2025 Pharmaceutical and Biotech IPO Performance Outlook: CXO Industry Sentiment Improves, Innovative Drug Companies' U-Turn Turbulent, Cost Reduction and Efficiency Gains Extreme Competition

Source: Times Business Research Institute Author: Lu Shuyi

Source | Times Business Research Institute

Author | Lu Shuyi

Editor | Zheng Lin

In 2025, the A-share pharmaceutical and biotech industry faces new changes, with IPO enthusiasm rebounding.

Wind data shows that in 2025, a total of 10 new pharmaceutical and biotech companies listed on the A-share market, doubling compared to 2024.

However, the Times Business Research Institute notes that by the end of February 2026, among the 10 pharmaceutical and biotech companies listed in 2025, 8 have released performance briefings or forecasts. Their performance shows a “polarized” pattern, possibly driven by the resonance of industry cycles, policies, and business models.

From the perspective of sub-sectors, CXO (Contract Research Organization) services and upstream industry chains are experiencing a “reversal of prosperity,” and pharmaceutical distribution models are quietly transforming. Meanwhile, innovative drug companies face a rugged path to “going U.” Additionally, despite increasing industry segmentation, “cost reduction and efficiency enhancement” has become a key survival rule. Companies that can balance R&D investment with operating expenses and optimize supply chain efficiency are better positioned to maintain profit margins amid industry fluctuations.

Number of new stocks doubles year-on-year, with performance showing a “polarized” pattern

In the 2026 National Two Sessions government work report, biopharmaceuticals are explicitly listed as a “new pillar industry” at the national level, alongside integrated circuits, aerospace, and low-altitude economy, laying a top-level strategic foundation for the industry’s long-term development.

In 2025, while many biotech companies chose to “list in Hong Kong,” the IPO enthusiasm for the A-share pharmaceutical and biotech industry also rebounded.

Wind data shows that in 2025, 10 pharmaceutical and biotech companies successfully listed on the A-share market, doubling from 5 in 2024. Under the new “Guidelines No. 9” with stricter regulation, how did the quality of these new stocks perform in 2025?

Wind data indicates that as of February this year, among the 10 A-share biotech companies listed in 2025, except for Weigao Blood Purification (603014.SH) and Chaoyan Co., Ltd. (301602.SZ), the remaining 8 have released performance briefings or forecasts. Of these, 5 companies reported both revenue and net profit growth, while only 1 showed a “performance reversal.”

Specifically, BaioSaitu (688796.SH) saw explosive growth in net profit attributable to shareholders, with a 416.37% increase, earning it the title of “performance king” among new biotech stocks.

Performance briefings show that in 2025, BaioSaitu’s revenue and net profit attributable to shareholders were 1.379 billion yuan and 173 million yuan, respectively, with year-on-year growth of 40.63% and 416.37%. The company explicitly attributes its performance to two main drivers: continuous expansion in overseas markets and recovery of the domestic biopharmaceutical industry. As a representative of outsourced medical R&D, BaioSaitu leverages high technical barriers (such as RenMice full-human antibody/TCR mouse platform) to improve both profitability and operational efficiency.

Other companies with strong performance include Sifen Technology (688758.SH) and Jianxin Superconducting (688805.SH), which reported year-on-year net profit increases of 48.42% and 34.65%, respectively. Sifen, as a raw material drug company, mainly benefits from increased demand for domestically produced purification media in downstream biopharmaceutical R&D and manufacturing. Jianxin, as a medical device company, benefits from increased revenue of liquid helium-free superconducting products and the gradual release of domestic medical equipment procurement demand, reflecting the positive impact of new medical infrastructure and equipment upgrade policies on the high-end medical device industry chain.

However, not all biotech companies have enjoyed the industry recovery. In stark contrast to leading CXO and high-end medical device sectors, some innovative drug companies still face losses.

Performance briefings show that in 2025, HeYuan Bio-U (688765.SH), despite revenue growth of 89.80% driven by new product Aofumin, saw its net profit attributable to shareholders decline from -151 million yuan last year to -158 million yuan. This is mainly because its production line is still in capacity ramp-up, coupled with sustained high R&D investment. Even with successful product approval, scaling up sales and covering early R&D costs remain long-term investments.

Losses also widened for Beite-U (688759.SH). The performance report indicates that in 2025, the company still had no revenue, with net profit attributable to shareholders worsening from -56 million yuan last year to -153 million yuan. Besides maintaining high R&D spending, the company received about 80 million yuan less in government subsidies compared to 2024, increasing its losses.

Unlike the “-U” companies still in the R&D phase, Hanbang Technology (688755.SH) experienced a “performance reversal” in its first year of listing. Wind data shows that from 2022 to 2024, Hanbang’s net profit grew rapidly, but in 2025, revenue increased by 6.40% year-on-year, while net profit attributable to shareholders fell by 24.89%. The increase in revenue did not translate into profit growth, mainly due to intensified market competition, fluctuations in downstream demand, and a decline in the proportion of high-margin overseas income, leading to decreased profitability.

Segmented industry prosperity varies, and overseas capability becomes a key differentiator

Why do some companies in the same biotech sector show “polarized” performance?

The primary reason lies in industry cycles and the differing prosperity levels of sub-sectors. In the biotech industry chain—from services to manufacturing to innovative drugs—the prosperity declines sequentially.

Leading companies like BaioSaitu and those with differentiated technological platforms are more likely to secure overseas orders or collaborations with major pharmaceutical companies. Coupled with the recovery of the domestic biopharmaceutical industry, their prospects remain high; high-end medical device companies like Jianxin Superconducting, supported by accelerated localization and new medical infrastructure policies, are expected to continue volume growth. Conversely, innovative drug companies like HeYuan and Beite, due to long commercialization cycles and large R&D investments, still face relatively low industry prosperity.

Additionally, some equipment and consumables suppliers relying on domestic homogeneous competition face price wars and declining gross margins.

Policy influence also plays a significant role. The biotech industry is highly affected by policies, with varying support across fields leading to uneven development. High-end medical devices benefit from localization policies and hospital reform policies, showing relatively better performance; meanwhile, traditional chemical preparations and medical devices face pressures from volume-based procurement and price regulation.

Externally, the performance divergence also depends on the companies’ R&D and commercialization capabilities. For example, BaioSaitu leverages high barriers to technology to convert R&D into revenue; companies like Sifen and Jianxin, which have achieved stable profitability, are in the stage of product commercialization and volume expansion. In contrast, “-U” companies are still in R&D phases; if clinical trials or approvals encounter obstacles, or if R&D investment pacing changes, their net profits can fluctuate significantly. For instance, Beite, with multiple pipeline products, remains uncommercialized and continues to incur losses.

In the context of globalization, overseas market expansion is another critical performance differentiator. BaioSaitu’s success in expanding abroad has become a significant revenue source in 2025. Conversely, companies facing obstacles in overseas expansion or mainly relying on the domestic market, like Hanbang, see increased competition and declining overseas high-margin income, which directly hampers profitability.

Pharmaceutical distribution models are quietly transforming, with “cost reduction and efficiency” becoming vital for survival

Behind the annual reports of 8 newly listed biotech stocks, industry trends are evident: CXO services are rebounding, and distribution models are undergoing subtle changes.

With overseas orders and domestic demand both recovering, CXO and upstream industry chains are experiencing a “reversal of prosperity.”

The performance turnaround of CXO and upstream companies like BaioSaitu and Sifen indicates a cycle turning point in outsourced R&D, with industry ecology showing signs of recovery. This is mainly due to the resonance of overseas order return and domestic demand revival. However, this positive trend currently benefits mainly those with technological barriers; mid- and low-end service providers facing severe homogenization still haven’t felt the full benefit.

Moreover, the distribution model is quietly evolving, with SPD (Specialized Procurement and Distribution) high-value-added services becoming new growth drivers.

As a representative in pharmaceutical distribution, Jianfazhixin (301584.SZ) forecasts a net profit increase of 6% to 29.65% in 2025. The company states that its SPD business maintained rapid growth, with high gross margins, boosting overall profitability.

In the face of declining gross margins in traditional distribution, SPD models provide integrated services such as procurement, inventory management, and delivery for hospitals, enhancing customer stickiness and profitability. Jianfazhixin’s growth indicates that competition in the pharmaceutical distribution industry has shifted from network coverage to supply chain comprehensive service capabilities.

As China’s medical insurance payment system reform deepens, hospitals’ demand for fine management of consumables is surging, and SPD service penetration is accelerating. Companies that can transition from logistics providers to supply chain solution providers are expected to capture more market share.

It is important to note that, despite some sub-sectors showing signs of prosperity, “cost reduction and efficiency” remain universal survival rules for biotech companies.

BaioSaitu explicitly mentions “lean management measures further promote operational efficiency,” indicating that even amid industry recovery, cost control remains a priority. Similarly, Jianfazhixin attributes part of its profit growth to financial structure optimization and reduced financing costs, reflecting cost reduction at the financial level.

Thus, the biotech industry has entered an era where management precision and cost control are key. Companies capable of balancing R&D and operating expenses and optimizing supply chains are better equipped to withstand industry cycles and maintain profit margins.

(Word count: 3036)

Disclaimer: This report is for Times Business Research Institute clients only. Receipt of this report does not constitute a client relationship. This report is based on information deemed reliable and publicly available, but the company makes no guarantees regarding its accuracy or completeness. The opinions, assessments, and forecasts herein reflect the views at the time of publication and may change without notice. The company does not guarantee that the information remains current. The company may modify the content without notice; investors should monitor updates independently. While striving for objectivity and fairness, the opinions and recommendations are for reference only and do not constitute buy or sell bids. They do not consider individual investor objectives, financial situations, or specific needs and are not personalized investment advice. Investors should consider their own circumstances and fully understand and use this report; it should not be the sole basis for investment decisions. The company and authors are not responsible for consequences arising from reliance on this report. The company and authors, within their knowledge scope, have no legal conflicts of interest with the securities or investment targets mentioned. Under legal permissions, the company and its affiliates may hold securities of the companies mentioned and engage in related transactions, including providing or seeking investment banking, financial advisory, or financial products services. All copyrights are owned by the company. No organization or individual may reproduce, copy, publish, quote, or redistribute in any form without written permission. If quoting or publishing with permission, it must be within authorized scope, citing “Times Business Research Institute” as the source, and avoid misrepresentation or modification. The company reserves the right to pursue legal responsibility. All trademarks and service marks used are owned by the company.