On August 19, Hengrui Pharma (01276) released its 2026 semi-annual report. During the reporting period, the company achieved operating revenue of RMB 15.456 billion, with product sales revenue of RMB 13.948 billion, up 1.87% year-on-year; net profit attributable to shareholders of the listed company reached RMB 4.465 billion, up 0.34% year-on-year. The company's R&D investment totaled RMB 4.605 billion, representing a year-on-year increase of 18.96% and accounting for 29.80% of operating revenue, of which expensed R&D investment amounted to RMB 3.493 billion, up 8.21% year-on-year.

If one were to look only at a single financial indicator, Hengrui Pharma's 2026 semi-annual report might not fit the narrative of "high growth." Since the start of 2026, the pharmaceutical manufacturing industry as a whole has continued to face certain operational pressures. According to data from the National Bureau of Statistics in June, revenue from the pharmaceutical manufacturing industry fell 1.5% year-on-year from January to May, forming a certain contrast with the overall growth in revenue of industrial enterprises above a designated size during the same period. Amid industry-wide growth divergence, innovative drug commercialization, product structure optimization, and internationalization capabilities are becoming key directions for pharmaceutical companies seeking new growth drivers.

Against this backdrop, the highlights of Hengrui's first-half 2026 performance lie not merely in absolute growth rates, but in further changes to its growth structure: innovative drug sales revenue reached RMB 8.809 billion, up 16.38% year-on-year, representing 63.16% of total drug sales revenue. Among this, non-oncology innovative drug sales revenue surged 73.97% year-on-year. Meanwhile, the R&D pipeline has continued to enter a harvest period, with a potential total transaction value of USD 15.2 billion global strategic collaboration signed with BMS, and two NewCo entities successively landing on Nasdaq.

Behind these changes, Hengrui's growth logic is becoming clearer — the commercialization capability of innovative drugs, sustained R&D output, and the global value realization of innovative assets are emerging as more important dimensions for observing the company's long-term value.

Innovative Drug Share Continues to Rise, Growth Is Getting "Thicker"

In recent years, as innovative drugs have entered a phase of concentrated commercialization, the criteria by which the market evaluates innovative drug companies are shifting. Pipeline scale and R&D investment remain important, but whether innovation outcomes can truly translate into revenue, whether the product structure is sufficiently diversified, and whether commercialization capabilities can continuously support R&D results are becoming observation indicators closer to the essence of business operations.

CITIC Construction Investment noted in its 2026 mid-year investment strategy for the pharmaceutical and biotech sector that innovative drugs are currently in a stage of "dual-wheel drive" from commercialization and internationalization, with innovative companies breaking through through differentiation and continuously realizing global value. From this perspective, one important signal from Hengrui's first-half 2026 results is the continued rise in the proportion of innovative drug sales. During the reporting period, Hengrui's innovative drug sales revenue increased 16.38% year-on-year, accounting for 63.16% of drug sales revenue. Among this, anti-tumor innovative drug sales revenue reached RMB 6.265 billion, up 2.58% year-on-year, representing 71.11% of innovative drug sales revenue; non-oncology innovative drug sales revenue reached RMB 2.545 billion, surging 73.97% year-on-year, with its share further rising to 28.89%.

This indicates that Hengrui, long known for its oncology products, is forming new growth pillars. In the non-oncology arena, the metabolic segment saw rapid growth from products such as Henggliflozin, Henggliflozin Metformin Extended-Release Tablets, and Retagliptin; in the autoimmune field, Aemasitinib and Funakizumab, along with Recaticimab in the cardiovascular space, achieved rapid growth after being included in the national medical insurance catalog; in the anesthesia and analgesia field, products such as Remimazolam and Fumarate Tigecycline maintained growth.

Looking at industry trends, global innovative drug R&D hotspots are also continuously expanding into metabolic and immunology fields. Citeline's Pharma R&D Annual Review 2026 shows that the global immunology pipeline grew 20.6% year-on-year, while the obesity R&D pipeline grew 30.7% year-on-year. Data from Gongyan.com indicates that China's autoimmune disease drug market will reach RMB 54 billion in 2026; separately, Frost & Sullivan forecasts that China's GLP-1 market still has significant growth potential. At the same time, the oncology segment continues to contribute growth as the basic business, with core products such as Rezvilutamide and Dalpiciclib maintaining growth, and Rekangtuzumab, newly included in the national medical insurance catalog, achieving rapid volume growth.

Evolving from an "oncology innovative drug leader" toward a multi-therapeutic-area innovative drug platform company, Hengrui's sources of innovative drug growth are further broadening. For an innovative drug company that already has a substantial commercialization scale, the diversification of growth sources also provides more support for the sustainability of performance.

R&D Enters a Dense Harvest Period, the Next Wave of Growth Curves Begins to Emerge

For innovative drug companies, today's sales revenue determines current-period performance, while the late-stage pipeline determines growth space for the coming years. In the first half of 2026, Hengrui had seven innovation achievements approved, including two Class 1 innovative drugs — Relafusp alfa injection and Luzinore sodium tablets — one Class 2 innovative drug, Cyclosporine Eye Drops (IV), as well as new indications for four already-marketed innovative drugs. As of the end of the reporting period, the company had nine marketing applications accepted by the NMPA in China, 17 clinical projects advanced to Phase III, 22 advanced to Phase II, and 10 innovative products progressed to Phase I clinical trials for the first time.

More notably, a batch of potential blockbuster products is entering late-stage development. In the metabolic field, two Phase III Type 2 diabetes studies in China for Rupoglutide Injection (GLP-1/GIP) achieved positive top-line results, with plans to submit NDAs; the Phase III weight-loss study in China for HRS-7535 (oral GLP-1) met all primary and key secondary endpoints at Week 44, achieving an average weight loss of 11.1% at Week 50, with plans to submit NDAs for the relevant indication. In the oncology field, the Phase III clinical study of the HER3 ADC innovative drug Rekangluozetamab Injection (SHR-A2009) for EGFR-mutant advanced non-small cell lung cancer met its primary endpoint, and the NDA has been accepted.

From an external evaluation perspective, Citeline's Pharma R&D Annual Review 2026 shows that Hengrui Pharma's self-developed pipeline continues to rank second globally. For Hengrui, which already has a substantial commercialization scale, pipeline quantity itself is no longer the sole highlight. More importantly, an increasing number of assets are transitioning from "R&D reserves" into Phase III, NDA, and even commercialization stages. Whether R&D investment can continue to translate into new products and revenue sources is a key dimension for observing the quality of its next-phase growth.

From Single Licensing to Diversified Collaboration, Global Value Continues to Be Realized

While innovative drug commercialization and R&D outcomes continue to advance, Hengrui's global collaborations are also deepening further. In recent years, China's innovative drug BD transactions have remained active, with collaboration models extending from single-asset licensing toward portfolio licensing, co-development, NewCo, and other more diversified forms. For innovative drug companies, the value of global collaboration is no longer reflected solely in the size of individual transaction amounts, but also in the continuous expansion of pathways for global development and value realization of innovative assets.

Sinolink Securities also pointed out in its 2026 annual strategy report on the innovative drug industry chain that BD collaboration has steadily grown into one of the important channels for innovative drug companies — beyond the financing system — to obtain capital support and accelerate R&D and commercialization processes. Hengrui is also continuously exploring diversified global collaboration models. During the reporting period, the company recognized RMB 1.422 billion in revenue from out-licensing collaborations for innovative drugs. Since 2023, Hengrui has completed 13 overseas business development transactions, encompassing different models including out-licensing, NewCo, and strategic alliances, with a potential total transaction value of approximately USD 42 billion, with counterparties including globally leading pharmaceutical companies such as BMS and GSK.

In the exploration of diversified global collaboration models, NewCo has also made further progress this year. In April 2026, Kailera Therapeutics listed on Nasdaq, becoming one of the largest biotech IPOs globally at that time. Kailera was Hengrui's first attempt at the NewCo model. In May 2024, Hengrui licensed to Kailera the exclusive rights for global development, manufacturing, and commercialization of its self-developed GLP-1 innovative drug portfolio outside Greater China. In the transaction, Hengrui received not only upfront payments and potential milestone payments but also equity in Kailera. Based on the closing price on the first day of listing, Hengrui's related shareholding was valued at approximately USD 300 million.

With Kailera entering the capital markets, Hengrui's NewCo model for going global has been successfully realized. After the reporting period, Hengrui's other NewCo partner, Braveheart Bio, also listed on Nasdaq. Braveheart Bio closed at USD 29.80 on its first day of trading, up 65.6% from its offering price. Based on the first-day closing price, Hengrui's related shareholding is valued at approximately USD 220 million. Unlike Kailera's portfolio licensing approach, Braveheart is centered around a single core asset, HRS-1893 (BHB-1893). In September 2025, Hengrui licensed to Braveheart the exclusive rights for global development, manufacturing, and commercialization of its self-developed next-generation myocardial myosin small molecule inhibitor HRS-1893 outside Greater China. The transaction's upfront payment included both cash and equity in Braveheart, allowing Hengrui to receive licensing transaction proceeds while also participating in the asset's downstream value creation through equity ownership.

At this point, Hengrui has had two NewCo entities enter international capital markets. Compared with traditional license-out arrangements, the greatest difference with the NewCo model is that the global development value of innovative assets is not released all at once at the time of the transaction. Through arrangements such as holding equity in the NewCo, the original innovator retains the opportunity to share in the incremental value generated from subsequent asset development, financing, and even capital market growth. The successive listings of Kailera and Braveheart Bio also signify that NewCo is no longer merely a transaction structure innovation for Hengrui, but has entered the stage of capital market validation and value realization.

Since 2026, China's innovative drug BD transactions have been moving from "scale going global" toward "value going global," with new collaboration models such as Co-Co and NewCo continuously emerging. More importantly, License-out, NewCo, and strategic alliances are not mutually substitutive options but together constitute diversified pathways for the global development and value realization of innovative assets. In terms of independent global development, the European marketing application for the innovative drug Rezvilutamide tablets has been accepted by the EMA; in July, the TF ADC innovative drug SHR-4375 injection for pancreatic cancer was granted FDA Orphan Drug Designation.

From "How Much Growth" to "Where Growth Comes From"

The innovative drug industry is entering a new phase of evaluation. As the industry moves from early-stage pipeline expansion toward commercialization and global competition, the question the market truly needs to answer is no longer just "how much will revenue grow this year," but where growth comes from, how long it can last, and whether today's R&D investment can translate into tomorrow's products and cash flow.

Viewed from this perspective, Hengrui's 2026 semi-annual report reveals a relatively clear main thread taking shape: the proportion of innovative drug sales continues to rise, the non-oncology business is growing rapidly, driving further diversification of endogenous growth momentum; the late-stage R&D pipeline continues to be enriched, providing reserves for subsequent product cycles; and the BMS collaboration, along with the successive listings of Kailera and Braveheart Bio, reflects the global development and value realization of innovative assets through different pathways.

BD revenue in financial statements may fluctuate annually due to transaction and recognition timing, but changes in innovation capability, commercialization capability, and global collaboration capability need to be observed over a longer cycle. For Hengrui, as the three curves of innovative drug sales, late-stage pipeline, and global value realization begin to move upward simultaneously, its growth logic is also shifting from the past singular "innovative drug leader" identity toward a platform-type pharmaceutical company with sustained R&D output, commercialization capability, and global innovative asset operation capability.

Institutional judgments from the secondary market indicate that in the second half of 2026, the first batch of overseas Phase III clinical data for domestic innovative drugs will see concentrated readouts. It is expected that from 2027 onward, more Chinese innovative drug companies will formally enter the value realization stage of "earning US dollars," driving a revaluation of the sector as a whole. According to media reports, Chinese research delivered 94 oral presentations and 12 LBAs at ASCO 2026, a record high, further confirming that domestic innovation is moving from market undervaluation toward value revaluation. With all three lines moving in tandem, Hengrui stands at a critical window for this round of industry revaluation.