On the track of domestic innovative drug development, ASCENTAGE PHARMA GROUP (06855.HK) was once one of the brightest stars. However, its recently disclosed 2025 annual report reveals a classic dilemma for a star company: rapidly increasing sales alongside sharply widening losses.
On the surface, the company appears to have delivered solid results, with core product Olverembatinib (耐立克®) sales exceeding 435 million yuan and total commercial revenue growing by 90% year-over-year. Yet a closer look shows the company's annual net loss reached a record high of 1.243 billion yuan, a 206.4% increase from the previous year. Behind these figures lie three significant structural risks that cannot be ignored.
Risk One: Over-reliance on a Single Product, Fragile Risk Resilience Olverembatinib contributes over 80% of the company's product sales revenue, making it ASCENTAGE PHARMA's critical but precarious "single bridge." Although the product has achieved volume growth under national medical insurance coverage, its indications are primarily limited to patients with chronic myeloid leukemia resistant to first- and second-generation TKI inhibitors, which inherently restricts its market size.
More alarmingly, Olverembatinib faces multiple external pressures: competition from originator drugs by international giants like Novartis and Bristol Myers Squibb, alongside persistent pricing pressure from national reimbursement negotiations. While the annual report did not disclose specific price cuts, the statement that "sales volume growth outpaced revenue growth" hints at the initial erosion of margins by pricing pressures.
Should Olverembatinib face policy adjustments, competitor challenges, or further price reductions upon insurance renewal, the company has virtually no secondary growth pillar to cushion the impact. Although Lisaftoclax (利生妥®) generated 70.58 million yuan in revenue within five months of launch, it also targets a niche patient population and is unlikely to alleviate profitability pressures in the short term.
Risk Two: Severe Input-Output Imbalance, Cost Black Hole Continues to Devour Profits ASCENTAGE PHARMA's losses are not accidental but an inevitable result of a severe mismatch between long-term, high-intensity investment and limited commercial returns.
In 2025, the company's R&D expenditure soared to 1.137 billion yuan, a 20.1% year-over-year increase. This figure even exceeded the total annual revenue (574 million yuan), resulting in an R&D expense ratio of 198%, far above the industry average. With most pipeline assets still in early clinical stages and years away from commercialization, this "cash-burning" model is expected to persist for the foreseeable future.
Concurrently, sales and distribution expenses surged to 354 million yuan, an 80.4% increase, pushing the sales expense ratio to 61.7%. In other words, for every 100 yuan of product sold, the company spends 61 yuan on promotion. This high-input, low-return business model is clearly unsustainable.
Risk Three: Volatile Revenue Structure, Lack of Sustainable Self-Generating Capacity In 2024, a one-time intellectual property income of 678 million yuan, recognized from an agreement with Takeda Pharmaceutical, temporarily improved ASCENTAGE PHARMA's performance. After this revenue stream disappeared in 2025, the company's revenue plummeted by 41.5%, starkly revealing its weak internal revenue-generating capability.
Currently, the company's revenue relies entirely on sales from two marketed products and lacks stable, diversified income sources. In contrast, R&D and sales expenses exhibit rigid growth, leading to a continuously expanding loss gap. The 2025 net loss of 1.243 billion yuan was nearly 2.5 times the product sales revenue for the same year. This structure of "losing two yuan for every one yuan earned" is rare even among innovative drug companies.
Profitability Inflection Point Remains Distant, Testing Investor Confidence ASCENTAGE PHARMA's annual report provided no clear expectation for a profitability inflection point. Based on current data, the possibility of the company achieving breakeven in the short term appears extremely low, given the persistent high R&D investment, continuously rising sales expenses, and over-reliance on a single product pipeline.
More concerning is that administrative expenses also grew by 31.6% year-over-year to 246 million yuan. The expansion of operational scale has not yielded corresponding revenue growth but has instead intensified the rigid pressure of management costs.
Conclusion: The Halo Fades, ASCENTAGE PHARMA Urgently Needs a "Self-Reinvention" The story of ASCENTAGE PHARMA reflects the common challenges faced by Chinese innovative drug companies during commercialization: technological leadership does not equate to commercial success, and product launch does not guarantee profitability.
As capital markets impose increasingly stringent requirements on the profitability and cash flow of innovative drug firms, ASCENTAGE PHARMA must swiftly adjust its investment structure, diversify revenue sources, and reduce single-product dependency. Otherwise, the vicious cycle of "high R&D + high sales + low return" will be difficult to break. The massive loss in 2025 should not merely serve as a financial warning but must become the starting point for a strategic overhaul.
Failing that, this once highly-touted "leader in apoptosis" risks becoming yet another capital-intensive venture forgotten by investors.
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