Beijing – Jiangsu Hengrui Pharmaceuticals, the largest Chinese drugmaker by market value, announced a modest 0.34% increase in first‑half net profit, reporting 2.2 billion yuan ($326.5 million) for the six months through June. The company’s earnings were buoyed by strong growth in its innovative oncology and metabolic‑disease divisions, even as its generics segment continued to feel the squeeze from government‑led bulk‑procurement programs.
Generics Business Under Pressure
Hengrui disclosed that revenue from its generics drug business dropped 16.07% year‑on‑year to 5.1 billion yuan. The decline reflects the impact of China’s bulk‑buying initiatives, which aim to lower healthcare costs by negotiating lower prices for widely used medicines. In response, Hengrui said it has proactively scaled back investment in the generics segment.
Innovative Drugs Drive Growth
By contrast, the company’s innovative drug portfolio—particularly oncology products—experienced a 16.38% revenue increase, reaching 8.8 billion yuan and representing 63.16% of total pharmaceutical sales. This shift underscores Hengrui’s strategic focus on higher‑margin, research‑driven medicines as the generics market tightens.
Overall Financial Performance
Total revenue for the half‑year fell 1.94% to 15.5 billion yuan, according to a filing with the Shanghai Stock Exchange. Quarterly revenue for the most recent period stood at 7.3 billion yuan, missing the consensus forecast of 8.9 billion yuan from two brokerages. Analysts had expected an average net profit of 2.9 billion yuan, indicating that Hengrui’s actual profit fell short of market expectations.
Outlook
Hengrui’s results highlight the tension between China’s policy goal of affordable medicines and the pharmaceutical industry’s push for profitability and innovation. While bulk‑procurement programs are likely to keep generics prices low, the company’s growing emphasis on oncology and metabolic therapies may help offset the pressure and sustain earnings growth in future quarters.
For more detailed financial data, see the company’s filing on the Shanghai Stock Exchange or consult LSEG market analytics.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
