{"text":[[{"start":6.72,"text":"This article only represents the author's own views."}],[{"start":10.04,"text":"An insomnia drug launched just over two years ago has become the best hope for reviving sluggish profits at Zhejiang Jingxin Pharmaceutical Co. Ltd. (002020.SZ).The oral medication, dimdazenil, is the first commercial fruit of the company’s efforts to shift away from generic drugs towards innovative therapies."}],[{"start":30.48,"text":"Seeking funds to accelerate the transition, Jingxin filed a renewed application this month for a Hong Kong listing, hoping that investors will regard its sleep-inducing capsules as just the start of a lucrative new pipeline.Jingxin’s operations span generic drugs, traditional Chinese medicine, biologics, active pharmaceutical ingredients and medical equipment, as well as the new line in innovative drugs."}],[{"start":53.48,"text":"Revenue from dimdazenil nearly tripled in the first half but overall income based mostly on legacy products was stuck in reverse gear, after showing little growth over the past few years.Annual revenue rose from about 4 billion yuan in 2023 to 4.16 billion yuan ($620 million) in 2024, before falling back to 4.07 billion yuan in 2025, representing a compound annual growth rate of just 0.9% over the two years. Net profit rose from 623 million yuan to 772 million yuan over the same period, for a CAGR of about 11.3%, outpacing revenue growth."}],[{"start":94.76,"text":"Cost controls helped to lift profits last year, as sales and marketing expenses fell by more than 90 million yuan while R&D spending declined to 368 million yuan and tax expenses also decreased."}],[{"start":107.24,"text":"In the first six months of 2026, Jingxin’s revenue fell 1.5% to 1.99 billion yuan from the year-earlier period, while net profit dropped 10% to 358 million yuan. Revenue fell across all its segments, except for innovative drugs and medical equipment. The company still relies on generic drugs for about 40% of revenue and is keen to inject fresh momentum through new products.According to the Hong Kong filing, the proceeds from the listing will be used to develop innovative drugs, expand the firm’s marketing network and acquire or license external pipeline assets."}],[{"start":107.74,"text":"New earnings engine"}],[{"start":142.52,"text":"The insomnia drug, Jingxin’s first approved innovation, is the clearest growth driver. In its first year on the market, the drug brought in 23.42 million yuan. In 2025, after the drug was granted state medical coverage, the figure rose to 195 million yuan. Sales jumped nearly 177% to 153 million yuan in the first half of this year, taking the overall revenue contribution to 7.7% from 2.7%. By the end of June, dimdazenil had gained access to more than 3,000 hospitals, generating cumulative sales of about 371 million yuan since its launch. The capacity utilization rate for producing the drug rose to 90% in the first half."}],[{"start":190.6,"text":"However, the rapid growth was from a low base. According to industry research cited in the listing application, dimdazenil ranked seventh in China’s market for sleep-onset drugs in 2025, with a share of about 5.4%. It competes with established products such as midazolam and zopiclone, as well as newer therapies such as lemborexant and daridorexant. What matters from this point is whether sales can keep growing at pace after the boost from entering the drug reimbursement list."}],[{"start":220,"text":"Jingxin’s traditional business is not short of market standing. The company ranked first in China’s generics market for the anti-convulsant levetiracetam and the dopamine agonist pramipexole dihydrochloride, and came second for sertraline hydrochloride, used to treat depression, according to research in the filing. However, nearly half the firm’s revenue came from its 10 highest-grossing products, several of which are subject to the price pressure of volume-based procurement. Jingxin cited intensified competition and lower average selling prices for certain drugs and APIs as factors in its revenue drop last year."}],[{"start":256.92,"text":"Founder Lyu Gang, along with his associates, set up a predecessor company in the 1990s with registered capital of 3.63 million yuan. Lyu led the company to the Shenzhen Stock Exchange in 2004 and currently controls about 36.44% of Jingxin shares with his wife, Zhang Liling."}],[{"start":276.04,"text":"The company is now pursuing the challenging task of transforming from an established drugmaker into an innovator, but dimdazenil remains its only breakthrough so far, and other discoveries are at an early stage. Of six candidates identified by Jingxin, only two - JX2201 and JX6001 - have entered clinical trials. JX2201, which is designed to lower cholesterol, has completed a first round of tests and has entered a Phase Two trial in China."}],[{"start":306.32,"text":"Jingxin’s R&D costs fell from 401 million yuan in 2023 to 368 million yuan in 2025, before declining 10.9% in the first half of this year. Its R&D expense ratio also fell to 8.3% from 10%. Proceeds from the Hong Kong listing have been earmarked for R&D and pipeline development through acquisitions or technology licenses. Jingxin said it had identified about 50 potential partnerships but had not selected any specific targets."}],[{"start":338.36,"text":"Jingxin’s mainland shares have weakened over the past month, from 14.02 yuan on Aug. 17 to about 11.4 yuan now, a drop of nearly 19%. The stock trades at about 13 times earnings, suggesting investors continue to view Jingxin as a mature drugmaker and have yet to confer an innovation premium."}],[{"start":359.6,"text":"Dimdazenil serves as proof of capability, but the revenue does not suffice to reverse the overall earnings decline. Until it achieves commercial scale with another innovative drug, Jingxin could well struggle to shed its generic label."}],[{"start":373.08,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790590279_8254.mp3"}