China drugmaker Hengrui misses quarterly profit estimates

Jiangsu Hengrui Pharmaceuticals, the largest drugmaker in China by market value, reported a fourth-quarter profit that fell short of analyst expectations as revenue from licensing deals failed to materialize. The company is currently navigating a challenging landscape where centralized bulk buying programs have significantly impacted its traditional generic drug business, prompting a strategic shift toward innovative therapies. For the quarter ending December 31, the pharmaceutical giant recorded a net profit of 1.96 billion yuan ($284.10 million), missing the 2.7 billion yuan estimate previously projected by analysts at HSBC Qianhai Securities. Despite the quarterly miss, the company's full-year net profit for 2025 rose by 21.69% to reach 7.71 billion yuan. To offset the decline in generic revenues, the firm has pivoted toward innovative drug development and international licensing agreements. In one notable deal, the company granted a license for its cancer treatment, trastuzumab rezetecan, to the branch in Switzerland of India-based Glenmark Pharmaceuticals. This agreement included an upfront payment of $18 million. This move follows a series of strategic collaborations established earlier in the year with major global players, including Merck & Co., Inc. and the United Kingdom-based GSK plc. The company's annual report highlighted a clear divergence in its business segments, noting that while revenue from innovative drug sales surged by 26.09% in 2025, income from generic drugs continued to face downward pressure. The firm remains focused on oncology, neurology, immunology, and cardiovascular treatments as it transitions away from its reliance on high-volume generic sales.