Hengrui Pharma’s recent performance is stunning. After listing on the Hong Kong Stock Exchange, the usually steady company suddenly adopted an aggressive approach. A two-day surge matched three years of previous volatility, finally entering an upward trajectory. In contrast, the “sister” company, Hansoh Pharma, has already surged over 90% this year, outperforming Hengrui by far. These two "family-run" companies were once considered stable and solid, but in recent years, they’ve become increasingly fierce. In some metrics, the “sister” is even more formidable than the “brother.”
The successful UK launch of Almonertinib exemplifies this aggressiveness, marking not only Hansoh’s significant progress in internationalization but also the first time a Chinese original EGFR-TKI has entered an overseas market — opening a new chapter for Chinese innovative drugs globally.
In the 1990s, China’s pharmaceutical market was dominated by expensive foreign original drugs, inaccessible to ordinary patients. In 1995, Sun Piaoyang and partner Cen Junda co-founded Jiangsu Hengrui Medicine (then Haosen Pharma), targeting this market gap. The company was tiny, with just over ten staff — a “Plan B” for Sun, then tied up with reforming Lianyungang Pharma (the predecessor of Hengrui).
Due to Sun's commitments, Zhong Huijuan left her prestigious academic post to take on Haosen’s operations. In 1997, after three months of work, Zhong and her R&D team launched “Meifeng,” a reformulated version of cefalexin tablets, achieving ￥30 million in sales that year, eventually becoming a blockbuster with annual sales exceeding ￥100 million. The success taught Zhong that, for startups, choice matters more than effort. She focused on replicating overpriced foreign drugs once their patents expired in China. This “first-to-copy” strategy fueled Hansoh’s rapid rise, establishing it as a generic drug leader in CNS, oncology, and anti-infection segments.
However, Hansoh faced constant skepticism due to overlapping product lines and sales models with Hengrui, leading to its nickname: “the couple’s company.” In 2008, Sun even publicly stated that “Haosen will be merged into Hengrui,” further intensifying doubts over Hansoh’s independence. Undeterred, Zhong quietly pivoted the business.
In 2014, Hansoh’s self-developed Class 1.1 drug Maitongda was approved — the world’s first nitroimidazole anti-anaerobic drug in 40 years — marking the beginning of Hansoh’s innovation journey. In 2015, Zhong consolidated her holdings under Hansoh Pharma, paving the way for its IPO. In June 2019, Hansoh debuted on the HKEX with a market cap exceeding HK$100 billion on day one, becoming the largest pharma IPO in Hong Kong.
But beneath this glittering listing, a storm was brewing. That same year, China launched its centralized procurement program — dubbed “soul-bargaining” — upending the profitability model of generics. Hansoh’s core drugs, Olanzapine and Imatinib, were forced to cut prices, while the ￥1.548 billion-selling Plavix lost the bid entirely.
Hansoh’s revenue growth was under 1% in 2020, and in 2022, it reported its first revenue and profit decline since 2016, with a total revenue of ￥9.382 billion, down 5.56%. The golden age of generics ended, and shifting to innovative drugs became a matter of survival.
Fortunately, Hansoh’s early investment in R&D paid off. In 2020, Almonertinib was approved — a textbook case of Chinese drug innovation. After the first 3rd-gen EGFR inhibitor was approved in China in 2018, Hansoh raced to launch Almonertinib within two years — the first domestically made and second globally of its kind.
Over five years, Almonertinib gained four indications, covering the entire course of non-small cell lung cancer (NSCLC). However, relying on a single product is risky. The EGFR-TKI market is now highly competitive, with 12 products approved in mainland China, including 3 first-generation, 2 second-generation, and 7 third-generation inhibitors.
Despite the intense competition, Hansoh increased its R&D investment from ￥1.121 billion in 2019 to ￥2.702 billion in 2024, with a CAGR of 19.24%. The returns have been substantial. Eight innovative drugs have been approved, including Henmu (first domestic original HBV drug), Fulaimi (China’s first long-acting GLP-1 for diabetes), and Xinyue (world’s first biologic for AQP4-positive NMOSD).
By the end of 2024, Hansoh’s revenue from innovative and partnered drugs hit ￥9.477 billion, up 38.1%, making up 77.3% of total revenue — a strong transformation. A key takeaway for generic firms is Hansoh’s use of business development (BD) to complete its innovation loop.
Hansoh used “inbound” licensing to fill R&D gaps and “outbound” licensing to validate its innovations — creating a two-way innovation flow. This strategy mitigated R&D risks while fast-tracking internal development.
In 2021, Hansoh partnered with Singapore-based Carmot Therapeutics to license an anti-Claudin 18.2 ADC for China. The drug is in Phase II, cutting 3+ years off development time. Hansoh also absorbed linker-payload design know-how, boosting its own ADC team. In 2023, its in-house HER2-targeted ADC (HS-20093) entered Phase I with 40% better payload stability than industry norms.
In metabolic diseases, Hansoh introduced small-molecule GLP-1 agonist tech to build both oral and injectable pipelines. A 2022 oral GLP-1 drug brought a patented crystalline form that resolved low bioavailability. Hansoh adopted this in its own long-acting candidate (HS-10415), extending half-life to 72 hours — 50% longer than competitors. This “l(fā)icense–absorb–innovate” model doubled R&D efficiency.
As Hansoh’s innovation matured, it began “going global” via out-licensing. High-value deals generated both revenue and capital for reinvestment, forming a positive cycle. In 2023, Hansoh inked a record-setting ADC deal with Merck & Co. (MSD), licensing HS-20089 — a Nectin-4-targeted ADC with high safety and low bystander effect. Merck paid $185 million upfront and co-established a joint R&D team.
In small molecules, Hansoh licensed HS-10322 (oral GLP-1) to GSK with a $112 million upfront and up to $1.9 billion in milestones. The drug’s liver-targeting feature reduces GI side effects. GSK agreed to share its global clinical data, aiding Hansoh’s international R&D efforts.
In 2024, Hansoh earned ￥1.572 billion from BD — 16% of innovative drug revenue and 35% of R&D funding — making BD its second-largest R&D fund source after operating cash flow. More importantly, collaborations with global leaders helped Hansoh align with international clinical and GMP standards. In 2024, its Shanghai plant passed FDA inspection, laying the groundwork for overseas expansion.
Hansoh’s “BD-reinforced R&D” model offers a third path beyond “pure self-development” or “pure licensing.” One key lesson is that BD isn’t just buying tech — it’s about using partnerships to enhance R&D efficiency. The ability to internalize technology determines success. Licensing alone shortens gaps temporarily; only a self-sustaining loop of absorption and re-innovation builds lasting advantage.
In the race of global competition, BD is the accelerator, R&D is the engine — only together can China’s pharma industry truly take off. We'll continue tracking Hansoh's future journey.
