Dizhe Pharmaceutical's dual product commercialization struggles to stop losses, going public in Hong Kong to bolster pipeline development

Born from AstraZeneca, Detech Medicine (688192.SH) has achieved commercialization of two core products, Shuvoze and Gaorui Ze, leading to continuous significant revenue growth, with an expected year-over-year increase of over 120% in 2025. However, high R&D and sales expenses continue to erode profits, with cumulative losses exceeding 4 billion yuan over seven years, and long-term cash flow pressures.

SEC Star notes that sustained R&D investment is the foundation for innovative pharmaceutical companies to maintain competitiveness. Backed by favorable policies for biotech and pharmaceutical companies in Hong Kong stocks, Detech Medicine has initiated plans to list in Hong Kong, aiming to expand financing channels to support R&D and global expansion. Nonetheless, intense industry competition still presents many challenges to its development.

Two products reach commercialization, revenue growth cannot hide ongoing losses

Founded in 2017, Detech Medicine was formerly the Asia Innovation Drug and Early R&D Center of AstraZeneca’s Global Oncology Translational Science Center. It is a commercial-stage biopharmaceutical company focused on oncology and hematological diseases. Currently, Detech holds two commercialized products: Shuvoze (generic name: Suvoletinib Tablets) and Gaorui Ze (generic name: Golotiximib Capsules).

Shuvoze received approval from the National Medical Products Administration (NMPA) in August 2023 and was approved by the U.S. FDA in July 2025 for treating adult patients with locally advanced or metastatic NSCLC harboring EGFR exon 20 insertion mutations, who have previously received platinum-based chemotherapy. According to Zhuoshi Consulting, Shuvoze is the first innovative, first-in-class drug discovered, developed, and approved in the U.S. in China. It is also the first lung cancer drug recognized as a breakthrough therapy in both the U.S. and China. Currently, Shuvoze is the only second- or third-line treatment for EGFR exon 20 insertion NSCLC included in the national medical insurance catalog.

Gaorui Ze is a new generation oral highly selective JAK1 inhibitor used to treat hematological diseases and solid tumors without driver gene mutations. It was approved by the NMPA in June 2024 for treating adult relapsed/refractory peripheral T-cell lymphoma (PTCL). Additionally, Gaorui Ze has received Fast Track and Orphan Drug designations from the U.S. FDA for treating relapsed/refractory PTCL. It is the first and only JAK1-specific inhibitor approved for T-cell lymphoma.

Commercialization of these products has become the core driver of revenue growth, with revenues climbing in steps. In 2023 and 2024, Detech’s revenue was 91.29 million yuan and 360 million yuan, respectively. All of 2023’s revenue came from Shuvoze, which contributed 91.3 million yuan. In 2024, Shuvoze and Gaorui Ze contributed approximately 311 million yuan and 49.1 million yuan, respectively.

In 2025, benefiting from the inclusion of these two products in the national insurance catalog for the first time, improving patient access, and increased market promotion, Detech expects to achieve about 800 million yuan in product sales revenue, a year-over-year increase of 122.28%.

SEC Star observes that despite the revenue growth from core products, Detech still cannot escape losses, with cumulative losses since inception exceeding 4 billion yuan. In 2023 and 2024, net losses were 1.108 billion yuan and 940 million yuan, respectively. The downward trend continues in 2025, with an estimated net loss attributable to shareholders of 770 million yuan and a net loss after non-recurring gains and losses of 850 million yuan. Although losses have narrowed, the company remains unprofitable. Over the long term, from inception to 2024, Detech’s total losses have exceeded 4 billion yuan.

Accompanying ongoing losses is the company’s long-term “cash drain.” In 2023 and 2024, net cash used in operating activities was -973 million yuan and -654 million yuan. In the first nine months of 2025, net cash used was -425 million yuan, indicating continuous net cash outflows and significant funding pressure.

“Two expenses” consume profits, R&D pipeline still requires heavy investment

The core reason for Detech’s persistent losses is the “two expenses” pressure from high R&D and sales costs, which far exceed revenue.

Data shows that in 2023 and 2024, R&D expenses were 806 million yuan and 724 million yuan. Despite substantial revenue growth, R&D investment remains high. In 2025, R&D expenses are expected to increase by 18.84% year-over-year to 860 million yuan. Sales and distribution expenses also rose annually, reaching 210 million yuan in 2023 and 445 million yuan in 2024, becoming another major profit drain.

As an innovative pharmaceutical company, continuous R&D investment is essential for maintaining global competitiveness. Detech’s R&D pipeline continues to advance. Besides the two commercialized products, the company has one candidate drug in registration trials, three assets in late-stage proof-of-concept, and one in early clinical development. Notably, Birelentinib (DZD8586) is an innovative dual inhibitor of lymphocyte-specific protein tyrosine kinase (Lyn) and Bruton’s tyrosine kinase (BTK), the first and only in clinical development of its kind. It received Fast Track designation from the U.S. FDA in August 2025, and in September 2025, Detech launched a global Phase III trial for its treatment of relapsed/refractory CLL/SLL.

The development of innovative drugs follows the “double ten law”: on average, a new drug takes over 10 years and costs billions of dollars from R&D to market. This means that further pipeline development and deepening of existing product commercialization will require substantial ongoing funding.

To meet these funding needs, Detech has mainly relied on capital markets. In 2021, it raised about 2.103 billion yuan through an IPO on the STAR Market, and in 2025, it conducted a private placement raising approximately 1.796 billion yuan, totaling nearly 4 billion yuan in fundraising.

SEC Star notes that at the policy level, the CSRC explicitly supports leading companies to list in Hong Kong. The Hong Kong Stock Exchange has introduced measures such as fast-track approval for A-share companies, and special lines for biotech and tech companies, facilitating cross-border listings for mainland biotech firms. “A+H” listings have become a new industry trend.

Aligned with HKEX rules, Detech has initiated a Hong Kong listing, which is a necessary step to expand new financing channels. The company states that the main purpose of applying for a Hong Kong listing is to deepen its global strategy, enhance its international brand image, and improve core competitiveness. According to the prospectus, the net proceeds from the Hong Kong IPO will mainly be used for clinical development or preclinical research of Shuvoze, Gaorui Ze, DZD6008, and other products, as well as sales and marketing activities.

However, Detech still faces multiple challenges in the pharmaceutical industry. The industry is characterized by rapid technological iteration, fierce competition, and a focus on patent-protected drugs. The company must compete with large domestic and international pharmaceutical firms and contend with emerging biotech startups. Many similar indications and candidate drugs are under development. Even with heavy R&D investment, the company may face difficulties in timely, low-cost development and commercialization of new candidates or expanded indications, as well as issues related to intellectual property protection.