to shareholders.

On the evening of March 25, Hengrui Medicine released its 2025 annual report, reporting total revenue of 31.629 billion yuan, a 13.02% increase year-over-year; net profit attributable to shareholders was 7.711 billion yuan, up 21.69% year-over-year.

According to the annual report, Hengrui’s performance growth is driven by two core engines: first, sales of innovative drugs reached 16.342 billion yuan, a 26.09% increase, accounting for 58.34% of drug sales revenue; second, licensing income from external partners was 3.392 billion yuan, up 25.62%. The company also aims for more than 30% growth in innovative drug sales revenue by 2026.

While maintaining steady growth, Hengrui continues to increase its innovation efforts, maintaining high R&D investment. In 2025, total R&D expenditure was 8.724 billion yuan, accounting for 27.58% of revenue, with 6.961 billion yuan classified as expenses.

Notably, Hengrui expects about 53 innovative products and indications to be approved for listing between 2026 and 2028.

Some securities analysts believe that starting in 2026, Hengrui will see strong endogenous performance and sustained external cooperation revenue, with accelerated growth in innovative drug sales and ongoing clinical development of licensed assets bringing continuous milestone income.

On the evening of the 25th, Hengrui also disclosed its dividend plan, proposing to distribute a cash dividend of 2.00 yuan (tax included) per 10 shares to all shareholders. This profit distribution plan is subject to approval at the shareholders’ meeting, with an estimated total dividend of 1.326 billion yuan.

Dual engines drive performance to new heights

Hengrui’s revenue and net profit attributable to shareholders have hit new highs since listing, with double-digit growth sustained. This is driven by two core engines: innovative drug sales and overseas BD licensing.

Over the past three years, Hengrui’s performance has continued to grow, with scale expanding steadily. Revenue rose from 22.82 billion yuan in 2023 to surpass 30 billion yuan in 2025, reaching 31.629 billion yuan; net profit attributable to shareholders increased from 4.302 billion yuan in 2023 to 7.711 billion yuan in 2025. Both key financial indicators have reached the highest levels since the company’s listing in 2000.

This growth correlates with the company’s ongoing emphasis on innovation and accelerated commercialization of results. According to the annual report, in 2025, sales of innovative drugs totaled 16.342 billion yuan, up 26.09%, representing 58.34% of drug sales revenue.

Among innovative drug sales, anti-tumor products accounted for 13.24 billion yuan, up 18.52%, making up 81.02% of total innovative drug revenue. Non-tumor products generated 3.102 billion yuan, a 73.36% increase, representing 18.98%.

“Hengrui has multiple innovative products that, due to their recent market entry and the fact that they are not yet included in medical insurance (2025), have yet to fully realize their sales potential. The company will continue to lead with medical and market-driven strategies, promote the adoption of new products, and accelerate commercialization to contribute stronger growth in the future,” Hengrui stated.

The company also announced plans for 2026, focusing on accelerating transformation and upgrading, concentrating resources to promote rapid market entry of innovative products, aiming for over 30% growth in innovative drug sales.

External licensing has become a new engine for growth amid the acceleration of overseas expansion. In 2025, licensing income reached 3.392 billion yuan, becoming an important part of revenue.

According to the annual report, licensing income is divided into three parts: first, upfront payments from MSD (2 billion USD), IDEAYA (75 million USD), and Merck KGaA (15 million euros); second, upfront payment and equity from Braveheart Bio totaling 65 million USD; third, a 500 million USD upfront payment from GSK, with about 100 million USD recognized as revenue based on performance obligations.

Of course, challenges remain with centralized procurement. Hengrui notes that, under the ongoing impact of national and local procurement policies, domestic stock procurement products have seen revenue declines, while high-quality new domestic and overseas products have partially offset this, leading to a slight overall decline in generic drug revenue.

To strengthen its innovation position, the company continues to increase R&D investment, with 8.724 billion yuan in 2025, up 6.03% year-over-year, representing 27.58% of revenue. From 2023 to 2025, R&D expenses were 4.954 billion yuan, 6.583 billion yuan, and 6.961 billion yuan respectively, accounting for 21.7%, 23.5%, and 22.0% of total revenue in those years.

“Hengrui maintains attractive profit margins and healthy operating cash flow despite significant R&D investments,” the company stated. “This robust profitability and cash flow ensure sustained investment in R&D, supporting long-term growth and a positive cycle.”

The annual report shows that in 2025, net cash flow from operating activities was 11.235 billion yuan, a 51.36% increase.

Additionally, to accelerate breakthroughs in original research drugs and high-end formulations, Hengrui partnered with the National Natural Science Foundation of China to establish the “National Natural Science Foundation Private Enterprise Innovation Development Joint Fund.” The company plans to invest a total of 1.2 billion yuan from 2025 to 2027, with the foundation matching 120 million yuan at a 1:10 ratio, totaling 1.32 billion yuan, focusing on basic and applied research in oncology, metabolic diseases, and other areas.

Approximately 53 innovative products expected to be approved within three years

The progress of Hengrui’s innovative drug pipeline and approvals is a key indicator of its future growth potential.

Currently, the company has 24 Class 1 innovative drugs and 5 Class 2 new drugs approved in China, with over 100 proprietary products in clinical development and more than 400 clinical trials underway domestically and internationally.

According to the annual report, in 2025, 14 innovative products received approval for listing. Among them, 7 Class 1 innovative drugs were approved, including Recarxab single antibody injection, Emactin sulfate tablets, Rigeletin metformin tablets (I)(II), Rituximab injection, Famitin malate capsules, Pirolo Ralapitan injection, and Zemetolostat tablets; 1 Class 2 innovative drug was approved, along with 6 new indications for existing innovative drugs covering oncology, metabolism, cardiovascular, immunology, and neuroscience.

Progress was also made in pipeline development. In 2025, 15 listing applications were accepted by NMPA, 28 projects advanced to Phase III, 61 projects to Phase II, and 28 innovative products entered Phase I for the first time.

In terms of project registration, Hengrui obtained 14 new drug formulation approvals, 6 generic drug formulation approvals, 180 clinical trial approvals, 8 Breakthrough Therapy Designations from CDE, 2 Priority Review designations, and 1 orphan drug qualification from the FDA.

The company also submitted 459 new patent applications in Greater China and 106 international PCT applications in 2025, with 76 granted in Greater China and 209 abroad. Its patent portfolio covers new drug compounds, protein structures, manufacturing processes, uses, and formulations.

Furthermore, Hengrui reports that in 2025, 20 products/indications entered the new national medical insurance catalog, with 10 products included for the first time. This enhances access and affordability, accelerates sales growth, and further consolidates its leading position in innovative drugs.

“Benefiting from updates to the medical insurance negotiation catalog, starting in 2026, the company will add 10 new drugs and new indications for 5 existing products to the insurance reimbursement list, driving rapid growth of its innovative drug business,” said a securities analyst.

With plans for more innovative drugs to be launched over the next three years, industry experts believe Hengrui’s growth potential will be further unleashed. The company expects about 53 innovative products to be approved between 2026 and 2028. Among these, the GLP-1/GIP dual receptor agonist HRS9531 for overweight/obesity, with best-in-class potential, may gain approval; new indications for Rituximab, such as HER2-positive colorectal and breast cancers, are also anticipated.

Hengrui is also accelerating its technological platform development. In 2025, its Shanghai Innovation R&D Center officially opened, equipped with world-class laboratories, focusing on emerging technology platforms to speed up project commercialization. The company continues to improve its mature ADC, bispecific/multispecific antibody, protein degraders, small nucleic acid drugs, and oral peptide platforms, and is developing new molecular platforms and AI-driven drug discovery (AIDD).

BD becomes a new growth engine

As innovation momentum strengthens, Hengrui’s internationalization process is also accelerating.

In 2025, Hengrui continued to innovate its BD cooperation model, completing five overseas innovative drug expansion deals. Notably, its strategic alliance with GSK attracted market attention, jointly developing up to 12 innovative drugs including PDE3/4 inhibitor HRS-9821. Hengrui received a $500 million upfront payment, with potential milestone payments and sales royalties totaling approximately $12 billion.

Hengrui also reached exclusive licensing agreements with MSD for the Lp(a) inhibitor HRS-5346 in Greater China, with a $200 million upfront and up to $1.77 billion in milestone payments. Additionally, it licensed the oral GnRH antagonist SHR7280 for commercialization in mainland China to Merck Germany, licensed the Myosin small molecule inhibitor HRS-1893 to Braveheart Bio under a NewCo model, and licensed some international rights for Rituximab to Glenmark.

Since 2023, the company has completed 12 overseas expansion deals, including licensing, NewCo, and strategic alliances, with potential total transaction value exceeding $27 billion.

Industry analysts see these active BD transactions as accelerating the global value realization of Hengrui’s innovative drugs.

Hengrui is also advancing overseas R&D and registration, further expanding globally. In 2025, it launched a new clinical R&D and collaboration center in Boston, USA. Currently, the company has 15 R&D centers across Asia, Europe, the US, and Australia, with multiple innovative drugs starting their first overseas clinical trials last year.

Moreover, in 2025, its HER2 ADC drug Rituximab combined with Atezolizumab and chemotherapy for gastric or gastroesophageal cancers received orphan drug designation from the US FDA. Currently, five of its innovative drugs have orphan drug status from the FDA, and four ADC products have fast-track designation.

Hengrui has obtained about 20 registration approvals overseas, including injectables, oral formulations, and inhaled anesthetics, with products commercialized in over 50 countries.

According to industry analysts, the pipeline that has advanced to clinical trials over the past few years is expected to see intensive data readouts in 2026, driving a new wave of external licensing.

Hengrui also raised capital through its Hong Kong listing. In 2025, it listed on the Hong Kong Stock Exchange, raising HKD 11.374 billion, marking the largest IPO in the healthcare sector in nearly five years.

To accelerate global expansion and address unmet medical needs worldwide, Hengrui states it will focus on two aspects: first, speeding up its own overseas market entry by conducting more global clinical trials and expanding its treatment areas and indications; second, obtaining regulatory recognition for more pipeline drugs to facilitate rapid market entry and patient access. Meanwhile, it will continue leveraging its strong innovation pipeline and R&D capabilities to explore diverse collaborations with top partners, enhancing global influence and expanding market share.