HENLIUS (02696) CEO Zhu Jun: Uncovering the "unmet demand" for innovative drugs will result in economic benefits becoming apparent.

In the field of biomedicine, after experiencing rapid expansion, intensive research on numerous drug targets, reduced product differentiation, and the bursting of the bubble in the market for innovative drugs, the financial data and commercial achievements of biotechs have gradually become "benchmark" instructions for secondary investors. Companies such as Ascentage Pharma (01672) and Kangbo Pharmaceutical (06990) achieved a market value doubling growth due to strong pipeline progress. Similarly, Hutchison China MediTech (02256) and Ascletis Pharma (01952) have seen continuous increases in their stock prices due to excellent financial performance in their first profitable fiscal year. HENLIUS (02696), which combines both advantages, seems to have become a favorite among investors: its stock price has surged over 90% since February, with a trading volume exceeding HK$2.4 billion and a turnover rate of 52%. Regarding the dual advantages, at the HENLIUS 2025 Global R&D Day held on April 15 with the theme "Gathering for Innovation", its Executive Director and CEO Zhu Jun stated clearly that the core of multi-dimensional expansion of pipeline value lies in uncovering "unmet needs". Once these needs are identified, economic benefits will naturally manifest. "HENLIUS has always been committed to pursuing the noble mission of 'Patient-Centered', focusing on providing solutions for patients. Economic benefits often follow. To date, our cumulative sales have exceeded 20 billion." Research and Development "Engine" + Growth "Cornerstone" The foundation of innovative drugs is undoubtedly built on continuous development and investment in high-quality targets. In the just concluded 2024, HENLIUS' R&D expenditure reached 1.8405 billion yuan, a year-on-year increase of 28.4%, becoming the "engine" driving innovative growth. With continuous investment, the company's pipeline progress in 2025 has been frequently reported. For instance, in February, HENLIUS' independently developed monoclonal antibody drug HLX11, a biosimilar of Trazimab, had its U.S. marketing approval application accepted by the FDA. This is the third self-developed product of HENLIUS to enter the U.S. market; shortly after, Hansizhu officially obtained approval from the European Commission for its combined use with Carboplatin and Etoposide in the first-line treatment of extensive-stage small cell lung cancer (ES-SCLC) in adult patients, becoming the world's first and only anti-PD-1 monoclonal antibody approved for the treatment of extensive-stage small cell lung cancer in Europe; and then announced the completion of the first patient dosing in mainland China for a Phase 2 clinical trial of HLX43 (a PD-L1 antibody coupled with a novel DNA topoisomerase I inhibitor) in patients with recurrent or metastatic esophageal squamous cell carcinoma. In March, the company's HLX22 (recombinant humanized anti-HER2 monoclonal antibody injection) completed the first patient dosing in Japan for an international multicenter Phase 3 clinical trial comparing HLX22 in combination with Trastuzumab and chemotherapy (XELOX) versus Trastuzumab and chemotherapy (XELOX), with or without Paclitaxel, in the first-line treatment of human epidermal growth factor receptor 2 (HER2)-positive locally advanced or metastatic gastric or gastroesophageal junction (GEJ) cancer. The Phase 3 clinical trial is also ongoing in China; HLX22 for the treatment of gastric cancer (GC) has been granted orphan drug status by the U.S. FDA; by the end of the month, the IIa clinical trial application for the combination of HLX79 injection (a fusion protein of human sialidase) with Hanlicon (rituximab injection) for the treatment of active lupus nephritis was approved by the National Medical Products Administration of China; In April, it was announced that the Phase 3 clinical trial of the recombinant anti-VEGF humanized monoclonal antibody injection HLX04-O for the treatment of wet age-related macular degeneration (wAMD) had reached its primary research endpoint; the combined treatment of HLX43 injection (a PD-L1 antibody coupled with a novel DNA topoisomerase I inhibitor) with Hansizhu for the treatment of advanced/metastatic solid tumors in a Phase 1b/2 clinical trial was completed in China (excluding Hong Kong, Macao, and Taiwan) with the first patient dosing. With new developments in the pipeline almost every week, Zhu Jun also bluntly stated that this is not only a systematic support for R&D, but also to see the social value behind it. "In our efficient operation system, in 2024, one-third of the revenue allocated to R&D has not only resulted in 6 marketed products but significantly increased the value of our R&D, providing long-term and substantial benefits to 750,000 patients through our medical solutions." Of course, in the face of massive R&D investment, stable revenue growth is their source of confidence. From a financial perspective, HENLIUS achieved revenue of 5.7244 billion yuan in 2024, an increase of 6.1% year-on-year; net profit reached 820.5 million yuan, an increase of 50.3%; cash flow reached a record high of 1.24 billion yuan. Following the first full-year profit in 2023, this is the company's second consecutive year of full-year profitability. Looking at the composition of their performance, Hansu and Hanrizhu are undoubtedly the "cornerstones" of the company's performance growth. As the company's key product, Hansu achieved global sales of 2.81 billion yuan in 2024, a year-on-year increase of 27.0%. This growth is attributed to its widespread application in areas such as breast cancer and the company's precise marketing strategies. As a domestic monoclonal antibody biosimilar approved in China, the international competitiveness of Hansu makes it more competitive in the global market. Similarly, Hanrizhu also performed well, achieving global sales revenue of 1.3126 billion yuan in 2024, an increase of 17.2%. As the world's first anti-PD-1 monoclonal antibody approved for first-line treatment of small cell lung cancer, Hanrizhu fills a market gap in the field of lung cancer treatment, providing new treatment options for patients. The continuous growth of these key products not only brings stable income to the company but also further consolidates HENLIUS' position in the field of innovative biopharmaceuticals. Expansion into the international market + Positive reviews from securities firms Driven by the wave of globalization, HENLIUS has accelerated its internationalization process. In 2024, the company successfully achieved International Loop 1.0, further expanding the coverage of its products. Hanquyu is listed in the United States, the Philippines, Brazil, Canada, etc.; Hanlikang is approved in multiple Latin American countries such as Peru, and Hanbeitai is approved in Bolivia, and so on.On the research and development day, Zhu Jun also reviewed the growth trajectory of multiple regions around the world. Taking the Japanese market as an example, due to the uniqueness of this market where the pricing of all products is determined by the government rather than the suppliers, he stated that without drugs like Hanshi and HLX22, HENLIUS would not consider entering Japan. "Japan is an opportunity-driven market, and if there is no potential product that can become a bestseller, it is not recommended to try easily. Unless the product's efficacy and data are outstanding, it is difficult to obtain high pricing power in the Japanese market. Thanks to Hanshi, we provide a good treatment solution for patients with colorectal and gastric cancer, and HLX22 also shows positive data in gastric and breast cancer. Therefore, the Japanese market is a must for us to explore." After entering the Japanese market, HENLIUS has also "adapted to the local customs" by setting up its own operating team. "The authority level system of clinical operation teams and doctors in Japan is quite strict, usually requiring senior professionals to gain respect. Therefore, we have hired some experienced clinical science liaison officers in the local area to deeply penetrate the Japanese market. With the release of colorectal cancer data by the end of this year or early next year, the market promotion of Hanshi and HLX22 will be strengthened." added Zhu Jun. Thanks to the localized internationalization strategy, as of now, HENLIUS has established authorized cooperation networks with over 100 global markets, including the 4 products mentioned above, covering more than 50 countries. Starting from 2024, strategic collaborations have been frequent: deepening innovation collaboration with Palleon founded by Nobel Prize winners, establishing a joint venture platform with a top family business in Saudi Arabia, reaching a strategic partnership with Sermonix in the field of breast cancer tumors, and continuously improving the company's treatment layout in the field of breast cancer. At the same time, HENLIUS has built up a commercial production capacity of 48,000 liters, achieving normalized and stable supply in regions such as China, Southeast Asia, North America, Europe, the Middle East, and Latin America, laying a solid foundation for further expanding into global markets in the future. Of course, while HENLIUS continues to strengthen its fundamentals, it has also gained bullish views from brokerage firms. TF Securities and CMB Securities have given HENLIUS a "buy" rating in their latest research reports. Brokerages believe that the company's continuous investment in innovative biopharmaceuticals and global layout will bring long-term growth momentum. With the further increase in core product volume and the continuous launch of new products, the company's performance is expected to continue to maintain steady growth. In summary, in the current atmosphere of the recovery of the innovative drug sector, HENLIUS may continue to enjoy this rebound with its stable performance, ongoing pipeline progress, and commercialization capabilities.