Drug setback leaves Ascletis with an all-in bet on weight loss

The company’s two core hepatitis drugs were dropped from China’s state insurance scheme on July 1, effectively wiping out the remains of its legacy drug sales

Key Takeaways:

• The company has exited antivirals and is now wagering its future on weight-loss drugs that are just entering overseas trials
• But a late start and intensifying competition leave Ascletis facing steep challenges

By Molly Wen

The first company to take advantage of Hong Kong’s revised listing rules for biotechs eight years ago has had a difficult journey since its debut, switching from one drug type to another in search of commercial success.

Now Ascletis Pharma Inc. (1672.HK) has suffered a further blow, as its two core hepatitis drugs have been dropped from China’s medical insurance coverage, virtually eliminating its product sales.

For most Hong Kong-listed innovative drugmakers, sustained sales are a key test of a company’s technological prowess and prospects for stable revenue. By that measure, Ascletis looks to be falling short. The drugs that were the centerpiece of its listing have faltered, and a big investment in developing weight-loss drugs has yet to pay off.

The company’s two therapies for hepatitis C, Ganovo and Asclevir, failed to secure reimbursement renewals, meaning the cost of their use will no longer be covered from July 1. While the products remain on the market, their sales are set to plummet, shrinking the company’s drug revenue to pretty much zero.

The two Ascletis products were among eight drugs that failed to hold on to their place in the reimbursement list this time.

The Ascletis earnings report for last year records 127 million yuan ($19 million) in revenue, but almost all of it came from bank interest, government grants and fair-value gains on its equity investment in Nasdaq-listed Sagimet Biosciences.

The two main Ascletis businesses — R&D services and drug sales — contributed only 2.03 million yuan, with token product sales of just 382,000 yuan.

When Ascletis listed in Hong Kong in 2018 as the first Chapter 18A biotech stock, it had the two hepatitis drugs in hand and its turnover more than tripled that year to 166 million yuan, apparently putting the business on the path to profit. But the Chinese drugs have lost out to rival products from multinational drugmakers.

Ganovo needed to be used in combination with long-acting interferon, requiring injections and carrying greater risks of side effect risks, while alternative drugs from Gilead Sciences and Merck & Co. could be taken in tablet form without any additional booster, and became the global standard.

In 2019 reimbursement talks, a price cut of more than 85% was agreed for the imported drugs, while the discount on Ganovo fell short. The Ascletis drug, then the only domestically developed hepatitis C treatment to make it into the talks, failed to get on the list. The misstep sent Ganovo sales plunging nearly 80% in 2020, before falling further to 1.1 million yuan in 2022. Although the second hepatitis C drug, Asclevir, was approved in 2020 and was accepted for reimbursement the following year, along with Ganovo, the firm had already lost its first-mover advantage.

Ascletis was also badly hit by setbacks in other parts of its drug business. As the sales agent in China for Roche’s long-acting interferon drug Pegasys, it enjoyed related revenue of 70.91 million yuan in 2021, accounting for as much as 90% of the total. But as better alternatives emerged, Roche withdrew the product from the Chinese market in 2022, depriving Ascletis of a key earnings pillar. The Chinese company later launched antiviral ritonavir, the booster in Pfizer’s Paxlovid, which generated 49.4 million yuan in 2023. But as the pandemic faded, that revenue also plunged by more than 90% in 2024.

Full pivot to weight loss

With its antiviral business beyond saving, Ascletis opted for sweeping reforms. In 2024, the company terminated several programs, including candidates for chronic hepatitis B, HIV and RSV, while seeking out-licensing opportunities for ASC40, a treatment for fatty liver disease. As a result, antiviral R&D spending was slashed from 33.7% of the total to just 0.4%.

In September 2024, Ascletis announced a full R&D shift to metabolic and weight-loss treatments, spanning small-molecule GLP-1 drugs, amylin and thyroid hormone receptor agonists. Its key bet, the oral GLP-1R/GIPR dual-target small molecule ASC30, is designed with both oral and injectable formulations. In a Phase One U.S. study over four weeks, it achieved a placebo-adjusted mean weight loss of up to 6.5%, while the oral formulation is expected to begin global Phase Three trials by the end of the third quarter of 2026. On July 6 the company said it had submitted two obesity-related clinical trial applications to the FDA.

Lifted by weight-loss hopes, Ascletis shares rocketed from a low of HK$0.76 in August 2024 to HK$18.75 in August 2025. But competition among obesity drugs is even more intense than in the hepatitis market. Giants Eli Lilly and Novo Nordisk kicked off a price war in China this year, as the tirzepatide price was cut by more than 80% after entering medical insurance coverage. Innovent Biologics (1801.HK) launched mazdutide in June 2025 as the first domestically developed dual-target weight-loss drug, while multiple dual-target weight-loss programs from Hengrui Pharmaceuticals (600276.SH; 1276.HK), BrightGene Bio-Medical Technology (688166.SH) and Hansoh Pharma (3692.HK) have been submitted for marketing approval in quick succession. Ascletis, whose programs remain in the clinical stage, is already lagging.

Ascletis currently has a market value of about HK$12.5 billion, while Laekna Inc. (2105.HK), which is also pivoting to weight-loss drugs, is valued at only about HK$3.3 billion. That gap reflects higher market expectations for Ascletis, which has a cushion of more than 1.9 billion yuan in cash reserves that could fund operations through 2029. Survival is not an immediate concern, but the true test will be whether the company can prove its worth with solid clinical data in an increasingly crowded market.

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