In the past, innovative drugs performed well during the AACR and ASCO annual meetings. During the 2025 Hong Kong-listed innovative drug conference, the Hong Kong-listed innovative drug ETF Guangfa (513120) recorded an interval increase of over 52%.

Ask AI · The explosive growth of the innovative drug sector, what role did U.S. stock acquisitions play?

On April 1, 2026, the innovative drug sector surged, closing up 4.70%, with related ETFs soaring; among them, the Hong Kong-listed innovative drug ETF GF(513120) increased significantly by 7.24%. As of the close on April 1, the GF Hong Kong Innovative Drug ETF has risen over 12% in the past five trading days.

In terms of size, as of April 1, 2026, the latest scale of the GF Hong Kong Innovative Drug ETF reached 26.31B yuan, hitting a nearly one-month high. Regarding capital inflows, over a longer period, the ETF has attracted a total of 144 million yuan in “funds” over the past 23 trading days. Data shows that the latest financing buy-in for the ETF reached 722 million yuan, with a latest financing balance of 1.5B yuan.

Market analysis suggests that the strong performance of innovative drugs is mainly due to two massive pharmaceutical acquisitions announced in the U.S. stock market on March 31: Eli Lilly’s acquisition of Centessa for a total consideration of $7.8 billion, and Bausch Health’s acquisition of Aplellis for $5.6 billion. These acquisitions attracted capital attention to the pharmaceutical sector, boosting valuations across various pharmaceutical production lines.

According to statistics from Guosheng Securities, as of March 27, the total transaction volume of China’s innovative drug BD deals since 2026 has exceeded $60 billion. Additionally, several brokerages indicate that the innovative drug sector is currently in a favorable phase of “performance realization, valuation repair, and conference catalysis.”

Specifically, leading pharmaceutical companies showed impressive annual reports for 2025, with R&D drug revenue proportions continuing to increase for companies like Hengrui Medicine and BeiGene. Biopharmaceutical companies such as Nanjing Chia Tai Tianqing and Rongchang Biotech achieved historic profitability turnaround. Some institutions believe that the sector currently benefits from both macro capital support and industry fundamentals. The yield on U.S. Treasury bonds shows a significant negative correlation with the innovative drug market. If Middle Eastern geopolitical conflicts ease, and the overseas interest rate cut cycle begins, with U.S. bond yields entering a downward turning point, it could attract global capital flows into emerging markets represented by the healthcare sector.

Moreover, the AACR annual meeting in April and the ASCO annual meeting in June-July are upcoming, with intensive clinical data disclosures expected to provide ongoing momentum for valuation recovery. Some institutions analyze that the innovative drug industry exhibits a clear “calendar effect.”

Wind data shows that from 2019 to 2025, during global academic conferences for innovative drugs, the sector experienced varying degrees of staged increases driven by the conference effect; notably, during the 2025 conference period (April 9, 2025 – June 13, 2025), the Hong Kong innovative drug sector’s maximum interval increase reached 79.1%, compared to a maximum increase of 25.1% in the Hang Seng Index during the same period, exceeding by over 54%. Regarding ETF performance, during the 2025 academic conference period, the GF Hong Kong Innovative Drug ETF (513120) increased over 52%, with a maximum rise exceeding 68%.

Data source: Wind, with the Hong Kong innovative drug sector referenced by the China Securities Index Hong Kong Stock Connect Innovative Drug Index (987018)

BOC Securities believes that the outbound expansion of innovative drugs continues to grow strongly, with solid fundamentals. After a substantial adjustment since September 2025, the sector’s valuation has fallen back to a relatively low historical median level. Against the backdrop of differentiated expectations for technology and cyclical markets in 2026, and shifts in capital flows, the innovative drug sector with strong performance certainty and sufficient prior adjustments is expected to become a key focus for capital rebalancing.

Related ETFs:

1. GF Hong Kong Innovative Drug ETF (513120) (Connect A: 019670, Connect C: 019671): Tracks the CSI Hong Kong Innovative Drug Index closely, investing in Hong Kong’s innovative drug industry. Notably, the ETF supports T+0 trading, allowing investors to buy and sell multiple times within a trading day, greatly improving capital efficiency and liquidity.

2. Hang Seng Biotech ETF GF (159169): Tracks the Hang Seng Biotech Index, which aims to reflect the overall performance of the top 30 biotech companies listed in Hong Kong that qualify for Stock Connect. Wind data shows that, according to Shenwan’s secondary industry classification, the top three weightings are Biopharmaceuticals (42.07%), Chemical Pharmaceuticals (38.28%), and Medical Services (11.01%).

3. GF Innovative Drug ETF (515120) (Connect A: 012737, Connect C: 012738): Tracks the CSI Innovative Drug Industry Index, investing in A-shares involved in R&D, manufacturing, and sales of innovative drugs.