A 70% Price Cut Yet Still Growing! How Does Luokang Pharma Navigate the Biotech Winter?

AI Inquiry · How does Kangfang Biotech maintain high growth after a 70% reduction in medical insurance prices?

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

As a leading enterprise in the field of domestic innovative drugs, Kangfang Biotech (9926.HK) once caused a stir in the global tumor treatment arena with its pioneering PD-1/VEGF bispecific antibody, Ivosimab (brand name: Edaravone®). This star drug, which defeated the “king of drugs” Pabrolizumab in head-to-head comparisons, carries the dream of bringing domestic innovation drugs to the world stage. Under the dual pressures of policy adjustments in medical insurance and intensified industry competition, it is undergoing rigorous commercialization.

From clinical breakthroughs to industry leadership, Ivosimab has reshaped the global tumor treatment landscape with its solid strength. Its rise is not accidental but stems from Kangfang Biotech’s long-term deep cultivation and precise deployment in bispecific antibody technology. As the world’s first approved “tumor immunotherapy + anti-angiogenesis” synergistic bispecific antibody, Ivosimab’s clinical value sets industry standards. Data from the September 2024 head-to-head Phase III HARMONi-2 study show that its monotherapy for PD-L1 positive non-small cell lung cancer (NSCLC) achieved an objective response rate of 50%, significantly surpassing Pabrolizumab’s 38.5%, with statistically significant progression-free survival benefits. This breakthrough not only challenges Pabrolizumab’s benchmark status in global tumor treatment but also ignites a wave of R&D around PD-1/VEGF targets, pushing domestic innovative drugs from “following” to “racing” and even “leading.”

The robust clinical strength gives Ivosimab a first-mover advantage in commercialization. In 2022, Kangfang Biotech signed an overseas licensing deal worth up to $5 billion with Summit Therapeutics, with an upfront payment of $500 million. This single drug supported half of the company’s market value at the time, setting a record for domestic innovative drug licensing overseas. Market expectations painted a clear growth blueprint: domestic annual treatment costs around 160,000 yuan, aiming for 5 billion yuan in annual sales by 2025, reaching peak sales and 2 billion yuan in annual profit by 2028. These projections are based not only on its excellent clinical efficacy but also on high market recognition of the commercialization potential of domestic innovative drugs.

However, the path of innovative drug commercialization is never smooth. Policy adjustments and intensified industry competition are real challenges Kangfang Biotech must face. At the end of 2024, Ivosimab was included in the national medical insurance catalog. Starting January 1, 2025, the price for the 100mg specification was sharply reduced to 736 yuan, a drop of over 68% from the previous 2,299 yuan. The annual treatment cost for patients plummeted from around 160,000 yuan to about 32,000 yuan. This “price-for-volume” policy adjustment temporarily compressed profit margins and made market performance expectations more rational.

Looking at performance, Kangfang Biotech’s revenue in the first half of 2025 reached 1.402 billion yuan, a 49.20% increase year-over-year, driven mainly by sales growth after insurance coverage. However, due to optimistic market expectations earlier, the full-year sales target for Ivosimab and industry forecasts still show some gaps. Nomura Securities estimates that Kangfang Biotech’s total revenue for 2025 will be about 3.3 billion yuan, with about 1.8 billion yuan in sales in the second half, indicating weaker overall profitability. Industry experts note that short-term fluctuations are typical in the early stages of innovative drug commercialization. Profit compression from price cuts, high R&D costs, and capacity depreciation are common issues. In the first half of 2025, the company’s R&D expenses increased to 731 million yuan, and combined with losses from Summit equity investments, net losses widened to 588 million yuan.

Despite short-term pressures, Kangfang Biotech’s commercialization foundation remains solid. The company has expanded its sales team to over 1,200 people, continuously improving channel coverage. In February 2026, it signed an exclusive distribution agreement with China Resources Pharmaceutical, covering over 8,000 primary healthcare institutions, with an expected additional sales of 120,000 to 150,000 units. Meanwhile, ongoing policy optimization supports sales growth. The 2026 revised medical insurance catalog added indications for Ivosimab as a first-line treatment for PD-L1 positive NSCLC, maintaining the price at 736 yuan per dose and further expanding patient coverage.

Industry competition is another challenge for Ivosimab, but it also pushes Kangfang Biotech to build a more comprehensive product matrix and competitive barriers. Major international giants like Merck, BioNTech, and Pfizer are actively developing PD-(L)1/VEGF bispecifics through licensing or in-house R&D; domestic companies such as Shenzhou Cell, Rongchang Biotech, and Junshi Biosciences are also in late-stage clinical trials. Competition is shifting from single-drug efficacy to systematic “IO + ADC” combination therapies.

In response, Kangfang Biotech is not solely relying on a single product but is strengthening its pipeline to build a moat. Ivosimab continues to advance multiple indications. In October 2025, its combination therapy for advanced squamous NSCLC was published in The Lancet, showing a median progression-free survival of 11.14 months, significantly better than the 6.9 months in the control group. This further consolidates its clinical advantage. The company is also accelerating ADC 2.0 pipeline development, promoting synergy between bispecific antibodies and ADC technology to create a treatment system covering multiple tumor types, ensuring long-term growth.

Breaking into overseas markets is another key strategy for Kangfang Biotech to disrupt domestic competition. On January 30, 2026, its BLA application for Ivosimab combined with chemotherapy for third-generation EGFR-TKI-treated EGFR-mutant NSCLC was accepted by the FDA, with a PDUFA date set for November 14, 2026. This is Ivosimab’s first overseas indication, marking its official entry into the world’s largest pharmaceutical market and potentially opening new revenue streams. According to the licensing agreement, upon approval, Kangfang Biotech will receive milestone payments and a 15% sales share.

Short-term performance fluctuations and stock price adjustments do not obscure Kangfang Biotech’s long-term value. In August 2025, news of the founder’s cash-out caused short-term stock volatility. However, from a financial standpoint, the company has ample cash reserves—raising 3.493 billion HKD through a share placement in September 2025, with net cash on hand reaching 5.8 billion HKD—providing strong support for R&D and market expansion. Nomura Securities forecasts that in 2026, the company’s revenue will grow to 5.3 billion yuan, with a gross margin of 84.5%, and net profit potentially reaching 954 million yuan, indicating a clear trend of profit recovery.

For innovative biotech companies, core competitiveness always stems from clinical value and technological barriers. Kangfang Biotech’s growth journey reflects the development of the domestic innovative drug industry—from technological breakthroughs to policy adaptation, from domestic deployment to global expansion—each step accompanied by challenges and opportunities. While price cuts in insurance may seem to squeeze profits, they accelerate drug adoption, benefiting more patients and prompting companies to optimize cost structures and improve operational efficiency. Industry competition, though intense, also compels firms to increase R&D investment, refine pipelines, and enhance global competitiveness.

At this pivotal point in 2026, Kangfang Biotech is transitioning from a “story-driven” phase to a “cash flow validation” stage. The domestic sales growth of Ivosimab, FDA approval progress, and ADC pipeline achievements are three key catalysts that will jointly drive the company’s performance recovery. Short-term adjustments are not the end but a new starting point for crossing industry cycles and achieving high-quality development.

As a benchmark for domestic innovative drugs, Kangfang Biotech’s exploration not only concerns its own development but also embodies industry upgrading expectations. In the future, with breakthroughs in overseas markets, product matrix optimization, and commercialization capabilities, Kangfang Biotech is poised to occupy a more prominent position in global tumor treatment, anchored by clinical value, and to write a new chapter of domestic innovation drugs from “following” to “leading.”