Lamei Pharmaceuticals Faces Loss Again; Combined Generic and Innovative Strategies Fail to Mask Transformation Difficulties

Ask AI · What challenges does a company face in adjusting its transformation strategy under an imbalanced product structure?

By Jingjing News reporter Su Hao and Lu Zikun, reporting from Beijing

(Laimai Pharmaceutical R&D Center / Company website / image)

Recently, Laimai Pharmaceutical (300006.SZ) released its 2025 annual report. For the full year, the company achieved operating revenue of RMB 776 million, down 2.50% year over year; net profit attributable to shareholders of the listed company was a loss of RMB 135 million, compared with a loss of RMB 87.8044 million in the same period last year.

This marks the seventh consecutive year since 2019 that Laimai Pharmaceutical has been in the red. According to incomplete statistics, over the past seven years, the company’s cumulative losses have been close to RMB 878 million.

In response to the company’s performance and subsequent measures to boost results, reporters from China Business News previously sent a letter to Laimai Pharmaceutical and called to request an interview. A staff member from the company’s securities department said they would forward the interview request letter to the relevant person in charge. However, as of the time of publication, no response had been received.

Intangible asset impairment “blows up”

Tracing the roots of Laimai Pharmaceutical’s losses, the impact of the centralized procurement policy is the first and foremost. According to the company’s published performance pre-announcement and annual report information, the company said that year over year decreases in the sales volume and sales prices of certain products led to a slight reduction in operating revenue.

More specifically, the data show that the company’s specialty-focused products—the pillar—faced challenges in 2025. This segment’s full-year revenue was RMB 292 million, down 24.21% year over year, and its share of total revenue fell from about 48% in the previous year to 37.7%. Although this segment’s gross margin remained at a high level of 68.49%, the sharp decline in revenue directly dragged down overall performance.

The immediate driver of this situation was the 10th batch of national drug centralized procurement advanced in 2025. According to publicly available information, one of Laimai Pharmaceutical’s core products—esomeprazole magnesium enteric-coated capsules—was bid on and won in this procurement. However, the average drop in the winning bid price was as high as around 70%. While this “price-for-volume” logic of centralized procurement can theoretically expand market share, in actual implementation it faces the awkward reality of “volume growth unable to offset the price decline.” In the first half of 2025, the company’s revenue from its specialty-focused segment fell 24.55% year over year, indirectly confirming this problem.

In fact, Laimai Pharmaceutical is not without actively seeking opportunities in centralized procurement. In 2025, the company’s product nicardipine tablets successfully won selection in the 11th batch of national drug centralized procurement. In the Guangdong alliance drug centralized procurement, Laimai Pharmaceutical’s clindamycin hydrochloride injection, triptorelin acetate injection, and multiple infusion products under Hunan Kangyuan also successfully won. However, the sales growth resulting from winning bids in centralized procurement was unable to fully offset the revenue loss caused by price declines; instead, it further compressed profit margins.

Beyond pressure on its main business, Laimai Pharmaceutical’s losses in 2025 were also significantly affected by two non-operating factors.

First is intangible asset impairment. In its announcement “Regarding the Accrual of Asset Impairment Provisions for 2025,” Laimai Pharmaceutical stated that after a comprehensive inventory check and impairment testing were conducted for assets that may have impairment indicators as of the end of 2025, it accrued RMB 75.5532 million in impairment provisions for various assets in 2025. Of this amount, it accrued RMB 4.8701 million for bad debt provisions for receivables, RMB 8.4449 million for inventory write-down provisions, RMB 57.8996 million for intangible asset impairment provisions, RMB 2.2617 million for fixed asset impairment provisions, and RMB 2.0768 million for impairment provisions for development expenditures.

Second is investment losses from associates. For some associates invested by Laimai Pharmaceutical, reasons such as increased R&D spending and increased losses from changes in fair value led the company to recognize an investment loss of approximately RMB 23 million accordingly.

Laimai Pharmaceutical has invested in multiple companies in the field of innovative drugs, such as Sichuan Kangdesa Medical Technology Co., Ltd. (hereinafter “Kangdesa”), which focuses on personalized cancer vaccines, and Sichuan Yingrui Pharmaceutical Technology Co., Ltd. (hereinafter “Sichuan Yingrui”), which independently develops anti-cancer new drugs. These companies may represent Laimai Pharmaceutical’s future, but at this stage they are in a loss position due to continued R&D investment, and instead have become a “drag” on the listed company’s financial statements.

Increasing investment in innovative R&D

In addition to the above reasons affecting performance, Laimai Pharmaceutical also faces deeper structural challenges.

First is an imbalance in product structure. From the perspective of revenue composition, in 2025, the company’s revenue from specialty-focused products fell 24.21%, and revenue from anti-infectives fell 5.43%. Both of these major traditional advantage business segments are in a shrinking state.

Meanwhile, the business segments growing relatively faster are pharmaceutical distribution (up 46.41%), service revenue (up 98.23%), and large infusion products (up 17.55%). Although the latter two are growing rapidly, the gross margin of pharmaceutical distribution is only 25.36%, and that of large infusion products is 53.91%, both far lower than the gross margin level of specialty-focused products.

Second, the company’s internationalization process has been hindered. Laimai Pharmaceutical’s star product—nanocarbon suspension injection (brand name: Canaline)—has maintained a leading position for a long time in the lymphatic tracing sub-segment, and the company has also been pushing its overseas expansion project.

However, changes in the international trade environment in 2025 cast a shadow over this plan. Starting October 1, 2025, the United States plans to impose an additional 100% tariff on patented and brand-name drugs, which directly affects market expectations for the Canaline overseas project. Although the project has completed pilot-scale processes and has started animal experiments, uncertainty about export prospects has risen sharply.

While traditional business has been set back, Laimai Pharmaceutical has not slowed down its pace toward an innovation-driven transformation. In 2025, the company’s R&D spending showed characteristics of “counter-cyclical” investment.

In 2025, the company’s R&D expenditure reached RMB 105 million, up 10.68% year over year. The proportion of R&D expenditure to operating revenue increased to 13.55%, up 1.61 percentage points from the same period last year.

In terms of R&D results, in 2025 as a whole, Laimai Pharmaceutical obtained five drug registration certificates; three products passed the evaluation of consistency in quality and efficacy for generic drugs. In addition, another two medical device products received registration certificates.

In the innovative drug field, the nanocarbon iron suspension injection independently developed by the subsidiary Sichuan Yingrui has successfully entered Phase II clinical trials in January 2026. The personalized cancer vaccine project (CUD002) and the macrophage project (CUD005) of Kangdesa, an investee company used to treat late-stage ovarian cancer and mid-to-late stage cirrhosis of the liver, respectively, are both being advanced steadily.

Worth noting is that Laimai Pharmaceutical’s R&D expenditure capitalization rate is 40.55%, meaning that a substantial portion of R&D expenditures is recorded as intangible assets rather than as expenses in the current period. From the perspective of accounting treatment, to some extent this alleviates pressure on the current income statement. However, at the same time it also plants risks of future asset impairment.

Nevertheless, the continued increase in R&D spending does, in the short term, directly affect operating profits. In its performance guidance, the company also stated clearly: “Continuous R&D investment to enrich the company’s product pipeline correspondingly affects operating profits.”

Facing the loss situation in 2025, Laimai Pharmaceutical proposed its strategic plan for 2026 in its annual report. On the one hand, with Canaline—its core product—as the key driver, it will continue to consolidate the advantage of high market share in the field of thyroid surgery, and concurrently step up efforts to break through overseas markets, accelerating the Canaline overseas rollout.

On the other hand, focusing on the generics segment, it will drive rapid completion of the listing-to-launch conversion for already approved products, accelerate the release of production capacity and the improvement of sales volumes, and accelerate centralized procurement application submissions. This will help offset the downward price pressure brought by centralized procurement policies, thereby achieving stable profitability in the generics segment.

In addition, led by its innovation-based layout, it will coordinate and advance pipeline acceleration and ecosystem improvement, push through breakthroughs in independently developed R&D, advance Phase II clinical trials of nanocarbon iron suspension injection (CNSI-Fe) by its subsidiary Sichuan Yingrui, and assist investee company Kangdesa in advancing Phase I clinical projects such as personalized cancer vaccines (CUD002) and macrophages (CUD005).

(Editor: Cao Xueping; Review: Tong Haihua; Proofread: Zhang Guogang)