Key takeaway
The company achieved a revenue of RMB 2.06 billion in 2025, representing a year-on-year increase of 6.5%, with pharmaceutical sales revenue accounting for RMB 540 million. The reported figures for Sac-TMT were impacted by the inventory price adjustment after its inclusion in the NRDL in the second half of the year, while its full-year commercialization performance met expectations. In 2025, the company reported positive clinical data for multiple products, including Sac-TMT. Partner MSD continued to advance global clinical trials for Sac-TMT, with 17 Phase III clinical trials currently underway. Overseas data is expected to be read out as early as 2026. The company currently has four marketed products and one in the NDA stage. We believe that as multiple products advance through clinical development, the company's R&D capabilities in the ADC field will gain further recognition.
Event
On March 23, Kelun-Biotech released its 2025 annual report, reporting an operating revenue of RMB 2.06 billion, a year-on-year increase of 6.5%. This included pharmaceutical sales revenue of RMB 540 million and licensing/collaboration agreement revenue of RMB 1.50 billion. The company reported a loss of RMB 380 million for the period, representing a year-on-year increase of 43.2%. The adjusted loss was RMB 210 million, up 78.3% year-on-year. Cash and financial assets totaled RMB 4.56 billion, reflecting a 48.1% year-on-year growth.
Quick Take
Sales of the core product Sac-TMT met expectations, and its inclusion in the NRDL is expected to accelerate volume growth.
In 2025, the company achieved an operating revenue of RMB 2.06 billion, a year-on-year increase of 6.5%, with pharmaceutical sales revenue reaching RMB 540 million. The reported figures for Sac-TMT were affected by the inventory price adjustment following its inclusion in the NRDL in the second half of the year, while actual sales in H2 2025 still showed quarter-on-quarter growth compared to H1. Meanwhile, the company expects commercialization to accelerate significantly by 2026.
In November 2024, the company's core product Sac-TMT was officially approved for marketing. To date, Sac-TMT has been approved in China for the treatment of EGFRm non-small cell lung cancer in the 2L/3L setting, late-line triple-negative breast cancer, and 2L+ HR+/HER2- breast cancer indications. In December 2025, the company announced that three of its products—Sac-TMT , tagitanlimab, and Cetuximab N01—were included in the National Reimbursement Drug List (NRDL) for the first time. The indications included for Sac-TMT are: 1) locally advanced or metastatic non-squamous non-small cell lung cancer with EGFR mutations that has progressed following treatment with EGFR-TKI and platinum-based chemotherapy; 2) unresectable locally advanced or metastatic triple-negative breast cancer in patients who have received at least two prior systemic therapies.
Since 2025, the company has established a commercialization team of over 600 members, serving 300+ cities and 1,200+ medical institutions across China. The team structure encompasses marketing, medical affairs, strategic operations, and more, with projected growth to exceed 800 members by 2026. In terms of channel distribution, core distributors (Sinopharm, Shanghai Pharma, China Resources Pharmaceutical, etc.) account for over 90% of the total market share. The company has established 400+ dual-channel pharmacies and added nearly 200 DTP pharmacies in January 2026. With an expanding sales team and a well-developed distribution network, the company's products are expected to experience accelerated sales growth in 2026.
Sac-TMT Phase III clinical trials are reading out results successively, with a comprehensive pipeline of innovative treatments
In 2025, the company presented clinical data for multiple core products at the ESMO Annual Meeting. Among them, two Sac-TMT clinical studies were selected for oral presentations: 1) A Phase III clinical trial of SKB264 versus platinum-based doublet chemotherapy in patients with EGFR-mutant NSCLC who progressed after EGFR-TKI treatment. Compared with chemotherapy, Sac-TMT demonstrated statistically significant and clinically meaningful improvements in both PFS and OS, reaffirming its best-in-class potential; 2) A Phase III clinical trial of SKB264 versus investigator's choice of chemotherapy in previously treated HR+/HER2- BC patients, showing superior clinical outcomes to chemotherapy. Additionally, a Phase III clinical trial of SKB264 in chemotherapy-naive HR+/HER2- BC patients is currently underway. In November 2025, the company announced that the Phase III clinical trial of SKB264 in combination with Keytruda for PD-L1-positive NSCLC showed statistically and clinically significant improvements in PFS, with a positive trend observed in OS. This indication received Breakthrough Therapy Designation from the CDE in January 2026.
Currently, the company has a robust pipeline of innovative products. Other clinical-stage pipelines include: 1) SKB315 (CLDN18.2 ADC), currently in Phase 1b clinical trials for indications including GC/GEJC/PDAC; 2) SKB410/MK-3120 (Nectin-4 ADC), for which MSD has initiated four global Phase 1/2 clinical trials to treat advanced solid tumors (including bladder cancer). 3) SKB571/MK-2750, a novel bispecific ADC being co-developed with MSD, primarily targets various solid tumors such as lung cancer (LC) and gastrointestinal (GI) cancers, with Phase II clinical trials currently underway in China. 4) SKB518, a novel ADC drug targeting a potential first-in-class target, is currently undergoing Phase II clinical trials in China. 5) SKB535/MK-6204, a novel ADC drug targeting a potential first-in-class target, is currently undergoing Phase I clinical trials in China. 6) SKB445, a novel ADC drug targeting a potential first-in-class target, is currently undergoing Phase I clinical trials in China. 7) SKB107, an RDC drug targeting bone metastasis in solid tumors co-developed with the Affiliated Hospital of Southwest Medical University, is currently in Phase I clinical trials.
MSD Phase III clinical trials underway, SKB264 overseas data to be read out soon
SKB264 is currently the most advanced product in the company's collaboration pipeline with MSD. In May 2022, the company entered into its first agreement with MSD, licensing out the overseas rights of SKB264. The company received a total of USD102 million in upfront payments and potential milestone payments of up to USD1.16 billion. SKB264 is being developed as MK-2870 in MSD's pipeline. Starting in 2025, MSD will initiate Phase III clinical trials for ovarian cancer and TNBC, with 17 Phase III clinical trials currently planned. MSD's planning and rapid development of MK-2870 as a monotherapy or in combination therapy further demonstratesthe company's confidence in the product. Overseas clinical data is expected to be read out sequentially starting in 2026.
New pipelines continue to make progress, with abundant catalysts expected by 2026
Looking ahead to 2026, the company's core product SKB264 in combination with Keytruda for first-line PD-L1-positive NSCLC is expected to submit a BLA, with related clinical data likely to be presented at ASCO. Additionally, the Phase III study comparing SKB264 plus Keytruda versus Keytruda plus chemotherapy for first-line PD-L1-negative non-squamous NSCLC is anticipated to report clinical data, while preliminary results from other early-stage ADC pipelines may also emerge. A166 for 2L HER2+ BC was approved for launch in China in the second half of 2025, and the Phase II clinical trial of A166 for HER2+ BC patients previously trea ted with TOP1 inhibitor ADCs is ongoing. Merck (MSD) has initiated a global Phase 1/2 clinical study of SKB410, while global Phase III clinical trials for SKB264 are still in planning. Additionally, MSD anticipates reading out global Phase III data for SKB264 in gastric, lung, and breast cancers between 2026 and 2027.
Financial analysis: The company has ample cash, and the commercialization of SKB264 has resulted in higher selling expenses.
The company's selling and distribution expenses in 2025 reached RMB 475 million, representing a year-on-year increase of 160.1%. This growth was primarily driven by the expansion of the commercialization team for core products and a substantial rise in marketing investments. Since some of the company's drugs were official ly launched for commercial sales in November 2024, the costs associated with marketing and academic promotion activities in 2025 increased accordingly. R&D expenses were RMB1.32 billion, up 9.4% year-on-year; administrative expenses rose 8.6% year-on-year to RMB180 million, primarily due to higher staff costs. Cash and financial assets totaled RMB 4.56 billion, representing a year-on-year increase of 48.1%, which laid a solid foundation for long-term development.
Profit forecast and investment recommendations
The company's three major R&D platforms are actively developing various drugs, with the ADC platform leading in technology. It has completed three out-licensing agreements with Merck, accelerating the global expansion of its products. These products have vast potential market opportunities and a strong competitive position. The R&D pipeline has progressed smoothly over the past 25 years, with outstanding data for core products. Currently, four commercialized products are expected to achieve significant sales growth this year. We project Kelun-Biotech's revenue for 2026-2028 to be RMB 2.62 billion, RMB 4.14 billion, and RMB 6.79 billion, respectively, with corresponding net profits attributable to shareholders of RMB -320 million, RMB 200 million, and RMB 1.22 billion. We maintain our "Buy" rating.
Risks:
Uncertainty risks in new drug R&D: New drug development is characterized by long cycles, substantial investment, high risks, and low success rates. The process from laboratory research to regulatory approval involves multiple complex stages—including preclinical research, clinical trials, drug registration, and post-market surveillance—each carrying inherent risks.
Industry policy risks: Changes in research design requirements, prices, volume-based procurement policies, and the scope and proportion of medical insurance reimbursement brought about by industry policy adjustments.
Slower-than-expected R&D progress: There are many potential barriers during the development of new drugs from drugs discovery, preclinical research, clinical trials to commercial listing, such as problems caused by substandard technology and production processes, untimely communication with regulators and non-compliance behavior.
Sales underperformance: Once the drug is on the market, its sales could be impacted by various potential risks, including pandemics, inadequate logistics capacity, and production shortages.