R&D Investment Surges, Gross Margin Declines; Newly Listed Xinuowei Reports First Loss Post-IPO as It Transforms into Innovative Drugs Business

Under intense research and development investment, New Novei (300765), which is transitioning into innovative pharmaceuticals, is also facing certain performance pressures. On March 17, New Novei reported its first annual loss since listing. Innovation drugs are an unavoidable keyword in New Novei’s performance changes. By 2025, the company further acquired a minority stake in its subsidiary, CSPC Giga Biopharmaceuticals Co., Ltd. (hereinafter referred to as “Giga Biopharma”), increasing its shareholding to 80%. Over the year, the company’s R&D expenses increased significantly year-on-year, and sales expenses surged by over 80%. The increases in these indicators are all related to the innovative drug business. Aside from the innovative drug segment, in 2025, New Novei’s gross profit margin and profitability of its caffeine products declined compared to the previous year, and the company’s overall gross profit margin also decreased. As the only A-share listed platform under CSPC Group, New Novei is experiencing a “growing pain” period in its transformation into an innovative biopharmaceutical company.

Net profit loss of 241 million yuan

New Novei’s 2025 annual report shows that during the reporting period, the company achieved operating revenue of 2.158 billion yuan, an increase of 8.93% year-on-year, and attributable net profit of -241 million yuan, a decrease of 548.8% year-on-year.

Regarding the reasons for the performance loss, New Novei provided three explanations, two of which are closely related to the innovative drug business.

It is understood that in 2024, New Novei expanded into the biopharmaceutical industry by increasing capital to control Giga Biopharma. This move is also seen as an important step in the company’s transition to innovative drugs. As an innovative pharmaceutical company, Giga Biopharma focuses on frontier areas such as antibody drugs, ADCs, and mRNA vaccines.

In 2025, New Novei increased its stake in Giga Biopharma from 51% to 80%. At that time, New Novei stated that it firmly believed in Giga Biopharma’s development prospects. Acquiring a minority stake was beneficial for further improving the company’s business layout, implementing development strategies, and promoting sustainable development, aligning with the company’s long-term strategic plan.

From a revenue perspective, the acquisition of Giga Biopharma brought certain benefits to New Novei. In 2025, the company’s biopharmaceutical revenue was 257 million yuan. After the approval and listing of Enrolusumab (Enshuxing) and Omalizumab for injection (Enyitan) in 2024, market development proceeded smoothly, quickly entering the commercialization stage, and becoming a new growth point for the company’s biopharmaceutical revenue in 2025.

However, Giga Biopharma has not yet turned a profit. As its R&D pipeline advances rapidly with various products and clinical indications, Giga Biopharma will still need substantial ongoing R&D investment in the future. This undoubtedly puts some financial pressure on New Novei.

New Novei stated that during the reporting period, the company’s acquisition of a minority stake in Giga Biopharma increased the impact of Giga Biopharma’s profit and loss on the company’s consolidated financial statements, becoming one of the main reasons for the performance loss.

Notably, in January this year, Giga Biopharma and its related parties, CSPC Group and Qiqi Pharmaceuticals, signed a Strategic Cooperation and Licensing Agreement with AstraZeneca, which will collaborate on innovative peptide drug discovery and long-acting delivery technology platforms. Giga Biopharma will receive an initial payment of $420 million and has the right to collect milestone payments, sales milestones, and royalties based on the actual pipeline.

New Novei stated that this transaction will optimize the company’s cash flow structure, accelerate the recovery of early R&D investments, and provide stable funding for the continued R&D of its pipeline.

Increased R&D and sales expenses

It is noteworthy that during the reporting period, both R&D expenses and sales expenses of New Novei increased significantly.

The company’s 2025 annual report shows that during the period, the company invested 1.036 billion yuan in R&D, an increase of 23.01%. Sales expenses reached 281 million yuan, an even more notable increase of 82.34%.

New Novei attributes the primary reason for its net loss to increased R&D investment. The company stated that during the period, it continued to increase R&D spending, accelerating the development of its innovative drug pipeline, with several products making important progress. Among them, nine products received clinical trial approval in China for the first time; four products received FDA approval for clinical trials in the U.S.; the new indication for Omalizumab for injection (Enyitan) was approved for listing; the application for Patuizumab injection was accepted; and two ADC products entered Phase III clinical trials. By the end of 2025, the company had more than ten key pipeline drugs in clinical or late-stage development.

Regarding sales expenses, New Novei explained that the main reason for the increase was the first full year of market promotion expenses for Enrolusumab and Omalizumab in 2025.

Deng Yong, director of the Health Law and Innovation Transformation Center at Beijing University of Chinese Medicine, believes that innovative drug R&D requires substantial funding and time investment. Therefore, New Novei maintained high R&D expenses in 2025, which impacted its performance. Additionally, the biopharmaceutical business is still in development, requiring significant resources for market promotion. The increase in sales expenses led to a sharp rise in short-term costs, and the growth in market share and sales revenue takes time to materialize, affecting overall performance.

Zhang Yue, chairman of AOYAO International, suggested that New Novei could reasonably control the growth rate of sales and R&D expenses while ensuring R&D and marketing effectiveness, thereby improving capital efficiency.

The company did not respond to inquiries from Beijing Business Daily by the time of publication.

Gross profit margin decline

The decline in gross profit margin is another factor contributing to New Novei’s net loss in 2025.

Data shows that New Novei focuses on biopharmaceuticals, functional raw materials, and health foods in R&D, production, and commercialization. Its functional raw materials and health foods mainly include caffeine, acarbose, anhydrous glucose raw materials, and products like Guolvank Vitamin C tablets and B-vitamin tablets. In 2025, revenue from these segments was 1.857 billion yuan, still the main source of income, accounting for 86.08%.

New Novei stated that market factors led to a decline in gross profit margin and profitability of caffeine products in 2025 compared to the previous year.

Specifically, in 2025, the gross profit margin of the company’s core business of functional raw materials and health foods was 34.88%, down 4.85% year-on-year; the gross profit margin of biopharmaceuticals was 64.63%, down 30.53%; overall, the company’s main business gross profit margin was 38.5%, down 3.76%.

In its 2025 annual report, New Novei mentioned that the functional raw materials and health foods industry relies on the steady development of the health industry. While demand upgrades, the industry faces challenges such as homogenization and stricter regulations, and is in a critical stage of upgrading. Looking ahead, the company will focus on existing business segments in the short term, emphasizing core areas, and in the long term, it will layout frontier fields, forming a synergistic and complementary business structure. Short-term focus will be on antibody drugs, ADCs, mRNA vaccines, and pipeline optimization with multi-scenario applications; long-term plans include deepening core technological iterations in biopharmaceuticals and expanding the application boundaries of innovative therapies. Additionally, the company will continue to strengthen its advantages in functional raw materials and health foods, extend high-end categories, diversify product offerings, optimize processes, and build long-term competitive advantages to seize opportunities in the health industry.

It is worth noting that New Novei is planning to list in Hong Kong and has already submitted an application to the Hong Kong Stock Exchange. Beijing Business Daily will continue to follow the company’s listing developments.