Revaluation of Dizhe Pharma: Three Capital Migrations of a 20+ Billion Yuan "Hybrid Gene"

How does AI DiZhe Medicine’s mixed heritage genes influence its capital trajectory?

From the STAR Market to private placements, and then to the Hong Kong Stock Exchange.

Investor.com Cai Jun

DiZhe Medicine (688192.SH, hereafter “the company”) is still awaiting the olive branch from the Hong Kong Stock Exchange.

In January, the company officially submitted its prospectus to HKEX. Riding the wave of the “A+H” listing craze for innovative pharmaceutical companies, the company aims to complete three capital shifts: from the STAR Market to private placements, and then to HKEX.

However, the successful narrative the company has built in the past is being reevaluated by the market. Whether in terms of business performance or overseas validation, Hong Kong investors are more discerning. Whether the company can cross this threshold remains to be seen.

Valuation Model Switches Twice

The story of DiZhe Medicine begins with the implementation of a “mixed heritage” structure.

Around 2016, Zhang Xiaolin, then Vice President of AstraZeneca globally and head of China Innovation Center, faced a turning point. At that time, many multinational R&D centers were shutting down, but Lu Dazhong from Guotou Innovation saw an opportunity. He negotiated with AstraZeneca and Zhang Xiaolin, hoping to establish a new platform to continue R&D based on the original team, and was willing to provide funding support.

This idea materialized with the company’s founding in 2017. The company’s “mixed heritage” is reflected in the three shareholders: foreign pharmaceutical giant AstraZeneca, state-owned Guotou Innovation, and management shareholding. To date, the company still has no controlling shareholder or actual controller; the senior management team is led by Zhang Xiaolin.

This “foreign technology + state capital + management shareholding” structure is relatively rare, but there are similar cases in the market. Today’s biotech giant BeiGene, before going public, also adopted a “overseas technology + capital” model. Interestingly, whether in capital path or pipeline strategy, the company seems to be following in BeiGene’s successful footsteps, shaping its own narrative.

In 2021, the company listed on the STAR Market, raising 1.987 billion yuan. Its technical approach—focusing on niche, differentiated indications—closely mirrors BeiGene, mainly targeting two pipelines: Suvorotin and Gilteritinib. Both drugs were approved and launched in 2023.

In other words, the company has successfully navigated the “R&D spending—commercialization” chain, shifting its valuation focus from pipeline potential at IPO to commercial volume growth. But the company’s capital ambitions are not satisfied; its narrative needs new support.

By 2025, the company’s overseas expansion will bear fruit. On one hand, at ASCO, it announced data for the non-covalent dual BTK inhibitor DZD8586, showing good efficacy in objective response rate and safety. On the other hand, Suvorotin received accelerated approval from the US FDA, becoming the first Chinese-origin targeted lung cancer drug to be approved in the US. To date, the company has built a pipeline of seven clinical-stage products.

Clearly, after shifting the narrative from “pipeline potential” to “commercialization growth,” the company has elevated to a dual-driven model of “commercialization + internationalization.” The pioneer of this model is BeiGene, which has achieved great success in the capital markets. Soon, the company’s own capital feast will begin.

Three Capital Shifts

With the new narrative, DiZhe Medicine has become active on the capital stage.

In 2025, the company completed a private placement at 43 yuan per share, raising nearly 1.8 billion yuan, with participation from well-known institutions such as Taikang Asset, Zhuque Fund, and UBS.

In fact, the capital story of domestic innovative drugs has gone through three stages. The first, before 2019, was “pipeline equals valuation,” where major pharma companies piled up pipelines and bet on targets, with capital paying for “whether it exists.” The second, before 2023, was “good pipeline equals valuation,” emphasizing clinical data and commercial progress, with capital paying for “how good it is.” The third, in 2025, is “can go overseas equals valuation,” driven by numerous BD deals and overseas R&D, with capital paying for “whether it can sell globally.”

From this perspective, the company has successfully advanced through all stages, attracting capital and pushing its market cap over 36 billion yuan at one point. But at the same time, senior executives have begun to cash out.

In July, the company announced that Vice President Zhang Shiying and Chief Business Officer and Vice President Wu Qingyi had reduced their holdings, at prices ranging from 58.9 to 69 yuan per share, citing reasons such as repaying loans and paying for equity incentive taxes. It’s worth noting that some of their holdings stem from 2022 equity incentives, with an exercise price of 9.61 yuan per share. Since then, the stock price has gradually fallen back, currently around 50 yuan per share, with a market cap of about 23 billion yuan.

This has raised market questions: Is management’s high-level divestment a precise exit? More fundamentally, is the company’s capital narrative sustainable? In response, the company told Investor.com, “The senior management’s equity incentives and divestments strictly follow regulatory laws, with procedures that are open, transparent, and compliant. There is no so-called ‘interest transfer.’”

Regardless, the company plans to re-enter the capital stage. In January, it officially submitted its IPO application to HKEX, aiming to complete the third capital shift from the STAR Market to private placements and then to HKEX.

However, the company’s high market valuation has cooled, prompting the market to reassess its value. First, how much can the company “self-sustain”? Second, can its overseas narrative translate from R&D validation to solid commercial results?

Reevaluating the Narrative

To answer these questions, we must return to the fundamentals of DiZhe Medicine.

By 2025, the company expects revenue of 800 million yuan, a year-over-year increase of over 120%, with net losses further narrowing. The growth is mainly driven by two drugs gaining market share under national insurance policies. As of Q3 2025, the company’s cash and cash equivalents totaled 1.93 billion yuan, indicating ample financial reserves.

However, there is a “ceiling” to its commercialization—Suvorotin and Gilteritinib target niche indications, so they are still far from becoming billion-yuan blockbusters. The company told Investor.com, “Both products follow a development path of starting with initial indications and gradually expanding to broader treatment areas. We are actively advancing research to expand indications and cover more patient populations.”

Meanwhile, the company believes that “innovative pharma companies typically enter profitability after their product portfolios mature and commercialization scales up. We aim to balance ongoing R&D investments with sales development, focusing on global innovation.”

Regarding overseas expansion, after validating its R&D technology, the next step is commercial launch. The company told Investor.com, “Currently, there are no overseas sales revenue. We are actively exploring and promoting diverse overseas collaborations, evaluating partners based on their global commercialization capabilities, pipeline synergy, and growth potential to determine the best overseas commercialization path.”

Essentially, the company is also reevaluating its own narrative. In the past, the market believed it could follow BeiGene’s path—“R&D foundation—capital empowerment—global breakthrough”—to become a Big Pharma. Now, the market recognizes BeiGene’s story is not fully replicable; its core competitive advantage lies in substantial overseas investment—building a real presence abroad and then financing through capital markets.

Therefore, the current Hong Kong listing requires a clear new vision. In 2025, many A-share pharma companies are seeking to list in Hong Kong, including Changchun High & New, Maiwei Biotech, and Betta Pharmaceuticals, while Hengrui Medicine has already successfully listed. Perhaps, the HKEX and international investors will prioritize mature, large-scale pharma companies.

The company told Investor.com, “Listing in Hong Kong is part of our long-term global strategic layout, not just a short-term fundraising goal. We will determine the appropriate issuance scale based on our business development needs and market conditions.” (Produced by Think Finance)■