Star's dual-resistant drugs face double pressure from medical insurance price reductions and the entry of industry giants—will Kangfang Biotech's user acquisition fail to monetize before falling into a life-and-death dilemma?

Chinatimes.net.cn Reporter Zhang Siwen and Na Beijing Report

Once hailed as a benchmark for domestic innovative drugs, Kangfang Biotech (Stock Code: 9926.HK) seems to be losing its spotlight, with its core product, Ivosidenib (a PD-1/VEGF bispecific antibody), appearing to decline from its peak.

Recently, Nomura Oriental International Securities lowered its target price for Kangfang Biotech by 7%, from HKD 120.64 to HKD 112.73, maintaining a “Neutral” rating.

The brokerage pointed out in its report that the target price was adjusted due to the narrowing gap in the PD-1/VEGF field compared to peers. The report forecasts that Kangfang Biotech’s drug sales in the second half of 2025 could reach 1.8 billion RMB, but overall profitability remains weak.

This star drug, the world’s first head-to-head competitor to the “King of Drugs” Pabrolizumab (K drug), has established a differentiated leadership position through robust clinical data. However, it faces significant pressure from price negotiations under medical insurance, slower-than-expected sales volume growth, and intense competition in the sector.

Birth of a “Miracle Drug”

Ivosidenib’s rise began with its strong clinical data.

As the first globally approved bispecific antibody with a “cancer immunotherapy + anti-angiogenesis” mechanism, Ivosidenib demonstrated significant superiority over K drug in a head-to-head Phase III clinical trial (HARMONi-2) announced in September 2024. It showed statistically significant benefits in progression-free survival (PFS) and an objective response rate (ORR) of 50% compared to 38.5%.

This result directly challenged the global benchmark status of K drug (pembrolizumab, marketed as “Cyramza” in colloquial terms, developed by Merck & Co.), which was once considered a groundbreaking cancer immunotherapy. It also sparked a wave of research into PD-1/VEGF targets.

With this milestone breakthrough, Ivosidenib had already secured a $5 billion overseas licensing deal in 2022, with an upfront payment of $500 million, supporting half of the company’s market value with just one drug.

At that time, the market envisioned a “perfect blueprint”: a globally pioneering drug with the best efficacy; large licensing fees from overseas markets; domestic market expectations of annual treatment costs around 160,000 RMB, with sales reaching 5 billion RMB in 2025 and peaking at 8 billion RMB in 2028, generating annual profits of 2 billion RMB. Market sentiment was high, discounting these peak profits into current stock prices.

However, the reality of the market is more complex than a simple upward curve.

First, there was a “sharp price drop.”

Ivosidenib was included in the national medical insurance catalog at the end of 2024. From January 1, 2025, the insurance reimbursement price was sharply reduced to HKD 736 per vial (100mg), down from HKD 2,299, a decrease of over 70%.

This meant that the annual treatment cost for patients dropped from around 160,000 RMB to about 32,000 RMB. Such a deep price cut directly squeezed profit margins by 80%.

Second, sales volume growth has fallen far short of expectations.

According to Kangfang Biotech’s mid-2025 interim report, the company’s revenue in the first half of the year was 1.402 billion RMB, up 49.2% year-over-year, mainly due to increased sales of core products like Ivosidenib after inclusion in the insurance.

However, when breaking down this figure to the full-year forecast for Ivosidenib alone, it falls far short of the earlier market anticipation of 5 billion RMB annual sales.

Professional institution Nomura Securities estimates Kangfang Biotech’s full-year 2025 revenue at about 3.3 billion RMB. While this aligns with market expectations, it also confirms that the actual sales growth of Ivosidenib is far from the overly optimistic earlier estimates.

Kangfang Biotech previously set targets of 4 billion RMB revenue in 2025 and 10 billion RMB in 2026, but the predicted 2025 revenue still falls short of these goals. The Huaxia Times reporter attempted to interview the company on questions such as “How does management evaluate this performance?” “What are the main reasons for missing expectations?” “Will revenue targets be adjusted, and on what basis?” but received no response.

Regarding the underperformance, Zhou Di, a professor at Renda Technology and senior engineer, and expert in the National Science and Technology Expert Database, told Huaxia Times that the company’s 2025 revenue not reaching 4 billion RMB and the widening losses are consistent with the growth pattern of early-stage innovative drug commercialization: after inclusion in insurance, the focus is on “price-for-volume” strategy; combined with high R&D costs of 731 million RMB, losses from Summit equity investments, and depreciation of capacity, short-term losses are industry norms. Key profitability barriers include: reduced gross margins due to insurance price cuts (H1 2025 gross margin 79.4%, down 12.3 percentage points YoY); ongoing investments in clinical development of bispecific antibodies and ADC pipelines; and the incomplete realization of commercialization scale effects, with high sales expenses.

Zhou Di believes that the company’s profitability turning point depends on three key factors: sustained sales growth of core products (Ivosidenib’s domestic sales expected to reach 5.4 billion RMB in 2026); realization of overseas licensing income (milestones and 15% sales share after FDA approval); and the maturation of ADC 2.0 pipeline, creating new revenue growth points.

Intensified Industry Competition

While Ivosidenib’s clinical success has earned its reputation and activated the entire PD-(L)1/VEGF bispecific antibody sector globally, the rapid follow-up from competitors poses significant threats.

Known developments include Merck introducing L-M299 from Lisheng Medicine; BioNTech acquiring Pumis’s BNT327 and licensing part of its rights to BMS; Pfizer making a record-breaking $1.25 billion upfront payment for Sanyou Pharmaceuticals’ SSGJ-707.

Domestically, companies like Sinocell, Huaao Tai (a subsidiary of Hualan Pharmaceutical), Rongchang Biotech, and Junshi Biosciences are also advancing similar products into late-stage clinical trials. Rongchang Biotech’s RC148 has already reached licensing agreements with AbbVie. As more competitors enter Phase II and III trials, Ivosidenib may face increasing pressure on pricing power and market share.

Meanwhile, competition has shifted from single-drug efficacy battles to systematic combination therapies of “IO + ADC.” Giants like Pfizer and BioNTech are deploying large-scale, multi-indication combination regimens around their respective PD-1/VEGF bispecifics, involving self-developed or licensed ADC pipelines.

This means future market leaders will need not only a good drug but also a comprehensive treatment system covering multiple tumor types.

In other words, although Kangfang Biotech has attracted significant attention with Ivosidenib, it may also attract larger competitors.

Market pessimism is directly reflected in the company’s stock price.

Since the announcement on August 28 last year that founders Xia Yu and Li Baiyong cashed out nearly HKD 450 million, the stock has plummeted.

Following the “precise reduction,” Kangfang Biotech’s stock price closed down 7% on August 27, 2025, and briefly fell over 7% intra-day to HKD 145.2.

According to Wind data, from August 27, 2025, to March 12, 2026, the stock price declined by 33.73%, while the Wind secondary industry index fell only 10.93% in the same period.

Whether Kangfang Biotech can establish a foothold amid fierce competition remains a focus for Huaxia Times.

Reporter: Jiang Yuqing
Editor-in-Chief: Chen Yanpeng