Institutions: Numerous highlights in innovative drugs, reaching the deployment timing

According to CCTV News, reporters learned from the National Medical Products Administration that in the first three months of this year, the total value of China’s innovative drug licensing transactions exceeded $60 billion, approaching half of the total for the entire year of 2025. The latest statistics from the National Medical Products Administration show that as of March 27, 2026, China has approved 10 innovative drugs, of which 2 are imported and 8 are domestically produced. China’s innovative drugs have achieved historic breakthroughs and maintained a good development momentum and potential.

Industrial Securities believes that continuous attention should be paid to the progress of products after innovative drugs go overseas. Although the innovative drug sector experienced some adjustments in the early stage, China’s global competitiveness in innovative drugs continues to strengthen, with overseas expansion consistently landing and the industrial logic of commercial profitability remaining unchanged, with BD+ performance catalysts ongoing. The past two years have been a “big year” for Chinese innovative drugs going overseas, with both the number and value of licensing transactions reaching new highs. The completion of BD transactions is the first step in going overseas, and with the subsequent launch of Phase III clinical trials abroad, the certainty of overseas listings is expected to increase, leading to a potential rise in valuations (based on the increase in potential sales peaks and success rates). Based on this, future progress of already BD-licensed products should be a key focus; on one hand, they possess greater certainty compared to non-BD products, and on the other hand, various progressions will continue to provide catalysts, bringing about valuation uplifts. Looking ahead to 2026, industry conferences (clinical data progress), major BD transactions, and breakthroughs in new technologies are expected to continue providing positive catalysts for the industry.

Huaxin Securities believes that there are many highlights in innovative drugs, marking an opportune moment for allocation. Starting from late March, many domestic pharmaceutical giants released their operational information for 2025, showing rapid growth in the innovative drug segment (excluding BD), with most biotech companies achieving significant turnaround in performance. The development model of innovative drugs has shifted from relying solely on financing to a comprehensive driving approach combining product commercialization + overseas R&D licensing + financing. Regarding innovative drug expansion overseas, according to the Pharma Magic NextPharma database, as of March 25, 2026, there have been 49 BD events for Chinese innovative drugs, with initial payments exceeding $3.3 billion and a total amount nearing $57 billion—just the transaction volume in the first quarter has already surpassed the total level for the entire year of 2024 and is close to half of the total level for the entire year of 2025.