On March 11, 2026, Xingqi Eye Medicine (300573.SZ) announced that its self-developed SQ-24071 eye drops completed the first phase of clinical trials with the enrollment of the first subject, officially entering the clinical research stage.

Image source: Company announcement

This drug is a modified new chemical drug classified as Category 2.2 and 2.4, in the form of eye drops, with the intended indication to delay the progression of myopia in children and adolescents.

Still Need to Cross the “Valley of Death”

The trial adopts a single-center, randomized, double-blind, placebo-controlled design, mainly evaluating safety, tolerability, and pharmacokinetics after single and multiple doses in healthy subjects. The clinical trial approval numbers are 2026LP00170 to 2026LP00173.

The announcement clearly states that, as of the disclosure date, there are no domestically or internationally marketed formulations of this eye preparation. However, drug development cycles are long, involve many steps, and carry high uncertainty. This clinical progress will not significantly impact the company’s recent performance.

The capital market quickly interpreted this as a signal of a “new growth pole.” Objectively, Phase I clinical trials are just the beginning of the R&D journey. From safety validation to efficacy confirmation, then to review, approval, and commercialization, it still requires crossing a long and arduous “Valley of Death.”

Looking at the company’s current operations, Xingqi Eye Medicine is in a “high-growth but highly dependent” structural stage.

In recent years, the company’s performance has exploded, driven mainly by the approval of 0.01% atropine eye drops in March 2024. As one of the first compliant products approved in China for myopia control in children, it rapidly covered public hospitals, private ophthalmology clinics, retail pharmacies, and internet healthcare channels, becoming the absolute pillar of revenue and profit.

In the first three quarters of 2025, the company achieved operating revenue of 1.904 billion yuan, a year-on-year increase of 32.27%; net profit attributable to the parent was 599 million yuan, up 105.98% year-on-year. The eye drop segment accounted for over 70% of revenue, with high gross margins maintained.

Dependence on Atropine Monoproduct

At the beginning of 2026, the company successively obtained approval for 0.02% and 0.04% atropine formulations, forming a multi-concentration, layered product matrix, further consolidating channel and clinical advantages.

However, beneath these impressive figures, concerns are emerging: performance is highly dependent on the atropine monoproduct, making growth structure fragile.

Major competitors such as Hengrui Medicine, Zhaoke Ophthalmology, OcuVist, and Qilu Pharmaceutical have entered late-stage clinical trials or filed for market approval. The atropine track is rapidly shifting from a blue ocean to a red ocean.

Regulations on pediatric medication are tightening, academic promotion standards are upgrading, and uncertainties in medical insurance and centralized procurement are squeezing profit margins for single products.

Against this backdrop, the advancement of SQ-24071 is both a proactive layout to diversify the pipeline and a necessary breakthrough to reduce reliance on a single product and seek a second growth curve.

The clinical launch of SQ-24071 eye drops positions the company at the forefront of the billion-yuan-level myopia prevention and control market.

According to data from the National Health Commission, the overall myopia rate among Chinese children and adolescents exceeds 50%. In middle and high school, rates surpass 70% and 80%, respectively. The trend toward younger, highly myopic individuals is significant, and myopia prevention has become a national public health strategy.

From the demand side, parental willingness to pay continues to grow. Methods such as orthokeratology lenses, defocus glasses, behavioral interventions, and medication are used in parallel. Drug intervention has become a core part of comprehensive prevention and control.

Industry estimates show that if the penetration rate of low-concentration atropine reaches 20%, the market size could approach 19 billion yuan. If SQ-24071 can achieve differentiated breakthroughs in mechanism, safety, and compliance, it may complement atropine and open up new niche markets.

The industry landscape is also rapidly shifting from a “blue ocean” to a “red ocean.” Multinational pharmaceutical companies are accelerating their布局, device products are growing quickly, and frontier technologies like gene therapy are gradually penetrating. In the future, SQ-24071 will face not only price wars with similar products but also multiple challenges related to technological barriers and cross-category substitution.

Multiple Risks Cannot Be Ignored

Beyond the sector’s growth potential and capital expectations, multiple risk factors must be considered.

First is the risk of R&D failure. Regulations for myopia drugs targeting healthy children are very strict. Any phase—I, II, or III—could be terminated due to safety signals or lack of efficacy, with overall success rates being low.

Second is the risk of worsening competitive landscape. Pediatric drugs have only a market exclusivity of less than two years, and many competitors are entering late-stage trials or applying for approval. Future price competition and centralized procurement pressures could significantly compress profits.

Third is policy and commercialization uncertainties. Ongoing tightening of pediatric drug approval, prescription management, and promotion regulation directly impact final profitability. Whether the drug can be included in medical insurance and how terminal prices are controlled are critical factors.

Fourth is the lack of immediate contribution to short-term performance. Phase I clinical investments are limited and do not generate revenue, thus cannot reduce the company’s dependence on atropine monoproduct. If subsequent R&D expenses increase, they may temporarily suppress net profit margins.

The capital market’s attitude is also cautious. Financing balances have been declining, and northbound funds have been significantly reduced, implying potential valuation corrections.

Overall, SQ-24071 is an important part of Xingqi Eye Medicine’s long-term strategic layout, reflecting the company’s ambition to shift from “single product-driven” to “platform-based innovation.” It is not a short-term “panacea” for performance.

Ultimately, what will determine Xingqi Eye Medicine’s future is its lifecycle management of atropine, the construction of comprehensive prevention strategies, continuous pipeline output, and its ability to maintain barriers in a highly competitive red ocean.

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