BAO PHARMA-B(02659) Financial Report Observation 2025: Transition from "Research and Development" to "Harvest", another core variety NDA review has entered a crucial period

In December 2025, Baoji Pharmaceutical (02659) successfully listed on the Hong Kong Stock Exchange, marking a historic moment as the company officially entered the international capital market and opened a new chapter in its development. As a pioneer in synthetic biology technology, Baoji Pharmaceutical focuses on four major blue ocean fields: large-volume subcutaneous drug delivery, antibody-mediated autoimmune diseases, assisted reproduction, and recombinant biopharmaceuticals. It is gradually transitioning from a "clinical-stage biotechnology company" to a leading player in recombinant biopharmaceuticals with strong commercialization capabilities. In 2025, for Baoji Pharmaceutical, it is not just a financial year, but also a starting point for validating its business model. From long-term "research and development" to the successful market approval and first sales of the company's first product SJ02 (Shen Nuo Va) within the year, and with another core product KJ017 in a key phase of NDA approval, expected in the first half of 2026, the overall value of the company is undergoing a profound restructuring from project-driven to clinically-driven scenarios. Moving from "development" to "harvest": Financial breakthroughs and "pyramid-type" hematopoiesis logic Through the financial performance of Baoji Pharmaceutical in 2025, it can be seen that the company's revenue scale is achieving significant breakthrough growth with the initiation of commercialization processes. In 2025, the company's core revenue source was from the first batch orders of the SJ02 product delivered at the end of the year after obtaining NDA approval. With the penetration of SJ02 in the assisted reproduction market, and the expected product sales revenue and continued expanding external cooperation revenue from the anticipated approval of KJ017 (recombinant human hyaluronidase) in 2026, the company's revenue is expected to enter a long-term steady growth trajectory. The company recorded a loss of 395 million RMB in 2025, mainly due to continuous investment in research and development expenses. In 2025, Baoji Pharmaceutical's research and development expenses reached 248 million RMB, driving several pipeline candidates to obtain IND approvals and enter clinical stages, achieving multiple research and development milestones. In terms of cash flow, by the end of 2025, the company had a cash and cash equivalent reserve of 1.242 billion RMB, providing a solid financial guarantee for the company's subsequent clinical trials of core pipelines in China and overseas and applications. Analysis shows that, unlike many 18A biotechnology companies facing "survival anxiety," Baoji Pharmaceutical's core competitiveness lies in the company's "pyramid-type" pipeline layout. The company considers low clinical risk, relatively low investment, good competitive landscape, and solid market foundation species such as SJ02, KJ017 (recombinant human hyaluronidase), KJ101 (recombinant human plasminogen), and BJ044 (recombinant ustekinumab) as the "base" of the pyramid. The brilliance of this logic lies in the fact that once the base assets start generating profit and cash flow, Baoji Pharmaceutical can break free from relying solely on external financing and achieve a "two-legged" model of "using profits to support research and development," supporting continued investment in upper-level pyramid assets such as KJ103 (IgG degrading enzyme) or KJ015 (anti-HER2 bispecific antibody subcutaneous formulation) that have global disruptive potential. On the industrial manufacturing front, Baoji Pharmaceutical has chosen a relatively arduous but deeply defensive path. It is understood that Baoji Pharmaceutical insists on building in-house GMP-standard large-scale production facilities, currently owning a total of approximately 63,000 square meters of production facilities, and is accelerating the construction of a new 37,000-square-meter production facility. The new plant is expected to be put into operation in 2026. Although heavy asset investment will generate significant depreciation and amortization pressure in the short term, in the long run, this end-to-end production control capability creates a deep moat of "total cost leadership." By mastering all the tricks from base cell construction to high-density fermentation, Baoji Pharmaceutical can avoid being restricted by external production capacity limitations or CDMO price fluctuations, have cost confidence in future medical insurance price cuts or market price wars, ensure price competitiveness and supply stability of products in the commercialization phase, and create long-term social value in a green manufacturing framework. Pipeline depth driven by synthetic biology: Reshaping medical scenarios and tackling clinical urgent needs If financial reports are the "skeleton" of a company, then the research and development pipeline is the "soul" of a company. In Baoji Pharmaceutical's pipeline map, KJ017 (recombinant human hyaluronidase) is undoubtedly the most imaginative presence. It is understood that the core value of KJ017 lies in its ability to significantly shorten the subcutaneous drug delivery time from 1 to 3 hours of intravenous infusion to a few minutes by temporarily degrading hyaluronic acid in subcutaneous tissue. This tool that reshapes the medical experience directly targets the management pain points of hospitals in improving "turnover rate" and DRG cost control, greatly enhancing patient compliance. According to application progress, KJ017 was submitted for NDA in 2024 and successfully passed multiple on-site GCP and GMP inspections by the National Medical Products Administration in 2025, and is expected to be officially approved for marketing in the first half of 2026. As the only owner of a recombinant human hyaluronidase in NDA stage in China, Baoji Pharmaceutical has demonstrated a typical "water-selling" business model. The premium space of KJ017 is not limited to its independent drug sales volume, but is deeply linked to the broader trend of "subcutaneous transformation" in biologics in China and globally. Currently, the company has established formal partnerships with leading pharmaceutical companies such as WUXI BIO, Qianxin Biopharma, Shanghai RAAS Blood Products, and Shangjian, and has developed business plans with more than ten potential partners. With the expansion of the cooperative ecosystem, KJ017 will serve as a foundational technology platform to extract value from every blockbuster drug that transitions from intravenous to subcutaneous administration, building an increasingly sophisticated subcutaneous drug delivery ecosystem. Another core product, KJ103 (recombinant IgG degrading enzyme), demonstrates Baoji's explosive power in solving clinical urgent needs. It was learned that in August 2025, the company initiated a Phase III trial for desensitization before kidney transplantation and by March 2026, it was completed, with an NDA application expected to be submitted to regulatory authorities in the first half of 2026. The Phase II clinical data for KJ103 is considered excellent, achieving a 100% overall survival rate in patients with anti-GBM disease (a dangerous form of rapidly progressive glomerulonephritis) after 6 months of treatment, with 75% of patients preserving kidney function without the need for dialysis, significantly better than historical standard therapies. With this profound therapeutic effect, KJ103 has obtained Breakthrough Therapy Designation for both kidney transplantation desensitization and anti-GBM disease indications, not only demonstrating high recognition of the product's value by regulatory agencies but also indicating expedited review in the product's upcoming marketing approval, filling clinical gaps in transplantation medicine at an early stage. In addition, Baoji Pharmaceutical has strategically planned for the future with BJ045 and BJ047, among other antienzyme-degrading recombinant antibodies, aiming to exploit the commercial ceiling of the self-immunization track through a combination therapy strategy of "rapid relief + long-term control" alongside KJ103. This comprehensive layout from tool platform to therapeutic drug, and then to combination therapy showcases Baoji Pharmaceutical's engineering mindset in the field of synthetic biology. It is noted that the company simultaneously holds technological barriers in large-scale production lines of CHO cells, yeast, and Escherichia coli, enabling efficient expression and purification of complex recombinant protein drugs, ensuring products far exceed in activity, safety, and batch consistency compared to biochemical extraction products. Through the use of synthetic biology technology to replace traditional animal-derived extraction (such as KJ101 recombinant plasminogen and BJ044 recombinant ustekinumab), Baoji Pharmaceutical has not only fully resolved safety concerns related to animal-derived virus contamination but also achieved green manufacturing within the ESG framework by shortening fermentation cycles and low-energy production. In summary, Baoji Pharmaceutical in 2025 is at a historic turning point. With a strategic focus on clinical value, the company is continuously developing differentiated drugs with global potential in high-demand medical areas. With the rapid scaling of SJ02 under Anhui Anke Biotechnology, the expected market approval of KJ017, and the progress of the critical clinical trial for KJ103, Baoji Pharmaceutical has crossed the uncertainties of the early stages and is poised to shift from steady "slope-type growth" to explosive value growth. For the capital market, Baoji Pharmaceutical is not just a biotechnology company, but a hardcore platform that has mastery over the future of biological medical drug delivery and core manufacturing capabilities. Its long-term investment value is increasingly highlighted as the pipeline enters a period of comprehensive harvest.