Kangfang Innovative Medicine revenue increased by over 50%. How to shift from single-product competition to comprehensive racing?

Ask AI · As competition in the bispecific antibody sector escalates, can the Kangfang platform drive global expansion?

21st Century Business Herald reporter Jiyuan JI

On March 27, amid lingering fallout from the capital winter in the biopharmaceutical industry and heightened scrutiny of innovative drug companies’ commercialization capabilities and sustainability, Kangfang Biotech (9926.HK) released its 2025 annual results.

The financial report shows that in 2025, Kangfang Biotech achieved new drug sales revenue of RMB 3.033 billion, a year-on-year increase of 51%. However, while the company’s innovative drug products are scaling up and revenue is surging, its loss for the year widened to RMB 1.141 billion.

A careful breakdown also reveals that this is not due to deterioration in core business performance. The main reasons for the increase in losses include two factors: first, an increase in impairment losses on its equity investment in its associate, Summit Therapeutics, by RMB 256 million; second, sustained high-intensity R&D spending added RMB 387 million. Excluding these non-cash items and changes in fair value related to equity investments, the loss under a Non-IFRS basis actually narrowed to some extent, indicating an improvement in the operating quality of the core business.

Analysts from securities firms in the biopharmaceutical industry told 21st Century Business Herald that Kangfang Biotech’s 2025 financial report data in fact reflects the typical “pain period” in a transition from a Biotech company to a Biopharma company. New drug revenue of RMB 3.033 billion indicates that the company’s core product has completed the key shift from “clinical value” to “commercial value,” and the logic of scaling up via reimbursement has been fully validated. As for the widening loss on the books, fundamentally, it is not a deterioration in operating quality; impairments related to equity investments in associates are non-cash, non-operating factors, while the continued ramp-up in R&D spending is meant to build momentum for pipeline reserves in the next stage.

“Actually, the operating efficiency of the company’s core business is improving. For innovative drug companies at this stage, we care most about the scale-up rhythm of core products, the adequacy of cash reserves, and the clinical advancement progress of key pipelines. Kangfang ranks at the forefront of the industry in all these dimensions,” the analyst said.

Scale-up of core products

From Kangfang Biotech’s financial report, it is evident that the company’s ability to generate blood for commercialization has been validated in a substantive way. For the full year of 2025, the company’s new drug sales revenue reached RMB 3.033 billion, up 51.48%. Against the backdrop of overall pressure on the pharmaceutical industry, this growth rate stands out. The explosive growth in revenue is mainly attributable to two globally first-in-class bispecific antibodies—Kaitanni (cadunilidimab) and Yivosi (Yivosi).

As relevant indications were first included in the National Reimbursement Drug List at the end of 2024, 2025 became the critical year for these two core products to achieve “volume expansion by pricing,” or “price-for-volume.”

Yivosi is undoubtedly the star molecule of 2025. As the first globally approved PD-1/VEGF bispecific antibody, it not only “head-to-head” defeated the global blockbuster pembrolizumab (K药) in clinical settings, but also demonstrated strong iterative capability in lung cancer treatment. In particular, for non-small-cell lung cancer indications with EGFR-TKI resistance, Yivosi is currently the only immunotherapy worldwide that has achieved significant positive results in both PFS (progression-free survival) and OS (overall survival). By the end of 2025, its indication for first-line treatment of PD-L1-positive non-small-cell lung cancer was successfully added to the National Reimbursement Drug List, paving the way for further scale-up in 2026.

Cadunilidimab (PD-1/CTLA-4 bispecific) continues to consolidate its advantage in sub-segments. In the treatment of recurrent or metastatic cervical cancer, it achieved a complete response rate of 14.1%, and the two-year survival rate for patients who achieved complete response is as high as 100%, highlighting the unique mechanism advantage of bispecific antibodies in “cold tumor” treatment. In 2025, indications for first-line gastric cancer treatment and first-line cervical cancer treatment also smoothly entered the National Reimbursement Drug List, further expanding coverage on the payor side.

Leveraging differentiated mechanisms and outstanding clinical data, these two core products not only achieved rapid penetration in the domestic market, but also established Kangfang Biotech’s leading position in the global bispecific antibody arena. At present, these two drugs have cumulatively initiated more than 23 registrational/Phase III clinical studies, building a deep barrier of clinical evidence worldwide.

Since 2018, the number of approved Class 1 innovative drugs in China has shown a clear upward trend; in 2024 it reached 48 types, more than five times that of 2018. The National Reimbursement Drug List has become an “accelerator” for innovative drugs to land quickly, expanding China’s innovative drug market capacity on a continuing basis. By the end of 2025, the total number of drugs included in the National Reimbursement Drug List had reached 3,253, of which the number of Class 1 innovative drugs increased to 50.

The aforementioned analyst pointed out that, through mechanisms such as “dual-channel” management, periodic adjustments by the Pharmaceutical Affairs Committee, and direct settlement between the reimbursement fund and enterprises, the pain point of “making it into reimbursement but not into hospitals” has been addressed. The time for innovative drugs to enter hospitals has been noticeably shortened, and patients’ out-of-pocket payment proportion has dropped significantly. Pharmaceutical companies are able, within a relatively short time, to make the leap from several hundred patients to tens of thousands of patients, and from sales in the million-scale to the hundreds of millions or even billions of yuan. The reimbursement-driven scale-up effect has been concentrated and reflected in pharmaceutical companies’ financial reports.

“On the updated list, there are both entries and exits. In 2025, 29 drugs that can be better replaced were removed, making room for innovative drugs. This mechanism compels companies to shift from ‘competing on channels and competing on marketing’ to ‘competing on clinical value and competing on real-world evidence,’ pushing the industry toward ‘true innovation.’” The analyst said that for companies, whether they can enter reimbursement and at what price they enter directly determines whether their scale-up curve rises steeply or remains steadily moderate over the long term.

Kangfang Biotech’s financial report shows that, as of the end of 2025, the company’s cash and cash equivalents, and other short-term financial assets totaled RMB 9.172 billion, and its sales expense ratio in 2025 was reduced to 47%.

Competition in the Bispecific Antibody 2.0 Era

As the number of entrants in the bispecific antibody sector surges, the competitive dimension has undergone fundamental change. Kangfang Biotech’s 2025 strategic layout also reveals the competitive direction of innovative drug companies in the Bispecific Antibody 2.0 era.

In the oncology field, Kangfang Biotech is pushing forward the “IO2.0 + ADC2.0” strategy with full force. On the one hand, the company has two major IO bispecific antibodies already on the market, giving it the initiative in combination therapy. On the other hand, its self-developed next-generation ADC drugs AK146D1 (bispecific ADC) and AK138D1 are designed to address the pain point of the current ADC treatment window being too narrow.

At present, a series of therapy combination regimens of these two ADC drugs with cadunilidimab and Yivosi have entered Phase II clinical trials, and international clinical progress will advance in parallel. This fully independent combination of “self-developed IO foundation + self-developed next-generation ADC” is expected to build very high technical barriers and commercial moats in future oncology treatment.

Meanwhile, the company’s first triple-antibody new drug AK150 (targeting ILT2/ILT4/CSF1R) has entered clinical trials as well, attempting to tackle more complex tumor microenvironments through triple immune modulation. More triple-/multi-antibodies and TCE bispecific/multi-antibodies are expected to enter clinical trials, indicating that Kangfang Biotech is moving from a “single-point breakthrough” in bispecific antibodies toward “system warfare” across multiple targets and multiple modalities.

In non-oncology areas, Kangfang Biotech is trying to replicate its success path in oncology by bringing bispecific antibody technology into broader markets such as autoimmune diseases, respiratory diseases, allergic diseases, and even diseases of the central nervous system (CNS). AK139 (autoimmunity, respiratory, allergy) is also advancing through seven Phase II clinical trials, demonstrating the company’s R&D execution strength in non-oncology areas. As for AK152 (Aβ bispecific antibody), its positioning directly targets Alzheimer’s disease, one of the “world-class problems” in the global CNS field.

“Today, the competitive landscape in the bispecific antibody sector has already undergone fundamental changes. One clear trend we saw in 2025 is that PD-1/VEGF bispecific antibodies have become one of the most crowded segments after PD-1. Relying on the bispecific antibody label alone is already hard to create differentiation,” the aforementioned analyst believes. Whether a next-generation molecule with synergistic effects can be built on a bispecific-antibody foundation determines whether pharmaceutical companies can break out of the quagmire of homogeneous competition.

In addition, global clinical and commercialization capabilities remain a key focus of competition going forward. Although bispecific antibody R&D in China is active, there are not many companies that truly possess the capability to advance clinical programs globally and successfully commercialize overseas. Kangfang’s partnership model with Summit provides a path for Yivosi’s overseas exploration, and the readout of subsequent overseas clinical data will be an important catalyst.

2025 is a pivotal year for Kangfang Biotech’s transition from a “product-driven” model to a “platform-driven” model. As the bispecific antibody sector moves from “blue ocean” to “red ocean,” companies that have first-mover advantages, platform capabilities, and global vision still have a relatively high probability of making the leap from domestic leaders to global participants. Whether Kangfang Biotech can become one of the first breakouts will also need to be validated by the market.