Benefiting from the gradual recovery of industry prosperity, the continuous development of overseas markets, and the implementation of favorable pharmaceutical policies, A-share biopharmaceutical companies will continue to write innovative transcripts in 2024 in the process of resilient development.

Choice data shows that as of January 25, more than 200 A-share biopharmaceutical companies have released their 2024 performance forecasts. From the lower limit of the forecast net profit growth, a total of 108 companies are expected to make profits, of which 18 companies expect their net profits to double (excluding loss-making and loss-reducing). In addition, 18 companies including Baili Tianheng, Hisun Pharmaceutical, Sinovac Pharmaceuticals, and Sinocell are expected to turn losses into profits, and 29 companies including Changshan Pharmaceuticals and Novozymes have also achieved year-on-year loss reduction.

Sales volume drives performance growth

Specifically, among the pharmaceutical companies that have released performance forecasts, 40 are expected to achieve year-on-year growth in net profit (excluding loss-making and loss-reducing). Among them, 18 companies including North China Pharmaceutical, Dabao Medical, and Yingke Medical have expected performance growth of more than 100%.

Product sales growth, coupled with internal cost reduction and efficiency improvement, have become one of the important reasons for the above companies to double their performance.

Among them, North China Pharmaceutical is far ahead with an increase of 2456.08%. The company expects to achieve a net profit attributable to shareholders of RMB 125 million in 2024, a year-on-year increase of 2456.08%. North China Pharmaceutical said that the company has achieved profitability improvement through measures such as adjusting product structure, strengthening procurement management, reducing procurement costs, implementing lean management, and digging deep into cost and expense control.

Driven by the sales of core products, Yuheng Pharmaceutical's performance has entered a period of rapid growth. With the growth in sales and sales revenue of products such as An Nao Pills, Multivitamins for Injection (12), Deer Melon Polypeptide Injection, and Pravastatin Sodium Tablets, Yuheng Pharmaceutical expects to achieve a net profit attributable to shareholders of RMB 210 million to RMB 250 million in 2024, a year-on-year increase of 74.51% to 107.75%.

Internationalization helps to open up incremental markets

International business is another booster for pharmaceutical companies' performance growth.

With the heavyweight overseas BD transactions, Baili Tianheng expects its net profit attributable to shareholders to be 3.6 billion yuan in 2024, a year-on-year turnaround. In December 2023, Baili Tianheng and multinational pharmaceutical company Bristol-Myers Squibb (BMS) reached an exclusive licensing and cooperation agreement for the company's independently developed dual-antibody ADC (BL-B01D1) anti-tumor drug, with a potential total transaction value of up to US$8.4 billion. During the reporting period, the company received an irrevocable and non-deductible down payment of US$800 million from BMS based on the cooperation agreement, which became an important reason for the company's substantial performance growth in 2024.

Ganli Pharmaceutical, the leader in insulin, expects to achieve a net profit attributable to shareholders of 600 million to 650 million yuan in 2024, a year-on-year increase of 76.44% to 91.14%. Ganli Pharmaceutical attributed this performance to the steady growth of the company's domestic and foreign operating income.

"In the international market, the company has won the trust and cooperation opportunities of more international customers by actively expanding emerging markets, and has achieved significant sales growth in multiple key markets. For example, the company's sales in Indonesia, India, Algeria and other countries have increased significantly." Ganli Pharmaceutical said.

Guoyuan Securities believes that the export of drugs is the basic threshold and the only way for companies to grow into global pharmaceutical companies. The global pharmaceutical market has broad space, and the price level of many products is also higher than that of domestic products. As the strength of my country's pharmaceutical companies continues to increase, going overseas can open up new growth space for corporate development. Overseas pharmaceutical companies with strong product power and channel capabilities are expected to gain the upper hand.

Domestic innovative pharmaceutical companies are gradually entering the harvest period

BeiGene recently voluntarily disclosed an announcement on the company's business progress. The company's CEO, John O'Reilly, revealed that according to US generally accepted accounting principles, the company expects to achieve positive operating profits for the full year of 2025.

BeiGene's turnaround is a microcosm of the improved performance of innovative drug companies on the Science and Technology Innovation Board. Judging from the 2024 performance forecast that has been released, driven by the emergence of blockbuster innovative products, the performance of biopharmaceutical companies listed on the Science and Technology Innovation Board's fifth set of standards has reached a turning point. The total amount of losses of many companies has narrowed significantly year-on-year, accelerating their entry into a positive cycle track.

So far, at least four companies, including Eli Lilly and Junshi Biosciences, have expected revenues of more than 1.5 billion yuan in 2024, and 11 companies, including CanSino and Bio-Thera, have revenues of more than 100 million yuan. At the same time, many companies, including Sinocell, Digene, and Rongchang Biopharma, have turned losses into profits or reduced losses.

Among them, Sinocell is expected to become the eighth company listed on the Science and Technology Innovation Board's fifth set of standards to get a "U". Sinocell expects to achieve a net profit attributable to shareholders of 90 million to 130 million yuan in 2024, turning losses into profits.

"During the reporting period, the company's core product Anjia has stable sales and other listed products have increased sales revenue, and the company's overall operating income has increased compared with the same period last year. At the same time, the company actively achieved cost reduction and efficiency improvement by controlling operating costs and improving R&D efficiency. These factors have a positive impact on the company's operations." Sinocell revealed.

At present, the research and development results of biopharmaceutical companies listed on the fifth set of standards of the Science and Technology Innovation Board are accelerating. With the announcement by Shouyao Holdings on October 23, 2024 that its independently developed new drug Contaitinib has been accepted for listing, all 20 companies listed on the fifth set of standards of the Science and Technology Innovation Board have achieved the listing of core products or the acceptance of listing applications.

In 2024, Dizhe Pharmaceuticals also handed in a brilliant report card. The company expects its operating income in 2024 to be 360 ​​million yuan, nearly three times that of 2023; the net profit attributable to the parent company will be a loss of 865 million yuan, a year-on-year loss reduction of 21.91%. The company's two innovative drug products, Shuwozhe and Gaoruizhe, both achieved rapid sales growth in 2024 and were included in the national medical insurance drug catalog at the end of 2024, further opening up potential market space. In addition, Shuwozhe's new drug application was accepted by the US Food and Drug Administration in January 2025 and was granted priority review qualification.

In addition, Junshi Bio's core product Tuoyi has also performed well in overseas market development and new indication expansion. In 2024, the product was successfully approved for listing in the European Union, India, the United Kingdom, Australia and other places. In 2024, Junshi Bio expects to achieve operating income of 1.949 billion yuan, a year-on-year increase of 29.71%, and net profit losses have also been significantly narrowed by more than 40%.

Source: https://finance.eastmoney.com/