China’s Hengrui posts 89% rise in third-quarter net profit, beating estimates

Jiangsu Hengrui Pharmaceuticals, a leading Chinese drug maker, reported an impressive 89% increase in net profit for the third quarter, surpassing analysts' expectations. The company's revenue for the period ended September 30 also rose by 20.55%, reaching 8.95 billion yuan (US$1.34 billion). This surge was primarily driven by robust sales of innovative drugs and out-licensing revenue, which helped Hengrui recover from a weak first half of the year.

In the first three quarters, the company's revenue grew by 20.38% to 6.92 billion yuan, while net profit climbed 20.38% to 6.92 billion yuan. Hengrui's Hong Kong-listed shares dropped 5.13% on the day of the earnings release, following a decline in first-half revenue due to national and regional procurement policies aimed at reducing medicine prices.

The generic medicine segment experienced a 16.1% year-on-year drop, whereas innovative medicine sales maintained steady growth. Despite falling short of initial expectations for the year, Hengrui's innovative drug revenue showed promise, driven by licensing deals with global pharmaceutical companies, such as the recent agreement with Danish company Novo worth up to US$2.6 billion.

The company's efforts in oncology, immunology, and weight management have also shown promise, with its psoriasis drug SHR-1139 currently undergoing phase-two trials.