Recently, Kanghong Pharmaceutical released its 2025 annual report, showing annual revenue of 4.585 billion yuan, a year-on-year increase of 2.98%, and net cash flow from operating activities of 1.504 billion yuan, a year-on-year increase of 6.50%. This marks the fifth consecutive year of steady growth.

In an industry context where innovative drugs face a high risk of failure and centralized procurement has become the norm, where does Kanghong Pharmaceutical's growth resilience come from? The answer lies not only in its impressive surge in biopharmaceuticals, but also in its long-term, meticulous cultivation of traditional Chinese medicine.

Data shows that the company's traditional Chinese medicine segment achieved revenue of 1.496 billion yuan, a year-on-year increase of 5.80% , leading the overall growth rate. While the market chases one hot biopharmaceutical trend after another, it has quietly built an insurmountable moat in the field of traditional Chinese medicine.

Focusing on the golden track of chronic diseases,
A unique product portfolio builds a solid foundation.

Since its establishment, innovative traditional Chinese medicine has been the cornerstone and foundation of Kanghong Pharmaceutical's development.

As early as 1994, when Chengdu Kanghong Pharmaceutical Co., Ltd. was established, its first product was Songling Xuemai Kang Capsules, an innovative traditional Chinese medicine for treating hypertension. After more than 30 years of development, Kanghong Pharmaceutical currently has 25 main drugs on the market, of which 10 are exclusive products, 20 are included in the National Medical Insurance Catalog, and 11 are included in the National Essential Medicines List.

In 2001, Kanghong Pharmaceutical acquired "Jishengtang," a time-honored brand with over 80 years of history, and injected vitality into it with a modern management system, enabling it to complete the iterative upgrade from traditional manual processing to intelligent production. Today, it has been recognized as a "China Time-Honored Brand" and has 97 drug approval numbers, providing solid support for the development of Kanghong's subsequent exclusive products.

Shugan Jieyu Capsules are the first innovative traditional Chinese medicine approved in China for the treatment of mild to moderate depression. According to the "2022 National Depression Blue Book," there are approximately 95 million people with depression in China, indicating a significant unmet clinical need. This product stands out due to its solid evidence-based medicine. Head-to-head clinical trials showed that its efficacy is comparable to that of the Western medicine fluoxetine, with an effectiveness rate of 67.14%, and fewer adverse reactions and better patient compliance. Based on these advantages, Shugan Jieyu Capsules have not only been recommended by multiple authoritative clinical guidelines, but were also approved as a national second-level protected traditional Chinese medicine in 2022, with a protection period of 7 years.

Songling Xuemaikang Capsules , as China's first traditional Chinese medicine for lowering blood pressure and lipids using fresh pine needles, is recommended as the only traditional Chinese medicine for hypertension intervention in the "Guidelines for the Management of Chronic Diseases of Ischemic Stroke in the Elderly". Facing the normalization of centralized procurement, Kanghong Pharmaceutical actively embraces change, and the product has been included in the centralized procurement catalogs of 23 provinces across the country and has been selected, successfully achieving "trading price for volume" and continuously expanding its market share.

Keluoxin Capsules target the untapped market of treating diabetic nephropathy, a serious complication of diabetes, filling a gap in traditional Chinese medicine treatment in this field. The diabetic patient population is large, and nephropathy is one of its major and costly complications, representing a market size of nearly 10 billion yuan. This product is recommended by the "Guidelines for the Diagnosis and Treatment of Diabetes in the Elderly with Traditional Chinese Medicine" and can effectively reduce patients' blood glucose, proteinuria, and serum inflammatory factor levels. With the rising prevalence of diabetes and increased awareness of its treatment, the market potential for treating complications is enormous.

Furthermore, Kanghong Pharmaceutical's products, including proprietary varieties such as Danshu Capsules and Qingrun Pills, share common characteristics: they target clearly defined, underserved clinical pain points, are supported by solid evidence-based medicine, and have long treatment cycles, resulting in high patient loyalty. Against the backdrop of centralized procurement policies continuously squeezing generic drug profits and accelerating industry consolidation, this core portfolio of traditional Chinese medicine provides Kanghong Pharmaceutical with stable cash flow and profit guarantees that allow it to weather economic cycles.

To ensure the quality and stable supply of its proprietary varieties, Kanghong Pharmaceutical has established a comprehensive supply chain management system from sourcing to production. On the raw material side, its subsidiary, Kanghong Planting, has established eight medicinal herb planting bases in four provinces—Sichuan, Gansu, Xinjiang, and Heilongjiang—covering a total area of over 7,000 mu, precisely matching the raw material needs of its core products. On the production side, its subsidiary, Jishengtang, has put its intelligent alcohol extraction production workshop into operation. Through advanced technologies such as the DCS automatic control system and MVR energy-saving concentration, it has achieved full automation from feeding to drying, ensuring absolute stability between product batches while maximizing energy conservation and reducing consumption.

This comprehensive industry chain layout continuously strengthens the foundation for the quality and stable supply of Kanghong Pharmaceutical's traditional Chinese medicine (TCM) products. In 2025, the gross profit margin of the TCM segment reached as high as 86.85%, demonstrating its strong profitability.

In-depth pipeline layout, locking in the next decade

While consolidating its existing exclusive product market position, Kanghong Pharmaceutical continues to strengthen its R&D layout , extending its R&D reach to broader and more challenging unmet clinical needs, and providing momentum for the long-term development of its traditional Chinese medicine business through indication expansion and original innovation.

As the core growth engine of Kanghong's traditional Chinese medicine sector, Shugan Jieyu Capsules, after achieving great success in the treatment of depression, will extend its indications to the field of anxiety disorders.

Currently, the NDA for the addition of anxiety as an indication to Shugan Jieyu Capsules has been submitted . Anxiety disorders also have a high prevalence in China. With its existing evidence-based medicine and good safety reputation, Shugan Jieyu Capsules is expected to further expand its applicable population and consolidate its leading position in the traditional Chinese medicine market for antidepressants after the approval of the new indication.

KH110 (Wujia Yizhi Granules), a new traditional Chinese medicine for treating mild to moderate Alzheimer's disease , is the most promising future star in Kanghong Pharmaceutical's traditional Chinese medicine pipeline. Currently, the drug is in Phase III clinical trials , and its development is progressing smoothly.

Alzheimer's disease (AD) is a major health challenge facing an aging global society, with enormous unmet clinical needs and broad market potential. If KH110 can demonstrate in Phase III clinical trials that it can significantly improve patients' cognitive function or slow disease progression, it is expected to secure a place in the multi-billion dollar AD treatment market.

More forward-thinkingly, Kanghong Pharmaceutical has broken through the traditional Chinese medicine research and development model, combining Chinese medicine research with modern synthetic biology technology. KH617 is a new drug developed based on synthetic biology technology . Although it is classified as a chemical drug, its active ingredient is derived from Chinese medicine. This drug is intended for the treatment of advanced solid tumors, including glioblastoma, and has obtained orphan drug designation from the US FDA for glioblastoma. It is currently in Phase II clinical trials.

Unlike traditional Chinese medicine extraction methods, synthetic biology technology can achieve efficient and standardized production of active ingredients in Chinese medicine without relying on traditional Chinese medicinal material cultivation. This not only avoids the risk of fluctuations in the quality of medicinal materials, but also significantly improves the purity and yield of active ingredients, opening up a new path for the research and development of innovative Chinese medicine drugs.

From expanding the indications of Shugan Jieyu Capsules to filling the gap in traditional Chinese medicine treatment for Alzheimer's disease with KH110, and then to breaking through traditional R&D bottlenecks with synthetic biology technology using KH617, Kanghong Pharmaceutical's innovative pipeline of traditional Chinese medicine has formed a clear "short, medium, and long" structure. The layout of these pipelines not only relies on the company's century-old brand advantages in formulation and the raw material and production guarantees of the entire industrial chain, but also aligns with the industry trend of modernization and innovation in traditional Chinese medicine, achieving a perfect integration of traditional Chinese medicine and modern technology.

This tiered and in-depth pipeline layout not only allows Kanghong Pharmaceutical to continuously widen and deepen its moat in traditional Chinese medicine, but also enables it to firmly grasp the initiative for future growth amidst the challenges of a winter for innovative drugs and the upgrading of the traditional Chinese medicine industry. The competitive barriers it has built are locking in Kanghong Pharmaceutical's "next decade" in a more lasting and profound way.

Conclusion

Since the launch of Songling Xuemaikang Capsules, Kanghong Pharmaceutical has been deeply involved in the field of traditional Chinese medicine for over 30 years. While the industry's attention is focused on the booming biopharmaceutical sector, it has quietly built an unparalleled competitive advantage through its exclusive product portfolio, century-old brand heritage, and comprehensive supply chain management.

https://news.yaozh.com/archive/47877.html