Innovative drugs are taking off again.
Recently, the external environment has been fluctuating daily, with declines one day and rebounds the next, and emotions shifting rapidly. Many sectors are still swaying back and forth according to macro expectations and risk appetite. However, the situation for innovative drugs is somewhat different. This round of strength is not just due to funds looking for a place to ignite, but because there are indeed developments happening beneath the surface.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OtMLrRUiGDhKbTG99c42DXwI02HDQ_biqz92BHVKUSvW8AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OtMLrRUiGDhKbTG99c42DXwI02HDQ_biqz92BHVKUSvW8AA/641"/>
First, the industry sentiment has changed, and global pharmaceutical companies are genuinely purchasing in China.
According to Pharmcube data, the total amount of license-out in the Greater China region is projected to reach USD 137.7 billion by 2025, nearly ten times that of 2021; by mid-February, the average transaction size for 2026 has already reached USD 1.3 billion, a year-on-year increase of 76%, with the average upfront payment rising to USD 77.7 million, doubling compared to 2025. By that time, 38 out-licensing transactions for 2026 had already been announced.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OAyoRBG_dFjevOKgJqNmp2BTmmj1pxfk22aZPzmPaEEuQAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OAyoRBG_dFjevOKgJqNmp2BTmmj1pxfk22aZPzmPaEEuQAA/641"/>
Specifically, at the end of January, AstraZeneca and CSPC PHARMA signed a collaboration on weight loss/type 2 diabetes, directly packaging 8 projects, with AstraZeneca initially paying USD 1.2 billion upfront, followed by up to USD 3.5 billion in development and registration milestones, plus commercialization milestones and tiered royalties.
On February 5, HENLIUS signed a licensing agreement with Eisai for the commercialization of Lusutrombopag in Japan. Eisai obtained exclusive commercialization rights in Japan, while HENLIUS received USD 75 million upfront, with up to USD 80.01 million in regulatory milestones, USD 233.3 million in sales milestones, plus double-digit royalties.
In the past, everyone thought that Chinese innovative drugs going abroad mainly targeted Europe and the United States; now even high-threshold markets like Japan are starting to pay in real money.
Last month, EQRx and UCB signed a global licensing agreement for ATG-201. EQRx initially received USD 80 million upfront and recent milestones, with over USD 1.1 billion in development, registration, and sales milestones, plus tiered royalties. This indicates that not only are interruptions occurring, but even platforms and early-stage assets are beginning to sell for good prices. However, due to the instability in the external environment, these positive developments have not yet been reflected in asset prices; once the situation stabilizes, there will likely be realizations.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Odvv8XVv6EjNePS1ymotJhhRk8gHtgLvBasN_4scHBML0AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Odvv8XVv6EjNePS1ymotJhhRk8gHtgLvBasN_4scHBML0AA/641"/>
The catalysts for the second quarter are still on the way. On April 1st, Corning Jereh announced that the Phase III study of KN026 combined with HB1801 for neoadjuvant treatment of HER2-positive breast cancer achieved its primary endpoint, and it is the first case globally to demonstrate that the HER2 dual antibody regimen is superior to the trastuzumab + pertuzumab dual monoclonal antibody combination in a head-to-head Phase III registration study.
This is significant because it is not just a small optimization for a niche indication, but a direct advancement in clinical value and platform recognition.
Secondly, platform companies are increasingly resembling &#34;innovative drug companies that can generate their own revenue,&#34; no longer just traditional money-burning biotech firms. Many people have not fully realized this change.
For example, HENLIUS just announced its 2025 performance, with revenue of 6.666 billion yuan, a year-on-year increase of 16.5%, and a net profit of 827 million yuan, marking its third consecutive year of profitability; overseas product revenue continues to expand, with ex-China product revenue exceeding 200 million yuan, doubling year-on-year.
Another example is Eucure. In its full-year performance for 2025, it has been very straightforward: the licensing of ATG-201 with UCB is the company's first out-license from the AnTenGager platform, and management directly defines this transaction as an important milestone towards profitability in 2026.
The company had 734 million yuan in cash at the end of 2025, plus an initial payment of 8 million USD and subsequent milestones, indicating that its financial situation and R&amp;D advancement capabilities are no longer reliant solely on financing as in previous years.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Ot9-9qfz8147-2m8IMBB_xuOVpp34Mp2VL8pM_eYTWtGQAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Ot9-9qfz8147-2m8IMBB_xuOVpp34Mp2VL8pM_eYTWtGQAA/641"/>
This is also why I believe that this round of innovative drugs is fundamentally different from previous ones.
In the past, many companies would &#34;first talk about the platform, then wait for validation&#34;; now, more and more companies are becoming &#34;platforms that have already been validated by overseas buyers, and cash flow is starting to come in.&#34; These two scenarios have completely different valuation implications.
Finally, let me share my own judgment. Innovative drug companies, especially AI innovative drug companies, are still undervalued. Many leading innovative drug companies are still being viewed through an outdated lens by the market.
What is the outdated lens? It perceives Chinese innovative drugs as high R&amp;D, high uncertainty, high volatility, with overseas revenue discounted, milestones discounted, and royalties further discounted.
This framework was fine in the past, but it may not be entirely applicable now. Because by 2026, the transaction prices, initial payment scales, overseas cooperation densities, and profitability of some leading Chinese pharmaceutical companies have already made significant progress.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OMDX0eSabhR762SbCqkNrrz594AJdYDfpfsHctGeSVkHIAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OMDX0eSabhR762SbCqkNrrz594AJdYDfpfsHctGeSVkHIAA/641"/>
Has the market fully accounted for these factors? I think not.
The down payment may have been factored in, but the long-term milestones may not have; a single project may have been included, but the platform's ongoing output capability may not have; a piece of clinical data may have been considered, but the flexibility for subsequent registration and global commercialization may not have; the profitability inflection point may have been seen, but the valuation system has not fully transitioned.
Transactions involving AstraZeneca, Eisai, and UCB, as well as cases like HENLIUS that have been continuously profitable and expanding overseas, all indicate that the fundamentals of Chinese innovative drugs and global buyer recognition are progressing; however, for the secondary market to fully reflect this change in valuation, it typically won't happen in just a day or two.
That said, no matter how hot innovative drugs are, not everyone is suited to engage in this field.
The barriers to entry in this sector have never been low. You need to keep an eye on business development, clinical trials, academic conferences, competitors, indication expansions, preferences of large overseas pharmaceutical companies, and market trends. Once the data falls short of expectations, or the transaction structure isn't as favorable as everyone thought, the stock price can turn around very quickly.
So my conclusion remains the same:
The innovative drug sector is worth continuous observation now, and the logic is more solid than before; however, it is more suitable for those on the right side and those with tracking capabilities, and not for those who just want to jump in for the excitement.
The above content is merely a personal analysis record and does not constitute any investment advice. There are risks in participating in IPOs, and participation is at your own risk. Follow my public account: Quantitative Cris Notes, for continuous sharing of IPO strategies and practical cases in Hong Kong and US stocks, to avoid detours and better understand market trends.

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During periods of geopolitical turmoil, the A-share innovative drug sector has performed outstandingly, with an increase in industry prosperity and global pharmaceutical companies increasing their investment in the Chinese market. The total amount of license-out in the Greater China region is expected to reach USD 137.7 billion by 2025, with significant growth in both transaction scale and upfront payments. Recent important cooperation deals, such as those between AstraZeneca and CSPC PHARMA, as well as HENLIUS and Eisai, demonstrate the internationalization trend of Chinese innovative drugs. Despite the unstable external environment, the potential of innovative drugs has not yet been fully reflected in asset prices, and more favorable developments are expected in the future

腾讯新闻 - 财经

Hwabao WP Hang Seng SCHK Innovative Drug Select ETF

Penghua CSI HK Connect Health Care Composite ETF

HENLIUS

Huaan Hang Seng Biotech ETF

China Universal CNI HK Connect Innovative Drugs Industry ETF

China Merchants CSI Biotechnology Theme ETF

ChinaAMC SSE Health Care ETF Initiating Fund

ChinaAMC Hang Seng Biotechnology Technology ETF(QDII)

Fullgoal Hang Seng SCHK Innovative Drug & Healthcare ETF

Huatai-PB Hang Seng Innovative Drugs Industry ETF(QDII)

Tianhong CNI BIOMEDICINE ETF

E Fund CSI Innovative Drugs ETF

Bosera Hang Seng Health Care ETF(QDII)

Ping An CSI Medicine and Medical Device Innovation ETF

Bosera Hang Seng SCHK Innovative Drug Select ETF

E Fund CSI Biotechnology Theme ETF

CSPC PHARMA

Minsheng Royal CSI Biotechnology Theme ETF

China Southern CNI HK Connect Innovative Drug ETF

E Fund CSI 300 Health Care ETF

ChinaAMC SSE STAR Biology and Medicine ETF

ChinaAMC CSI Biotechnology Theme ETF

GF CSI HK Innovative Drugs Industry ETF(QDII)

Hwabao WP CSI Pharmaceuticals ETF

China Southern Hang Seng Biotech ETF(QDII)

Penghua SSE STAR Biology and Medicine ETF

Guotai CSI Bio-medicine ETF

Founder Fubon CSI Medicine and Medical Device Innovation ETF

ICBCCS SSE STAR Biology and Medicine ETF

AstraZeneca

Stock Talk | During Geopolitical Turmoil, Why Can A-Share Innovative Drugs Stand Out? The Industrial Logic Has Changed