Net profit surges by 180%! What are the "hidden worries" for the established innovative pharmaceutical company, Betta Pharmaceuticals?

In the innovative drug sector, differentiation remains the main theme of the market.

On July 22, Betta Pharmaceuticals disclosed its semi-annual report forecast: net profit for the first half of the year was between 308 million yuan and 392 million yuan, a year-on-year increase of 120% to 180%.

Looking at this set of numbers alone, it is a relatively good semi-annual report delivered by Betta Pharmaceuticals in recent years. However, if further broken down, the situation may not be as optimistic: the net profit of Betta Pharmaceuticals in the first quarter was 236 million yuan. Calculated accordingly, the net profit in the second quarter was only between 72 million yuan and 156 million yuan, a quarter-on-quarter decline of 33% to 69%.

Simply put, although Betta Pharmaceuticals' performance saw a significant pre-increase in the first half of the year, the growth was mainly driven by the first quarter, and the momentum of growth in the second quarter has clearly slowed down.

From the stock price trend, market capital showed relatively cautious performance regarding this semi-annual report forecast. After reaching a 阶段性 high of 78.18 yuan/share on July 6, Betta Pharmaceuticals' stock price began to gradually fall. As of the close on July 31, Betta Pharmaceuticals' stock price was reported at 57.5 yuan/share. In less than a month, the stock price dropped by 26% from the highest point. Looking at a longer cycle, since 2022, Betta Pharmaceuticals' stock price has been oscillating repeatedly in the range of 40 yuan to 80 yuan for four years.

Data shows that Betta Pharmaceuticals was once an early benchmark for China's innovative drugs. With the approval and launch of Kemina (Icotinib) in 2011, the company launched the country's first independently developed EGFR targeted anti-cancer drug. In 2016, Betta Pharmaceuticals landed on the ChiNext board under the title of "the first innovative drug stock in A-shares," enjoying unparalleled prominence at the time.

From the perspective of the development trend of China's innovative drug industry, the period from 2015 to 2023 was the golden age of industry development. Betta Pharmaceuticals, with its first-mover advantage, should have taken full advantage of the timing and geography. However, even amidst this era's wave, Betta Pharmaceuticals did not continuously keep up with the pace of industry development, and the gap with leading innovative drug companies gradually widened.

What are some issues worth discussing in the development pace of Betta Pharmaceuticals over these years? After experiencing developmental lag, what opportunities does Betta Pharmaceuticals still have to catch up?

The Glorious Past

Betta Pharmaceuticals is a name that cannot be bypassed in the history of China's innovative drug development.

Taking the time back to 2003, Ding Liming, who was engaged in tumor pharmacology research in the United States, gave up his green card and returned to China. He co-founded Betta Pharmaceuticals in Hangzhou with several 海归 scientists.

At that time, the domestic innovative drug industry was almost blank: the mainstream direction of local pharmaceutical companies was still generic drugs, and all targeted drugs used in the oncology departments of large Grade III Class A hospitals relied on imports. The annual treatment cost for two imported EGFR-TKIs, Gefitinib (Iressa) and Erlotinib (Tarceva), was as high as more than 100,000 yuan.

Ding Liming thus set the direction: directly targeting the EGFR target for independent R&D, with the goal of making domestic patients able to afford and use domestically produced targeted drugs.

From project initiation to drug approval, Kemina (Icotinib) underwent nearly ten years of R&D. In 2011, Kemina was approved and launched, becoming the country's first independently developed EGFR-TKI. Before this, it was hard for the market to imagine that a team of overseas-returnee entrepreneurs, relying on limited financing and undergoing nearly ten years of R&D, could create a truly original targeted drug in China, which is enough to see the epoch-making significance of Kemina.

The commercial performance of Kemina also exceeded market expectations. Relying on the price advantage of domestic substitution and a local academic promotion team, Kemina rapidly expanded after its launch. Since 2013, Kemina's annual sales have stably exceeded 1 billion yuan. Relevant statistics show that within three years of its launch, Kemina's cumulative sales revenue exceeded 3.3 billion yuan. Relying on a single product, Betta Pharmaceuticals proved that innovative drugs in China can not only be successfully developed but also possess commercial value.

In November 2016, Betta Pharmaceuticals listed on the ChiNext Board of the Shenzhen Stock Exchange, with an issue price of 17.57 yuan/share. On the first day of listing, the stock rose by 44%, and the market capitalization broke through 10 billion yuan on that day. At that time, Betta Pharmaceuticals was already a benchmark enterprise in the field of innovative drugs. During the same period, Hengrui Medicine was still deeply cultivating the generic drug field, BeiGene had just been established, and Innovent Biologics' PD-1 product had not yet entered the clinical stage. Betta Pharmaceuticals was one of the few innovative drug companies at that time holding already-listed innovative drugs and successfully landing on A-shares.

However, just when the market generally expected that Betta Pharmaceuticals, with its first-mover advantage, would continue to surge forward after listing, this highlight phase also became a 阶段性 high point in the company's development history.

"Midlife" Crisis

From 2015 to 2023, it was the recognized golden age of China's innovative drugs.

Drug policy reform, capital market support, and the inclusion of innovative drugs in dynamic medical insurance negotiations 叠加 multiple dividends, pushing the domestic innovative drug industry to unprecedented explosion.

From the data, the number of IND applications for domestic innovative drugs grew from less than 100 in 2015 to more than 400 in 2021; the number of approved domestic Class I new drugs by NMPA grew from single digits per year to more than 30 in 2023. Meanwhile, BeiGene's Zanubrutinib was successfully approved and launched in the United States, Legend Biotech's Cilta-cel obtained FDA approval, and China's innovative drug going global achieved a key breakthrough from zero to one.

Betta Pharmaceuticals should have been one of the biggest beneficiaries of this wave. Holding first-mover advantages, brand influence, a listed company financing platform, and a mature cash cow product, from the starting point, Betta Pharmaceuticals had a better foundation for growing bigger and stronger than most other innovative drug companies at the same time.

Reality deviated from market expectations. Over the eight years from the germination to the explosion of the innovative drug industry, BeiGene grew into a multinational Biotech with a market capitalization exceeding 200 billion yuan; Innovent Biologics and Akeso seized the initiative in the bispecific antibody track; Hisun Pharmaceutical transformed from a generic drug company to an innovative drug company, running through the BD going-global model in just three years. Betta Pharmaceuticals was not without results: Ensartinib was approved in 2020, becoming the country's first domestic ALK-TKI, and subsequently smoothly obtained FDA marketing authorization; biosimilars such as Bevacizumab were also successively pushed to the market. But compared to the leapfrog development speed of peers, this industry "senior" clearly slowed down its progress.

Market discussions on Betta Pharmaceuticals gradually falling behind focus mainly on Kemina.

Kemina is an epoch-making product with outstanding commercial performance. For a long time after its launch, the company maintained stable revenue and profit solely based on this single product. External perspectives believe that the urgency for the enterprise to further expand the next-generation new drug pipeline was somewhat insufficient. From the approval of Kemina in 2011 to the launch of Ensartinib in 2020, the interval was exactly nine years. During these nine years, the competitive landscape of China's innovative drugs was completely reshaped: BeiGene built Zanubrutinib from scratch; Innovent Biologics' Sintilimab 跻身 the mainstream PD-1 varieties; Hengrui Medicine's Camrelizumab, Pyrotinib, and other innovative drugs were successively implemented. In contrast, Betta Pharmaceuticals' pipeline relied long-term on Kemina alone for support.

At the same time, the EGFR targeted drug track where Kemina is located has gradually become the most crowded track in domestic tumor drug competition.

First-, second-, and third-generation EGFR-TKIs flooded the market one after another: AstraZeneca's Osimertinib (third generation) firmly occupies the global first-line position; domestic third-generation EGFR-TKIs such as Hansoh's Aumolertinib and Alisir's Furmonertinib were successively approved. First-generation drugs have natural disadvantages in efficacy compared to third-generation ones, and their market share continues to be eroded. Coupled with continuous price reductions in centralized procurement, although Kemina continues to contribute revenue relying on brand reputation and grassroots market sales inertia, its revenue growth rate and profit space continue to narrow.

Today, Betta Pharmaceuticals faces development challenges. In terms of revenue, Betta Pharmaceuticals' revenue in 2025 was 3.609 billion yuan, maintaining positive growth in recent years; but net profit was only 305.3 million yuan. Compared to the net profit of 606.4 million yuan in 2020, profits have nearly halved in five years. Meanwhile, the company's stock price has been ranging sideways in the 40-80 yuan range for four years, and the current total market capitalization is only 24.3 billion yuan.

How Long Can the Old Capital Last?

At the present stage, Betta Pharmaceuticals' operating income still highly relies on mature varieties.

The core source of income is still Kemina. The company did not separately disclose Kemina's sales revenue. Combined with product structure and early public data industry estimates, this old drug launched 14 years ago still accounts for a high proportion of Betta Pharmaceuticals' total revenue. In 2025, Betta's annual revenue was 3.609 billion yuan, sales expenses were about 1.3 billion yuan, R&D expenses were about 510 million yuan, and net profit was 305 million yuan. The cash flow created by Kemina supports the operation of the sales team on one hand and maintains R&D pipeline investment on the other.

Relying purely on mature products to contribute cash flow is not yet the biggest hidden danger. The risk points concerned by the market lie in: the competition in the track where Kemina is located continues to intensify, and there is pressure on long-term growth space.

As mentioned earlier, the EGFR targeted track is the most involutional track in the domestic tumor field. From first-generation iteration to third-generation, AstraZeneca's Osimertinib firmly occupies the first-line market, and domestic third-generation products such as Hansoh's Aumolertinib and Alisir's Furmonertinib continue to grab market share. First-generation EGFR-TKIs have a generational gap compared to third-generation drugs, with shorter progression-free survival, and subsequent resistance treatment plans are also gradually tilting towards third-generation drugs.

Kemina still has stable sales volume to this day, relying on the doctor prescription habits accumulated over more than ten years in the grassroots market and the early medical insurance access advantages in some provinces. However, the coverage of third-generation EGFR-TKIs in medical insurance is expanding year by year, and the diagnostic and treatment cognition of grassroots doctors is continuously updating. Market observation believes that Kemina's revenue curve has transitioned from a stable growth stage to a slow shrinkage stage.

Looking at another core product, Ensartinib. Ensartinib is currently the most important incremental variety for Betta Pharmaceuticals, approved in 2020, being the country's first domestic ALK-TKI, and obtaining FDA approval at the end of 2024. The track direction has value, but the market size has a natural ceiling. ALK-positive non-small cell lung cancer patients account for only about 5% of the total lung cancer population. Compared to the EGFR-positive patient group corresponding to Kemina, the potential market volume of Ensartinib is low by one order of magnitude. Even with continued growth later, whether Ensartinib can grow into a second Kemina remains uncertain.

In addition, Ensartinib also faces fierce competition. Roche's Alectinib firmly occupies the global ALK-TKI first-line market, Pfizer's Crizotinib and Lorlatinib compete on the same stage, and domestic Qilu Pharmaceutical and Chia Tai Tianqing are also laying out similar products. Ensatinib's commercialization in the United States is still in the initial stage of channel building and doctor academic education. It will take one to two years of ramp-up period to convert from obtaining FDA approval to actual sales revenue. Under the background of pressure on Kemina's revenue, whether Ensartinib can complete performance supplementation exists with considerable uncertainty.

More worthy of market attention is the change in the rhythm of Betta Pharmaceuticals' R&D investment. In 2025, the company's R&D expenses were about 510 million yuan, accounting for more than 20% of the proportion of period expenses. In the first quarter of 2026, R&D expenses dropped significantly, less than 100 million yuan. According to this rhythm, it is estimated that the full-year R&D investment in 2026 may decline compared to 2025. For innovative drug companies, adjustments in the rhythm of R&D investment will trigger market concerns about the future speed of pipeline advancement and long-term competitiveness.

Horizontally comparing peers, the gap in industry investment volume is quite intuitive. Hengrui Medicine's R&D investment exceeded 6 billion yuan in 2025, BeiGene exceeded 10 billion yuan, and Innovent Biologics and Akeso's R&D investments were also at the level of billions of yuan. Betta Pharmaceuticals' investment scale of slightly over 500 million yuan is no longer in the same tier; if it continues to reduce investment in 2026, the industry gap may further widen. More importantly, after Ensartinib, there are temporarily no heavy-weight varieties with high certainty in Betta's pipeline. The biosimilar drug track such as Bevacizumab is more crowded, and prices are pressed to low levels by Qilu and Innovent. Such products can bring revenue increments, but under the mode of exchanging price for volume, the profit contribution is relatively limited.

Conclusion

What are some aspects worth reflecting on in the development process of Betta Pharmaceuticals over these years?

It did not make major operational mistakes; rather, its development pace fell behind the industry expansion window. For the nine years after Kemina's launch, relying on a single product was sufficient to maintain stable operations. Market views believe that the company lacked sufficient urgency and failed to quickly enrich its R&D pipeline during the industry dividend window period. By the time Kemina's growth peaked and Ensartinib was approved and launched, China's innovative drug industry had completed a round of high-speed expansion.

Enterprises such as BeiGene, Innovent Biologics, and Hisun Pharmaceutical took advantage of this nine-year window when Betta's development was relatively flat to achieve overtaking on a bend.

After experiencing 阶段性 developmental lag, can Betta Pharmaceuticals still catch up? Combining the current product line and R&D investment scale, returning to the first tier of the industry in the short term poses considerable challenges.

Ensartinib going overseas belongs to the correct strategic direction, but whether the product volume can support the enterprise's continuous growth remains to be seen. The 阶段性 decrease in R&D expenses and the blankness of subsequent pipeline reserves are all constraint conditions focused on by the market. Betta Pharmaceuticals was once the starting point of A-share innovative drug development and was hailed as "China's first innovative drug stock" ten years ago. Now it is in the middle of the industry. Although the company still holds a place in the biomedical track, the room for trial and error left for the enterprise to adjust its layout and complete transformation has become relatively limited.