Betta Pharmaceuticals recently announced its plan to issue H-shares and list on the Hong Kong Stock Exchange's main board. This marks the company's third attempt to go public in Hong Kong within four years. Unlike previous attempts, this IPO push comes as the company faces multiple challenges, including declining performance, financial strain, and a lack of product pipeline momentum.
**Cash Flow Pressure and Unresolved Dispute** The immediate driver behind Betta Pharmaceuticals' renewed H-share listing plan is its worsening liquidity crunch. The company's Q3 2025 report shows revenue of RMB 2.717 billion, up 15.9% year-on-year, but net profit attributable to shareholders fell 23.86% to RMB 317 million. Operating cash flow also declined by 19.6% to RMB 668 million in the first nine months of 2025, signaling weakening core business profitability.
As of September 2025, the company had RMB 1.484 billion in current assets against RMB 1.927 billion in current liabilities, with current and quick ratios of just 0.77 and 0.59, respectively—well below healthy industry benchmarks. Cash reserves stood at RMB 414 million, with tradable financial assets of RMB 77.6 million, but short-term borrowings and current maturities totaled RMB 1.124 billion, leaving a clear coverage gap.
A lingering issue is the RMB 180 million payment dispute with partner InventisBio. The debt stems from a 2018 collaboration agreement tied to the lung cancer drug BPI-D0316 (besifitinib mesylate). Payment milestones were triggered upon the drug's approval in China (May 2023) and inclusion in the national reimbursement list (early 2024), but Betta Pharmaceuticals has delayed payment citing cash flow constraints. InventisBio disclosed it had provisioned RMB 18 million in bad debt reserves, reflecting both financial strain and reputational damage for Betta.
**Product Pipeline Struggles** The company remains heavily reliant on its 14-year-old flagship drug, icotinib (Conmana), which historically contributed over 96% of revenue. However, as a first-generation EGFR-TKI, it faces declining competitiveness against third-generation therapies now dominating clinical practice.
The much-anticipated third-generation EGFR-TKI besifitinib (Saimena) has underperformed since its 2023 launch, failing to breach the 10% revenue disclosure threshold amid fierce competition from rivals like osimertinib and almonertinib. Other approved products—eight in total across lung cancer, breast cancer, and other areas—have yet to meaningfully contribute.
Recent launches also face headwinds: the CDK4/6 inhibitor tericiclib (Kangmeina, approved June 2025) competes with established players like Pfizer’s palbociclib, while recombinant human albumin (Oufumin, launched July 2025 via partner Hygeen) has limited regional distribution rights and minimal earnings impact.
**R&D Cutbacks and "Four-Pronged Strategy" Stalling** Amid financial and product challenges, Betta’s "four-pronged" strategy—combining commercialization, R&D, partnerships, and an innovation ecosystem—has yet to deliver. Recent investments, such as in diabetes cell therapy firm RuiPu (2024) and Hygeen (2022, 7.47% stake), remain early-stage with uncertain returns.
Notably, R&D spending has contracted for three consecutive years, dropping 21.59% in 2024 to RMB 717 million and another 2.88% in the first nine months of 2025 to RMB 373 million. The R&D team was halved from 647 in 2022 to 327 by end-2024, with the resignation of key scientist Wang Jiabing further disrupting continuity.
Meanwhile, SG&A costs keep rising: Q1-Q3 2025 saw management expenses up 26.45% to RMB 372 million, sales expenses up 6.72% to RMB 929 million (third straight annual increase), and finance costs surging 78.26% to RMB 62 million.
With no blockbuster successors in sight, shrinking R&D, and mounting financial pressure, Betta Pharmaceuticals’ hopes for a turnaround via its Hong Kong IPO remain uncertain.
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