Gan & Lee Pharmaceuticals Faces Challenges: New Drug Development Lags Peers, Q3 Revenue and Profit Decline Sequentially, Accounts Receivable Surge by 147%

Reporters Zhang Siwen and Yu Na of this website (chinatimes.net.cn) report from Beijing

Gan&Lee PharmaceuticalsGan&Lee Pharmaceuticals (hereinafter referred to as "Gan&Lee Pharmaceuticals," stock code: 603087.SH) recently announced that its wholly-owned subsidiary, Gan&Lee Pharmaceuticals Shandong Co., Ltd., has received the "Drug Clinical Trial Approval Notice" issued by the National Medical Products Administration, approving the clinical trial of the investigational drug GLR1044 injection.

The drug is the original Dupixent.®The biosimilar of Dupilumab targets a blockbuster product market with global annual sales reaching 13.072 billion euros, aiming to enter the vast track of atopic dermatitis — a disease with approximately 204 million patients globally, including an adult prevalence rate of about 10.6% in China, with the total number of domestic patients expected to exceed 75 million by 2025. As of September 30, 2025, the company has cumulatively invested 65.7245 million yuan in R&D for this project.

However, looking at the entire track, Gan&Lee Pharmaceuticals may face significant challenges in terms of R&D progress, market competition, and future commercialization. According to the announcement, the company's GLR1044 has only received clinical trial approval, meaning it has not yet begun patient enrollment. Subsequently, it needs to complete Phase I and Phase III clinical trials, with the entire cycle expected to take at least 3 to 5 years. Currently, several companies in China, including Qilu Pharmaceutical and Innovent Bio, have made more advanced clinical progress with similar drugs. As a "follower," Gan&Lee Pharmaceuticals' GLR1044 is significantly behind its leading peers in terms of clinical progress. Meanwhile, currently in China, only Sanofi's original drug has been approved for marketing, and the first mover has already taken the high ground of the market. Moreover, the potential entry of more competitors in the future may trigger price competition.

This move into the autoimmune disease field represents a key strategic layout by Gan&Lee Pharmaceuticals to reduce its reliance on its core insulin business. After experiencing the financial pain caused by the insulin centralized procurement, the company managed to achieve restorative growth in the first three quarters of 2025, with revenue reaching 3.047 billion yuan and a net profit attributable to shareholders of 818 million yuan. However, whether this cross-industry innovation will succeed or not will directly test its future growth potential and market imagination.

Products Under Research May "Fall Behind"

The drug is Dupixent.®(A biosimilar of Dupilumab), registered as a therapeutic biological product classified under Category 3.3, is intended for the treatment of adult patients with moderate to severe atopic dermatitis who are not adequately controlled by topical prescription medications or for whom the use of topical prescription medications is not advisable. It can be used with or without topical corticosteroids.

Atopic dermatitis is a common chronic, recurrent, inflammatory skin disease. Data shows that the prevalence rate among adults in China is approximately 10.6%, with the total number of patients exceeding 67 million, including about 18.7 million with moderate to severe conditions, and the incidence rate is increasing year by year.

Notably, some pharmaceutical companies in China are progressing significantly faster than Gan&Lee Pharmaceuticals.

Leading companies such as Qilu Pharmaceutical have completed patient enrollment for the Phase III clinical trial of their similar product, QLB1204, for moderate to severe atopic dermatitis in early 2024. It is expected to complete the pivotal clinical study 2 to 3 years ahead of GLR1044, with a market application on the horizon.

Another giant, Innovent Bio, has also entered the Phase III clinical stage with its similar drug. In addition, includingHuahai PharmaceuticalProducts from several companies, including Boan Biotech, are in more advanced clinical stages.

Currently, the drug targeting this point in the Chinese market is the original drug Dupixent by Sanofi.®Absolute dominance.

Data shows that the product was approved for marketing in China in 2020 and successfully included in the National Medical Insurance Catalog. In 2024, its global sales reached 13.072 billion euros, establishing a strong brand recognition, doctor prescription habits, and patient base.

For GLR1044, after its future market launch, it will need to seize the already well-educated market from the original drug on one hand, and on the other hand, engage in fierce competition with domestically produced biosimilars that were launched earlier.

New drug research and development itself has the characteristics of "high technology, high investment, long cycle, and high risk."

Gan&Lee Pharmaceuticals announced that, as of the end of September 2025, the GLR1044 project has accumulated R&D expenses of approximately 65.7245 million yuan. As clinical trials progress, subsequent funding requirements will increase significantly. The impact on the company's performance remains to be seen and requires attention.

Performance Declines Significantly Month-on-Month

In terms of performance, after a recovery in the first half of this year, Gan&Lee Pharmaceuticals experienced a dual decline in revenue and profit in the third quarter.

According to the third-quarter report, the company's total operating revenue for the third quarter was 980 million yuan, a 9.4% decrease from 1.082 billion yuan in the second quarter; the net profit attributable to shareholders was 215 million yuan, down 26% quarter-over-quarter; the non-recurring net profit fell by 24.9% quarter-over-quarter, with both year-over-year growth rates showing significant declines.

Notably, data shows that the sales volume of Gan&Lee Pharmaceuticals' core product, insulin glargine, has decreased by more than one million units, with the average price dropping from 38.5 RMB per unit to 36 RMB per unit.

Reporters from the China Times contacted the company to verify the matter and interviewed the company on issues such as "the core reason for the decline in Glargine sales" and "how to maintain product profitability," but have not received a response.

In this regard, Li Jindi, General Manager of Guangdong Better昊 International Certification Co., Ltd., told the "Huaxia Times" reporter that the centralized procurement has turned insulin from a "high-margin prescription drug" into a "standard consumable." In the past, companies relied on price differences to establish distribution channels, but now these price differences are firmly fixed. The core variable of the income statement has shifted from "factory price" to "capacity utilization rate × cost curve." Enterprises must streamline SKUs like fast-moving consumer goods companies, replace imported raw materials with domestically produced ones, and make production lines more flexible. Only by reducing the unit cost to 20% below the centralized procurement floor price will there be room for reinvestment. Price and volume are no longer a seesaw relationship but a matter of survival: if the bid is not low enough, losing the tender means instant zero sales; if the bid is too low, cash flow may not last until the next round. There is only one equilibrium point — trading price for volume must increase capacity utilization by more than 30% to keep the decline in gross margin within 10 percentage points. Otherwise, the larger the scale, the greater the loss.

Regarding the decline in sales of insulin glargine, Li Jindi believes that the primary reason is the contraction of the "in-market segment," which is not an isolated case for the company. After the centralized procurement, the winning bid price for insulin glargine dropped by over 60%, making the profit margin in the hospital channel too thin. As a result, many doctors have proactively switched to second-generation insulin or GLP-1 combination therapies, whose prices were not slashed. This represents a "passive substitution" on the demand side. Meanwhile, the patent cliff for third-generation insulin analogs has already appeared.Dongyang LightThe influx of generic drugs from various companies, such as Federal and Wanbang, has further fragmented the existing market. The Phase III clinical trials for Gan&Lee Pharmaceuticals' ultra-long-acting insulin analogs GZR4 and GZR18, which were expected to take over, have been delayed by 6 to 9 months, exacerbating the decline due to the lack of new products. With only a two-year window left in the industry, if the next-generation products do not come to market before 2026, they will directly face the centralized procurement of biosimilars, leading to a further loss of pricing power.

Regarding the decline of Gan&Lee's insulin glargine, Yuan Shuai, standing vice president of the China Urban Development Research Institute and the Rural Cultural Tourism Industry Revitalization Research Institute, analyzed from the perspective of demand.

He told the reporter of Huaxia Times that with the advancement of centralized procurement, market competition intensified, product prices of various companies dropped, patients had more choices, and market shares were redistributed. At the same time, the delay in the development of a new generation of insulin significantly impacted the competitive landscape of enterprises. If Gan&Lee Pharmaceuticals fails to launch a new generation of products in time, it will be at a disadvantage in the competition for product iteration, and its market share may be seized by competitors, affecting the company's long-term development.

Increased Financial Risk

At the same time, indicators of the company's actual operational efficiency and financial health are deteriorating.

Financial reports show that as of September 30, 2025, the accounts receivable balance of Gan&Lee Pharmaceuticals reached 530 million yuan, surging by 316 million yuan from 214 million yuan at the end of 2024, marking an increase of 147.86%. This growth rate far exceeds the company's revenue growth of 35.73% during the same period, with the proportion of accounts receivable to total assets sharply rising from 1.77% to 4.36%.

Generally speaking, such abnormal growth likely indicates that the company has significantly relaxed its credit policy to boost sales. This could lead to longer collection cycles and a notable increase in the risk of customer defaults and bad debt losses.

The bad debt situation has been reflected in the company's financial report, and the income statement shows that the company's credit impairment loss in the first three quarters was -1.92 million yuan.

The above factors directly led to a mere 3.57% increase in the company's net cash flow from operating activities for the first three quarters, significantly lower than the 61.32% growth rate of net profit.

Not only that, but by the end of September, the company's inventory book value was 1.125 billion yuan, increasing by 6.86% from the end of last year, accounting for about 9.3% of total assets, remaining at a relatively high level.

It should be noted that, in the pharmaceuticals industry with rapid product iteration and fierce competition, high levels of inventory face the risk of potential devaluation losses due to market changes or technological updates, which may erode net profits in the future.

Moreover, the inventory exceeding 1.1 billion yuan has occupied a large amount of working capital, solidifying huge amounts of cash in the production and warehousing processes. Considering the slow growth of cash flow, high inventory may further exacerbate the company's cash flow pressure. The alignment between inventory growth and revenue growth, as well as whether there is overstocking or unsold products, also requires further observation.

In the future, how will Gan&Lee Pharmaceuticals break through the predicament? Reporters from The China Times will continue to follow up.

Editor: Jiang Yuqing, Chief Editor: Chen Yanpeng