The stock price has surged sixfold, but the performance has collapsed. Has CStone Pharmaceuticals made the right choice by withdrawing from Biopharma?
Transitioning from Biotech to Biopharma can be considered the ultimate goal for most innovative pharmaceutical companies.
The former focuses on biotechnology R&D, specializing in drug discovery, preclinical research, and clinical trials, often lacking a complete production and sales system and relying on technology platforms and innovative pipelines to attract investment or partnerships. The latter covers the entire drug lifecycle (from R&D to production to commercialization), with large-scale production capabilities and a mature sales network, generating stable revenue from marketed products and reinvesting in pipeline expansion.
It is clear that Biopharma has a more complete industrial chain, achieving a closed-loop commercialization. Currently, many domestic Biotechs are steadily advancing toward Biopharma, but across the entire innovative drug sector, there are also those who are reversing course, moving 'from Biopharma back to Biotech.'
'Every Biotech once aspired to become a Biopharma, but survival and development are the immediate priorities,' said Yang Jianxin, CEO, R&D President, and Executive Director of CStone Pharmaceuticals, in an interview. It is reported that the company has adjusted its Biopharma structure to a Biotech structure with a mature commercialization model.
What did this shift bring? A 'bull stock' in the secondary market: its stock price surged over 6 times in the past year. Yet, its performance collapsed: in the first half of this year, CStone Pharmaceuticals' revenue was 49.45 million yuan, down 80.54% year-on-year, with losses reaching 270 million yuan, a 1,821.02% increase year-on-year.
Against this backdrop, how should we view CStone Pharmaceuticals?
Why did a potential Biopharma emerge, and why did it return to Biotech?
The early Biopharma structure left a deep imprint on CStone Pharmaceuticals.
Official information shows that CStone Pharmaceuticals has successfully launched four innovative drugs, obtained 16 new drug applications (NDAs), and nine indications. Its R&D pipeline is well-balanced, featuring 16 candidate drugs, including potential first-in-class or best-in-class antibody-drug conjugates (ADCs), multi-specific antibodies, immunotherapies, and precision therapies. Additionally, CStone Pharmaceuticals has a seasoned management team covering key areas such as preclinical exploration, clinical translation, clinical development, drug production, business development, and commercial operations.
Clearly, CStone Pharmaceuticals does not fit the traditional Biotech image.
This raises two questions: First, how did CStone Pharmaceuticals initially build its Biopharma structure?
Looking back at CStone Pharmaceuticals' development, the VIC model played a significant role in its business expansion. The VIC model is a drug R&D business model combining venture capital (VC), intellectual property (IP), and contract research organizations (CROs).
Among them, VC provides financial support and bears the high-risk nature of R&D; IP, typically patents or innovative achievements, is the core competitiveness of R&D, with its quality and potential directly determining the success rate and market prospects of drug development; CROs offer end-to-end outsourcing services from drug discovery to clinical trials to improve the efficiency and quality of drug development.
Therefore, innovative pharmaceutical companies adopting the VIC model generally have advantages such as asset-light operations, fast project initiation, and relatively short R&D cycles. CStone Pharmaceuticals is a prime example: founded in late 2015, it secured the largest single Series B financing record for a domestic biopharmaceutical company in 2018, went public in 2019, and saw three licensed-in drugs (pralsetinib, avapritinib, ivosidenib) and one self-developed drug (sugemalimab) approved for marketing in 2021...
Its growth was astonishing—a potential Biopharma was born rapidly.
But given CStone Pharmaceuticals' current strategic shift, the second question arises: While Biopharma is the vision of many pharmaceutical companies, and CStone Pharmaceuticals had the foundation to become one, why did it not pursue this path to the end but instead chose to return to Biotech?
The difficulty in achieving a commercial closed loop is a core reason.
The commercial performance of the four marketed products mentioned earlier has been underwhelming. Financial reports show that in 2022, CStone Pharmaceuticals generated revenue of approximately 481 million yuan, with avapritinib, pralsetinib, and ivosidenib contributing 364 million yuan in sales. Additionally, according to a Southwest Securities research report, sugemalimab sales in 2022-2024 were 20 million yuan, 30 million yuan, and 70 million yuan, respectively. Product sales volume is constrained by patient demand, market competition, healthcare reforms, and other factors.
This is clearly insufficient to cover various costs (including pipeline introduction, R&D, and sales expenses), and the company's losses have been significant in recent years. Financial reports show that from 2021 to 2023, CStone Pharmaceuticals' total revenue was 244 million yuan, 481 million yuan, and 464 million yuan, respectively, with losses of 1.92 billion yuan, 903 million yuan, and 367 million yuan.
This situation accelerated CStone Pharmaceuticals' entry into Phase 2.0—not continuing toward the grand scale of Biopharma but becoming a high-quality Biotech, focusing more on independent innovation and pipeline refinement.
During the Phase 2.0 transformation, did CStone Pharmaceuticals temporarily abandon growth?
What has CStone Pharmaceuticals done in Phase 2.0? We see three aspects.
First, cost-cutting. In November 2022, CStone Pharmaceuticals announced the suspension of trial operations at its Suzhou factory due to operational cost considerations. Since its construction began in the first half of 2020, the factory's total investment reached 1 billion yuan.
From November 1 to December 21, 2023, CStone Pharmaceuticals transferred partial commercialization rights for the PD-1 monoclonal antibody CS1003, pralsetinib capsules, and ivosidenib tablets to 3SBio, Allist Pharmaceuticals, and Servier, respectively, while streamlining its sales team.
In the first half of 2024, CStone Pharmaceuticals' 'slimming down' continued, with employee numbers dropping from 476 in 2022 and 230 in 2023 to 164. R&D, administrative, sales, and marketing expenses all decreased compared to the same period last year.
Second, deepening Pipeline 1.0. In this year's interim report, CStone Pharmaceuticals detailed new progress for several existing products.
For example, in March this year, the company submitted a new indication application for sugemalimab to the European Medicines Agency (EMA) for the treatment of unresectable, stage III non-small cell lung cancer (NSCLC) patients who have not progressed after concurrent or sequential chemoradiotherapy (CRT).
In July 2025, the company entered into a strategic partnership with Gentili for the commercialization of sugemalimab in 23 Western European countries and the UK. To date, based on four partnerships, sugemalimab's international reach has expanded to over 60 countries worldwide.
Additionally, in July 2025, China's National Medical Products Administration approved the localized production application for pralsetinib. In August this year, pralsetinib passed the formal review for inclusion in the national reimbursement drug list. Avapritinib also began domestic supply in February this year.
Third, expanding Pipeline 2.0. Yang Jianxin stated, 'In the first half of 2025, CStone Pharmaceuticals accelerated the R&D of next-generation innovative products. The clinical progress of Pipeline 2.0's key products is among the fastest globally, showing potential to reshape treatment paradigms.' Specifically, Pipeline 2.0 focuses on first-in-class/best-in-class (FIC/BIC) drugs, targeting hot areas such as oncology and autoimmune/inflammatory diseases.
Two key clinical projects are drawing attention. The first is CS5001, the first ROR1 ADC to demonstrate clinical antitumor activity in both solid tumors and lymphomas. Currently, the global multicenter Phase Ia/Ib clinical trial for CS5001 is underway in the US, Australia, and China; the Ib monotherapy cohort for aggressive and indolent advanced lymphomas is enrolling patients, with potential expansion into a Phase II single-arm registrational study.
The second is CS2009, a potential first-in-class/best-in-class PD-1/VEGF/CTLA-4 trispecific antibody independently developed by CStone Pharmaceuticals. It generates potent multi-target synergistic effects in the tumor microenvironment and preferentially targets tumor tissue to reduce systemic toxicity. The global multicenter Phase I/II study is actively recruiting patients in Australia and China, with plans to expand to the US for Phase II enrollment. The number of cases is expected to exceed 100 by year-end.
Overall, while CStone Pharmaceuticals currently has a commercialization strategy, the need for R&D innovation seems more pronounced. The company is increasingly focused on building competitive barriers through technology platforms and cutting-edge products, no longer solely pursuing 'speed as the winning strategy.'
It is worth noting that CStone Pharmaceuticals' decision in Phase 2.0 to 'become a Biotech with a mature commercialization model' also sets it apart from many early-stage clinical Biotechs and large, commercially mature Biopharmas.
Compared to the former, CStone Pharmaceuticals clearly has commercialization advantages. But compared to the latter, the company is in a transitional phase, inevitably facing growing pains. Specifically, balancing cost control, commercialization, and R&D is no easy task, as evidenced by the fact that after achieving its first profit in the first half of 2024, the company's performance 'reverted to form' in the first half of this year, with an even steeper decline.
However, judging by this year's stock price surge, the capital market still has confidence in CStone Pharmaceuticals. This is understandable—the strategic vision of 'seeking long-term gains over short-term profits' remains dominant. CStone Pharmaceuticals has repeatedly emphasized that 'everything is for long-term benefits, even at the expense of short-term financial performance.' More importantly, CStone Pharmaceuticals is not lacking in 'cornerstones.' Multiple commercialized and pipeline products have already paved the way for the future.
Moreover, while most innovative pharmaceutical companies are moving from Biotech to Biopharma, CStone Pharmaceuticals' choice to return to Biotech is a standout differentiation.
We are eager to know: How wide are CStone Pharmaceuticals' innovation boundaries? How high is the ceiling after making pragmatic choices? Can it ultimately evolve into a true Biopharma? In this context, CStone Pharmaceuticals is undoubtedly a long-term case study in the innovative drug sector.
Source: Pharmaceutical Research Society
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