In-Depth Analysis of the Competitive Landscape of Zejing Pharmaceutical's Donafenib

Based on the information I have collected, I now present to you the

.

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According to Zejing Pharmaceutical’s 2024 annual report data [0], the company achieved operating revenue of RMB 533 million, a year-on-year increase of 37.91%, mainly driven by the growth in sales of Donafenib tablets. However, the company remains in a loss-making state: in 2024, the net profit attributable to shareholders was a loss of RMB 138 million, a reduction of RMB 140.75 million compared to the previous year’s loss of RMB 279 million; the non-recurring net profit was a loss of RMB 171 million, a year-on-year reduction of RMB 177.58 million [0].

Looking at a longer time frame, the company has not achieved profitability for six consecutive years since its listing on the STAR Market in 2019. As of the third quarter of 2025, the company’s cumulative losses reached RMB 1.027 billion [1]. In terms of revenue, the figures were RMB 320 million, RMB 384 million, and RMB 532 million in 2022, 2023, and 2024 respectively, showing a steady growth trend, but R&D investment and sales expenses remain high — in 2024, R&D investment was RMB 388 million, and sales and distribution expenses were RMB 271 million [0][1].

Notably, the company’s net cash flow from operating activities turned positive in 2024, reaching RMB 38.2 million, mainly due to the receipt of RMB 280 million in exclusive marketing authorization fees for recombinant human thrombin [0]. This indicates that the company is improving its cash flow through means such as business development (BD) collaborations.

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Donafenib is a

independently developed by Zejing Pharmaceutical. By replacing the methyl group in the sorafenib molecule with a deuterated methyl group, it optimizes pharmacokinetic properties [2]. As an oral multi-kinase inhibitor, Donafenib exerts anti-tumor effects through :

• Anti-angiogenesis
  : Inhibits the activity of multiple tyrosine kinase receptors such as VEGFR and PDGFR
• Anti-proliferation
  : Blocks the RAS/RAF/MEK/ERK signaling pathway to directly inhibit tumor cell growth

Donafenib was approved for marketing by the National Medical Products Administration (NMPA) in June 2021, as a first-line treatment for unresectable hepatocellular carcinoma in patients who have not previously received systemic therapy, making it

[2]. In 2023, it added a new indication: iodine-refractory differentiated thyroid cancer. At the end of 2022, Donafenib was included in the National Medical Insurance Drug List, with its price reduced from approximately RMB 30,000 per month at launch to approximately RMB 5,000-6,000 per month after medical insurance coverage [3].

Donafenib experienced rapid volume growth after being included in medical insurance, with sales data as follows [2][4]:

Period	Sales Revenue	Number of Covered Hospitals	Number of Covered Pharmacies
2023	RMB 426 million	Approximately 900	Approximately 700
2024	Approximately RMB 500 million (estimated)	Over 1,100	Approximately 1,000

As of December 31, 2024, Donafenib had been made available in over 1,100 hospitals, covering more than 2,000 hospitals and nearly 1,000 pharmacies [0]. This expansion rate indicates that the product is gradually gaining market access, but there is still a significant gap compared to competitors such as lenvatinib.

In the pivotal Phase III clinical trial (ZGDH3), Donafenib demonstrated non-inferior safety characteristics compared to sorafenib [5]:

Indicator	Donafenib	Sorafenib
Median Overall Survival (mOS)	12.1 months	10.3 months
Median Progression-Free Survival (mPFS)	3.7 months	3.6 months
Objective Response Rate (ORR)	4.6%	2.7%
Grade 3 or Above Adverse Reactions	25.3%	36.8%

The main advantage of Donafenib lies in its

: the incidence of grade 3 or above adverse reactions is significantly lower than that of sorafenib, leading to better patient tolerance. However, compared to lenvatinib, Donafenib lags in terms of ORR and mPFS data.

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As of December 2024, globally approved small-molecule targeted drugs for liver cancer include the following [2][6]:

Drug Name	Developer	Launch Time	2024 Market Characteristics
Sorafenib	Bayer	2006 (China)	Patent expired, impacted by generics, H1 2024 sales only RMB 100 million
Lenvatinib	Eisai	2018	40.2% market share, peak sales of RMB 2.8 billion in 2022
Regorafenib	Bayer	2017 (China)	Included in the 10th round of national volume-based procurement in 2024, maximum price cut of 91.86%
Apatinib	Hengrui Medicine	2014	Full-year sales expected to remain at RMB 1 billion
Cabozantinib	Exelixis	2019 (China)	Second-line treatment
Donafenib	Zejing Pharmaceutical	2021	Period of volume growth driven by medical insurance, low market share

As the world’s second targeted drug for first-line liver cancer treatment, lenvatinib was developed by Eisai and approved by the FDA in 2018 [2]. Its advantages include:

• Clinical Efficacy Advantage
  : The REFLECT trial showed that the lenvatinib group had an mPFS of 7.4 months vs. 3.6 months for sorafenib; the Chinese sub-group had an mOS of 15.0 months vs. 10.2 months for sorafenib [5]
• First-Mover Market Advantage
  : Experienced rapid volume growth after being included in medical insurance in 2020, with peak sales of nearly RMB 2.8 billion in 2022
• Leading Market Share
  : In H1 2024, lenvatinib held a 40.2% market share, ranking first [3]

As the world’s first targeted drug for first-line liver cancer treatment, sorafenib was once the market leader:

• Peak sales of RMB 1.669 billion in 2020
• With patent expirations (expiring sequentially from 2021 to 2023), the number of competitors increased, leading to declining sales year by year
• Domestic sales in H1 2024 were only RMB 100 million, with a market share of just 3.7% [2]
• Price wars between generics and the original drug have put pressure on the entire market

As the world’s first second-line drug for liver cancer, regorafenib:

• Included in the 10th round of national volume-based procurement in December 2024, with a maximum price cut of 91.86%
• Its total sales are expected to decline significantly in 2025 [2]
• This also foreshadows the potential volume-based procurement risks that Donafenib may face in the future

Liver cancer treatment is transitioning from

[2][5]:

Combination Regimen	Company	2023 Sales Revenue	Market Share	Characteristics
Tislelizumab	BeiGene	RMB 4.5 billion	24.75%	Ranked first in liver cancer market share
Sintilimab	Innovent Biologics	RMB 4 billion	22%	Second-line treatment for liver cancer
Pembrolizumab	Merck & Co.	RMB 3.2 billion	17%	Not included in medical insurance but with strong sales

• Atezolizumab + Bevacizumab
  : ORR reached 29.7%, mOS reached 24 months, and the risk of death was reduced by 53% [5]
• Sintilimab + Bevacizumab Biosimilar
  : ORR reached 21%, with mPFS of 4.6 months
• Camrelizumab + Apatinib (“Double Ai Combination”)
  : ORR reached 34.3%, with mOS of 20.1 months [5]

The 2024 edition of the Chinese Society of Clinical Oncology (CSCO) guidelines has listed multiple PD-1 combination regimens as recommended first-line treatments for advanced liver cancer, creating substitution pressure on traditional single-agent TKIs [2].

The Chinese liver cancer drug market is undergoing a process of

[2]:

• Sorafenib generics
  : Approved by multiple companies, with significant price reductions
• Lenvatinib generics
  : Approved or to be approved by multiple companies in 2024, expected to be included in volume-based procurement in 2025-2026
• Downward price pressure
  : Donafenib is currently priced at approximately 60-70% of lenvatinib, but its pricing advantage may be weakened as price wars among generics intensify

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Advantage	Description
Deuterated Innovation Technology	Has independent intellectual property rights, and theoretically has superior pharmacokinetic characteristics
Safety Advantage	The incidence of grade 3 or above adverse reactions is significantly lower than that of sorafenib, leading to better patient compliance
Medical Insurance Coverage	Included in the medical insurance catalog, improving price accessibility
Domestic Innovative Drug	Benefits from certain policy dividends against the backdrop of domestic substitution policies
International Layout	Launched global multi-center clinical trials to seek breakthroughs in overseas markets [2]

Challenge	Specific Performance
Low Market Share	Its 2024 market share is far lower than that of lenvatinib, and it faces fierce competition from sorafenib generics
Clinical Efficacy Gap	Lags behind lenvatinib in terms of ORR and mPFS data
Substitution by Combination Regimens	Immune combination therapy has become the mainstream, challenging the status of single-agent TKI treatment
Volume-Based Procurement Risk	Its price may further decline as competitors are included in volume-based procurement
Sales Network	Compared with giants such as Eisai and Hengrui Medicine, the scale of its sales team and hospital coverage are still limited
R&D Investment Pressure	Multiple pipeline drugs under development require continuous investment, resulting in significant financial pressure

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1. Short-term (2025-2026)
   :
   • Lenvatinib generics will be launched one after another, intensifying market price wars
   • Donafenib needs to seize the window period to expand its market share
   • Immune combination regimens will further squeeze the market space of single-agent TKIs

2. Mid-term (2027-2030)
   :
   • The pattern of first-line liver cancer treatment may be reshuffled
   • Perioperative treatment and combination therapies will become new growth drivers
   • Internationalization capabilities will become core competitiveness

According to the strategic plan disclosed in the company’s 2024 annual report [0]:

1. Focus on Core Products
   : Leverage the advantages of Donafenib as a superior first-line innovative drug to rapidly establish market share in liver cancer and thyroid cancer
2. Pipeline Diversification
   : Promote the commercialization of products such as gigacixitinib tablets (for myelofibrosis) and recombinant human thrombin (in the hemostasis field)
3. International Layout
   : Launched global multi-center clinical trials for Donafenib; pipelines such as ZG005 and ZGGS18 have obtained IND approvals in the US [1]
4. Development of Combination Therapies
   : Explore combination treatment regimens of “novel small-molecule targeted drugs - tumor immunotherapy”
5. BD Collaborations
   : Expand revenue channels through product rights transfers and collaborations with domestic and foreign pharmaceutical companies

Risk Type	Specific Content
Sustained Loss Risk	The company has not yet achieved profitability, with a large accumulated deficit, and may face delisting risk
Product Competition Risk	Lenvatinib and other competitors have leading market shares, and Donafenib’s sales may fall short of expectations
Policy Risk	Medical insurance cost control and volume-based procurement price cuts may compress profit margins
R&D Risk	Pipeline drugs under development may fail or be delayed in commercialization
Capital Risk	As of the end of September 2025, the company’s book cash is only RMB 133 million, requiring continuous financing

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Zejing Pharmaceutical’s core product Donafenib is facing

:

1. Direct Competition
   : Lenvatinib leads by a wide margin with a market share of over 40%, while sorafenib generics and regorafenib have seen their prices collapse under the impact of volume-based procurement
2. Substitution Competition
   : Immune combination therapies (PD-1 + anti-angiogenesis), with significantly better clinical data, are becoming the new standard for first-line liver cancer treatment
3. Price Competition
   : The mass launch of generics and the normalization of volume-based procurement will continue to drive down drug prices

Although Donafenib has secured a place in the market with its deuterated technology innovation and safety advantages, achieving sales of approximately RMB 500 million in 2024, the company needs to take the following actions to stand out in fierce competition:

• Accelerate the clinical development of combination therapies
• Continuously expand hospital coverage and sales network
• Advance the internationalization strategy to gain incremental market space
• Diversify risks through BD collaborations and pipeline diversification

Under the current competitive landscape, Donafenib is more likely to exist as an

rather than an absolute leader. Whether Zejing Pharmaceutical can achieve a profitability inflection point depends on whether Donafenib can continue to grow in sales volume and the progress of other commercial pipelines.

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[0] Suzhou Zejing Biopharmaceutical Co., Ltd. 2024 Annual Report (http://notice.10jqka.com.cn/api/pdf/97050b923c2a25a1.pdf)

[1] Gelonghui - Zejing Pharmaceutical Pursues Hong Kong IPO, Remains in Loss Phase, Recently Secures USD 1.2 Billion BD Deal (http://www.aastocks.com/tc/stocks/analysis/china-hot-topic-content.aspx?id=GLH5145652N&catg=4&source=GLH)

[2] Moshang Consulting - Analysis of the Market Pattern and Trends of Liver Cancer Drugs (https://www.cn-healthcare.com/articlewm/20251010/content-1658757.html)

[3] Sina Finance - Zejing Pharmaceutical: Reported a Loss of RMB 138 Million in 2024 (https://finance.sina.com.cn/stock/relnews/cn/2025-04-19/doc-inetrmwm2066359.shtml)

[4] Sina Finance - Analysis of the Competitive Landscape of the Liver Cancer Drug Market (https://n.sinaimg.cn/sinakd20260106s/99/w1080h619/20260106/2ee0-4eb79e5402a872b9cedc42f9e8b5f2fc.png)

[5] Dongfang Fortune Securities - Analysis of the Competitive Landscape of Innovative Drugs in Advanced Liver Cancer Treatment (https://pdf.dfcfw.com/pdf/H3_AP202206071570656727_1.pdf)

[6] Moshang Pharmaceutical - Inventory of Domestic Targeted Therapy Drugs for Liver Cancer (https://www.pharnexcloud.com/zixun/sd_5681)