Prospects for New Stocks | Core products have received orders from Gilead; can Qinhao Pharmaceutical secure a ticket to the Hong Kong stock market?

In August 2026, the innovative drug sector continues to maintain a high level of prosperity. Recently, Qinhao Pharmaceutical (Suzhou) Co., Ltd. (hereinafter referred to as Qinhao Pharmaceutical) submitted a listing application to the Hong Kong Stock Exchange, with Huatai International serving as the exclusive sponsor. This marks the company's second attempt to enter the Hong Kong stock market, following its initial submission in January 2026. As an 18A innovative pharmaceutical company, the core product GH31 has received financial endorsement from multinational pharmaceutical firms, and its pipeline focuses on the "undruggable" RAS pathway and the blue ocean track of "synthetic lethality," highlighting its scarce value; however, the company's fastest progress product is still in clinical phase II, and the subsequent efficacy results remain uncertain, which poses a risk factor that cannot be ignored. Authorized revenue drives short-term turnaround, while R&D investment continues to increase. From the financial data, Qinhao Pharmaceutical currently generates no revenue from commercial products, with income primarily coming from external licensing collaborations. For the fiscal years 2024, 2025, and the five months ending on May 31, 2026, the company's revenue was approximately 4.69 million, 1.27 million, and 558 million RMB (hereinafter the same), respectively. Notably, the revenue from the first five months of 2026 saw a significant increase, mainly due to an exclusive external licensing arrangement with Gilead Sciences for the GH31 project, where the company received an upfront payment of 80 million USD (before tax, approximately 557.4 million RMB). The changes in gross profit align with the revenue trends. The gross profit for 2024 was approximately 2.31 million RMB, dropping to around 150,000 RMB in 2025, while the gross profit for the first five months of 2026 exploded to 556 million RMB, also primarily contributed by the upfront payment from Gilead. On the profit side, the company reported a net loss of 152 million RMB in 2024, which narrowed to 144 million RMB in 2025. In the first five months of 2026, aided by the large upfront payment, the company achieved a net profit of 355 million RMB, marking a significant turnaround. However, it is noteworthy that during the same period, administrative expenses reached 73.192 million RMB, far exceeding the full-year figures of 23.596 million RMB in 2024 and 29.292 million RMB in 2025, primarily impacted by stock incentives and financing-related costs. In terms of R&D, the expenditure was 103 million RMB in 2024, 79.196 million RMB in 2025, and 37.758 million RMB for the first five months of 2026, reflecting a year-on-year increase of 35.5%. The company also warned that as clinical trials progress, future R&D expenses will increase significantly, with an average cash burn rate expected to reach 4.3 times the level of 2025. Regarding cash flow, the net cash outflow from operating activities was 107 million RMB in 2024, 81.66 million RMB in 2025, and turned into a net inflow of 420 million RMB in the first five months of 2026 due to the payment received. As of June 30, 2026, the company's cash and cash equivalents amounted to approximately 344 million RMB, with financial assets accounted for at fair value of about 301 million RMB, and interest-bearing bank borrowings of approximately 47.798 million RMB. The liabilities and financing pressures should not be overlooked. As of May 31, 2026, the company's net liabilities stood at 379 million RMB, with net current liabilities of 412 million RMB and redemption liabilities for equity shares of about 996 million RMB. The company's early-stage betting agreements stipulate that if it fails to complete a qualifying IPO by December 31, 2027, investors have the right to redeem shares at principal plus 8% annual interest, adding time pressure to the company's listing process. Pipeline focus on RAS pathway and synthetic lethality. Founded in May 2014, Qinhao Pharmaceutical is a biopharmaceutical company focusing on targeted therapies in the field of oncology, building a pipeline of self-developed innovative drug candidates centered on the RAS signaling pathway and synthetic lethality mechanisms. According to reports, the company's pipeline includes eight candidate drugs, four of which are in clinical stages, and one (GH31) has received IND approval from both the National Medical Products Administration of China and the FDA in the United States, with three others in the preclinical stage. The core assets GH21 and GH31 constitute two major pillars of the company's valuation. RAS Pathway: Challenging "undruggable" targets, GH21 ranks second globally in progress. The RAS gene is a key regulatory switch for human cell growth, and once mutated, cells will continue to proliferate, ultimately leading to tumors. However, due to the smooth surface of its protein and the lack of drug-binding sites, RAS has long been regarded as an "undruggable" target. According to data from Zhiqu Consulting, approximately 19.0% of solid tumors globally were associated with RAS mutations by 2025, with KRAS mutations accounting for 90% of all RAS mutations, making it a major carcinogenic driver. Currently, several KRAS G12C inhibitors have been approved for the market, yet there remains a significant unmet need in the broader field of RAS pathway inhibition. Qinhao Pharmaceutical's RAS signaling pathway pipeline is exemplified by GH21, GH55, and the preclinical candidate GH58. GH21 is an allosteric SHP2 inhibitor, ranking second in global clinical progress, currently in phase II clinical trials, primarily for treating KRAS G12C mutant solid tumors and third-generation EGFR-TKI-resistant non-small cell lung cancer (NSCLC). As SHP2 is a critical node connecting upstream RTK signals to the RAS pathway, there are currently no approved drugs globally, highlighting its significant potential but also the high difficulty of development. The design highlight of GH21 lies in its allosteric inhibition mechanismavoiding the off-target effects and poor membrane permeability issues associated with traditional active-site inhibitors by binding to and stabilizing the inactive conformation of SHP2 for inhibitory action. In vitro and in vivo studies have shown that GH21 has limited off-target effects on non-target sites, as well as favorable metabolic properties and oral bioavailability. In a phase I trial as a monotherapy, GH21 has shown some preliminary efficacy signals: the disease control rate (DCR) for NSCLC patients with KRAS G12C mutations was 60% (6/10), 57% for patients with EGFR mutations or high expression NSCLC (4/7), 100% for head and neck squamous cell carcinoma patients (4/4), and 75% for esophageal cancer patients (3/4). In terms of safety, adverse events and various tests indicate that GH21 is well-tolerated. However, since the phase I trial primarily focused on safety exploration, this data is still insufficient to confirm efficacy, and the company's subsequent R&D focus has shifted towards combination therapies. According to data from Zhiqu Consulting, GH21 can be combined with various drugs including KRAS inhibitors, MEK inhibitors, EGFR-TKIs, and PD-1 inhibitors, covering multiple indications such as NSCLC, colorectal cancer, and pancreatic cancer. Currently, the company is conducting a 1b/2 phase trial in China (in combination with the GDC-0879 developed with Zhongtai Tianqing Pharmaceuticals) and a 2 phase trial targeting patients resistant to KRAS G12C inhibitors, alongside a 1b/2 phase trial exploring a combination regimen with Osimertinib (supplied by AstraZeneca). However, these trials have no critical data readouts yet: the 2 phase trial for resistant patients has only enrolled 5 individuals, and the Osimertinib combination trial has enrolled 36, both lacking interim analysis results. The company plans to complete the 2 phase trial for resistant patients by Q4 2027 and submit a conditional new drug application in 2028, but there is considerable uncertainty regarding whether these timelines will be met. It is noteworthy that the regulatory authority's standards for conditional approval are quite stringent, requiring drugs to be used for treating life-threatening diseases for which effective treatment methods are lacking, along with data demonstrating their efficacy and clinical value. Whether GH21 can meet these requirements remains uncertain. Even if granted conditional approval, the company will need to complete confirmatory clinical trials, and should it fail to demonstrate clinical benefit subsequently, it may face risks of license withdrawal. In terms of commercialization, GH21 has granted exclusive global development and commercialization rights (excluding China, Hong Kong, Macau, and Taiwan) to HUYABIO International, with a potential total transaction value of up to 282 million USD. In other developments in the RAS pathway, GH55 is a dual mechanism ERK1/2 inhibitor currently undergoing a phase I clinical trial as a monotherapy in China, expected to complete in Q4 2026. There are currently no ERK inhibitors approved for the market, and GH55 is the second-fastest ERK inhibitor candidate in clinical development in China. GH21 and GH55 regulate RAS upstream and downstream signals, respectively, and have shown synergistic effects in preclinical studies. The company has received IND approval for combination therapy and completed the first patient enrollment in March 2026. GH58, meanwhile, is a PAN-RAS inhibitor in the preclinical stage, with plans to submit an IND application in 2028. In terms of market landscape, despite the absence of approved drugs for the SHP2 target, competition is already quite fierce. Novartis's TNO-155 is the world's first high-selective allosteric SHP2 inhibitor to enter clinical trials and has progressed to phase II across multiple indications; domestically, the JAB-3312 combination therapy has entered phase III registrational trials, making it the first SHP2 inhibitor to reach this stage globally, with Tianfeng previously predicting its approval in China in 2026. However, developing SHP2 inhibitors is not without challenges: another allosteric SHP2 inhibitor, JAB-3068, had advanced to phase II trials but was terminated in 2023; Revolution's RMC-4630 was also returned by Sanofi, and its combination therapies with the KRAS G12C inhibitor Lumakras and MEK inhibitor cobimetinib did not meet ideal outcomes. Moreover, since SHP2 is not a tumor driver itself, the single-agent activity is limited (for instance, the objective response rate of Novartis's TNO-155 in phase I was 0%), leading the industry to focus almost entirely on combination therapies. With existing competitors for the same target entering phase III, although GH21 ranks second in global clinical progress, the advantage is not significant, and there is considerable uncertainty in the market landscape. Synthetic lethality: A vast blue ocean track, GH31 receives endorsement from Gilead. It is understood that the mechanism of synthetic lethality is not complicated: cells can survive with either of two genes individually inactivated, but simultaneous inactivation leads to cell death. Tumor cells inherently have defects in a certain gene pathway, and synthetic lethality therapy aims to precisely block the alternative pathways they rely on to selectively kill tumor cells while preserving normal cells. While many promising targets exist in this area, only PARP inhibitors have successfully been commercialized over the past decade, and the PARP space has become notably crowded, with seven products approved globally. Qinhao Pharmaceutical has several candidate drugs laid out in the area of synthetic lethality: GH31 (MAT2A inhibitor, IND approved in China and the U.S.), GH56 (MTA synergistic PRMT5 inhibitor, phase I), GH2616 (KIF18A inhibitor, phase I), and two clinical preclinical products. Among these, GH31 and GH56 target the synthetic lethality axis of MTAP deletion. According to Zhiqu Consulting data, MTAP deficiency exists in about 15% of solid tumors, with higher prevalence in glioblastoma (58%), pancreatic cancer (40%), and adult T-cell leukemia (14%), while in colorectal cancer, it is about 2%, indicating considerable market potential. In terms of R&D progress, GH2616 is the third KIF18A inhibitor globally to enter clinical trials. The clinical data for the MAT2A target that GH31 aims for is still relatively limited, with a similar domestic drug, ISM3412, administering its first patient dose in phase I by June 2025, slightly ahead of Qinhao Pharmaceutical. However, GH31 has been successfully licensed to Gilead, garnering an upfront payment of 80 million USD and potential milestone payments of up to 1.45 billion USD, which to some extent validates the value of the target. Moving forward, the company's research focus in the realm of synthetic lethality may shift towards GH56 and GH2616, with the phase I trials for both drugs expected to be completed in the second or third quarter of 2027. In summary, overall, Qinhao Pharmaceutical's R&D pipeline possesses differentiated scarce valueone being the long-term "undruggable" RAS-MAPK pathway, and the other being synthetic lethality, which remains a cutting-edge blue ocean track, with both hitting the core trends of global innovative drugs. The core product GH31 has received endorsement from Gilead, and GH21's clinical progress ranks in the global first tier, highlighting the company's potential compared to typical 18A innovative pharmaceutical companies. However, investors need to cautiously assess the associated risks. The uncertainty in the R&D of the RAS pathway and synthetic lethality fields that the company is pursuing is relatively high, and the fastest progress is merely phase II, with commercialization still far off, making it difficult to change the ongoing loss situation in the short term. Additionally, the time pressure from the betting agreement, the fierce competition landscape for the SHP2 target, and regulatory approval uncertainties mean that whether the company can realize its pipeline value on schedule still requires time and data for validation.