ALEBUND-B (09637) Mid-Year Report Deep Dive: The Compounding Growth of the Nephrology Sector

On August 26, Libang Pharmaceutical (09637) released its first interim results since going public, delivering an impressive performance: revenue has surged to 8.6 times that of the same period last year. Even more noteworthy is that this report arrives at a time when global innovations in nephrology drugs are accelerating commercialization, and high-quality assets are continuously being re-evaluated by capital. The path represented by Libang, a Chinese vertical specialty Biopharma, is thus gradually becoming clearer. The U.S. nephrology specialty pharmaceutical company Travere Therapeutics reported its second-quarter financial results for 2026, showing that its core product FILSPARI achieved net sales of $141.1 million in the U.S. for the quarter, a 96% year-over-year increase; the launch of the new indication for FSGS and the growth of the IgA nephropathy business contributed to the initiation of 2,012 new patients. After the earnings release, the company's stock price jumped approximately 14% in after-hours trading. In April of this year, FILSPARI was approved by the FDA for the treatment of FSGS, becoming the first drug approved for this long-neglected indication. Travere has demonstrated that by clearly targeting unmet needs in nephrology innovation, it has the opportunity to establish a complete pathway from R&D to regulatory approval and market access, becoming a scalable commercial asset. This trend is not an isolated case. In 2023, Novartis acquired Chinook Therapeutics for a total deal value of up to $3.5 billion; in 2024, Calliditas, which has the IgA nephropathy product Nefecon, was acquired by Asahi Kasei for approximately $1.1 billion; Ardelyx's innovative NHE3 inhibitor XPHOZAH was approved by the FDA in 2023, opening a new treatment path for hyperphosphatemia in dialysis patients that differs from traditional phosphate binders. These cases collectively indicate that when the pricing of innovative drugs aligns with clinical value, Biopharma companies that focus on vertical disease areas and possess ongoing R&D and specialized commercialization capabilities are gaining greater industry recognition. Within this global context, Libang's first interim report outlines the growth profile of a Chinese vertical specialty Biopharma. Overseas examples verify that innovation in nephrology can become a "big business." A global burden of disease study published in The Lancet indicates that in 2017, there were approximately 697.5 million patients with chronic kidney disease worldwide, with a prevalence rate of about 9.1%, resulting in approximately 1.2 million related deaths; China alone has about 132.3 million patients. Beyond the vast patient base, chronic kidney disease is characterized by a long disease course, numerous complications, and the need for long-term treatment, leading patients to experience proteinuria, declining renal function, renal anemia, hyperphosphatemia, and even dialysis, thus creating a lasting demand for continuous treatment across different stages of the disease. The International Society of Nephrology points out that there are significant gaps in the early identification, standardized treatment, and accessibility of renal replacement therapy for kidney disease globally; the KDIGO 2024 guidelines further emphasize the need for risk stratification, early intervention, and management of complications to slow disease progression. This suggests that industry increment comes not only from patient numbers but also from improved diagnostic and treatment penetration rates and upgrades in treatment regimens. Travere has validated the commercialization potential of rare glomerular disease products; the mergers of Calliditas and Chinook reflect the strategic value of differentiated renal assets; Ardelyx has demonstrated that new mechanisms can open up new product categories beyond traditional therapies. Libang's differentiation lies in its approach, as it has not bet on a single indication but instead has established a gradient matrix encompassing "commercialized products core varieties in the registration phase global clinical assets cutting-edge pipelines for disease modification." The first interim report presents double-channel value realization. During the reporting period, Libang Pharmaceutical achieved operating revenue of RMB 104.2 million, growing to 8.6 times that of the same period last year. Breaking down the revenue structure, two types of revenues confirm the company's dual growth capabilities: Meixinluo contributed product sales revenue of RMB 24.8 million, up approximately 105% year-over-year, validating the companys ability to enter hospitals, promote academically, and implement commercialization in the nephrology field; revenue from licensing agreements outside Greater China for AP306 brought in RMB 79.3 million, marking the market-based valuation of the company's R&D assets by overseas industrial partners. The differing nature of these two revenue streams addresses two core propositions in the growth path of biotech: whether commercialization can achieve sustained product uptake within hospitals, and whether R&D can secure global market recognition for innovative pipelines. While licensing revenue is not recurring product sales revenue, its value lies in the ability to convert long-term R&D assets into income and industry resources early. Libang retains all rights to AP306 in Greater China, while advancing overseas development through R1 Therapeutics, creating a lightweight path for international expansion characterized by "retaining core markets, introducing global resources, and sharing development costs." As of the end of the reporting period, the company had approximately RMB 1.393 billion in cash and time deposits, providing ample financial reserves to support the registration application and commercialization preparations for AP301, the global clinical advancement of AP306, and the concurrent development of cutting-edge pipelines such as AP303 and AP308. This distinction marks the core divide between Biopharma and purely R&D-oriented biotech: a company's value no longer relies solely on clinical data driving growth, but increasingly extends to product sales, asset licensing, global cooperation, and the creation of a diversified closed loop of ongoing R&D. From "today's revenue" to "the space of the day after tomorrow." Libangs pipeline layout can be understood as a clearly layered value growth curve. Meixinluo represents "today." Its sales revenue has doubled year-on-year, not only providing stable cash flow but also helping the company to complete the establishment of hospital coverage, academic recognition among doctors, and market promotion systems in nephrology ahead of schedule. Upon the launch of self-developed products in the future, this mature specialty channel network can be directly reused, significantly shortening the new product uptake cycle. AP301 represents "recent fulfillment." Positioned as the best-in-class oral iron phosphate binder, AP301 is used for treating hyperphosphatemia in dialysis patients and possesses differentiated advantages such as high phosphate-binding efficiency, no need for chewing, and minimal gastrointestinal absorption. As of August 2026, its application for listing as a Chinese new drug has been accepted by the National Medical Products Administration, and the global Phase III multi-regional clinical trials have completed recruitment of all patients. The valuation logic of AP301 is gradually shifting from "clinical success probability" to "review and approval process, listing rhythm, and commercialization growth." AP306 represents "product upgrades and globalization." It can simultaneously inhibit three key phosphate transport proteins: NaPi-IIb, PiT-1, and PiT-2, functioning at the source of intestinal phosphate absorption. Completed Phase II clinical data indicates that AP306 can keep average blood phosphate levels within the better range recommended by KDIGO, maintaining a daily dose of approximately 300 mg, which is only about one-sixteenth of the positive control drug sevelamer used in the trial. Currently, this product has been granted breakthrough therapy designation by the National Medical Products Administration, and the global Phase IIb clinical trial has randomized and dosed the first subject. The commercialization practices of Ardelyx have validated that mechanisms beyond phosphate binders can receive both regulatory and clinical recognition in the hyperphosphatemia market. AP306, employing a different mechanism targeting various phosphate transport proteins, has the potential to drive further product iterations in this therapeutic area. AP303 and AP308 represent Libang's "long-term growth potential." AP303 is an oral dual PPAR agonist aimed at delaying or blocking the progression of chronic kidney disease, covering multiple major indications such as FSGS, DKD, IgA nephropathy, and ADPKD. It has completed Phase I clinical trials, and applications for Phase II clinical trials in both China and the U.S. have been approved, with preparations for the trial startup underway. Travere's rapid uptake in the FSGS and IgA nephropathy markets has already proven that once differentiated drugs for glomerular diseases complete clinical validation, they can swiftly open up specialty markets. While AP303 is still in the earlier stages, its strategy for basket development covering multiple nephropathies with high proteinuria provides ample indication space for subsequent clinical concept validation. AP308 is an engineered recombinant IgA protease that attempts to directly cut and eliminate generated pathogenic IgA complexes. Compared to existing therapies that reduce IgA generation or inhibit downstream damage, its mechanism is closer to the disease's root causes, aiming for a functional cure for IgA nephropathy. Related preclinical research results have been published in Kidney International, validating the therapeutic potential. From the commercialized Meixinluo, to the upcoming AP301, and the globally clinical AP306, as well as the disease modification directions of AP303 and AP308, Libang Pharmaceutical has built a clearly tiered product lineup. This gradient pipeline layout allows the company's long-term value to be decoupled from the success or failure of any single product and reduces reliance on individual clinical milestones for growth catalyst. The real advantage of vertical specialties is that capabilities can compound. The core value of vertical specialty Biopharma has never been simply the accumulation of products but rather the ongoing reuse and compound growth of R&D, clinical, and commercialization resources within the same disease area. Libang's different products target highly overlapping end-users, primarily concentrated among nephrology specialists, dialysis centers, and the long-term management of chronic kidney disease patients. The hospital network established by Meixinluo can directly support the market promotion of AP301; the clinical resources and expert networks accumulated in the hyperphosphatemia field can assist in the clinical advancement of AP306; and the professional brand recognition formed among nephrologists and research institutions will support the subsequent clinical development of AP303 and AP308. As the product matrix continues to grow, individual channels no longer serve only a single drug; the R&D team's understanding of disease mechanisms, clinical endpoints, and patient recruitment can be reused across pipelines. This does not result merely in simple scale expansion but in a continuously strengthening lever for specialty operations. This pattern has also been validated by leading overseas specialty pharmaceutical companies like Travere, Calliditas, and Ardelyx: once companies in vertical tracks successfully navigate the clinical and commercialization closed loop of their first product, subsequent growth is driven not only by new product sales increments but also by the reuse value of consolidated R&D understanding, doctor networks, and market access capabilities. Long-term shareholders are increasing their stakes, signaling to the capital markets that this path is beginning to be recognized. The re-evaluation of global renal assets is beginning to resonate domestically, clearly reflected in the stock price and capital activities of Libang Pharmaceutical. On August 5, following Travere's robust quarterly performance, Libang Pharmaceutical's stock surged over 15% during trading before closing up 13.07% at HKD 33.22. Although the two companies' products are not completely overlapping, the market's positive response indicates that investors are starting to reassess the value of comparable scarce assets in China based on the commercialization progress of global nephrology innovation drugs. The continuous accumulation by long-term shareholders has released a clearer signal of confidence. According to public equity disclosures, on July 17, TENCENT increased its stake in Libang Pharmaceutical by 238,500 shares, at an average price of approximately HKD 27.97 per share, involving a total of about HKD 6.6701 million. After the increase, its latest holdings reached approximately 22.9162 million shares, raising its ownership proportion to about 10.09% of the issued H shares. Tencent is not a short-term investor who entered after the IPO but is an early long-term shareholder that has accompanied the company through multiple rounds of financing. Its continued increase in holdings in the secondary market following Libang's IPO essentially represents a commitment of real capital to express ongoing confidence in the company's future registration applications, clinical development, and commercialization prospects. In conclusion, the Chinese model of vertical specialty Biopharma. Travere, Calliditas, Ardelyx, Akebia, and Chinook have taken different paths to growth: some have relied on heavyweight products to rapidly generate revenue, others have rewritten treatment paradigms with entirely new mechanisms, and still others have become targets for acquisitions by industry giants thanks to their high-quality pipelines. Libang does not need to replicate any of these companies. It is forming a growth path that is more uniquely its own: building a commercialization foundation with Meixinluo, opening a recent fulfillment window with AP301, linking global development resources with AP306, and extending toward disease modification and root cause treatment with AP303 and AP308. The significance of this interim performance goes beyond the 8.6-fold growth figure; it lies in the simultaneous shaping of three core capabilities: market-validated specialty commercialization capability, innovation asset value creation recognized by overseas industry, and ongoing R&D capability covering the entire disease life cycle. When a biotech company simultaneously possesses stable product revenues, near-commercial core assets, deeply integrated global cooperation, a clearly tiered long-term pipeline, and ample cash reserves, its value positioning has undoubtedly completed a leap. A globally competitive vertical specialty Biopharma is quietly rising in the field of Chinese nephrology innovation.