On March 20, Sino Biopharm (HK.01177) released its 2024 annual results report, delivering an impressive "double-digit growth" across two key metrics: full-year revenue for 2024 reached RMB 28.87 billion, a year-on-year increase of 10.2%, hitting a record high; adjusted net profit attributable to owners of the parent company reached RMB 3.46 billion, a year-on-year increase of 33.5%. As a benchmark for traditional pharmaceutical companies transitioning to innovation, Sino Biopharm's revenue from innovative products in 2024 reached RMB 12.06 billion, an increase of 21.9%, with innovative products accounting for 41.8% of total revenue. Supported by the intensive launch of innovative products and optimization of full-chain operations, the company has achieved a "leading speed" that far surpasses the industry average, highlighting its robust long-term value.

 

In the next three years, the company will enter a period of explosive growth in harvesting innovative pipelines, with nearly 20 innovative products expected to be approved for marketing, covering cutting-edge therapies such as bispecific antibodies and ADCs. It is expected that by 2027, the number of the company's innovative products approved for marketing will exceed 30, which will lead to continuous optimization of the revenue structure and achieve steady and high-quality performance growth.

 

 

Striving for Innovative Product Revenue to Exceed 50% by the End of This Year or Early Next Year

 

The Chairwoman of the Board stated that as a leading pharmaceutical company, Sino Biopharm has always actively responded to the development needs of the national pharmaceutical industry and continuously invested in innovative R&D. The company's many years of persistent investment in pharmaceutical innovation have now entered a harvest period. With the intensive launch of innovative products, the company aims for innovative product revenue to account for over half of the total revenue by the end of this year or early next year, making innovation the driving engine for the company's high-quality development.

 

 

In terms of R&D investment, Sino Biopharm has ranked among the top domestic pharmaceutical companies for many consecutive years. In 2024, the company's R&D expenses reached RMB 5.09 billion, accounting for 17.6% of total revenue, with approximately 78% of this investment dedicated to innovative drug R&D.

 

As the company fully enters its innovation harvest phase, the resulting financial performance are also accelerating. In 2024, the company's innovative product revenue surpassed the RMB 10 billion milestone, reaching RMB 12.06 billion, an increase of 21.9% - with innovative products now contributing 41.8% of total revenue, further solidifying its leadership in innovation. In 2024, the company had a total of 6 innovative products approved for marketing, including 4 Class 1 innovative drugs, ranking first among domestic pharmaceutical companies. As of the end of 2024, the company had 17 innovative products approved for marketing, and this number is expected to reach 22 by the end of 2025.

 

The company's better-than-expected performance growth was mainly due to the continued ramp-up of innovative products approved in the previous two years, which achieved high-speed sales growth. The Class 1 innovative drug Yilishu, approved in 2023, saw accelerated volume growth in 2024 after being included in the National Reimbursement Drug List that year. Four biosimilars (Bevacizumab, Rituximab, Trastuzumab, and Recombinant Human Coagulation Factor VIII) also experienced explosive growth last year, with their market shares expanding rapidly.

 

Double-Digit Performance Growth Expected to Continue in 2025

 

The Chief Executive Officer expects the company's performance to continue its double-digit growth in 2025. He emphasized that three key tailwinds – holistic policy support for innovation, the company’s innovative products entering the harvest phase, and the mitigation of volume-based procurement risks – together with the continued execution of comprehensive innovation strategy, the company will increase R&D investment, further enhance product quality and innovation capabilities, to achieve the mission of "Science for a healthier world".

 

 

On one hand, the 6 innovative products approved for marketing in 2024 each have their own highlights, which injected strong momentum into the company's revenue growth for 2025. Andewei (Benmelstobart) successfully obtained approval for two major indications, small cell lung cancer and endometrial cancer, in its first year on the market. The treatment regimen of Benmelstobart combined with Anlotinib plus chemotherapy, as an innovative therapy for first-line extensive-stage small cell lung cancer, set new historical highs in registrational studies with a median progression-free survival (PFS) of 6.9 months and a median overall survival (OS) of 19.3 months. The efficacy and safety data of Anfangning (Garsorasib) are superior to those of previously FDA-approved drugs with the same target, and it is expected to ramp up quickly while filling a market gap.

 

In addition, BD has also secured blockbuster products in the past two years, including CPX102, the first Class 1 innovative drug for the nebulized treatment of respiratory syncytial virus (RSV) infection in children, and QP001, a Class 2 new drug for long-acting post-operative pain. The latter is the first domestic once-daily long-acting analgesic NSAID injection, for which marketing applications have been submitted in both China and the U.S. This innovative product, which is expected to provide a safer, more effective, and non-addictive analgesic solution for a broad range of post-operative pain patients, may soon be approved for marketing and contribute to the company's performance growth in 2025 within a short period.

 

On the other hand, the continuous improvement of operational efficiency also provides a solid guarantee for the company's future development. In 2024, due to the advancement of group-wide centralized procurement, a significant increase in capacity utilization, and the scale effects brought by the pioneering deployment of 10,000-liter bioreactors, the company's gross profit margin increased by 0.5 percentage points year-on-year. Meanwhile, the selling and administrative expense ratio continued to decrease by 0.1 percentage points, having fallen by more than 7 percentage points over the past five years, which is at a leading level in the industry. This demonstrates the company's excellent results in strategic management, including digitalization and organizational integration.

 

"In-house R&D + BD" to Strengthen the Innovative Product Matrix, Comprehensive Layout in Artificial Intelligence

Thanks to the dual-driver of "in-house R&D + BD", the company expects several blockbuster products to be launched in the next three years, to accelerate their contribution to performance. Among them, Rovadicitinib is the world's first oral small molecule inhibitor with a dual mechanism of inhibiting both JAK and ROCK. A marketing application has been submitted in China, and it has been approved for Phase II clinical trials in the U.S., possessing global First-in-Class (FIC) potential. The PDE3/4 inhibitor TQC3721, for indications such as Chronic Obstructive Pulmonary Disease (COPD), is currently second in the world in terms of R&D progress. Zongertinib, a non-small cell lung cancer drug developed in collaboration with Boehringer Ingelheim, had its marketing application filed in China this January and has been granted priority review by the Center for Drug Evaluation (CDE).

 

Breast cancer is the second most common cancer globally, and the company is accelerating its layout in this area. Breast cancer is expected to become another major driver of the company's revenue growth, following lung cancer. In addition to currently marketed products such as Everolimus, Trastuzumab, and Pertuzumab, a marketing application for the CDK2/4/6 inhibitor Culmerciclib (TQB3616) was filed last year. The HER2 bispecific ADC drug TQB2102 has also initiated Phase III clinical trials and is expected to be launched in 2027.

 

Currently, "AI+" applications have become a focus of attention across various industries. The company has made a comprehensive layout in artificial intelligence through multiple dimensions such as strategic cooperation, investment, and localized applications. It has not only participated in strategic investments in two major AI pharmaceutical technology companies, XtalPi and Insilico Medicine, but has also collaborated with them to explore applications in the field of new drug development. At the same time, the company has also fully integrated AI assistants such as Deepseek and ChatGPT internally to support the implementation of more business scenarios. In the future, the company will continue to increase its investment in the AI field, deeply expand the application of AI in various departments such as R&D, production, sales, and management, fully unleash the advantages of AI, accelerate corporate development, and lead industry innovation and upgrading.

 

 

In addition, the results report shows that the financial condition of Sino Biopharm continues to improve. As of the end of last year, the company's cash reserves reached RMB 24.1 billion, another record high, while the total financing cost decreased by 40%. The RMB 1 billion equity incentive of the core subsidiary Chia Tai Tianqing has been fully repurchased. The Group's total stock purchases for the full year of 2024 exceeded HKD 1.35 billion, a new high since the company's listing, fully demonstrating confidence in future development.

 

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