As earnings season arrives, China's innovative drug industry has delivered a more robust report card compared to previous years. According to incomplete statistics, at least 17 listed innovative pharmaceutical companies on the Hong Kong Stock Exchange and the STAR Market achieved profitability in 2025, marking an increase of nearly 55% from 2024. Companies such as BeiGene, Innovent Biologics, InnoCare Pharma, Lepu Biopharma, Hua Medicine, QuanSheng Biotech, and Mabpharm crossed the breakeven line for the first time this year. Meanwhile, companies including Fosun Pharma-linked Henlius, HUTCHMED, Allist Pharmaceuticals, Beta Pharma, Harbour BioMed, Shanghai Yingli Pharmaceutical, and 3S Bio have maintained profitability for over three consecutive years.
The year 2025 appears to be a turning point. Some firms bolstered profits through globally successful blockbuster drugs, others increased revenues via established commercial systems, and several pushed net profits into positive territory through licensing collaborations, contract revenues, or one-time income recognition. It seems the biotech sector has collectively reached a milestone of sustainability.
The cohort of profitable biotech companies expanded to at least 17 in 2025, signaling the formation of a recognizable segment within China's innovative drug industry. The most notable among them are BeiGene and Innovent Biologics. After 15 years since its founding, BeiGene reported a net profit attributable to shareholders of 14.22 billion yuan in 2025. Innovent Biologics achieved a net profit of approximately 8.14 billion yuan, officially turning profitable. InnoCare Pharma also recorded its first full-year profit as it celebrated its tenth anniversary. Mabpharm, Lepu Biopharma, Hua Medicine, and QuanSheng Biotech also reported positive profits in 2025.
For the secondary market, this indicates that Chinese biotech firms are entering a new phase of value reassessment. However, over a longer timeframe, the profit trajectory of these companies is not a straight upward line but rather a fluctuating, zigzagging progression. Firms like Henlius, HUTCHMED, Allist Pharmaceuticals, Beta Pharma, Harbour BioMed, Shanghai Yingli Pharmaceutical, and 3S Bio, which have been profitable for over three years, have largely validated their business models. Leading companies such as BeiGene, Innovent, and InnoCare, after years of heavy investment, have finally achieved profitability, drawing significant industry attention. On the other hand, companies like Baili Pharmaceutical, Sinocelltech, and TOT Biopharm returned to losses after brief profitable periods, indicating that profitability alone is not yet stable. Firms such as ChipScreen Biosciences and Remegen, after transitioning from profit to loss, returned to profitability driven by sales of their core products. The profitability landscape is clearly stratified.
The duration since establishment is also telling. Based on available statistics, the average time to first profitability for these companies is approximately 11.4 years. Innovative drug development is not a short-term endeavor; it involves around a decade of R&D cycles, iterative trial-and-error investments, and building commercial systems from scratch—none of which can be significantly shortened. The wave of profitability in 2025 reflects the accumulated progress of China's innovative drug industry over the past decade.
Ultimately, it is products that enable biotech firms to cross the profitability threshold. Among all profitable examples, two-thirds rely primarily on product sales for their earnings. Companies including BeiGene, ChipScreen Biosciences, Mabpharm, Innovent Biologics, Shanghai Yingli Pharmaceutical, Beta Pharma, and Allist Pharmaceuticals derive over 90% of their revenue from product sales. BeiGene, for instance, reported total revenue of 38.2 billion yuan in 2025, with product revenue accounting for 377.7 billion yuan, nearly 90% of the total. The global sales of zanubrutinib reached 280.67 billion yuan, up 48.8% year-on-year, representing the largest component of the company's revenue structure. Tislelizumab, a foundational product for solid tumors, achieved global sales of 52.97 billion yuan. Revenue from Amgen-licensed products also grew 33.6% to 34.71 billion yuan. BeiGene's profitability serves as a textbook case of product scaling and monetization. Zanubrutinib has been approved in over 75 markets worldwide, with sales in the U.S. reaching 202.06 billion yuan, and 42.65 billion yuan and 24.72 billion yuan in Europe and China, respectively. At this scale of sales volume, profitability was inevitable.
Additionally, Innovent Biologics saw its revenue surpass 100 billion yuan for the first time in 2025, reaching 130.42 billion yuan, a 38.4% increase year-on-year. Pharmaceutical product sales contributed 118.96 billion yuan, accounting for over 90% of total revenue. The company now has 18 marketed products, with 12 included in the National Reimbursement Drug List. Oncology remains its core business, but cardiovascular, metabolic, and autoimmune areas are beginning to contribute new growth. Profitability stems from revenue growth and operational efficiency improvements, reflecting the company's operational capabilities.
Smaller companies, even without blockbuster drugs, can achieve profitability through stable sales. Mabpharm reported a profit of 57.13 million yuan in 2025, with drug sales revenue rising from 215 million yuan in 2024 to 598 million yuan in 2025, contributing over 92% of total revenue. Nearly all growth came from its three marketed products: Enlituo, Aomaishu, and Leiting. For small and medium-sized biotech firms, this type of profitability is particularly meaningful, indicating that product sales are genuinely supporting operations.
There are also numerous examples of single-product sales driving profitability. Allist Pharmaceuticals' third-generation EGFR-TKI, almonertinib, generated revenues of 19.72 billion yuan in 2023 and 35.06 billion yuan in 2024, accounting for about 98% of total revenue. In 2025, overall revenue growth was still primarily driven by almonertinib sales. InnoCare Pharma's orelabrutinib achieved commercial revenue of 14.10 billion yuan in 2025, a 40.99% increase year-on-year, with all four approved indications included in the医保 and recommended by multiple guidelines. ChipScreen Biosciences' chidamide continued to see sales growth a decade after launch, with sales revenue reaching 5.797 billion yuan in 2025, up 16.05% year-on-year. HUTCHMED's fruquintinib saw overseas sales grow 26% to 366.2 million USD, indicating steady expansion in international markets. Hua Medicine's dorzagliatin also experienced significant sales growth following医保 inclusion and commercial adoption, with revenue reaching 4.929 billion yuan in 2025, a 91% increase year-on-year.
For biotech companies, products are the fundamental currency. Commercial revenue is repeatable and can compound over time. Even among profitable firms, the market tends to view those with product-driven earnings more favorably.
Despite the increase in profitable companies, the market has not become more forgiving. Among the seven companies achieving profitability for the first time, five saw their stock prices rise one week later, with gains ranging from 1.46% to 19.61%. Hua Medicine, Innovent Biologics, and Lepu Biopharma all experienced increases exceeding 10%. However, when extended to one week or even one month later, several pharmaceutical stocks underwent corrections or declines. BeiGene's stock price fell 17% after one week, with a cumulative drop of over 23% within a month. Mabpharm also saw a double-digit decline one week after announcing profits. Only Lepu Biopharma continued its upward trend, expanding gains to 26.54%. Merely turning a profit no longer guarantees sustained positive market sentiment. The source of profitability, growth sustainability, and valuation alignment are the true variables influencing market performance.
Lepu Biopharma occupies a middle ground. The company reported annual revenue of approximately 9.35 billion yuan and a net profit of 2.59 billion yuan. Revenue from its PD-1 inhibitor, prolizumab, and EGFR ADC, vebicetostat, combined for 5.01 billion yuan, while income from the out-licensing of the CDH17-targeting innovative ADC MRG007 and TCE assets contributed 4.24 billion yuan. This profit structure is evidently more solid than relying solely on licensing revenue. However, if future business development (BD) activities slow down, it remains uncertain whether existing products alone can sustain profit expansion.
QuanSheng Biotech is more representative. It reported a net profit of 3.07 billion yuan in 2025, with 7.23 billion yuan of its total 8.07 billion yuan revenue coming from BD income. Three out-licensing deals were the direct drivers of its profitability. However, such income is inherently non-recurring and difficult to establish as a long-term competitive moat.
Conversely, companies that transitioned from profit to loss due to reliance on BD income are even more illustrative. Baili Pharmaceutical's 2024 collaboration with Bristol Myers Squibb on an EGFR/HER3 bispecific ADC brought in 800 million USD in intellectual property income. In 2025, milestone revenue recognized from BMS dropped to 250 million USD, a sharp 57.06% decline, while R&D expenses continued to increase, making a return to losses almost inevitable. Companies like Ascentage Pharma, Kelun-Biotech, and CStone Pharma also experienced brief profitability in the first half of 2024, primarily driven by one-time BD revenues.
Nevertheless, a shift from profit to loss does not signify complete failure. As long as core products can genuinely take over as growth drivers, profitability can be restored. Remegen achieved profitability in 2021 through BD, subsequently returned to losses, and by 2025, with sales of telitacicept and disitamab vedotin becoming primary growth engines, the company returned to profitability. ChipScreen Biosciences fell into loss in 2024 but returned to profit in 2025, driven by a 122.56% sales growth of siglitazar sodium and a 16.05% increase in chidamide sales.
In summary, achieving a positive bottom line indicates that a biotech company has crossed a threshold. The ability to maintain and grow that profitability will ultimately determine whether it has truly reached sustainable success.
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