Hutchison MediPharma's net profit soars behind the scenes: selling assets to recover funds, betting on innovative drugs

Recently, Hutchison China MediTech (Hutchmed) announced its full-year 2025 results, achieving total revenue of $549 million, a decrease of 12.96% year-over-year; net profit of $457 million, a year-over-year increase of 1111.03%. Behind this surge in net profit is not from core business operations but from a one-time non-recurring gain resulting from the sale of traditional Chinese medicine assets. While divesting its “cash cow” of traditional Chinese medicine, Hutchmed is also ramping up R&D in cutting-edge innovative drugs. The company is seeking transformation with a “limb amputation” approach.

Domestic Market Continues to Face Pressure

Hutchmed’s net profit in 2025 soared largely due to the completion of the Shanghai Hutchison Pharma equity sale in January 2025, which generated a post-tax net gain. The company sold 35% and 10% stakes in Shanghai Hutchison Pharma to Jinpu Jianfu and Shanghai Pharmaceuticals, respectively, for a total of approximately $608.5 million. This transaction directly supported most of the year’s profit. Excluding this non-recurring gain, the core innovative drug business only achieved marginal profits, indicating that the main business profitability has yet to be fully realized.

In recent years, Hutchmed’s revenue has been steadily declining. In 2024, revenue fell by 24.80% year-over-year. Although the decline narrowed in 2025, the downward trend has not been reversed.

Hutchmed’s revenue structure shows a polarization: “strong overseas, weak domestic.” The core reason for domestic market decline is setbacks in the oncology/immunology segment, which generated a total revenue of $286 million in 2025, down 21.44% year-over-year, with three key self-developed products experiencing collective sales declines. AiuT (Fuquitinib) in China earned $100.1 million, down 13%; Sutida (Sofamatinib) earned $27 million, down 45%; Vorizan (Savoritinib) earned $28.9 million, down 36%.

The core product AiuT, used for third-line and above treatment of metastatic colorectal cancer (mCRC), faces competition from drugs like Regorafenib and Trifluridine/Tipiracil. Regorafenib tablets have been included in the 10th batch of national drug procurement and began implementation in April 2025, directly impacting its market.

In stark contrast, overseas markets have seen significant growth. The Japanese Takeda sales partner for FRUZAQLA (Fuqquitinib overseas brand name) reported sales of $366 million, up 26%, becoming a major revenue pillar for Hutchmed. This growth is driven by demand for innovative chemo-free treatment options in colorectal cancer and positive clinical experience among oncologists in third-line or above treatments. Nearly 20 countries have now included this product in their medical insurance coverage.

Additionally, milestone payments from licensing collaborations have become an important revenue supplement. Vorizan received approval for a third indication in lung cancer in China, triggering a milestone payment of $11 million from AstraZeneca.

Divesting Traditional Chinese Medicine “Cash Cow” and Focusing on Innovative Drugs

Facing fierce competition in the domestic innovative drug market and the normalization of medical insurance procurement, Hutchmed has chosen to “cut off” its traditional Chinese medicine business entirely, focusing all efforts on R&D of oncology and immunology innovative drugs.

Shanghai Hutchison Pharma, a valuable asset under the company, has its flagship product, Musk Tong Bao Xin Wan, a leading Chinese patent medicine for coronary heart disease. In the first half of 2024, sales reached $207 million, providing stable dividends and profits for Hutchmed over the years, earning it the nickname “cash cow.” In January 2025, Hutchmed sold 35% and 10% stakes in Shanghai Hutchison Pharma to Jinpu Jianfu and Shanghai Pharmaceuticals for 3.483 billion yuan and 995 million yuan, respectively. After this transaction, Hutchmed retained only a 5% indirect stake, relinquishing control.

This is not the first time Hutchmed has divested Chinese medicine assets. In 2021, the company sold its stake in Guangzhou Baiyunshan Hutchison Whampoa Chinese Medicine, continuing to divest from traditional Chinese medicine. Hutchmed stated that proceeds from these sales would be used to optimize capital and debt structure, replenish cash flow, and increase investment in core innovative drug pipelines, especially in building a new-generation ADC (antibody-drug conjugate) platform, achieving resource concentration.

The ADC platform is a core growth engine for the future. It has entered a critical stage. Unlike traditional ADCs, this platform uses targeted small molecules as payloads, offering lower off-target toxicity and stronger potential for combination therapies. Currently, the ADC platform is in clinical trials.

Hutchmed’s innovative drug pipeline is becoming increasingly competitive globally, with 13 candidates in clinical stages, including four drugs (Fuqquitinib, Sofamatinib, Savoritinib, and Tazemetostat) approved in mainland China. Fuqquitinib has been approved or listed in 39 countries and regions worldwide.

Looking ahead, with adjustments in domestic sales strategies, new indications approval, and the implementation of the ADC platform, Hutchmed aims to break through its revenue decline and achieve profitability in its core business. The Beijing News will continue to follow this story.

Beijing News Reporter: Zhang Zhaohui

Proofreader: Mu Xiangtong