The Second Bill for ADC Integration: Haoyuan Starts Phase Two in Chongqing, and a Back-End Business Running at 13.6% Gross Margin

In October, Haoyuan Pharma began phase two of its Chongqing antibody-drug conjugate CDMO site, and the site's first project formally entered US FDA clinical filing. The 85-mu site, commissioned in March 2025 and already through an EU QP audit, runs antibody drug substance, high-potency payload, conjugation and sterile fill-finish under one roof. First-half revenue was RMB 1.648B (+25.71%) with back-end backlog above RMB 1B (+72.6%), yet 2025 gross margin on back-end APIs and intermediates was only 13.6% against 61.9% on front-end building blocks. ADC integration is a chemistry exam and a heavy-asset exam.

Two events in October pushed Haoyuan's ADC story onto the same node at once.

First, phase two construction at the Chongqing antibody-drug conjugate CDMO site formally began. Second, the site's first project was launched to support a customer's US FDA clinical filing. The first is capacity, the second is an order - and in ADC, the distance between the two is usually measured in years. This time they nearly coincided.

What was actually built in Chongqing

The site was commissioned in March 2025 on 85 mu of land and is the largest ADC CDMO platform in southwest China, having passed an EU Qualified Person audit. Its design logic is a commercial manufacturing matrix under one roof: antibody drug substance, ADC drug substance and conjugation, and sterile fill-finish for ADC drug product, three commercial lines in one physical space.

Only people who have run ADC programmes fully appreciate why that matters. Conjugation often needs payload and linker adjustments; if payload is made in city A, antibody in city B and fill-finish in city C, each adjustment waits weeks for cold-chain shipping and re-testing. Co-located, the change happens on site. By the company's own account, the DNA-to-IND filing cycle is compressed to 14 months.

In August 2026 the site launched an antibody drug product expansion, adding commercial lines for antibody substance, ADC conjugation substance and antibody fill-finish on top of existing capacity. The three-site split is now clear: Shanghai headquarters runs the innovation centre and technology platform (an integrated XDC payload-linker CMC service covering molecular design, custom synthesis, process optimisation, analytical work, non-GMP/GMP manufacturing and regulatory filing), Ma'anshan in Anhui runs high-potency ADC lines, and Chongqing runs commercial manufacturing. On funding, the company redirected RMB 200M of raised proceeds trimmed from its Heze project to the Chongqing build as an intercompany loan.

Orders are rising from a thin base

First-half 2026 revenue was RMB 1.648B, up 25.71%. The company has taken on more than 1,100 CRDMO programmes cumulatively, 160 of them in late-stage or commercial. Back-end backlog exceeded RMB 1B, up 72.6%. By the end of June it had handled more than 100 ADC programmes, with ADC large-molecule backlog above RMB 150M.

Read together, those numbers describe a classic building-block company moving downstream: many programmes (1,100+), a modest late-stage share (160), and a still-small absolute ADC backlog (RMB 150M). That is a different order of magnitude from WuXi XDC, which booked RMB 5.944B of 2025 revenue, up 46.69%, and holds more than 24% of the global ADC CXO market - the only clear leader in the niche.

The second bill: 13.6% at the back end

The line that matters is the profit structure.

In 2025 Haoyuan's back-end API and intermediate revenue was RMB 872M, up only 15.6%, at a 13.6% gross margin; front-end tool compounds and building blocks ran at 61.9%. Depreciation and energy costs from ramping new capacity squeezed profit hard - in the fourth quarter of 2025, net profit attributable to shareholders briefly fell to RMB 3M. The high-margin front end is effectively funding the heavy back end.

That is the shared model of every reagent-born company heading downstream, and it is the most under-appreciated cost line in ADC integration. ADC outsourcing penetration is around 70%, well above traditional drugs, which looks like easy money; but capturing it requires three capabilities at once: synthesis and safe handling of highly potent toxins (OEB5-grade suites), conjugation process development and scale-up, and sterile fill-finish. All three are heavy assets, and none can reuse a front-end distribution network.

Peers are filling those three in different ways. Asymchem's Fengxian phase-two antibody workshop and ADC commercial suite are in production; in 2026 the site completed its first delivery batch covering 2,000 litres of antibody plus ADC substance and drug product, and has started validation batches. Pharmablock built a dedicated PB-XDC platform and equipped its Huishi site in Zhejiang with OEB5-grade GMP high-potency API lines capable of kilogram-scale safe production of camptothecin analogues. WuXi XDC has knitted Wuxi, Shanghai, Hefei, Jiangyin, Suzhou and Singapore into a one-stop network spanning antibody intermediates, payload-linkers, conjugation substance and conjugated drug product.

The market itself is not small. Frost & Sullivan projects the global XDC drug CXO market at USD 11B by 2030, a 25.73% CAGR from 2025 to 2030 - among the strongest sub-segments in CXO.

Editor's read: three playbooks, one clock

The first playbook is front end funds back end, which is Haoyuan's route. It buys cash-flow independence and no dependence on a single customer, at the cost of an ugly P&L during ramp - and front-end margins will drift lower as building-block competition intensifies.

The second is to anchor a large customer and fill capacity with one commercial project. Most efficient, and most concentrated: one delayed tech transfer and the depreciation has nowhere to go.

The third is to sell the platform - license out conjugation technology or the payload-linker library and buy time with fees. Asset-light, but it demands genuine technical distinctiveness.

Behind all three sits the same clock: ADC capacity typically takes 18 to 36 months from commissioning to full loading, while depreciation starts on day one. Chongqing was commissioned in March 2025, phase two began in October 2026, and the first project entered FDA filing in the same month - a standard cadence. The problem is that RMB 150M of ADC backlog does not cover the fixed cost of an 85-mu commercial site. The watch items are specific: utilisation after phase two, how many quarters it takes ADC large-molecule backlog to move from RMB 150M to RMB 1B, and whether back-end gross margin can climb from 13.6% back above 20%.

Until all three hold, Haoyuan's ADC story remains what it is: spending 61.9% front-end gross margin to buy a ticket to the back end. Whether the ticket was worth it depends on filling the lines before depreciation eats the profit.