/ The Invisible King of Baoji Pharmaceutical: Moving Beyond ADC Competition to Find the Unique Golden ‘Shovel Seller’ in the Subcutaneous Injection Gold Rush of Anticancer Drugs /
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Introduction: When ‘Involution’ Becomes a Biological Phenomenon
In the vast landscape of China’s biopharmaceutical industry, the past five years have been overshadowed by two words—’involution’. This is not only a sociological term but has also become a true reflection of capital and pipelines.
In 2024, the National Medical Products Administration (NMPA) of China approved a record 83 new drugs, a 12% increase year-on-year, far exceeding the 50 new drugs approved by the FDA across the ocean during the same period. However, behind this seemingly prosperous number lies a brutal war of homogenization. While we cheer for the billions in licensing for the ADC (Antibody-Drug Conjugate) market, the industry’s red sea has already turned bloody.
Globally, 17 ADC drugs have been approved, with Enhertu leading the pack with annual sales of $3.754 billion. This myth has stimulated the nerves of Chinese pharmaceutical companies, leading to hundreds of ADC pipelines fighting over the same target. HER2, Trop-2, Claudin18.2—behind each popular target, dozens of companies are ‘involving’ clinical progress, ‘involving’ enrollment speed, and ‘involving’ prices. However, the patience of capital is limited. By 2025, whether it is MacroGenics terminating its prostate cancer ADC clinical trials or Ipsen returning Sutro’s ROR1 ADC rights, these events foreshadow the retreat of this carnival.
In this almost suffocating game of stock competition, smart capital is beginning to seek an exit from ‘involution’.
If PD-1 is the ‘King of Drugs’ of the previous generation, and ADC is the ‘King of Involution’ of this generation, then who is the ‘True King’ of the next generation? This article will reveal a severely underestimated logic to the market through detailed industry chain research and data analysis:The true king is not a specific drug fighting in the red sea, but the underlying technology that enables all macromolecular drugs to ‘pass the customs’—recombinant human hyaluronidase (PH20).
In China, the company standing at the forefront of this trend, playing the role of the ‘shovel seller’, isShanghai Baoji Pharmaceutical. While the world is focused on when BeiGene, Junshi Biosciences, and HengRui Medicine’s PD-1 subcutaneous formulations will be launched, Baoji Pharmaceutical, as the core enzyme supplier behind this transformation, is quietly building an unassailable business moat.
Stop competing in ADC. In the historic migration of PD-1 from intravenous (IV) to subcutaneous (SC) injection, those holding the ‘shovel’ will be the rulers of the new cycle.
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Chapter 1: Anxiety and Breakthrough in the Post-PD-1 Era
1.1 The Twilight of the King of Drugs and the Dawn of New Life
It is well known that PD-1 inhibitors (such as Keytruda and Opdivo) have completely changed the landscape of tumor treatment, being dubbed the ‘King of Drugs’ with annual revenues exceeding $10 billion. However, in the Chinese market, the story of PD-1 is a tragic tale of price plummeting. From initial annual treatment costs of hundreds of thousands of yuan to tens of thousands after medical insurance negotiations, profit margins have been severely compressed.
Even more urgent is the patent cliff. Taking Merck’s ‘King of Kings’ Keytruda (K drug) as an example, its core patent will expire in 2028. Once the patent expires, cheap biosimilars will flood the market. To defend this cash cow with annual sales exceeding $25 billion, Merck must find a way to complete product iteration before the patent expires and establish new patent barriers.
The core of this strategy issubcutaneous injection (SC). Transforming what originally required hospitalization and took 1-3 hours for intravenous infusion into a subcutaneous injection that only takes 3-5 minutes not only greatly enhances patient compliance but, more importantly, creates a brand new patented product, effectively achieving ‘product hopping’ and keeping biosimilars at bay.
1.2 The Wall of Physics and the Shovel of Biology
However, transitioning from IV to SC is not easy. It is a collision of physics and biology.
Macromolecular antibody drugs (such as monoclonal antibodies) typically require high doses (e.g., over 1000mg). If administered intravenously, these drugs dissolve in 250ml or even 500ml of saline and drip slowly, where volume is not an issue. But in subcutaneous injection, the capacity of subcutaneous tissue in the human body is extremely limited, usually only accommodating 1-2ml of liquid.
This creates a huge contradiction:
Volume Limitation: The subcutaneous tissue is filled with extracellular matrix (ECM) composed of hyaluronan. This matrix acts like a solid jelly, locking in moisture and restricting the diffusion of liquids. Forcing more than 2ml of liquid can cause severe pain and tissue damage.
Viscosity Nightmare: To fit 1000mg of drug into 2ml of volume, the drug concentration must reach an astonishing 500mg/ml. Such a high concentration protein solution becomes as viscous as honey, making it impossible to inject through a fine needle, not only making production extremely difficult but also exceeding ergonomic limits during injection.
This is why subcutaneous injection has long been a forbidden zone for macromolecular drugs. Until the emergence ofrecombinant human hyaluronidase (PH20).
This enzyme acts like a ‘biological shovel’. When mixed with the drug and injected subcutaneously, it temporarily hydrolyzes the hyaluronan in the extracellular matrix, instantly turning the solid ‘jelly’ into a liquid channel. This allows large volumes (10ml-20ml or even more) of the drug to enter the subcutaneous tissue effortlessly within minutes and be rapidly absorbed into the bloodstream. Even better, this effect is reversible, as the body will resynthesize hyaluronan within 24-48 hours, restoring the skin’s barrier function.
This ‘shovel’ is the only key to solving all subcutaneous administration issues for the King of Drugs.
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Chapter 2: Global Benchmarking—The ‘Water Seller’ with a Trillion Market Value
To understand the value of Baoji Pharmaceutical, we must look globally to see how much this ‘shovel’ is worth in the international market.
2.1 Halozyme: A Billion-Dollar Empire Built on Patents
AmericanHalozyme Therapeutics (NASDAQ: HALO) is the pioneer in this field. With its ENHANZE® drug delivery technology (i.e., rHuPH20), Halozyme has built an enviable business model: it does not directly develop anticancer drugs but licenses its enzyme technology to pharmaceutical giants like Roche, BMS, and Johnson & Johnson.
Financial data is staggering: In the third quarter of 2025, Halozyme’s royalty revenue reached a record$236 million, a 52% year-on-year increase. The company’s total annual revenue guidance was raised to$1.3 billion to $1.375 billion, with a very high net profit margin.
What is its core asset? It is this ‘shovel’.
Johnson & Johnson’s Darzalex SC (Daratumumab subcutaneous formulation): A blockbuster for multiple myeloma.
Roche’s Phesgo (Pertuzumab + Trastuzumab): The standard treatment for breast cancer.
BMS’s Opdivo (Nivolumab): A newly approved subcutaneous formulation.
Every patient receiving treatment with these drugs, every injection, contributes to Halozyme’s cash flow. This ‘laying down and earning’ model supports its market value of about $8 billion.
2.2 Alteogen: The Challenger and the $17 Billion Miracle
If Halozyme is the dominant player of the old era, then Korea’sAlteogen (KOSDAQ: 196170) is the challenger of the new era.
Alteogen has developed a new hyaluronidase called ALT-B4, claiming to have better thermal stability and lower immunogenicity than Halozyme. But what truly made it famous was its successful entry into Merck’s K drug supply chain.
As BMS is already deeply bound to Halozyme (for Opdivo SC), Merck, as a rival, had to find an alternative for its K drug subcutaneous formulation (Keytruda SC). Alteogen seized this once-in-a-lifetime opportunity and signed a global exclusive licensing agreement with Merck.
The capital market’s reaction was enthusiastic: Alteogen’s market value soared to approximately23 trillion Korean won (about $17 billion). The logic given by the market is simple: K drug is the highest-selling drug globally (annual sales exceeding $25 billion), and if 50% of K drug patients switch to subcutaneous injection, even charging a low single-digit sales share would yield astronomical value.
2.3 Valuation Gap and Chinese Opportunity
| Dimension | Halozyme (USA) | Alteogen (Korea) | Baoji Pharmaceutical (China) |
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| Core Asset | rHuPH20 (ENHANZE) | ALT-B4 (Hybrozyme) | KJ017 (rHuPH20) |
| Business Model | Licensing/Royalty | Licensing/Royalty | Formulation Supply/Co-development/Self-research |
| Market Value/Valuation | ~$8 billion | ~$17 billion | $800-900 million (HK-IPO) |
| Key Partners | Roche, BMS, Johnson & Johnson | Merck, Sanofi | Anke Biotech, numerous monoclonal antibody companies |
| Market Position | Global Monopoly | Strong Challenger | China’s Only NDA |
Table 1: Comparative Analysis of the Three Giants of Hyaluronidase Globally
The data reveals a shocking fact: as the only company in China with an NDA-stage recombinant human hyaluronidase, Baoji Pharmaceutical’s valuation is only one-twentieth of its Korean counterparts. This significant valuation gap presents a golden opportunity for investors.
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Chapter 3: Baoji Pharmaceutical—The Infrastructure Builder of China’s Biopharmaceuticals
After understanding the global landscape, we return to China. Why Baoji Pharmaceutical? Why can it become China’s Halozyme?
3.1 The Founder and the Background of Synthetic Biology
Baoji Pharmaceutical is not an ordinary startup. Its founder, Dr. Liu Yanjun, previously served as Vice President of Shanghai Pharmaceutical Group and Director of the Central Research Institute, with over 20 years of experience in new drug development. This profound industry background has endowed Baoji with a strong industrialization gene from its inception.
The company’s core technology platform issynthetic biology. This may sound like a trendy concept, but in the field of enzyme preparations, it is the line between life and death. The production of recombinant human hyaluronidase is extremely difficult, requiring highly complex glycosylation modifications to maintain activity and stability. Traditional animal extraction (such as bull testis extract) poses risks of viral contamination and immunogenicity issues and has been eliminated. Large-scale, high-purity, low-cost recombinant protein expression is precisely where synthetic biology comes into play.
3.2 KJ017: The Only Ticket to the Subcutaneous Era
Baoji’s core assetKJ017 is currently the only recombinant human hyaluronidase in China that has completed clinical trials and is in the NDA (New Drug Application) stage.
Note the significance of the word ‘only’. In drug development, first-mover advantage is a matter of life and death.
Technical Barrier: KJ017 is not just an enzyme; it is a complete formulation. According to patent disclosures, KJ017 contains specific stabilizers (such as trehalose, methionine) and non-ionic surfactants that can maintain long-term stability at 2-8°C. This is crucial for biopharmaceuticals that require cold chain transport.
Regulatory Barrier: Baoji’s hyaluronidase has completed DMF (Drug Master File) registration with the FDA in the United States. This means its quality standards have been recognized by the world’s most stringent regulatory agency. For Chinese pharmaceutical companies looking to export subcutaneous formulations, choosing a supplier with FDA DMF is essential.
3.3 The ‘Dual Antibody’ Strategy: A Dimensional Reduction Attack of Antibodies and Antibiotics
Unlike Halozyme, which focuses solely on high-end antibodies, Baoji has developed a more grounded ‘dual antibody’ strategy:
Antibodies: Providing subcutaneous administration solutions for PD-1, monoclonal antibodies, and other high-end biopharmaceuticals to earn high profits.
Antibiotics: Developing subcutaneous formulations for bulk antibiotics such as ceftriaxone (e.g., BJ007).
This is an extremely clever business layout. In China’s vast grassroots medical institutions, intravenous infusion is being strictly limited (‘infusion restriction order’). If antibiotics that must be administered IV can be converted to SC injection, it not only responds to national policies but also opens up a massive grassroots market. This is the wisdom of the ‘shovel seller’: digging for gold (biopharmaceuticals) while also mining coal (antibiotics), ensuring steady income.
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Chapter 4: The Subcutaneous War of PD-1—Whoever Has Baoji Will Rule the World
This is the core logic of this report. China’s PD-1 market is undergoing an evolution from ‘price war’ to ‘formulation war’.
4.1 Junshi Biosciences’ JS001sc: The First Domino
Junshi Biosciences’ Toripalimab (Tuoyi) is the first domestically approved PD-1 in China. However, in subsequent commercial competition, it faces strong pressure from HengRui and BeiGene. Junshi’s counterattack weapon isJS001sc—the subcutaneous version of Toripalimab.
In November 2025, Junshi announced that JS001sc achieved its primary endpoint in the Phase III clinical study for non-small cell lung cancer (NSCLC), with pharmacokinetic (PK) data comparable to the intravenous formulation.
The key point is: JS001sc is a compound formulation that includeshyaluronidase. So, where does Junshi’s enzyme come from?
Halozyme? Too expensive, and it not only takes a cut but also shares rights.
Alteogen? Already bound to Merck, and as a Korean company, supply chain security is questionable.
4.2 HengRui and BeiGene’s Anxiety
When Junshi’s subcutaneous PD-1 is launched in a few years, HengRui (Cameralizumab) and BeiGene (Tislelizumab) will face immense pressure.
BeiGene: Although it is also developing a subcutaneous formulation (Tevimbra SC), there are indications that its early attempts were on the high-concentration formulation (HCF) route. However, high-concentration formulations without enzymes are limited by volume (usually <2ml), which often means higher injection pain and more frequent administration for high-dose PD-1. As competition intensifies, embracing the hyaluronidase route is almost inevitable.
HengRui: As the leading pharmaceutical company in China, it has a vast pipeline. HengRui has several subcutaneous formulations in development and possesses strong formulation development capabilities. However, facing the stringent patent barriers in the enzyme preparation field, directly procuring high-quality enzymes from Baoji may be more cost-effective than building its own capacity.
4.3 Why Must It Be Baoji?
In the ‘involution’ of the Chinese market, cost is the lifeline. Halozyme’s licensing model typically includes hefty upfront payments and royalties of up to low single digits. For the profit-squeezed domestic PD-1, this is an unbearable burden. Baoji Pharmaceutical, as a local enterprise, has a more flexible business model—it can be ‘formulation supply’ or ‘low royalty licensing’. According to the prospectus, Baoji adopts a ‘mixed business model’, with both self-research and excipient supply. This flexibility makes Baoji the best ally for Chinese pharmaceutical companies to combat multinational giants (MNCs) in subcutaneous formulations (such as the subcutaneous version of K drug).
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Chapter 5: Pharmacoeconomics and Policy Moat
Why is subcutaneous injection of ‘great’ market significance? Because in the medical context of China, it solves not only medical problems but also economic problems.
5.1 Turnover Rate: The Lifeline of Hospitals
China’s top-tier hospitals are overcrowded. Chairs in infusion rooms are a scarce resource.
Intravenous Injection (IV): Patients need to register, queue, undergo puncture, infusion for 60 minutes, and observation for 30 minutes. Including nurse preparation, the entire process takes 2-3 hours. This means one chair can only serve 3-4 patients a day.
Subcutaneous Injection (SC): Injection only takes 3-5 minutes, and observation time is significantly reduced. One chair can serve dozens of patients a day.
In the era of DRGs (Diagnosis-Related Groups) and DIP (Disease-Related Payment), hospitals are extremely eager to improve turnover rates. Moving cancer patients from infusion rooms to injection rooms can free up valuable medical resources for more complex treatments, which is a pressing need for hospital managers.
5.2 The Victory of Pharmacoeconomics
Multiple studies have shown that subcutaneous injection can significantly reduce the indirect costs of the healthcare system. An Italian study indicated that switching to subcutaneous formulations reduced patient and caregiver absenteeism, lowering indirect costs by 70%. In China, although the unit price of subcutaneous formulations may be slightly higher than IV (considering the cost of enzymes), the overall pharmacoeconomic benefits, considering saved hospitalization costs, nursing fees, and patient time costs, are enormous. This is a story that can persuade the medical insurance bureau.
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Chapter 6: In-Depth Financial Analysis and Valuation Reconstruction
6.1 The Explosive Potential of Revenue Models
Baoji Pharmaceutical’s revenue sources will show exponential growth:
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Cash Cow: SJ02 (Long-acting FSH). This is a blockbuster in the field of assisted reproduction. Although the collaboration with Organon has ended, this actually allows Baoji to regain global rights. The subsequent rapid commercialization cooperation with Anke Biotech in China proves the desirability of this asset. With the implementation of China’s fertility encouragement policy, the assisted reproduction market is expanding.
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Growth Engine: KJ017 (Hyaluronidase).
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Excipient Sales: Direct sales to pharmaceutical companies as pharmaceutical excipients, with demand expected to be in tonnage as PD-1 subcutaneous formulations ramp up.
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Milestones and Royalties: If adopting a licensing model, every successful subcutaneous formulation launch will bring milestone payments.
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Long Tail Market: Modified new drugs such as subcutaneous antibiotics (BJ007) will gain traction through grassroots markets.
6.2 Valuation Reconstruction Logic
Currently, Baoji Pharmaceutical’s valuation (approximately $900 million) is extremely undervalued. Let’s do a simple arithmetic:
Assuming the market size of PD-1 in China is 50 billion yuan.
In the next 5 years, if the penetration rate of subcutaneous formulations reaches 30% (referencing the over 60% penetration rate of subcutaneous formulations for Herceptin in Europe and the US), that would be a market of 15 billion yuan.
If Baoji, as the core raw material/technology supplier, captures 10% of the value chain (conservatively estimated), the annual revenue from PD-1 alone could reach 1.5 billion yuan.
Giving it a PE of 30 times (considering high growth and monopolistic nature), this one business alone could support a market value of 45 billion yuan (approximately $6 billion).
This does not even account for the potential of the assisted reproduction business and the global market.
Therefore, Baoji Pharmaceutical has 15-20 times growth potential.
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Chapter 7: Risk Warning and Anti-Fragility
As a financial report, we must objectively examine the risks.
7.1 Fearless of Patent Litigation
Halozyme is known for its fierce patent litigation. Baoji will inevitably face patent challenges when going global. Anti-fragility logic: Baoji is extremely cautious in its patent layout, applying for formulation patents that include specific stabilizers (trehalose, methionine) aimed at circumventing Halozyme’s core patent network. Furthermore, Halozyme’s core patent US7767429 will expire in 2027, significantly reducing legal risks.
7.2 The Impact of Biosimilars
Anti-fragility logic: This is the most exciting part. When IV PD-1 faces the impact of biosimilars, original drug manufacturers (such as Junshi and HengRui) have more motivation to promote SC formulations to build barriers. The more ‘involved’ biosimilars become, the more urgent the demand for Baoji’s ‘shovel’ will be. Baoji is a beneficiary of the biosimilar wave, not a victim.
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Conclusion: The New King is Rising, All-in on Baoji Pharmaceutical
In the investment logic of biopharmaceuticals, the most certain opportunities often do not bet on the success or failure of a specific drug but on the inevitability of a trend.
Inevitable Trend One: The transition of macromolecular drugs from intravenous to subcutaneous is a comprehensive victory from convenience to economics, irreversible.
Inevitable Trend Two: In the ‘involution’ of the Chinese market, cost control and supply chain security will force pharmaceutical companies to choose high-quality local suppliers.
At the intersection of these two major trends,Shanghai Baoji Pharmaceutical stands in the throats of the industrial chain, much like Nvidia (Nvidia) for AI and ASML for chips. It does not directly participate in the competition for the throne of PD-1, but it determines who can wear the crown of the new era.
For investors and pharmaceutical companies deeply trapped in the ADC red sea anxiety, it is time to look up and find those quietly selling shovels by the roadside.
Because in the upcoming era of subcutaneous injection,KJ017 is not just an enzyme; it is the ticket to the next golden decade.
Appendix: Key Data and Industry Chain Map
1. Forecast of China’s Hyaluronidase Market from 2024 to 2030
According to comprehensive analysis from multiple research reports, China’s hyaluronidase market is expected to grow at a CAGR of 12.7%, reaching nearly $1 billion by 2034. However, this is only the value of the enzyme itself; the downstream biopharmaceutical market it leverages will be in the trillion-level.
2. Comparison of Key Technical Parameters of Major Global Competitors
| Characteristic | Halozyme (rHuPH20) | Alteogen (ALT-B4) | Baoji Pharmaceutical (KJ017) |
|---|---|---|---|
| Source | CHO Cells | CHO Cells (Hybrozyme) | CHO Cells (Synthetic Biology) |
| Thermal Stability | Standard | Claims Higher | Long-term Stability at 2-8°C |
| Immunogenicity | Low | Claims Lower | Clinical Validation (FDA DMF Support) |
| Main Applications | Oncology, Autoimmunity | Oncology (K Drug) | Oncology, Assisted Reproduction, Antibiotics |
Data Source: Company Financial Reports and Patent Disclosures
3. Baoji Pharmaceutical Financing and IPO Progress
Listing Location: Hong Kong Stock Exchange (HKEX)
Status: Passed Hearing (End of 2025)
Underwriters: CITIC Securities, Haitong International
(All data in this article is based on publicly available information and does not constitute investment advice)