On the evening of October 27, Shijiazhuang Yiling Pharmaceutical Co., Ltd. (Yiling Pharmaceutical) released its Q3 2025 report. During the reporting period, the company achieved revenue of 5.868 billion yuan in the first three quarters, representing a 7.82% year-on-year decline but showing significant narrowing compared to previous high-base periods. Net profit attributable to shareholders surged 80.33% year-on-year to 1 billion yuan, demonstrating clear profitability recovery. Against the backdrop of normalized demand for traditional flagship products, this resilient performance stems from the deep implementation of its "innovation-driven growth" strategy.
The profit structure reveals Yiling Pharmaceutical's departure from the traditional "marketing-driven" model of Chinese medicine companies. In the first three quarters, sales expenses dropped 19.08% year-on-year to 1.353 billion yuan, hitting a record low of 23.06% of revenue. Meanwhile, gross margin rose over 7 percentage points to 60.53%. This "lower costs, higher profits" dynamic reflects how R&D investment has translated into product competitiveness—secondary patented products saw revenue jump 53.18% year-on-year in H1, enabling market share expansion without heavy promotional spending.
Sustained R&D investment fuels this product strength. Yiling Pharmaceutical allocated 544 million yuan (9.27% of revenue) to R&D in the first three quarters of 2025, setting another industry-leading benchmark for Chinese medicine firms. Long-term commitments have yielded results: five new drugs launched in five years, with nine traditional Chinese medicine projects currently in Phase II+ clinical trials, continuously enriching the product pipeline.
Beyond traditional medicine innovation, Yiling Pharmaceutical has built a second growth engine through its "three-step" chemical and biological drug strategy, further solidifying its R&D-driven foundation. The initial "technology transfer" phase is complete, with wholly-owned subsidiary Yiling Wanzhou achieving global technology transfers for over 30 oral solid dosages now steadily supplied across欧美 markets. The "generic drug dual-registration" approach has secured 15 U.S. FDA ANDA approvals and filings in 53 countries (nine approvals obtained). Most promising is its "innovative drug breakthrough"—four chemical innovative drugs are in clinical trials, including anilodfen injection (NDA submitted), while flurbiprofen (already generating over 900 million yuan annually despite centralized procurement) could become a billion-yuan blockbuster.
As its chemical/biological drug segment evolves from "manufacturing+generics" to "generic-innovative hybrids" and proprietary innovation, Yiling Pharmaceutical is establishing a dual-engine R&D framework combining traditional and chemical medicines. This quarterly report validates "innovation-driven growth"—using R&D to counter cyclical fluctuations while building long-term technological advantages. The company's practice also offers a replicable model for the Chinese medicine industry's transition from "scale expansion" to "innovation-led quality improvement."
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