At the beginning of 2026, another significant collaboration has emerged in China's innovative drug sector. Recently, Guangdong Zhongsheng Pharmaceutical Co., Ltd. ("Zhongsheng Pharmaceutical") announced that its controlling subsidiary, raynovent, signed a licensing agreement with Qilu Pharmaceutical Co., Ltd. The former granted the latter the rights to manufacture and commercially sell RAY1225 injection in China. In this collaboration, an upfront payment and milestone payments totaling up to 1 billion yuan along with double-digit sales royalties—could this help Zhongsheng Pharmaceutical break away from the difficulties of its traditional business and accelerate the breakthrough of innovative drugs?


Down payment of 200 million yuan


The core subject of this collaboration, RAY1225 Injection, is an innovative structural peptide drug independently developed by Raynovent with global intellectual property rights. It exhibits dual agonist activity on both GLP-1 and GIP receptors and is administered once every two weeks.


Currently, the Phase III clinical trial (REBUILDING-2 study) for the safety and efficacy of RAY1225 injection in treating obese/overweight patients in China, the Phase III clinical trial (SHINING-3) for the safety and efficacy of RAY1225 injection in combination with oral hypoglycemic drugs for type 2 diabetes patients compared with semaglutide injection, and the placebo-controlled Phase III clinical trial (SHINING-2) for the safety and efficacy of RAY1225 injection as monotherapy for type 2 diabetes patients have all completed participant enrollment.


According to the agreement, Raynovent retains all rights, ownership, and interests of the licensed intellectual property. After the licensed product receives market registration approval from the pharmaceutical regulatory authorities, Raynovent will be the holder of the drug marketing authorization. Meanwhile, Raynovent still holds all rights, ownership, and interests of RAY1225 Injection abroad, including but not limited to clinical development, production, new drug registration, sales, and marketing promotion.


Under the terms of the license agreement, Raynovent will receive a total of 1 billion yuan (RMB, hereinafter the same) in upfront and milestone payments, including an upfront payment of 200 million yuan and development and sales milestone payments of up to 800 million yuan. After the subsequent product launch, Raynovent is entitled to receive double-digit royalties based on the net sales of the licensed product.


Zhongsheng Pharmaceutical stated that the signing of the innovative drug project license agreement is an important step for the company to promote the construction of its innovative drug platform and the subsequent commercialization of new drugs. Relying on the mature production qualifications, scaled production capacity, and well-established commercial channels of the cooperation partner, the efficiency of product commercialization and market coverage can be significantly improved, strengthening the company's ability to transform innovative drug achievements. At the same time, it reduces operational costs in terms of fixed asset investment in production, channel construction in sales, and market promotion.


Innovative Drug Layout in Popular Tracks


In recent years, due to the impact of policies such as centralized procurement and price reductions, Zhongsheng Pharmaceutical's traditional business has faced significant pressure. In 2024, the revenue from Zhongsheng Pharmaceutical's traditional Chinese medicine amounted to 1.318 billion yuan, a year-on-year decrease of 5.25%. Revenue from sectors such as chemical drugs and raw materials also declined, resulting in a net loss of 299 million yuan in annual attributable net profit. Although Zhongsheng Pharmaceutical's performance showed some recovery in the third quarter of 2025, achieving a net profit of 251 million yuan, transforming into an innovative pharmaceutical company remains the core strategy to break through its growth bottleneck.


As the core platform for Zhongsheng Pharmaceutical's innovative drug research and development, raynovent has successfully facilitated the approval and market launch of two innovative drugs—Ravidasvir Tablets and Aladavir Tablets—since its establishment in 2018. Additionally, seven projects are currently in clinical trial stages, forming a dual-track layout in "respiratory + metabolic" fields. The RMB 1 billion collaboration fund will effectively alleviate the financial pressure of innovative drug R&D. Previously, Zhongsheng Pharmaceutical reallocated RMB 103 million of raised funds to Phase III clinical trials for projects like RAY1225. The upfront payment and milestone payments from this collaboration will further support its R&D investment. Meanwhile, leveraging Qilu Pharmaceutical's production capacity and distribution channels will help reduce operational costs in manufacturing and sales.


However, the competition in the GLP-1 drug category where RAY1225 is located is becoming increasingly fierce, with companies both in China and abroad rushing to make their moves.


Internationally, Novo Nordisk's semaglutide and Eli Lilly's tirzepatide have established a solid market position and continue to consolidate their advantages by expanding indications. Meanwhile, China's innovative drug companies are accelerating their breakthroughs, forming a competitive matrix with multiple targets and dosage forms.


Compared with competing products, the advantages of RAY1225 lie in its convenience and safety of administration. Its ultra-long-acting characteristic, requiring injection only once every two weeks, reduces the frequency by half compared to mainstream weekly formulations, and it has the potential for a monthly formulation, which can significantly improve patient compliance. Phase II clinical data shows that its incidence of gastrointestinal adverse reactions is lower than that of similar competing products, and a low-dose escalation regimen is more likely to establish patient tolerance. However, its development progress is not leading among similar drugs, necessitating an acceleration in the pace of clinical trials and commercialization.


In the future, how to maintain a competitive edge in the fierce track competition will become an ongoing challenge for Zhongsheng Pharmaceutical. Regarding the data analysis of the three Phase III clinical trials of RAY1225 injection and the progress of its marketing application, as well as the drug's performance in subsequent medical insurance negotiations and changes in the competitive landscape with similar products, reporters from The Beijing News will continue to follow up.


Reporter Zhang Zhaohui from The Beijing News

Proofread by Baoqing Liu