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Produced by | China-in-Forum Network

Reviewed by | Li Xiaoyan

Recently, ZaiLab Pharmaceuticals officially submitted an application for a listing to the Hong Kong Stock Exchange, aiming to secure an “A+H” dual-capital platform. As an innovative drug company originating from AstraZeneca’s Asia R&D center and rooted in the STAR Market, the company launched a Hong Kong listing after less than a year of completing a private placement on the A-share market. This reflects not only the funding needs of high-intensity R&D and global expansion among innovative drug firms, but also clearly demonstrates its strategic resolve to move from domestic innovation to global competition. Although it is still in a loss-making cycle in the short term and faces phased challenges on growth and cash flow, supported by four core pillars—its world-first innovative products, expansion under medical insurance coverage, staged progression of its R&D pipeline, and breakthroughs in overseas approvals—ZaiLab Pharmaceuticals is at a critical inflection point where commercialization delivers value and global deployment takes shape. In the long run, its value is worthy of rational consideration by the market.

ZaiLab Pharmaceuticals’ capital path is a typical case of how Chinese innovative drug companies grow from startup to scale-up, and from domestic focus to global reach. In December 2021, the company listed on the STAR Market, raising RMB 2.103 billion, injecting its first key funding for R&D and commercialization launch. In April 2025, it completed a targeted share issuance, raising net proceeds of approximately RMB 1.773 billion. The net proceeds from the two equity financings total nearly RMB 3.8 billion. Combined with other financing channels, the cumulative fundraising cash inflow after listing was about RMB 5.778 billion, providing solid backing for continued R&D and market expansion. This move to list in Hong Kong is not simply a matter of “raising capital to replenish funds,” but a strategic decision to build a dual domestic-and-international circulation financing system.

The STAR Market is grounded in the domestic market, providing the company with domestic capital support and industry recognition; the Hong Kong market, as a hub for international capital, can connect with global long-term capital and enhance international brand influence, aligning with the funding needs for the overseas commercialization of Shuwozhe and Gairuizhe and global multi-center clinical trials. As of the end of September 2025, the company held RMB 1.014 billion in cash and cash equivalents and RMB 0.911 billion in financial assets. Existing funds can cover operations for the next 12 months, with a clear financial safety buffer. With the completion of Hong Kong financing, the company will effectively smooth out the risk of volatility from a single market, laying a solid financial foundation for long-term R&D investment and global expansion.

On the performance front, ZaiLab Pharmaceuticals has moved beyond the early startup stage of “burning money on R&D” and entered the commercialization value-realization period. In 2025, revenue is expected to be about RMB 800 million, a year-on-year increase of as high as 122.28%. The growth momentum is driven by medical insurance expansion for two core products and deeper market penetration. Shuwozhe is used for EGFR exon 20 insertion mutation-type non-small cell lung cancer, while Gairuizhe is the world’s first JAK1 inhibitor for relapsed or refractory peripheral T-cell lymphoma. Both were included in China’s national medical insurance in January 2025. With the dual advantages of strong clinical demand and insurance coverage, they quickly opened up the market.

Data show that in the first three quarters of 2025, Shuwozhe generated revenue of RMB 422 million, up 47.72% year over year; Gairuizhe generated revenue of RMB 164 million, up a significant 211.56% year over year. Together, they lifted total revenue to RMB 586 million. While inclusion in medical insurance leads to a small downward adjustment in pricing, the company’s gross margin remains at a high level of 95.7%, reflecting the strong pricing power and cost-control advantages of innovative drugs. Scale effects continue to become evident: the selling expense ratio fell sharply from 230% in the early period to 72.27%, with a clear improvement in expense efficiency. Although revenue in the fourth quarter declined slightly quarter over quarter, mainly due to adjustments in channel cadence and the phased implementation of medical insurance coverage, it does not change the trend of high growth for the full year—its commercialization capability has already been validated by the market.

The core value of innovative drug companies lies in consistently producing new drugs with clinical value. Since it was founded in 2017, ZaiLab Pharmaceuticals has invested over RMB 4.7 billion in R&D, and in 2025, R&D expenses are expected to reach RMB 860 million, a year-on-year increase of 18.84%. R&D investment accounts for over 100% of revenue. This “heavy R&D” investment is not mindless spending, but a focused strategy for precise deployment targeting unmet clinical needs.

The company’s founding team comes from AstraZeneca’s Asia R&D center and has a global perspective on new drug development. Both of its core products are first-in-class (world-first) innovative drugs: Shuwozhe fills the therapeutic gap for EGFR exon 20 insertion mutations, and Gairuizhe breaks through bottlenecks in the treatment of peripheral T-cell lymphoma. The R&D pipeline shows a staged progression pattern: Shuwozhe’s first-line global Phase 3 clinical trials have completed patient enrollment, and it is planned to submit applications simultaneously in China and the U.S. in mid-2026, which is expected to open up a larger market. Birelentinib has initiated international multi-center Phase 3 clinical trials, and the fourth-generation EGFR TKI DZD6008 is planned to start registration-enabling clinical studies in 2026, continuously enriching the product portfolio. High R&D investment brings book losses in the short term, but at its core it is about building technological barriers and a patent moat, laying a foundation for long-term profitability—this is also the common growth law shared by global innovative drug companies.

ZaiLab Pharmaceuticals’ core competitiveness is not limited to the domestic market; it also lies in its ability to innovate globally and commercialize overseas. In July 2025, Shuwozhe received accelerated approval from the U.S. FDA, becoming the first first-in-class innovative drug independently developed by a China-based company and approved in the U.S. It was included in the NCCN guideline for non-small cell lung cancer, enabling a leap for China’s innovative drugs from “following” to “leading.” Gairuizhe also received fast-track designation from the FDA, with overseas registration progress advancing steadily.

Although the overseas commercialization team is still being built and its near-term contribution is limited, FDA approval signals that the company’s R&D quality and clinical data have been recognized by international authorities, paving a mature path for subsequent overseas product launches. With its A+H dual-platform access, the company can better connect with global clinical resources, partners, and capital markets, advancing the strategic implementation of “China R&D, global benefit.” As Shuwozhe’s first-line indications take hold and overseas commercialization gradually progresses, the market space will extend from domestic to global, with the growth ceiling significantly expanded.

Amid rapid growth, ZaiLab Pharmaceuticals also faces phased challenges: cumulative losses of RMB 4.659 billion from 2018 to 2024; an expected net loss attributable to shareholders of about RMB 770 million in 2025; and losses excluding non-recurring items expanding to RMB 850 million. The market for indications of core products has an upper limit in scale, and revenue concentration from a single customer remains relatively high. In addition, before the IPO, key executives reduced their holdings, and there is uncertainty in the valuation of Hong Kong-listed shares. These issues are common characteristics of the early commercialization stage for innovative drug companies, not fundamental risks.

The innovative drug industry follows a “high investment, long cycle, high returns” pattern. Losses stem from upfront investment in R&D and commercialization, not from poor operations. As the scale of revenue expands, the proportion of R&D investment gradually declines, and overseas revenue contribution increases, the magnitude of losses is expected to continue narrowing, with the profit turning point steadily approaching. Executive share sales are personal financial arrangements and do not affect the company’s strategy or R&D cadence. Hong Kong valuations are aligning with the international system; investors place greater emphasis on innovation capability and global prospects. In the long run, valuation will return to intrinsic value itself.

ZaiLab Pharmaceuticals’ listing in Hong Kong is a microcosm of coordinated and upgraded progress in Chinese innovative drug companies’ R&D, commercialization, globalization, and capital deployment. Short-term losses are part of the pains of growth, high R&D investment is the foundation of value, medical insurance expansion and overseas approvals are the engines of growth, and the A+H dual-platform is strategic support. Against the backdrop that unmet clinical needs still widely exist, origin-based innovative companies represented by ZaiLab Pharmaceuticals are reshaping the industry landscape of China’s innovative drugs with technological breakthroughs and a global perspective. For the market, rather than obsessing over short-term accounting profit or loss, it should focus on three core dimensions—its innovation capability, commercialization value realization, and global potential—and witness the value leap of China’s innovative drugs as they move from the domestic market to the world.