Frontier Biotech-U (688221.SH) 2025 Annual and Q1 2026 Earnings Review: Return to Profitability in Q1 2026 and Accelerated Global Expansion via Small Nucleic Acid Out-Licensing to GSK

(Source: Medical Innovation Riders)

Event:Frontier BiologicsIn2026Year04Month24Day of Publication2025Year and2026First Quarter Earnings Report of the Year. Company2025Total operating revenue achieved in the year1.23100 million yuan, a year-on-year decrease4.7%; Net profit attributable to母公司 shareholders-2.68100 million yuan.

2026First Quarter Operations in [Year]Revenue increased significantly948.89%To2.97100 million yuan, net profit attributable to the parent company reached2.27100 million yuan, turning from loss to profit, contributed by non-recurring gains and losses812.5Million yuan. The net cash flow from the company's operating activities increased to2.18100 million yuan, the main reason for the increase in cash flow in the first quarter isGSKUpfront Payment of Licensing Agreement4000Million USD confirmed in Q1, significant enhancement in cash recovery capability.

Aibening Stabilizes the Basic Market, Company's R&D Expenses Increase Significantly: Aibening to Contribute Revenue of 105 Million Yuan in 2025, with Income Declining 7.62% Year-on-Year, but Gross Profit Margin Increasing by 5.77 Percentage Points to 34.76%. We believe the main reasons are the 15.12% decrease in production costs and channel optimization. The antiviral basic market continues to strengthen, providing stable cash flow support for the innovative pipeline.

At the same time, the company is steadily expanding its generic drug portfolio: advancing the registration and evaluation of high-end generic drugs and medical devices in the fields of osteoporosis and pain management, which in turn supports innovative R&D.2025R&D expenditure reached in year1.42Billions, supporting innovative transformation.

Small Nucleic Acid Licensed to GSK, Internationalization Accelerates: The company focuses on small nucleic acid pipelines. In February 2026, Frontier Biotech reached a global exclusive licensing agreement with GlaxoSmithKline (GSK) for two small nucleic acid drugs, with a total BD amount of up to $1.003 billion, including a down payment of $40 million. Licensing small nucleic acids to GSK represents an important development milestone for the company, serving as international authoritative validation of its technology platform and R&D capabilities, while also promoting the company’s full alignment with global standards, enhancing its quality system, and strengthening international operational capabilities.

The company's core focus is on small nucleic acids, with a pipeline of multiple differentiated products to solidify its innovative foundation: building aIgAA differentiated pipeline guided by unmet clinical needs such as kidney disease and cardiovascular disease, independently developedACORDEExtrhepatic delivery technology completes proof-of-concept in muscle, fat, heart and other tissues, supporting multi-target product development.2026Year3In the month, the company received the "Drug Clinical Trial Approval Notice" issued by the National Medical Products Administration, agreeingFB7013Injectable for PrimaryIgAClinical Trials for Kidney Disease Treatment.

Investment Advice:Frontier Biotechnologies' commercialization is proceeding steadily, with extensive布局in the small nucleic acid treatment field. We expect the company's revenue for 2026-2028 to be 418/281/335 million yuan respectively, with year-on-year growth rates of 239%/-32.8%/19.1%; net profits attributable to母公司shareholders are expected to be 25/-99/-88 million yuan; EPS

Respectively0.07/-0.26/-0.24Yuan;PSRespectively19/28/24Times. Considering that the small nucleic acid drug track is currently in a stage of rapid development, we are optimistic about the company's forward-looking layout in small nucleic acid drugs. Maintain a "recommended" rating.

Risk Warning:1) The medical insurance and centralized procurement policies led to prices lower than expected;2) Clinical progress or time to market falls short of expectations;3) The industry competition pattern is intense.

Relevant Statements

Note:The excerpt in the article is fromNational LivelihoodThe securities research institute has publicly released the research report. For specific report content and related risk warnings, please refer to the full version of the report.

Analyst:Zhang Jinyang

Analyst LicenseIndustry Code:S0590525120012

Analyst:Hu Ruobi

Analyst LicenseIndustry Code:S0590525120011

Analyst: Guo Guangyang

Analyst's LicenseIndustry Code:S0590525120010

Securities Research Report: "Frontier Biotechnologies Inc. (688221.SH) 2025 Annual Report and 2026 Q1 Performance Review: Q1 2026 Turns Profitable, Small Nucleic Acid Goes Global with GSK's International Expansion Accelerating"》

Report Release Date: April 30, 2026

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