On the evening of April 2, Borui Pharmaceutical (688166. SH) released its 2024 annual report as scheduled, with a total revenue of 1.283 billion, a year-on-year increase of 8.74%, a net profit of 189 million, basically the same as the same period last year, and a net operating cash inflow of 246 million, a year-on-year increase of 26.08%.

What should we think of Borui Pharmaceutical's performance answer sheet in 2024?

The core is basically stable and entering, and it goes overseas to participate in global competition

As a biopharmaceutical company that started from the first imitation, difficult to imitate and characteristic APIs, APIs have always been the ballast business of Borui Pharmaceutical.

According to the data, Borui Pharmaceutical's annual API product revenue in 2024 will be 988 million, a year-on-year increase of 11.57%. Except for antiviral products, which fell by 37.92% year-on-year due to the high demand for oseltamivir APIs during the flu last year, other API products maintained double-digit growth.

The revenue of antifungal products increased by 60.28% year-on-year, immunosuppressive products increased by 45.72% year-on-year, and other products increased by 10.22% year-on-year.

Based on APIs, after opening up the whole industrial chain of "starting materials→ difficult intermediates→ characteristic APIs → preparations", Borui Pharmaceutical's preparation business continued to increase in volume, with an annual revenue of 161 million in 2024, a year-on-year increase of 16.77%.

In addition to sales, the variety of preparation products is also continuously enriched, in addition to anti-tumor, antifungal, antiviral, cardiovascular and cerebrovascular products, the company has also enriched the pipeline of obstetrics and gynecology drugs.

(Source: the company's official website).

In addition, Borui Pharmaceutical's overseas equity sharing income in 2024 will be 60.04 million yuan, which is basically the same as that of the same period last year; The technology revenue was 39.22 million yuan, a year-on-year decrease of 48.26%, as a non-CXO enterprise, technical services are not the core business of Borui Pharmaceutical, the company said that this change is caused by the company's initiative to adjust the allocation of resources.

Although Fengyunjun has affirmed in different articles that the core competitiveness reflected in Borui Pharmaceutical's overseas equity income with a gross profit margin of 100%, there is one thing to say that the most representative of a pharmaceutical company is the product sales revenue.

For the whole year of 2024, the sales revenue of Borui pharmaceutical products will be 1.149 billion, a year-on-year increase of 12.27%, stabilizing the company's fundamentals.

According to official data from the National Bureau of Statistics, the total revenue of pharmaceutical manufacturing enterprises above designated size in China will be 2.53 trillion yuan in 2024, basically the same as last year. And the reason why Borui Pharmaceutical can make steady progress is that there is no open secret, two words, going to sea.

In 2024, Borui Pharmaceutical's export revenue will be 575 million, a year-on-year increase of 45.06%, and the gross profit margin will be 71.12%, exceeding the domestic sales by more than 20 percentage points.

(Annual Report 2024

Borui Pharmaceutical's pharmaceutical production system has passed the official GMP certification of China, the United States, the European Union, Japan and South Korea, and its products cover China, the European Union, the United States, Japan and South Korea and other "Belt and Road" countries or regions, and are sold in more than 40 countries around the world.

In 2024, in different countries/regions such as Europe, the United States, Japan, and South Korea, Borui Pharmaceutical will have 1 preparation and 10 APIs approved.

At present, Borui Pharmaceutical mainly sells APIs overseas. However, with the completion of the last participant in the Phase I clinical trial of the company's innovative drug product BGM0504 injection in the United States, this highly anticipated product is expected to inject new vitality into the company's overseas formulation business.

innovative drug BGM0504, and steadily advancing commercialization and iteration

Peptide hypoglycemic drug BGM0504 injection is a dual agonist of GLP-1 and GIP receptors independently developed by Borui Pharmaceutical, which can activate the downstream pathways of GIP and GLP-1, produce biological effects such as blood sugar control, weight loss and treatment of nonalcoholic steatohepatitis (NASH), and show the potential for the treatment of a variety of metabolic diseases.

As of the disclosure date of the annual report, the two indications of type 2 diabetes treatment and weight loss of BGM0504 injection have obtained the ethical approval for phase III clinical trials in China, and the phase III clinical trials are currently progressing smoothly as planned.

The data of the phase BGM0504II clinical trial showed that the weight loss effect of each experimental dose group was obvious, and 120 subjects did not have any hypoglycemic events and other unexpected adverse reactions, as well as adverse reactions that led to dose reduction and withdrawal from the trial during the whole trial.

(Source: Choice data, chart: Market Cap APP).

From the perspective of progress, BGM0504 can only be produced and marketed in China after completing the domestic phase III clinical study and being reviewed and approved by the State Food and Drug Administration.

In February 2025, BGM0504's compound patent was granted in the United States, laying the foundation for its overseas market expansion.

In addition to continuing to promote clinical trials at home and abroad, the BGM0504 production base is also under construction. Borui Pharmaceutical has built a preparation production base in Suzhou for the R&D and production of BGM0504 injections, and an API production base in Taixing for the R&D and production of BGM0504 APIs.

By the end of 2024, the mechanical and electrical construction of the Suzhou preparation production base has been completed by 90%, and it is currently in the process of equipment installation; In Taixing API production base, the mechanical and electrical construction has been completed, the equipment has been installed, and it is currently in the process of commissioning and verification.

In addition to promoting commercialization, Borui Pharmaceutical is also steadily carrying out the research and development of oral tablets with BGM0504 new delivery methods and a new generation of innovative drugs BGM1812 for hypoglycemic and weight loss, all of which are currently in the preclinical research stage.

(Annual Report 2024

We noticed an interesting point, following the BGM0504, Borui Pharmaceutical BGM1812 with innovative drugs decisively increased the blood sugar and weight loss track. BGM1812 is a long-acting amylin analog, and studies have shown that amylin has the potential to become the next 10 billion dollar hypoglycemic re-star. Amylin is composed of 37 amino acids, which has the function of inhibiting gastric emptying and controlling appetite, thereby achieving hypoglycemic and weight loss effects.

In the treatment of diabetes, the combination of drug regimens has attracted more and more attention, which can not only play a synergistic effect, improve the hypoglycemic effect, but also reduce the dose and side effects of a single drug.

For example, Novo Nordisk's CagriSema injection is mainly composed of the GLP-1 receptor agonist semaglutide and a long-acting amylin analogue cagrilintide, which is better than a single drug regimen.

In March 2025, Roche announced that it had reached a cooperation agreement with a Danish biotechnology company with a total price of up to $5.25 billion to jointly develop the long-acting amylin analogue small molecule Petrelintide, which also verified the popularity of the amylin track.

Whether it is BGM0504 oral tablets or the R&D promotion of BGM1812, it has injected new momentum into Borui Pharmaceutical's continuous efforts in the field of metabolic diseases such as hypoglycemic and weight loss.

R&D intensity has reached a new high in the past five years, and a new growth curve looms

Speaking of R&D, innovative drugs and inhalation preparations are the core of Borui Pharmaceutical's R&D investment in recent years, and "developing innovative drugs (BGM0504) with global independent intellectual property rights in the field of metabolic diseases, and building an internationally competitive product line in the field of respiratory inhalation-based drug and device combinations" are the company's two key R&D goals.

In 2024, the total R&D investment of innovative drugs and inhalation preparations accounted for 62.78% of the total R&D investment, a year-on-year increase of 77.37%; Among them, the investment in innovative drugs increased by 97.30% year-on-year, and the investment in inhalants increased by 52.27% year-on-year.

In 2024, Borui Pharmaceutical's R&D investment will be 312 million yuan, a year-on-year increase of 25.42%, and the growth rate will be about 3 times that of revenue, which is also the main reason why the company's net profit growth rate has not kept up.

Historically, Borui Pharmaceutical has rarely capitalized R&D investment, and the capitalization rate of R&D investment in 2024 is only 4.6%, almost all of which are expensed. The R&D expense rate of 23% in the year of single expense has been a new high in the past five years.

(Source: Choice data, chart: Market Cap APP).

Borui Pharmaceutical currently has no inhaler products on the market, but its budesonide suspension for inhalation, tiotropium bromide olodaterol inhalation spray, and tiotropium bromide inhalation spray have been declared in China; Tiotropium bromide inhalation powder aerosol and salmeterol ticasone inhalation powder aerosol (50μg/250μg specification) have completed BE trials, and the latter is in phase III clinical trials.

The above products represent the three main drug directions for the treatment of chronic obstructive pulmonary disease (COPD): glucocorticoids such as budesonide, anticholinergic drugs such as tiotropium, β2 agonists such as salmeterol, and their combinations.

Borui Pharmaceutical's salmeterol ticasone is a combination of salmeterol (a long-acting beta-2 agonist) and fluticasone propionate (glucocorticoid).

The

global COPD population base is huge, and the research report of Huafu Securities shows that its 500 million patients in the world can be benchmarked against diabetes, and it is estimated that the number of patients in the world will be nearly 600 million in 2050, and the number of COPD patients in China will exceed 100 million in 2021.

According to Frost & Sullivan, the global market size of inhaled preparations for respiratory diseases is expected to reach US$29.3 billion in 2025, of which the domestic market is RMB23.9 billion.

Minenet data also shows that in recent years, the terminal sales scale of inhalants in China's urban public hospitals, county-level public hospitals, urban community centers and township health centers has exceeded 20 billion, and budesonide suspension is leading with sales of more than 2 billion, and the domestic inhaler market demand has huge potential.

At present, domestic phase III clinical trials generally take about 1 year, and the marketing approval can be obtained within 1 year after the drug declaration, which means that Borui Pharmaceutical's preparation product line is expected to blossom in 1-2 years and usher in a large volume.

At this stage, there is no revenue contribution, but R&D investment has increased by 52.27%, and a number of new products are ready to be launched.