Jiangsu Hengrui Pharmaceuticals (01276) experiences a shift in growth structure: acceleration of the second curve and global value release.

On August 19, Jiangsu Hengrui Pharmaceuticals (01276) delivered a remarkably resilient half-year financial report. During this period, the company reported an operating income of 15.456 billion yuan and a net profit attributable to shareholders of 4.465 billion yuan, with revenue from innovative drugs exceeding 63%. Beyond the surface of the financial figures lies a profound "declaration of qualitative change"the era of innovative drugs is just beginning. What is particularly noteworthy is that Hengrui's growth structure is undergoing a transformation. In the first half of the year, the sales revenue of non-oncological innovative drugs reached 2.545 billion yuan, a year-on-year increase of 73.97%, further raising their proportion in innovative drug sales revenue to 28.89%. The acceleration of commercialization in areas such as metabolism, autoimmunity, and cardiovascular diseases is sustaining the growth momentum beyond oncology, leading to the rapid formation of a "second growth curve" represented by non-oncological innovative drugs. Meanwhile, global partnerships continue to advance, offering more pathways for the global development and value realization of innovative assets. Notably, the hundred-billion-dollar global strategic cooperation is extending the company's value boundary from China to the world, opening up new spaces for international value. The simultaneous realization of three structural breakthroughs undoubtedly marks Jiangsu Hengrui Pharmaceuticals' evolutionary path. Market analysts believe that the Chinese biopharmaceutical industry is experiencing a transformation from a "valuation lowland" to a "value exporter." This transformation will not occur uniformly or at a constant pace. It will first be achieved by those enterprises that dare to define themselves by global standards and embrace the global ecosystem with a collaborative attitude. Jiangsu Hengrui Pharmaceuticals is precisely such an example. What it reveals goes beyond the financial performance of a single companyit is a vivid footnote to the leap from "follower" to "co-builder" for China's innovative drug leader. Companies capable of completing this transformation will define the next decade of the Chinese biopharmaceutical industry. Crossing the critical point: Innovative drugs leading the high-quality transformation of old and new momentum with a 63% share 63.16% is the proportion of Jiangsu Hengrui Pharmaceuticals' innovative drugs in its pharmaceutical sales revenue for the first half of 2026. This figure signifies the gradual establishment of a new income structure dominated by innovative drugs. This is seen as a strategic transition with a deliberate rhythm. During the reporting period, revenue from generic drugs stood at 5.139 billion yuan, a decrease of 16.1% year on year, lowering their proportion of pharmaceutical sales revenue from 44.7% in the previous year to 36.8%. Due to the effects of local centralized procurement, the revenues of drugs such as butorphanol and sevoflurane have declined, while price reductions on collective procurement varieties such as albumin-bound paclitaxel have further contracted. Simultaneously, the company has strategically reduced resource investment in some generic drugs. The confluence of these three factors indicates a planned and orderly exit from the revenue center for the generic drug business. However, this is not a purely passive response; it is a strategic choice by the company to redirect its limited commercial energy toward innovative products with high clinical value. The innovative business, which is taking over as the main growth driver, has completed its mission with strong performance. Revenue from innovative drugs reached 8.809 billion yuan, a year-on-year increase of 16.37%. Anti-tumor products remain the backbone. In the first half of the year, revenue from innovative anti-tumor products was 6.265 billion yuan, a year-on-year increase of 2.58%, accounting for 71.11% of innovative drug sales revenue. Key products such as the innovative drug enzalutamide (a second-generation AR antagonist) and palbociclib (a CDK4/6 inhibitor) have maintained strong growth, and the newly included trastuzumab deruxtecan (HER2 ADC) in the National Medical Insurance catalog has achieved rapid volume growth. The real highlight comes from the non-oncology field. In the first half of the year, the sales revenue of non-oncology innovative drugs reached 2.545 billion yuan, an astonishing increase of 73.97%, accounting for 28.89% of innovative drug sales revenue. In the metabolism field, empagliflozin (an SGLT2 inhibitor) has become the second largest SGLT2 inhibitor by market share in China; the autoimmunity products abrocitinib (a JAK1 inhibitor), and secukinumab (an IL-17A inhibitor), along with the cardiovascular product evolocumab (a PCSK9 inhibitor), have all seen rapid growth following their inclusion in the National Medical Insurance catalog. A dual-driven growth pattern is gradually taking shape. As the sales proportion of innovative drugs continues to rise, the companys revenue structure is further shifting toward innovative drugs. The optimization of the revenue structure has substantively translated into improved profitability. The transformation of old and new momentum has not only been completed in terms of quantity but has also been validated in terms of quality. The long-term stability of this structure is underpinned by the depth of the companys pipeline and the strength of its R&D efforts. In the first half of the year, Jiangsu Hengrui Pharmaceuticals' R&D investment reached 4.605 billion yuan, a year-on-year increase of 18.96%, accounting for 29.8% of revenue. By the end of the reporting period, the company had nine marketing applications accepted by the National Medical Products Administration in China and 17 clinical studies advancing to Phase III. From ADCs and bispecific antibodies to small molecule targeted therapies, a diverse technology platform and differentiated target layout have established a sustainable innovation output mechanism, ensuring that the 63% share has continued upward momentum. The significance of the critical point lies in its irreversibility once crossed. As innovative drugs transition from being supplementary to becoming the main revenue source, Jiangsu Hengrui Pharmaceuticals has completed its identity transformation from a giant in generic drugs to a leader in innovative drugs. The future changes in the proportion of innovative drug revenue will depend on the growth of existing products and the continuous conversion of the R&D pipeline. Opening up growth prospects: The non-oncology sector builds a new multipolar growth pattern with a 74% growth rate The innovative drug share surpassing 63% reaffirms Jiangsu Hengrui Pharmaceuticals' strategic shift of its revenue focus from the generic drug sector to the innovative drug sector. Meanwhile, the 73.97% growth rate in the non-oncology sector validates the companys structural upgrade from single-product concentration to pipeline combination-driven growth mode, reopening the market's revaluation space from a single track to a multi-track synergistic premium. For a long time, the market's perception of Jiangsu Hengrui Pharmaceuticals has been heavily anchored in the oncology field. While this label demonstrates the companys core competitive advantages, it has also obscured the substantial value being realized in broader fields such as metabolism, autoimmunity, and cardiovascular diseases. In the first half of 2026, the revenue from non-oncology innovative drugs accounted for 30% of the total innovative drug revenue, indicating that Jiangsu Hengrui Pharmaceuticals' growth equation is undergoing a comprehensive reconstruction from "tumor-driven" to "multipolar collaborative efforts." From the perspective of segmented tracks, three major growth poles are forming a collaborative force. The metabolism sector has entered a phase of scaled harvest. Empagliflozin (an SGLT-2 inhibitor) has become the second largest product in its category in China, and products like metformin extended-release tablets and sitagliptin (a DPP-4 inhibitor) are achieving rapid growth through precise delivery of clinical advantages. Diabetes is one of Chinas largest chronic disease markets, and Jiangsu Hengrui Pharmaceuticals is progressing from "category supplementation" to "main competitive force" in this field, with its commercial value accelerating toward release. Autoimmunity and cardiovascular products have quickly gained market volume after being newly included in the National Medical Insurance catalog. Abrocitinib (a JAK1 inhibitor), secukinumab (an IL-17A inhibitor), and evolocumab (a PCSK9 inhibitor) are all products newly included in the National Medical Insurance catalog in 2026, rapidly entering the market due to their clear efficacy advantages. Both autoimmunity and cardiovascular disease are highly lucrative markets historically dominated by foreign brands, and the rapid penetration of Jiangsu Hengrui Pharmaceuticals' products signifies a substantial breakthrough for domestic innovative drugs in these fields. The analgesics and anesthetics sector has maintained stable growth, with products such as remimazolam and fumaric acid tegretol consistently contributing revenue, further enriching the revenue composition of the non-oncology sector. The 73.97% growth does not stem from a single product but rather from the collaborative contributions of various treatment areas, including metabolism, autoimmunity, cardiovascular, and analgesics. Empagliflozin has secured the second position in the Chinese market for SGLT2 inhibitors, and products such as abrocitinib, secukinumab, and evolocumab have achieved rapid growth after being included in the National Medical Insurance catalog, further broadening the commercial foundation for non-oncology innovative drugs. As multiple tracks like metabolism, autoimmunity, cardiovascular, and analgesics simultaneously enter a harvest phase, Jiangsu Hengrui Pharmaceuticals' growth logic has upgraded from "single-track drive" to "combinatorial revenue realization." The 73.97% growth rate is a direct quantitative expression of this new pattern. Reshaping the valuation anchor: Billion-dollar global cooperation opens new spaces for international value If the 73.97% growth in the non-oncology sector completes the "structured upgrade" of Jiangsu Hengrui Pharmaceuticals' growth pole from singular to multipolar, then the deepening advancement of the globalization strategy has initiated a "systematic migration" of the company's valuation framework from local leader premiums to global innovative asset pricingshifting the valuation anchor from growth expectations in the domestic market to the revaluation of synergistic value within the global industrial ecosystem. The billion-dollar strategic cooperation is a landmark event in this value reset. In May 2026, Hengrui reached a global strategic partnership with BMS to jointly advance 13 early projects, with a potential total transaction amount of approximately 15.2 billion USD. The cooperative model has evolved from "single-product licensing" to "platform-level strategic collaboration," marking that Jiangsu Hengrui Pharmaceuticals' early R&D capabilities have received systematic recognition from top global pharmaceutical companies. Outward licensing cooperation has transitioned from occasional transactions to a normalized revenue source. During the reporting period, the recognized external licensing revenue amounted to 1.422 billion yuan, and ongoing overseas business development transactions have validated the gradual increase in international recognition of the companys innovation pipeline. The "NewCo" model constitutes a second pathway for global value release. In terms of the NewCo model, Hengruis NewCo partner Kailera Therapeutics was listed on NASDAQ in April 2026, becoming one of the largest IPOs in the biotechnology sector at that time. According to the report, the recognized fair value change income from the companys equity holdings during the reporting period was 820 million yuan. Meanwhile, another NewCo partner, Braveheart Bio, has also been listed on NASDAQ in August 2026. The significance of the NewCo model lies in the companys expectation to share global development and commercialization value through various means, including licensing fees, milestone payments, sales royalties, and equity rights. When the valuation logic of domestic pharmaceutical companies shifts from "domestic market growth expectations" to "global innovative asset pricing," the value ceiling is then redefined. In summary, the Chinese biopharmaceutical industry is experiencing a transformation from a "valuation lowland" to a "value exporter." This transformation will undoubtedly not be evenly distributed, but will first be realized by those companies that define R&D by global standards and integrate into the global industrial ecosystem with a collaborative attitude. Jiangsu Hengrui Pharmaceuticals has demonstrated with this half-year report that it is precisely such an exampleranging from a qualitative change in revenue structure to a reconstruction of growth dynamics, to a global migration of valuation logic, its evolutionary path clearly points to one conclusion: when a domestic pharmaceutical company has the capability to price its innovative assets globally, its value boundary is no longer defined by a single market.