Suzhou Zelgen Biopharmaceuticals Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange main board, marking its second attempt, with China International Capital Corporation acting as the sole sponsor. A successful listing would establish the company as a dual-listed entity on both the A-share and Hong Kong markets.

While the company achieved its first semi-annual profit since its IPO in the first half of 2026, ending years of sustained losses, a closer look reveals that the bulk of this profitability stems from a one-time technology licensing fee of RMB 662 million tied to a global development partnership with AbbVie for the ZG006 program, which has cast doubt on its long-term self-sustainability. The company now markets four approved products, and with expanded market access following their inclusion in China's National Reimbursement Drug List (NRDL), rapid sales growth could potentially bolster future earnings. Additionally, its pipeline holds notable promise, with ZG006 having received Breakthrough Therapy designation from China's CDE and Orphan Drug designation from the U.S. FDA, while ZG005 is advancing at the forefront of global clinical development. As of the close on September 4, 2026, Suzhou Zelgen Biopharmaceuticals Co., Ltd. (688266.SH) A-shares traded at RMB 117.99, giving the company a market capitalization of approximately RMB 31.2 billion.


Four Commercial Products Gain Traction While One-Time BD Income Fuels Profit Turnaround

From a financial perspective, revenue has climbed steadily from RMB 302 million in 2022 to RMB 384 million, RMB 532 million, and RMB 810 million in 2023, 2024, and 2025 respectively (all in RMB), before surging to RMB 1.204 billion in the first half of 2026, a year-on-year increase of 220.71%. However, profitability tells a different story: net losses persisted from 2023 through 2025, at RMB -295 million, -150 million, and -165 million respectively, with the 2025 loss widening by 9.87% year-on-year, marking the sixth consecutive year of losses since listing. It wasn't until the first half of 2026 that the company turned profitable, driven by the RMB 655 million upfront payment from the exclusive licensing collaboration with AbbVie, achieving a profit of RMB 640 million during the period, versus a loss of RMB 68.09 million in the same period last year. Gross margins for 2023 through the first half of 2026 were 92.6%, 93.6%, 90%, and 94.5% respectively, with the first half of 2026 improvement largely attributed to the higher-margin licensing business; drug sales gross margin inched up from 88.8% to 89.6% year-on-year, reflecting a shift in product mix.

The company's four commercialized products are experiencing sales volume and pricing shifts driven by drug reimbursement policy dynamics. Zepsun® (donafenib tosylate tablets), China's first domestically developed small-molecule multi-target drug for first-line treatment of advanced hepatocellular carcinoma, launched in June 2021, maintained a stable gross margin of around 94.5% during the reporting period. Zepning® (recombinant human thrombin), the only recombinant human thrombin developed and successfully commercialized using recombinant DNA technology in China, launched in January 2024, saw revenue surge 73.5% year-on-year, with volumes growing from 206,000 boxes to 384,000 boxes. Despite the average selling price declining from RMB 332.4 to RMB 309.9 per box due to broader market coverage after NRDL inclusion, scaled production drove unit costs down and lifted gross margin from 62.5% to 78.9%. Zeppin® (golidocitinib tablets), China's first domestically developed innovative JAK inhibitor for myelofibrosis, commercialized in May 2025, saw volumes jump from 1,400 boxes to 33,600 boxes post-launch, but after its inclusion in the NRDL in January 2026, the average selling price dropped sharply from RMB 8,266.2 to RMB 4,279.0 per box, pulling gross margin down from 95.2% to 90.4%. Zesuning® (recombinant human thyrotropin beta for injection), the only recombinant human thyrotropin approved in China for post-operative follow-up diagnosis in differentiated thyroid cancer patients, launched in January 2026, generated RMB 9.6 million in sales revenue during the first half with 1,100 boxes sold, an average price of RMB 9,153.8 per box, and a gross margin of 66.2%. In terms of the revenue structure for the first half of 2026, Zepsun accounted for 23.2%, Zepning for 37.8%, Zeppin for 20.8%, and Zesuning for 4.9%.

Business expansion continues to be accompanied by high operating expenses. Sales and distribution expenses grew from RMB 250 million in 2023 to RMB 465 million by 2025, while R&D expenses remained above RMB 388 million; however, from 2025 onward, total sales and marketing expenditures have exceeded R&D spending, with R&D expenses at RMB 200 million in the first half of 2026. On the liquidity front, as of June 30, 2026, the company held RMB 2.0566 billion in bank deposits and cash equivalents, along with RMB 2.1006 billion in undrawn, committed, and unrestricted bank facilities. Additionally, beyond the USD 100 million upfront payment from AbbVie, the company received a RMB 200 million milestone payment from Merck in February 2026, further strengthening its financial reserves.


Advancing Pioneering Oncology Pipeline with Two Global First-in-Class Candidates in Development

Suzhou Zelgen has established a strategically tiered R&D pipeline comprising 10 drug candidates spanning 29 key clinical programs, broadly targeting oncology and autoimmune diseases, with a particular focus on indications with significant unmet medical needs. Multiple late-stage candidates are either at the BLA/NDA stage or advancing through pivotal Phase III trials, with a clear and structured pipeline. Among marketed products, Zepsun® (donafenib tosylate tablets) received approval in June 2021 as China's first domestically developed small-molecule multi-target drug for first-line treatment of advanced hepatocellular carcinoma, with Phase III data demonstrating superior survival benefits over sorafenib, making it the only monotherapy to show such an advantage in a head-to-head trial of its kind. In August 2022, the drug gained an additional indication for progressive, locally advanced, or metastatic radioactive iodine-refractory differentiated thyroid cancer, with both indications now covered by the NRDL. Backed by strong efficacy and a favorable safety profile, Zepsun® has been recommended as a first-line treatment option in 32 national clinical guidelines and expert consensus documents, and the company continues to expand hospital and pharmacy coverage to drive sales growth. Zeppin® stands as China's first domestically developed JAK inhibitor approved for myelofibrosis, targeting both JAK and ACVR1; it has secured approvals for myelofibrosis and severe alopecia areata, with indications for moderate-to-severe atopic dermatitis and ankylosing spondylitis at the BLA/NDA stage. While this product spans both oncology and autoimmune therapeutic areas, global competition in JAK inhibitors for atopic dermatitis is intense, with multiple products already on the market and fierce competition in topical formulations; for instance, OCUMENSION-B (康哲药业) introduced ruxolitinib cream, which received approval for vitiligo in January 2026 and has its atopic dermatitis indication under priority review. With many pharmaceutical companies actively exploring multiple indications, Suzhou Zelgen's prospects as a late entrant in hematological oncology and autoimmune diseases carry some uncertainty. Zesuning® (recombinant human thyrotropin beta for injection), the only approved recombinant human thyrotropin in China for post-operative follow-up diagnosis in differentiated thyroid cancer patients, is indicated for radioactive iodine whole-body scanning and serum thyroglobulin monitoring, filling a domestic clinical gap. Its thyroid cancer post-operative diagnosis indication has already launched, while the post-operative treatment indication is at the BLA/NDA stage, and it has been recommended in the 2025 Chinese Guidelines for the Diagnosis and Treatment of Radioactive Iodine-Refractory Differentiated Thyroid Cancer issued by the Nuclear Medicine Branch of the Chinese Medical Association. The company has entered into an exclusive commercialization agreement with Merck's Swiss affiliate ATSA, providing support for rapid market penetration. Zepning® (recombinant human thrombin), the only recombinant human thrombin developed and successfully launched using recombinant DNA technology in China, was approved in January 2024 and included in the NRDL in January 2025. It has been endorsed by the 2025 Expert Consensus on Hemostasis in Hip and Knee Arthroplasty and the 2026 Guidelines for Blood Management in Adult Abdominal Surgery Perioperative Patients, and the company has partnered with YuanDa Life Science, a specialist in hemostasis and perioperative care, to accelerate market promotion. With the continued growth of surgical volumes in China, demand for topical surgical hemostatic agents is rising, positioning Zepning® to expand its market share further through NRDL advantages.

Among other pipeline candidates, ZG006 (Alveltamig) is a global first-in-class trispecific T-cell engager targeting DLL3/DLL3/CD3, featuring a dual-DLL3 targeting design that represents a mechanistic breakthrough with the potential to address difficult-to-treat tumors such as small cell lung cancer and neuroendocrine carcinoma. The drug has received clinical trial approvals from both the U.S. Food and Drug Administration (FDA) and China's National Medical Products Administration (NMPA), has been designated a Breakthrough Therapy by NMPA's Center for Drug Evaluation for recurrent or progressive advanced small cell lung cancer and DLL3-positive neuroendocrine carcinoma, and has also received Orphan Drug designation from the U.S. FDA, underscoring its significant clinical and commercial potential. To accelerate global development, the company entered into a collaboration and licensing option agreement with AbbVie in December 2025, granting AbbVie an exclusive option for commercialization worldwide excluding mainland China, Hong Kong, and Macau. Under the terms, Suzhou Zelgen Biopharmaceuticals Co., Ltd. will receive a one-time upfront payment of USD 100 million, with eligibility for up to USD 60 million in near-term milestone payments and license option-related payments contingent on clinical progress. Should AbbVie exercise the license option, Suzhou Zelgen becomes eligible for milestone payments of up to USD 1.075 billion, plus tiered royalties ranging from high single digits to mid-teens on net sales of ZG006-related products outside Greater China, with total payments under the agreement potentially reaching USD 1.235 billion. ZG005 (Nilvanstomig) is a recombinant humanized bispecific antibody targeting PD-1/TIGIT, representing a next-generation immunomodulatory agent; no drug with the same mechanism has been approved globally, and it is also one of the fastest-developing candidates in its target class. The product is currently advancing Phase III trials for hepatocellular carcinoma and neuroendocrine carcinoma, and holds broad potential for combination use with ZGGS18, which modulates the tumor microenvironment; clinical trial applications for the combination therapy have been approved by both the FDA and NMPA. Given the limitations of PD-1 monotherapy, such as limited response rates and resistance issues, ZG005 holds promise as a next-generation tumor immunotherapy with substantial market opportunity. Overall, ZG006 (for third-line and beyond, second-line treatment of extensive-stage small cell lung cancer, and neuroendocrine carcinoma) and ZG005 (for hepatocellular carcinoma and neuroendocrine carcinoma) are both in pivotal/Phase III trials and are expected to enter commercialization stages progressively over the coming years. Furthermore, leveraging its core technology platforms, the company is advancing R&D across multiple dimensions including tumor immunity, tumor microenvironment, tumor growth, resistance mechanisms, and gene mutations, continuously expanding its pipeline of innovative candidates. These include ZGGS18 (VEGF/TGF-β bifunctional fusion protein), ZGGS34 (CD3/CD28/MUC17 trispecific T-cell engager antibody), ZGGS15 (LAG-3/TIGIT bispecific antibody), ZG2001 (a novel oral pan-KRAS mutation inhibitor), ZG0895 (a highly selective TLR8 agonist), and a preclinical novel pan-RAS inhibitor. Among these, ZGGS18, ZGGS15, ZG2001, and ZG0895 have completed Phase I dose-escalation trials in China, while ZGGS34 has entered Phase I clinical trials in China; all five candidates have also received IND approval in the U.S., collectively demonstrating potential as breakthrough therapies for solid tumors, with extensive combination prospects and promising commercial value.


Key Takeaways

With a revenue foundation built on four commercially available products and a competitive pipeline of over a dozen investigational drugs, Suzhou Zelgen has preliminarily completed its transition from a research-driven entity to a mature commercial-stage biopharmaceutical company. Core products such as Zepsun and Zepning are well-positioned to sustain volume growth through NRDL coverage, while global or China first-in-class drugs like ZG005 and ZG006 have consistently secured regulatory breakthroughs and endorsements from multinational pharmaceutical partners, demonstrating differentiated clinical potential. The critical question for investors going forward will be whether the company can consistently convert its technology platform advantages into sustainable market share gains.