Revolution in Novel Drugs: Jiangsu Hengrui and Hansoh Pharmaceutical's Profit Surge

Significant Profit Growth in Chinese Pharma

Both Jiangsu Hengrui Pharmaceuticals and Hansoh Pharmaceutical Group are projected to report significant profit increases. On August 21, Hengrui is anticipated to declare a 40% rise in their net profit to 4.1 billion yuan (US$570.8 million) for the first half of the year, boosted by novel drug sales. Analysts anticipate a forecasted profit upsurge of 28% for the entire year, reaching 8.1 billion yuan. The pharmaceutical firm's transition from traditional generics to innovative drugs significantly contributes to this financial growth.

The Shift Toward Innovative Drugs

The ramp-up of novel drug sales has been a crucial driver for Jiangsu Hengrui's profit growth. A report from Huayuan Securities noted that the company is undergoing a transformation,reducing its dependency on generics significantly. From 43% of revenue coming from generics last year, this is predicted to decline to 23% by 2027. With 19 innovative drugs launched and 15 covered under national health insurance, Hengrui's commitment to innovation is evident.

Strategic Licensing Initiatives

The company is also seeing promising results from licensing agreements. Hengrui has signed several significant out-licensing deals since 2018, culminating in upfront payments of US$600 million, with potential further payments reaching US$13.4 billion.

Hansoh Pharmaceutical’s Growth

On August 18, Hansoh is predicted to report a remarkable 51% increase in its net profit, reaching 2.5 billion yuan. Innovations within their product pipeline for cancer, infectious diseases, and metabolic disorders will likely drive a major portion of their revenue, projected to exceed 10 billion yuan this year.