From innovative drugs to NewCo, what new signals did Hengrui Pharmaceutical's (01276) semi-annual report release?

The Zhitong Finance App learned that on August 19, Hengrui Pharmaceutical (01276) released the 2026 semi-annual report. During the reporting period, the company achieved operating income of 15.456 billion yuan, of which product sales revenue was 13.948 billion yuan, up 1.87% year on year; net profit attributable to shareholders of listed companies was 4.465 billion yuan, up 0.34% year on year. The company invested 4.605 billion yuan in R&D, an increase of 18.96% over the previous year, accounting for 29.80% of revenue, of which the cost R&D investment was 3.493 billion yuan, an increase of 8.21% over the previous year.

If we only look at a single financial indicator, Hengrui Pharmaceutical's 2026 semi-annual report probably doesn't count as a “high growth” narrative. Since 2026, the pharmaceutical manufacturing industry as a whole is still facing certain operating pressure. According to June data from the National Bureau of Statistics, the revenue of the pharmaceutical manufacturing industry fell 1.5% year on year from January to May, which is in contrast to the overall revenue growth of industrial enterprises above the same period. As the industry grows and differentiates, commercialization of innovative drugs, product structure optimization, and internationalization capabilities are becoming important directions for pharmaceutical companies to find new volumes.

In this context, Hengrui's focus in the first half of 2026 was not only the absolute growth rate, but further changes in the growth structure: innovative drug sales revenue reached 8.809 billion yuan, up 16.38% year on year, accounting for 63.16% of drug sales revenue; among them, sales revenue for non-oncology innovative drugs increased 73.97% year on year; at the same time, the R&D pipeline continued to harvest, and reached a global strategic cooperation with BMS with a potential total transaction amount of 15.2 billion US dollars. The two NewCo companies successively landed on NASDAQ.

Behind these changes, Hengrui's growth logic is becoming more clear — the ability to commercialize innovative drugs, continuous R&D output, and the realization of the global value of innovative assets are becoming more important dimensions for observing the company's long-term value.

The share of innovative drugs continues to rise, and the growth is becoming more “thick”

In recent years, as innovative drugs enter the stage of centralized commercialization, market standards for evaluating innovative drug companies are changing. Pipeline scale and R&D investment are still important, but whether innovation results can actually be converted into revenue, whether the product structure is sufficiently diverse, and whether commercialization capacity can continue to undertake R&D results are becoming observational indicators that are closer to the essence of business.

CITIC Construction Investment pointed out in its 2026 mid-term investment strategy for the pharmaceutical and biological industry that innovative drugs are in the “two-wheel drive” stage of commercialization and internationalization. Innovative companies have broken through differentiation, and global value continues to be realized.

From this perspective, an important sign for Hengrui in the first half of 2026 is that the share of innovative drug sales continues to rise.

During the reporting period, Hengrui Innovative Pharmaceutical's sales revenue increased 16.38% year on year, accounting for 63.16% of drug sales revenue. Among them, the sales revenue of innovative anti-tumor drugs was 6.265 billion yuan, up 2.58% year on year, accounting for 71.11% of the sales revenue of innovative drugs; sales revenue of non-oncology innovative drugs was 2,545 billion yuan, a sharp increase of 73.97% year on year, accounting for a further increase of 28.89%.

This means that Hengrui, which has long been known for cancer products in the past, is forming a new growth fulcrum.

In the non-oncology sector, products such as hengagliflozin, hengagliflozin metformin sustained-release tablets, and regagliptin in the metabolic sector achieved rapid growth; in the autoimmune field, emaxitinib, fenacizumab, and ricasimab in the cardiovascular field achieved rapid growth after being included in national health insurance; in the field of anesthesia and analgesia, products such as rimazolam and tejilidine fumarate continued to grow.

Judging from industry trends, global innovative drug research and development hotspots also continue to expand into the fields of metabolism and immunity. According to Citeline's Pharma R&D Annual Review 2026, the global immunology pipeline increased 20.6% year over year, and the obesity R&D pipeline increased 30.7% year over year. According to data from the Joint Research Network, China's autoimmune disease drug market will reach 54 billion yuan in 2026; in addition, according to Frost & Sullivan's forecast, China's GLP-1 market still has a lot of room for growth.

At the same time, the basic market in the oncology sector continues to contribute to growth. Core products such as revelumide and darcilib have continued to grow, and Ruikang trastuzumab, which is newly included in the national medical insurance catalogue, has achieved relatively rapid release.

Evolving from a “leader in innovative oncology drugs” to an innovative drug platform enterprise in the multi-treatment field, Hengrui's innovative drug growth sources are being further broadened. For innovative pharmaceutical companies that already have a large commercialization volume, diversification of sources of growth also provides more support for the sustainability of performance.

R&D has entered an intensive harvest period, and the next batch of growth curves is beginning to emerge

For innovative pharmaceutical companies, today's sales revenue determines current performance, while late-stage pipelines determine the room for growth in the next few years.

In the first half of 2026, Hengrui approved a total of 7 innovative achievements, including 2 Class 1 innovative drugs Relavulp α injections and ruznorel sodium tablets, 1 Class 2 innovative drug ciclosporin eye drops (IV), and 4 new indications for innovative drugs that have already been marketed. By the end of the reporting period, the company had 9 domestic listing applications accepted by the NMPA, 17 clinical projects had advanced to phase III, 22 to phase II, and 10 innovative products had been promoted to phase I clinical trials for the first time.

What is more noteworthy is that a number of potentially large varieties are entering the later stages of development.

In the field of metabolism, two Chinese phase III type 2 diabetes studies with repropotide injection (GLP-1/GIP) achieved positive top line results and plans to submit an NDA; the HRS-7535 (oral GLP-1) Chinese phase III weight loss study reached all major endpoints and key secondary endpoints in week 44, with an average weight loss of 11.1% in week 50, and the relevant indications plan to submit an NDA.

In the field of oncology, a phase III clinical study of HER3 ADC innovative drug injecting Ruikang ruzetutamab (SHR-A2009) to treat advanced EGFR mutant non-small cell lung cancer reached the main end, and the NDA has been accepted.

Judging from external evaluations, the “Pharma R&D Annual Review 2026” published by Citeline shows that Hengrui Pharmaceutical continues to rank second in the world in terms of the number of self-developed pipelines.

For Hengrui, which already has a large commercial volume, the number of pipelines itself is no longer the only point of interest. More importantly, more and more assets are moving from “R&D reserves” to Phase III, NDA, and even commercialization. Whether R&D investment can continue to be transformed into new products and revenue streams is an important measure for observing the quality of its next stage of growth.

From single licensing to diversified cooperation, global values continue to be realized

While commercialization of innovative drugs and R&D results continue to advance, Hengrui's global cooperation is also deepening. In recent years, China's innovative drug BD transactions have continued to be active, and the cooperation model has also extended from single asset licensing to more diverse forms such as portfolio licensing, joint R&D, and NewCo. For innovative pharmaceutical companies, the value of global cooperation is no longer only reflected in the amount of a single transaction, but also in the continuous expansion of global development of innovative assets and value realization paths

Guojin Securities also pointed out in the 2026 Strategy Report on the Innovative Drug Industry Chain that BD cooperation has steadily grown into an important channel for innovative pharmaceutical companies to obtain financial support and accelerate the R&D and commercialization process outside of the investment and financing system.

Hengrui is also continuing to explore diverse global cooperation models. During the reporting period, the company confirmed revenue from foreign licensing cooperation for innovative drugs of 1,422 billion yuan. Since 2023, Hengrui has finished

It became 13 overseas business expansion transactions, including various models such as foreign licensing, NewCo, and strategic alliances. The total potential transaction value is about 42 billion US dollars. The counterparties include leading global pharmaceutical companies such as BMS and GSK.

In exploring diverse global cooperation models, NewCo has also made further progress this year. In April 2026, Kailera Therapeutics landed on NASDAQ and became one of the largest biotech IPOs in the world at the time. Kailera is Hengrui's first attempt at NewCo. In May 2024, Hengrui licensed Kailera the exclusive rights for global development, production and commercialization of its self-developed GLP-1 innovative drug product portfolio outside of Greater China. In addition to receiving a down payment and potential milestone payments, Hengrui also obtained Kailera's shares in the transaction. Based on the closing price on the first day of listing, the market value of Hengrui's related holdings is about 300 million US dollars. As Kailera entered the capital market, Hengrui successfully went overseas through the NewCo model.

After the reporting period, Hengrui's other NewCo partner, BraveHeart Bio, also listed on NASDAQ. The closing price of Braveheart Bio on the first day of listing reached $29.80, up 65.6% from the issue price. Based on the closing price on the first day of listing, the market value of Hengrui's related holdings was about US$220 million. Unlike Kailera's product portfolio licensing, BraveHeart revolves around a single core asset, HRS-1893 (BHB-1893). In September 2025, Hengrui licensed Braveheart for the exclusive global development, production and commercialization of HRS-1893, a next-generation myocardial myosin (Myosin) small molecule inhibitor developed independently outside of Greater China. The down payment of the transaction includes both cash and Braveheart shares, enabling Hengrui to participate in subsequent asset value creation through equity while receiving the proceeds of the licensed transaction.

So far, Hengrui has entered the international capital market with two NewCo companies.

Compared with traditional license-outs, the biggest difference in the NewCo model is that the global development value of innovative assets is not released all at once when a transaction occurs. Through arrangements such as holding NewCo shares, original innovators still have the opportunity to share the incremental value brought by subsequent asset development, financing, and even capital market growth.

Kailera and Braveheart Bio have been listed one after another, which also means that NewCo has stopped at the level of transaction structure innovation for Hengrui and has begun to enter the capital market verification and value realization stage. The “Economic Reference Journal” previously pointed out that since 2026, China's innovative drug BD transactions are moving from “going overseas on a large scale” to “going overseas with value,” and new cooperation models represented by Co-Co and NewCo have continued to emerge.

More importantly, License-Out, NewCo, and strategic alliances are not alternatives to each other, but together form multiple ways to develop innovative assets globally and realize value.

In terms of independent global development, the European marketing application for the innovative drug Revelumide tablets has been accepted by the EMA; in July, the TF ADC innovative drug SHR-4375 injection for pancreatic cancer obtained FDA orphan drug qualification.

From “how much it grew” to “where did the growth come from”

The innovative pharmaceutical industry is entering a new phase of evaluation.

As the industry gradually moves from early pipeline expansion to commercialization and global competition, the question that the market really needs to answer is not just “how much revenue growth this year”, but where the growth comes from, how long it will last, and whether today's R&D investment can be converted into tomorrow's products and cash flow.

Looking at Hengrui's 2026 semi-annual report from this perspective, a relatively clear main line is being formed: the share of innovative drug sales continues to rise, the non-oncology business grows rapidly, driving further diversification of endogenous growth momentum; the late-stage R&D pipeline continues to be enhanced to provide reserves for subsequent product cycles; BMS cooperation and the successive launches of Kailera and Braveheart Bio reflect the global development and value realization of innovative assets from different paths.

BD revenue in financial statements may fluctuate from year to year due to the pace of transactions and confirmations, but changes in innovation ability, commercialization ability, and ability to cooperate globally need to be observed over a longer period of time.

For Hengrui, when the three curves of innovative drug sales, late-stage pipeline, and global value fulfillment began to rise simultaneously, its growth logic is also shifting from a single “innovative drug leader” in the past to a platform-based pharmaceutical company with continuous R&D output, commercialization capabilities, and the ability to operate global innovative assets.

Secondary market institutions have determined that in the second half of 2026, the first batch of overseas phase III clinical data for innovative domestic drugs will be read centrally. It is expected that from 2027, more innovative Chinese pharmaceutical companies will officially enter the “earn dollars” stage of value realization, driving the overall valuation of the sector. According to media reports, ASCO 2026 has handed over 94 oral reports and 12 LBA records, which also confirms that local innovation is moving from market undervaluation to revaluation. Hengrui is on the same path and is standing at a critical window in this round of industry revaluation.