Baoji Pharmaceutical: Infringement compensation eats up 20% of revenue, executives still cashing out despite huge losses

Source: Collect Salt Warrior

The outrageous operations of Baoji Pharmaceutical can’t be hidden……

A biotech company with a market value of nearly HK$30 billion is getting trapped in a multi-layered vortex of thin revenue, continued year-after-year huge losses, and litigation compensation. On March 26, 2026, Baoji Pharmaceutical, while releasing its 2025 performance, received a compensation ruling, pushing it into the spotlight.

According to the announcement, Baoji Pharmaceutical’s 2025 revenue was only RMB 49.16 million, while its full-year net loss was as high as RMB 395 million, with the loss amount continuing to expand compared with the previous year. Cumulative losses over the last two years have already reached RMB 759 million.

To make matters worse, on the same day, the People’s Court of Baoshan District in Shanghai issued a first-instance judgment in the case involving Baoji Pharmaceutical’s asset infringement dispute with Shanghai Jingfeng Pharmaceutical, ordering Baoji Pharmaceutical to compensate the other party for equipment losses of RMB 10.2385 million and related expenses, for a total of about RMB 10.39 million. This compensation amount is about 21% of the company’s total revenue last year.

This dispute traces back to an asset transaction in 2021.

At the time, Baoji Pharmaceutical purchased real estate and equipment from Jingfeng. However, some of the equipment later failed to complete the transactions and was kept at Baoji Pharmaceutical. Due to blocked communications for moving out, Jingfeng filed a lawsuit in 2023. Although the court did not fully support the plaintiff’s initial compensation claim of RMB 19.30 million, the judgment has established Baoji Pharmaceutical’s infringement liability.

It is worth noting that this is not Baoji Pharmaceutical’s only litigation dispute. Last year, it was also involved in multiple cases such as construction project construction contract disputes and house purchase and sale contract disputes. The total amount involved exceeded RMB 50 million, which has already surpassed its 2025 revenue scale.

But these major lawsuits were merely brushed over in its HKEX IPO prospectus submitted in 2025, creating a sharp contrast with the requirement of the Hong Kong Listing Rules that “listing documents must be accurate and complete and must not be misleading.”

Founded in 2019, Baoji Pharmaceutical claims to focus on innovative drugs based on synthetic biology technology. Meanwhile, continuous large losses have become the core pain point for business development.

Data show that from 2023 to 2025, the company’s revenue was RMB 6.93 million, RMB 6.16 million, and RMB 49.16 million, respectively. Over three years, the cumulative revenue was only RMB 62.25 million. In 2025, 95.3% of revenue came from a one-off license upfront payment from a single customer. In the same period, net profits were losses of RMB 160 million, RMB 364 million, and RMB 395 million, respectively. Over three years, the cumulative loss reached RMB 919 million, with the loss magnitude increasing year by year.

The main reasons for the losses are high R&D and administrative expenses. Over these three years, the company’s cumulative R&D expenses were nearly RMB 632 million, and cumulative administrative expenses were RMB 259 million. Among them, the surge in administrative expenses mainly came from management’s equity incentives.

In stark contrast to the continuing losses is the unusually high compensation received by Baoji Pharmaceutical’s management.

From 2023 to 2024, the remuneration paid to directors and supervisors skyrocketed from RMB 4.90 million to RMB 105.8 million, up more than 20 times year over year. The remuneration of key management personnel rose from RMB 7.013 million to RMB 123 million. Even after excluding RMB 114 million in equity incentives, the increase still reached 24%.

As of the end of the first three quarters of 2024, the combined compensation of the company’s three actual controllers who also serve as executive directors totaled RMB 74.45 million, of which 95.94% was share-based payment.

Even more worth attention is that one of the actual controllers, Liu Junjun, transferred the company’s equity in 2021 and 2023 twice, cashing out a total of RMB 46 million. Against the backdrop of the company’s ongoing losses, management became the biggest beneficiary of this capital feast.

Weak commercialization makes Baoji Pharmaceutical’s future even bleaker. According to publicly available information, since the company’s establishment, only one assisted reproductive drug, SJ02 (Shengnuova®), has been approved for listing. This product took seven and a half years to complete approval from IND to NDA, yet its commercialization path has been full of twists and turns.

In September 2024, Baoji Pharmaceutical signed an exclusive commercialization agreement with Organon. However, in July 2025, the agreement was terminated in advance. Subsequently, although it signed a sales agency agreement with Anke Bio, it still needs to give up commercialization rights in Greater China, squeezing profit margins.

Meanwhile, SJ02 faces intense market competition. In China, seven short-acting similar products have already been上市. The long-acting product of Changchun High-tech’s subsidiary was also approved in September 2025. The current market size for China’s long-acting FSH is only RMB 100 million. Even with optimistic projections that it could reach RMB 1.2 billion by 2029, Baoji Pharmaceutical has no obvious advantages in channels or branding.

In addition, the company’s purchase and sales sides are highly dependent on a single customer and a single supplier. In the first half of 2025, the revenue share of the first-largest customer was 95.3%, and the procurement share of the first-largest supplier was 52.6%, meaning its operating stability is extremely poor. Its other products are also all in pre-clinical or early-stage trial phases, making it difficult to form revenue support in the near term.

This round of million-level compensation not only further increases Baoji Pharmaceutical’s funding pressure, but also damages its market image of “compliant operations.” For a pharmaceutical company with cumulative revenue of less than RMB 100 million, that has not yet achieved profitability, and whose core products’ commercialization prospects remain unclear, the question of how to support a market value of nearly RMB 30 billion with actual operating results has become a core issue that urgently needs to be resolved.

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