Qilu Pharma Bets Big on Innovation with $2.8B Deal, Staying Firmly Off the Public Markets

Produced by | Bullet Finance

Author | Zhang Jue

Editor | Dan Zong

Art Editor | Qianqian

Review | Song Wen

In the new wave of listings in the pharmaceuticals industry, the veteran drugmaker Qilu Pharmaceutical appears exceptionally calm.

Most innovative drug companies choose to go public to raise capital or monetize their R&D assets through licensing deals, but Qilu Pharmaceutical has taken the opposite approach — neither going public nor raising funds, and instead continuously purchasing innovative drugs from external sources at high prices.

In November 2025, Qilu Pharmaceutical Co., Ltd., the veteran pharmaceutical company headquartered in Jinan, Shandong, acquired the China rights to Laekna Therapeutics' AKT inhibitor LAE002 for up to 2.045 billion yuan, becoming one of the highest-value local licensing deals in China this year.

In the landscape of China's biopharmaceutical industry, Qilu Pharmaceutical has always stood out.

As a family-controlled unlisted pharmaceutical company, it generates annual revenue of over 37 billion yuan through the sales of generic drugs and biosimilars. Now, it is attempting to establish a growth curve in the innovative drug sector, but without the oversight of the capital market, can this transition to innovative drugs succeed?

1. Under the Impact of Centralized Procurement, Investing Heavily in Innovative Drug Products

In November 2025, Qilu Pharmaceutical announced the acquisition of China rights to Laekna Therapeutics' AKT inhibitor LAE002 (Afuresertib) for up to approximately 2.045 billion yuan.

According to the agreement, until the first indication receives new drug application approval in China, Laekna Therapeutics is entitled to receive an upfront payment and clinical development milestone payments totaling up to RMB 530 million, which are non-refundable. In addition, Laekna Therapeutics is also entitled to receive tiered sales royalties ranging from 10% to 20%.

(Image / Shutterstock, based on VRF protocol)

This breast cancer candidate drug, which is still in Phase III clinical trials, has become the highest-value licensing deal for Qilu Pharmaceutical in recent years.

For Laekna Therapeutics, this marks the entry of its first innovative drug into the commercialization phase; for Qilu Pharmaceutical, it represents an attempt by a traditional pharmaceutical company to seek new growth points.

The history of Qilu Pharmaceutical is almost a microcosm of the industrialization process of China's pharmaceutical industry. The company was established in 1958, initially focusing on veterinary drugs and pesticides, and began entering the human pharmaceuticals field in the 1980s. In the 1990s, Qilu Pharmaceutical built a complete production system from active pharmaceutical ingredients to formulations.

In 1997, the company was among the first in China to pass the GMP certification by the National Medical Products Administration, becoming one of the earliest enterprises to meet the standards for powder injection production.

By around 2000, Qilu Pharmaceutical had developed a product line focused on anti-infectives, cardiovascular and cerebrovascular drugs, and anti-tumor medications. It also made significant progress in exporting active pharmaceutical ingredients, with some products receiving certification from the U.S. FDA and EU EDQM.

After 2000, Qilu Pharmaceutical achieved rapid expansion by relying on the scaling up of generic drugs. In 2004, its Oxaliplatin Injection was launched, becoming one of the earliest重磅 chemotherapy drugs in China to be registered through generic drug approval. Subsequently, it introduced a series of generic products such as Ceftriaxone, Methotrexate, and Cyclophosphamide.

According to public data, with scaled production and sales system, the revenue of Qilu Pharmaceutical broke through 10 billion yuan in 2014.

What truly established Qilu Pharmaceutical in the oncology drug sector was the rise of biosimilars.

In 2019, Qilu Pharmaceutical's bevacizumab biosimilar "Ankeda" was approved for marketing.

Bevacizumab, originally developed by Roche, achieved global sales exceeding 8 billion US dollars in 2019 and is primarily used for indications such as non-small cell lung cancer and colorectal cancer.

Qilu Pharmaceutical's Ankezhu, as the first biosimilar of its kind, entered the national medical insurance directory after its market launch. Leveraging Qilu Pharmaceutical's advantages in hospital channel access and medical insurance pricing, it quickly gained a dominant market position.

According to the data from sample hospitals, Qilu Pharmaceutical's bevacizumab holds approximately 40% of the market share, surpassing Roche's original drug, and has become one of the company's most profitable products.

Subsequently, Qilu Pharmaceutical launched two biosimilars, trastuzumab and pertuzumab, which also originate from Roche and are core drugs for the treatment of HER2-positive breast cancer.

Qilu Pharmaceutical Completes "QuPa Dual-Target" Combination Regimen by the End of 2024, Almost Simultaneously Approved with Zhengda Tianqing, Achieving 50 Million Yuan in Sales Within Half a Year of Launch.

(Image / Shutterstock, based on VRF protocol)

However, this growth model is reaching its peak.

In 2024, the National Healthcare Security Administration explicitly encouraged regions in China to carry out alliance-based centralized procurement for biologic drugs that involve "large procurement amounts and wide population coverage," promoting the principle of "procuring all that should be procured." Subsequently, the Anhui Provincial Healthcare Security Administration led a nationwide biologics drug alliance procurement in China, with Bevacizumab, Adalimumab, Trastuzumab, and Pertuzumab all included.

This biopharmaceutical procurement will inevitably be gradually rolled out across China. Qilu Pharmaceutical, which previously gained market share through price advantages and sufficient production capacity, may face systemic price compression.

Taking Bevacizumab as an example, industry insiders predict that if the centralized procurement of biosimilars is fully implemented, the price of Bevacizumab will drop by more than 40% compared to the original Medicare negotiation price, and there are already more than ten Chinese manufacturers competing in the market.

Currently, the annual sales of Bevacizumab by Qilu Pharmaceutical Co., Ltd. are around 4 billion yuan. If it fails to win the centralized procurement bid, the revenue loss will be enormous.

Overall, Qilu Pharmaceutical's profit pillar is being simultaneously impacted by policies and competition, making it difficult to sustain profits and growth in the long term.

2. Established pharmaceutical companies are accelerating their search for new growth curves

Qilu Pharmaceutical has been accelerating its search for new growth curves in recent years, with licensing and acquisition becoming a key strategy. Especially this year, the company has intensively purchased multiple innovative drug pipelines.

In addition to the deal with Laekna Therapeutics, Qilu Pharmaceutical also reached a collaboration with Minghui Pharmaceuticals in May this year for the development, manufacturing, and commercialization of an ADC product, MHB088C, with a total value of 1.345 billion yuan.

In June, Qilu Pharmaceutical and Mabwell Biotherapeutics reached a collaboration, granting Qilu Pharmaceutical the commercial rights of the long-acting G-CSF product "Mairis" (Aregstimα for injection) in Greater China, with a total transaction value of up to 500 million yuan.

In September, Qilu Pharmaceutical reached a cooperation agreement with Biomay Biotechnology for its BM601 metal embolic microspheres product used in TACE treatment for liver cancer, at a cost of 200 million yuan and sales sharing.

Behind the frequent introduction of authorized collaborations is the slow progress of Qilu Pharmaceutical's self-developed innovations.The company claims to have more than 80 innovative drug projects underway, with 20 having entered the clinical trial stage. However, only two truly Class 1 innovative drugs have been approved for marketing so far.

(Image / Shutterstock, based on VRF protocol)

One is the PD-1/CTLA-4 bispecific antibody Aipalolituo Weirili monoclonal antibody (Qibean), approved in 2024 for recurrent or metastatic cervical cancer; the other is Irualk tablets (Qixinke), targeting EGFR mutations, approved in 2023 for non-small cell lung cancer.

Currently, the key projects under research by Qilu Pharmaceutical include Claudin18.2/CD3 bispecific antibody (QLS31905), KRAS G12D inhibitor (QLC1101), PROTAC new drug (QLH12016), etc. In addition, the MabPair combination antibody platform has been established for the co-expression of bispecific antibody drugs.

However, as a non-listed company, Qilu Pharmaceutical's investment in and achievements of innovative drugs cannot be directly observed externally.It can only be known through its self-published data that the company's R&D investment reached 4.53 billion yuan in 2024, accounting for 12% of its sales revenue that year.

(Figure / Qilu Pharmaceutical Official Website)

Moreover, the high revenue structure of Qilu Pharmaceutical has long been built on its aggressive bidding within the centralized procurement system. Since the first round of national drug centralized procurement in 2019, the company has become known for winning bids at the lowest prices in almost every round.

In the first batch of centralized procurement, Qilu Pharmaceutical's atorvastatin calcium tablets were priced at only 0.12 yuan per tablet, which was 5% of the original research drug price; in the third batch of centralized procurement in 2020, its sildenafil citrate tablets won the bid at 2.08 yuan per tablet, the lowest price among similar products.

As of the 10th centralized procurement in 2024, Qilu Pharmaceutical's selected products have cumulatively exceeded 100 varieties, ranking first in China.

This strategy has led to a continuous increase in sales volume. Although Li Yan, President of Qilu Pharmaceutical, has publicly stated that the company's "every bid in the centralized procurement has not broken the bottom line" and is the result of "very rational and rigorous calculations," the industry generally believes that its low-price strategy is aggressive.

Qilu Pharmaceutical has a strong hospital promotion system and distribution network, enabling it to quickly capture the terminal market after winning bids. However, "exchanging price for volume" also means profit dilution, and as a non-listed company, Qilu Pharmaceutical has never disclosed its sales expenses or net profit margin.

In the era of generic drugs, low prices for volume can bring absolute market share; in the era of biosimilars, cash flow can still be maintained through scaled production capacity. However, competition in the innovative drug era has shifted from production capacity and distribution channels to science and clinical value, making it difficult to replicate advantages through price wars.

By contrast, some other veteran pharmaceutical companies are significantly ahead in the transition to innovative drugs.For example, Hengrui Medicine entered the harvest period of innovative drugs starting from 2020. By the end of 2024, it had 19 Class 1 innovative drugs on the market, with revenue from innovative drugs reaching 13.89 billion yuan in 2024, accounting for 49.6% of total revenue.

Similarly, CSPC, which has also performed remarkably in the bulk procurement, has been continuously expanding its innovative drug portfolio in recent years. It is estimated that the revenue from innovative drugs will exceed 6.5 billion yuan in 2024, accounting for approximately 45% of the prescription drug business.

3. Can the Giant That Doesn't Go Public Succeed in Transitioning to Innovative Drugs?

In 2025, when the majority of pharmaceutical companies are accelerating capitalization, Qilu Pharmaceutical remains a "hidden giant" in China's pharmaceutical industry.

Medical companies that have submitted listing applications to the Hong Kong Stock Exchange and the STAR Market of A-shares since the beginning of this year,HealthcareMore than 60 companies, including Hengrui Medicine, have completed secondary listings in the Hong Kong stock market to support the high R&D investment in innovative drugs.

Qilu Pharmaceutical, however, has always maintained a cautious attitude towards the capital market. The company and its several subsidiaries have not taken any steps towards going public or listing, nor have they announced any plans for an IPO.

According to the company's public information, in 2024, Qilu Pharmaceutical Co., Ltd. achieved sales revenue of 37.82 billion yuan, an increase of approximately 3% year-on-year, with exports reaching 1.02 billion U.S. dollars. Exports of formulations to the United States and Europe grew by 21.4% and 50.6%, respectively. Currently, 32 formulation products have been exported to the United States, and 17 to Europe, with a cumulative total of over 300 product varieties on the market. Additionally, 38 products rank first in terms of market share overseas.

A large cash flow and stable customer base may reduce Qilu Pharmaceutical's motivation for external financing.

Qilu Pharmaceutical, of such scale, is still operated in a family style. In 2003, Qilu Pharmaceutical underwent restructuring, with the founder Li Bota and employees buying out the state-owned assets, transforming the enterprise from state-owned to privately owned.

Thereafter, Li Botao and his daughter Li Yan gained absolute control over Qilu Pharmaceutical through the holding company "Shandong Lufa Pharmaceutical Investment Co., Ltd." Information from Tianyancha shows that Li Botao holds 25.64% of Lufa Pharmaceutical, while Li Yan holds 43.22%, with their combined shares exceeding 68%.

(Figure / Tianyancha)

Li Botao currently serves as the Chairman of Qilu Pharmaceutical, and Li Yan has been serving as the President of Qilu Pharmaceutical Group since 2009, taking full responsibility for daily operations and gradually transitioning into a leadership role.

This model brings powerful decision-making efficiency, but it also implies the possibility of some degree of oversight deficiency. In recent years, the company has exposed some governance issues.

In the first half of this year, Qilu Pharmaceutical Co., Ltd. was reportedly involved in a case of issuing fake value-added tax invoices, with the amount involved reaching 1.351 billion yuan.

According to the publicly available criminal judgment (Case No. [2024] Wan 0181 Criminal Initial 327), the prosecution charged that between December 2019 and September 2021, Chaohu Yitong Tianxia Health Consulting Co., Ltd. issued fake value-added tax special invoices to Qilu Pharmaceutical Co., Ltd. and its affiliated companies in the absence of real transactions. The total number of invoices was 13,925, with an amount of 1.275 billion yuan, a tax amount of 76.4759 million yuan, and a combined price and tax amount of 1.351 billion yuan.

The verdict shows that Qilu Pharmaceutical provided the company with the personal information of more than 300 employees, issuing false invoices in the name of individual businesses and completing the circulation of funds.

The full name of the criminal judgment for this case is "First Instance Criminal Judgment of Zhao Mou for Falsely Issuing Special VAT Invoices, Used for Defrauding Export Tax Rebates, and Deductible Tax Payment Invoices," which was published on the China Judgments Online website on December 3, 2024.

However, to the surprise of many, this judgment was taken down from the China Judgments Online website shortly after being uploaded. Currently, relevant screenshots of the judgment can only be seen in past media reports, and some media coverage has also disappeared. Qilu Pharmaceutical has not publicly responded to the matter, and it remains unknown to the public whether the incident is true or not.

Previously, in January 2024, the Second Inspection Bureau of the Luoyang City Tax Bureau of the State Administration of Taxation issued a penalty decision (Document No.: Luo Tax Two Inspection Penalty [2024] No. 2) to Henan Qihe Pharmaceutical Co., Ltd., a subsidiary of Qilu Pharmaceutical.

(Figure / Henan Provincial Tax Service, State Administration of Taxation)

It was pointed out that the company had engaged in tax evasion in items such as value-added tax, urban maintenance and construction tax, and corporate income tax, with the total amount of tax evasion reaching 22.8973 million yuan. However, Qihe Pharmaceutical had already submitted an application for deregistration in 2021.

In addition, subsidiaries of Qilu Pharmaceutical have been exposed in recent years for issues related to production safety and environmental protection.

Qilu Pharmaceutical is a highly competitive pharmaceutical company with a strong manufacturing system and channel control, and has broad prospects in both the Chinese and overseas markets.

For a non-listed company like Qilu Pharmaceutical, there is no need to regularly disclose financial reports, nor is it subject to the audit and information disclosure requirements of the capital market. However, for the company’s future development to be more stable and sustainable, the management should further enhance governance capabilities in terms of compliance and internal governance systems.

In the era of innovative drugs, will this non-listed pharmaceutical giant achieve a true innovative transformation, or will it still rely on price and scale to maintain the old order? The answer from Qilu Pharmaceutical may still be hidden in that unseen ledger.

*The image in the article is from the official website of Qilu Pharmaceutical.

       Title: Spending 2 Billion on an Innovative Drug, Is Qilu Pharmaceutical Starting to Place Big Bets by Insisting on Not Going Public for Financing?