The recognition of revenue from the licensing of innovative drugs was delayed, which once hindered the performance growth of Hengrui Medicine (600276.SH, 01276.HK) in the first half of this year, nearly bringing it to a standstill. Now, with the realization of revenue from these licenses, the company's performance has resumed growth.
On the evening of October 27th, Hengrui Medicine released its third-quarter report, which showed that in the first three quarters of this year, the company achieved revenue of 24.409 billion yuan, a year-on-year increase of 5.26%; net profit attributable to shareholders of the listed company was 6.923 billion yuan, a year-on-year increase of 20.38%.
In particular, the revenue in the third quarter and the net profit attributable to shareholders of the listed company showed significant growth. The revenue amounted to 8.953 billion yuan, a year-on-year increase of 20.55%; the net profit attributable to shareholders of the listed company was 2.458 billion yuan, a year-on-year increase of 88.92%.
Hengrui Medicine stated that its revenue from external licensing has been steadily increasing. In the first three quarters of 2026, the company's innovative drug licensing business generated 2.781 billion yuan in confirmed revenue, a year-on-year increase of 31.12%. This revenue mainly came from GSK (GlaxoSmithKline) and BMS (Bristol-Myers Squibb) based on the progress of their contractual obligations, as well as milestone payments for some of the authorized products.
Turning to product sales, in the first three quarters of this year, the company's product sales revenue amounted to 21.476 billion yuan, a year-on-year increase of 2.52%. Specifically, the sales revenue from innovative drugs was 13.871 billion yuan, a year-on-year increase of 17.05%, and the proportion of these sales in total drug sales revenue rose to 64.59%.
What has driven the growth in the sales of innovative drugs from Hengrui Medicine are mainly its non-tumor innovative products. In the first three quarters of this year, the company's revenue from non-tumor innovative products amounted to 4.006 billion yuan, a year-on-year increase of 75.36%, accounting for 28.88% of the total revenue from innovative drugs.
Antitumor innovative products, which account for about 70% of Hengrui Medicine's revenue from innovative drugs, generated 9.865 billion yuan in revenue, with a year-on-year increase of only 3.13%. The company stated that this is due to a combination of multiple factors: changes in the external market environment, slower-than-expected access within hospitals, and fierce market competition for some earlier-launched innovative products (such as Camrelizumab and Pyrotinib).
Hengrui Medicine also stated that the growth rate of sales revenue from innovative drugs in the first three quarters of the company was lower than expected at the beginning of the year. Although the growth rate improved in the third quarter, it is anticipated that there will still be a certain gap between the annual growth rate of sales revenue from innovative drugs and the target set at the beginning of the year.
Affected by the continuous policies of centralized procurement, Hengrui has been actively reducing its investment in generic drug resources. In the first three quarters of this year, the company's sales revenue from generic drugs amounted to 7.605 billion yuan, a year-on-year decrease of 16.41%.
Hengrui Medicine stated that as the sales revenue from innovative drugs continues to grow, the proportion of sales revenue from generic drugs in the total sales revenue will gradually decrease. The company's revenue structure will be further optimized, and the development pattern driven by innovation will become more stable.
Hengrui Medicine is also increasing its investment in research and development of innovative drugs. In the first three quarters of this year, the company invested a total of 7.146 billion yuan in R&D, of which 5.423 billion yuan was spent on expenses related to R&D. In the third quarter of this year, the company's innovative achievements began to be rapidly translated into practical products; a total of 7 innovative accomplishments were approved, including 2 new class-1 innovative drugs and 5 new indications for already marketed innovative drugs.
