Jiangsu Hengrui Medicine Co Ltd

In early trading on August 20, innovative drug stocks surged at the open. Sanyuan Gene, Jiankai Technology, Walvax Biotechnology, Laimei Pharmaceutical, CanSino Biologics, Youcare Pharmaceutical, Shuanglu Pharmaceutical, and Baike Bio hit their daily limit up at the open, while Zhifei Biological, CSPC Innovation, and Kangtai Biological rose more than 10%. On the news front, Merck and Moderna announced on Wednesday that the first Phase III clinical trial of their jointly developed mRNA personalized cancer vaccine, intismeran autogene, produced preliminary positive results. Moderna's stock price soared nearly 180% in overnight U.S. trading. Among exchange-traded funds, the GF Hong Kong Innovative Drug ETF rose as much as 7%, the GF Hang Seng Biotech ETF and GF Medical ETF rose as much as 6%, and the GF Innovative Drug ETF and GF Pharmaceutical ETF followed higher. On the industry side, innovative drug listed companies have been releasing their 2026 interim reports and earnings forecasts in a concentrated manner. The industry is officially welcoming a triple earnings inflection point: commercialization of blockbuster single products, realization of overseas business development deals, and high prosperity across the entire upstream CXO chain. Blockbuster products such as zanubrutinib and mazdutide have achieved scaled profitability, while CSPC Pharmaceutical Group, Hengrui Pharmaceuticals, and Innovent Biologics have successively landed overseas business development deals worth billions of dollars. CXO leaders have seen profits and orders simultaneously hit record highs.

Hengrui Pharmaceuticals announced that it plans to use its own funds to repurchase A-shares through centralized bidding, with a total repurchase amount of no less than 1 billion yuan and no more than 2 billion yuan, at a price not exceeding 81.78 yuan per share. The repurchased shares will be used for an employee stock ownership plan, and the repurchase period will be no more than 12 months from the date of board approval. The company also released its 2026 semi-annual report, achieving operating revenue of 15.456 billion yuan, down 1.94 percent year on year, and net profit attributable to shareholders of the listed company of 4.465 billion yuan, up 0.34 percent year on year. Among this, innovative drug sales revenue was 8.809 billion yuan, up 16.38 percent year on year, accounting for 63.16 percent of pharmaceutical sales revenue. In addition, the company plans to launch a 2026 A-share employee stock ownership plan, with a transfer price of 26.21 yuan per share, a quantity of no more than 12.855 million shares, accounting for about 0.19 percent of the company's total share capital, and a total of no more than 1,269 participants.

On August 19, several A-share companies disclosed major capital operations. Nanjing Public Utilities received an indirect acquisition of a 54.19 percent stake by the Nanjing municipal state-owned assets group. Litong Electronics plans a private placement to raise no more than 5 billion yuan for building an intelligent computing center. Sieyuan Information signed a 6.45 billion yuan high-performance computing services sales contract. GD Power plans to start acquiring some assets of its controlling shareholder, China Energy Group, involving a total of about 320,000 kilowatts of controlling installed capacity in operation and 13.54 million kilowatts under construction or planned. Sinopharm Modern plans to acquire a 51 percent stake in Guorui Pharmaceutical for 406 million yuan. Minxin Micro plans to acquire a 54 percent stake in Beijing Putian Optoelectronics for 177 million yuan. In addition, Huaxin Building Materials shareholder Huaxin Group plans to increase its stake by 340 million to 680 million yuan. Hengrui Medicine plans to repurchase its A-shares for 1 billion to 2 billion yuan. On the capital side, main funds in the Shanghai and Shenzhen markets saw a net outflow of 193.964 billion yuan that day, with coke, shipping ports, and wind power equipment sectors receiving the largest net inflows from main funds.

Hengrui Pharma announced its financial results for the first half of 2026, reporting revenue of RMB15.46 billion and net profit attributable to shareholders of RMB4.47 billion, up 0.34%. Innovative drug sales increased by 16.38% year-over-year and accounted for 63.16% of total drug sales, with non-oncology innovative drug sales surging 73.97%. The company obtained seven innovation-related approvals in China, including two Class 1 innovative medicines, and reported positive Phase III results for its GLP-1/GIP dual receptor agonist ribupatide injection and oral GLP-1 receptor agonist HRS-7535. Since 2023, Hengrui has completed 13 overseas business development transactions with a total potential value of approximately US$42 billion, and its NewCo partners Kailera Therapeutics and Braveheart Bio both listed on Nasdaq in 2026.

Sieyuan Information signed two computing power service contracts with Company W, with a total tax-inclusive amount of 6.45 billion yuan, accounting for 311.11% of the company's audited revenue for 2025. The contract service period is 60 months, during which Sieyuan Information will provide high-performance computing power services to Company W. In addition, Litong Electronics plans to raise no more than 5 billion yuan through a private placement for projects including the construction of an intelligent computing center. Guodian Power plans to start acquiring part of the assets of its controlling shareholder, China Energy Group. Hengrui Pharmaceuticals plans to repurchase its A-shares with 1 billion to 2 billion yuan.

China has pulled ahead of the United States in clinical drug development and supply chain, two of six domains measured in a June Cure Innovation Index survey, even as Big Pharma signs billion-dollar deals for Chinese-developed medicines. Dr. Nathan Goodyear of Williams Cancer Institute told Benzinga that roughly a third of new drugs Big Pharma licensed in came from Chinese labs, up from almost none a decade ago. Bristol Myers Squibb signed a $15.2 billion collaboration with Jiangsu Hengrui Pharmaceuticals in May covering 13 early-stage programs, while Merck reached a $2 billion licensing agreement in March 2025 for HRS-5346, a cardiovascular drug developed entirely in China. The U.S. Department of Health and Human Services launched Operation TrailBlazer in late June, and Congress introduced the Biotech Investment National Security Act to screen outbound biotech investment, building on the Biosecure Act signed into law in December 2025. The survey of 117 senior U.S. industry and academic leaders found 76% say the U.S. leads but China is closing fast, 85% say the U.S. lead lasts 10 years or less, and 72% agree China is improving faster than the U.S.

Guangdong Hengrui, a subsidiary of Hengrui Medicine, has received the Drug Clinical Trial Approval Notice for SHR-7590 Injection issued by the National Medical Products Administration, allowing the product to proceed with clinical trials for ulcerative colitis and Crohn's disease. The drug is a self-developed therapeutic biological product by the company, which effectively suppresses inflammation in animal inflammatory bowel disease models. Currently, no drug targeting the same target has been approved for marketing globally, and the cumulative R&D investment is approximately 32.5 million yuan.

The A-share buyback wave is accelerating, with multiple industry leaders intensively disclosing progress. Panel leader BOE Technology had repurchased 500 million yuan of A-shares by July 31, reaching the lower limit of its buyback plan, taking only about half a month since the first repurchase on July 20. The company also simultaneously repurchased B-shares for 393 million Hong Kong dollars, shortly after completing a round of over 4 billion yuan in A-share buybacks at the end of May. Eye drug leader Shenyang Xingqi Pharmaceutical completed its 80 million to 100 million yuan buyback plan in just about a week, with the payment amount reaching 100 million yuan as of August 4. Innovative drug leader Hengrui Medicine had cumulatively paid 853 million yuan for buybacks as of July 31, while dental service leader Topchoice Medical's buyback amount reached 88.75 million yuan in the same period, approaching 90 percent of the 100 million yuan plan cap.

Hengrui Medicine announced that its subsidiaries Suzhou Shengdiya and Shanghai Shengdi have received the Drug Clinical Trial Approval Notice issued by the National Medical Products Administration, approving a Phase II clinical trial of injectable SHR-A2009 combined with adebrelimab, or combined with a third-generation EGFR TKI, in patients with non-small cell lung cancer. Adebrelimab is an anti-PD-L1 monoclonal antibody independently developed by the company, and has been approved for two indications: first-line treatment of extensive-stage small cell lung cancer and adjuvant treatment of operable NSCLC.

GigaDevice chairman Zhu Yiming has proposed a 1 to 2 billion yuan buyback of the company's A-shares, with all repurchased shares to be cancelled and registered capital reduced. Zhu also pledged not to reduce his holdings in the next 12 months and plans to increase his stake by no less than 1 billion yuan between 13 December 2026 and 29 July 2027. Hengrui Medicine's self-developed Shudi insulin injection, China's first long-acting insulin analogue, has been approved for marketing to treat adult type 2 diabetes. Xingyun Technology's wholly owned subsidiary Shenzhen Xingyun signed a supplementary agreement with a VB client, increasing the number of computing power service units from 128 to 256, with the total tax-inclusive amount adjusted from 1.014 billion yuan to 3.053 billion yuan, a 201.14% increase over the original contract. Yitian Intelligent's wholly owned subsidiary Gansu Yisuan signed a 1.106 billion yuan computing power resource service contract with client Y Company, with a service period of 60 months, representing over 100% of the company's audited main business revenue for the most recent fiscal year. Haoneng Technology plans to invest 1 billion yuan to build a production base for robot joint reducers, with an annual capacity of 5 million units upon completion. A consortium led by United Science and Technology won the bid for the CBTC signalling system localisation retrofit project for Shenyang Metro Line 2, with a contract value of 243 million yuan.

Tinavi Medical announced plans to acquire a 62% stake in Shanghai Orthopaedics, expected to constitute a major asset restructuring, with trading in its shares to resume tomorrow. Yongding Co.'s controlling subsidiary has received purchase orders for high-power laser chip products worth approximately 1.133 billion yuan over the past month. Xingyun Technology's wholly-owned subsidiary has signed a supplementary agreement for computing power services, increasing the contract value to 3.053 billion yuan, up 201.14% from the original agreement. Jiayun Technology shareholder Ruineng Co. plans to acquire an 18.31% stake through a negotiated transfer, and trading in the shares will resume. Lianchuang Electronics' controlling shareholder is set to change to Shouxian Xinqiao, and trading in the shares will resume. GigaDevice Chairman Zhu Yiming has proposed a buyback of A-shares worth between 1 billion and 2 billion yuan for cancellation, and plans to increase his holdings by no less than 1 billion yuan. Sinosun Technology is planning a change of control, and trading in its shares has been suspended. Zijin Mining's controlling subsidiary has terminated its acquisition of Union Gold and plans to subscribe for a 9.2% stake in the company. Huawen Media has had its delisting risk warning removed but will continue to be subject to other risk warnings, with its stock abbreviation changed to ST Huawen. Hailiang Co.'s controlling shareholder has received a commitment letter for an 860 million yuan shareholding increase loan. Huajin Co. Vice General Manager Yan Zenghui has been placed under investigation and subjected to detention measures. Hengrui Medicine's insulin degludec injection has been approved for marketing for the treatment of type 2 diabetes in adults, making it the first domestically developed long-acting insulin analogue in China.

The clinical trial applications for two oral weekly GLP-1 drugs, Innovent Biologics' IBI3042 and Gan & Lee Pharmaceuticals' GZC8072 tablets, have been accepted by the National Medical Products Administration. IBI3042 is the world's first small-molecule weekly GLP-1 drug to enter the clinical stage. Recently, Hengrui Medicine achieved three key milestones, including the approval of famitinib combined with camrelizumab for first-line treatment of PD-L1 positive cervical cancer. The number of oral presentations by Chinese innovative drugs at the ESMO Congress hit a new high, which Soochow Securities believes signals China's growing influence in research and development. In the first half of this year, 38 innovative drugs were approved for marketing, of which 31 were domestically developed, accounting for over 80 percent. The total value of out-licensing deals for innovative drugs exceeded 100 billion dollars.

The number of oral presentations on China innovative drugs at the ESMO 2026 congress has reached a record high of 47, up from 35 last year, highlighting the growing voice of China innovative drug R&D on the international academic stage. Soochow Securities noted that the global competitiveness of ADC and bispecific antibody pipelines continues to be validated, with leading players such as Hengrui Medicine, Innovent Biologics, and Akeso delivering results across multiple fronts. Data on PD-1/VEGF bispecific and trispecific antibodies will be disclosed in a concentrated manner at this year's ESMO. In addition, the 12th round of national centralized drug procurement has officially launched, covering 65 varieties, with on-site bidding in Shanghai on July 31 and a procurement cycle through the end of 2029. The Sci-Tech Innovation Board Biopharma ETF Harvest Fund tracks the Shanghai Stock Exchange STAR Board Biomedical Index, which selects 50 large-cap biomedical industry leaders from the STAR Board, with the top ten constituents accounting for 51.84% of the total weight.

Hengrui Medicine announced that its product SHR-4375 injection has received orphan drug designation from the U.S. FDA for the treatment of pancreatic cancer. The drug is an ADC targeting tissue factor. With this designation, Hengrui Medicine can benefit from policy support including tax credits for clinical trial costs, waiver of new drug application fees, and seven years of market exclusivity upon approval.

ChinaAMC Health Mix A disclosed its second-quarter 2026 report, with a quarterly profit of 15.3123 million yuan and a net asset value growth rate of 4.48%. As of the end of the second quarter, the fund size stood at 374 million yuan. Fund manager Sun Mingda stated that during the quarter, the fund continued to increase holdings in innovative drug assets and the pharmaceutical outsourcing services sector, where fundamentals are steadily recovering. The portfolio tilted moderately toward innovation, and going forward, asset allocation will continue to center on two core themes: rigid domestic demand and industrial innovation and upgrading. As of July 21, the fund's three-month cumulative NAV growth rate was 8.21%, ranking 20th out of 127 comparable funds. Its one-year growth rate was 2.28%, ranking 30th out of 127, and its three-year growth rate was 27.88%, ranking 27th out of 102. The fund's three-year Sharpe ratio was 0.3133, with a maximum drawdown of 26.62% and an average equity position of 85.01%. At the end of the second quarter, the top ten heavy-weighted holdings included Kelun Pharmaceutical, RemeGen, and Hengrui Medicine.

From July 15 to 20, the A-share market saw a dense wave of buyback and shareholding increase disclosures, with the combined cap on new buyback and shareholding increase plans on the Shanghai and Shenzhen exchanges exceeding 15.7 billion yuan. Central enterprises took the lead, with Aluminum Corporation of China's controlling shareholder planning to increase holdings by no less than 1 billion yuan and no more than 2 billion yuan. CRRC Corporation and China Coal Energy also disclosed shareholding increase plans. The chairman of NARI Technology proposed a buyback of 500 million to 1 billion yuan, and Sinopec updated its buyback progress. Earlier, China Reform Holdings had already used over 50 billion yuan in special re-lending and supporting funds, and China Chengtong Holdings Group had cumulatively purchased nearly 10 billion yuan in domestic stock assets. The wave spread across all sectors on the Shanghai and Shenzhen exchanges. Hengrui Medicine cumulatively paid 853 million yuan for buybacks, Lingyi iTech raised its total buyback funds to between 400 million and 800 million yuan, and three brokerages including Huaan Securities had a combined buyback cap of 700 million yuan. This round of buyback and shareholding increase wave features an increase in buyback cancellations, continued force from special loan tools, and diversification of shareholding increase entities. Analysts believe this is expected to inject positive factors into the market.

Hengrui Medicine announced that its subsidiary Chengdu Shengdi Pharmaceutical received the Drug Clinical Trial Approval Notice for HRS-8797 tablets from the National Medical Products Administration on July 15, 2026. The drug is a Class 1 innovative therapy independently developed by the company for atopic dermatitis, with no similar drugs approved globally. Cumulative R&D investment amounts to approximately 32.9 million yuan.

Kailera Therapeutics announced positive topline results from two Phase 3 clinical trials of its oral GLP-1 receptor agonist HRS-7535/KAI-7535, conducted by Hengrui Pharma. In the obesity trial, participants achieved a mean weight loss of up to 10.9% by Week 44 and 11.1% by Week 50, while the type 2 diabetes trial showed a mean HbA1c reduction of 1.50% to 1.68%. Liver safety findings remained consistent with prior data and showed no observed safety signals. The company is also advancing KAI-7535 through a global Phase 2 trial that began in April 2026, with results expected in 2027.

In the first half of 2026, the A-share Shenwan pharmaceutical and biotech sector remained sluggish, with the index falling 14.11% year-to-date, but the innovative drug supply chain bucked the trend. Traditional pharma companies faced operational pressure: Pian Zai Huang reported its first-ever decline in both revenue and net profit since listing, while Tong Ren Tang saw its revenue drop for the first time in five years. In contrast, BeiGene achieved its first full-year profit, and Hengrui Medicine's innovative drug sales exceeded 60% of total revenue for the first time. In the first half, total out-licensing deal value for domestic innovative drugs reached 99.7 billion dollars, roughly double the full-year total for 2024. This included an 18.5 billion dollar deal between AstraZeneca and CSPC Pharmaceutical Group, and an 8.5 billion dollar deal between Eli Lilly and Innovent Biologics. On the industrial capital front, 145 A-share pharma and biotech companies implemented share buybacks in the first half, totaling over 13.3 billion yuan, with innovative drug and CXO firms leading the charge. The secondary market's valuation logic is shifting from pipeline expectations to commercialization and overseas delivery. In the last week of June, the Shenwan pharmaceutical and biotech index rebounded 10.53% in a single week, while the innovative drug segment surged 17.06%.

The innovative drug sector opened lower on July 6 before climbing higher in choppy trade. Shouyao Holdings surged by the 20 percent daily limit, Maiwei Bio and Shutaishen jumped over 10 percent, BeiGene rose more than 6 percent, and Asymchem and Hengrui Medicine gained over 4 percent. On the news front, the General Office of the National Medical Products Administration recently sought public comments on a draft notice regarding optimizing the review and approval of cell and gene therapy drugs. The draft mentions supporting clinically driven innovation in cell and gene therapy drug development, focusing on key areas such as malignant tumors and rare diseases, encouraging global simultaneous development, and including eligible cell and gene therapy drugs in a 30-day review and approval channel for innovative drug clinical trials. A research note from Orient Securities noted that Chinese companies have recently made gradual breakthroughs in frontier fields such as cell therapy and AI-driven drug discovery. Several innovative drug makers have seen their core products enter the harvest stage, while medical insurance access, commercial insurance coverage, and cost ratio optimization are jointly driving continuous profit improvement.