In the "Pharmaceutical Spring Festival Gala" in the United States, Chinese pharmaceutical companies have transformed from "optional consumption" to "essential consumption."

At the latest JP Morgan Global Healthcare Conference, discussions among several multinational pharmaceutical companies regarding mergers and acquisitions (M&A) and business development (BD) have noticeably intensified, with innovative drug assets from China being repeatedly included in the core discussion scope. According to the Chase Wind Trading Desk, JP Morgan's latest report analyzes the changing role of Chinese innovative drugs in global allocation based on the industry signals reflected at the conference, starting from the R&D and capital constraints of multinational pharmaceutical companies. JP Morgan's conclusion is not that "China Meheco is fully rising," but rather a more specific and limited judgment: In several technological platforms and therapeutic directions, Chinese innovative drugs have evolved from being an "optional allocation" to a "type of source that must be systematically evaluated" by multinational pharmaceutical companies during the asset screening phase, but this change is highly dependent on clinical data, development pace, and globalization capabilities, and does not possess universality. When M&A Becomes a Survival Tool, the "Availability" of External Assets Begins to Be Repriced The report states that at this conference, multinational pharmaceutical companies repeatedly emphasized the importance of supplementing their pipelines through M&A and licensing, and the background is not complex: the expiration of core patents, continuously declining internal R&D return rates, and intensified competition in key therapeutic areas have made it no longer economical to rely solely on self-research in terms of time and risk. Under these constraints, the criteria for screening external assets have changed. Multinational pharmaceutical companies are now focused not just on technological concepts, but on whether they can enter late-stage clinical or registration phases within a controllable timeframe. It is under this screening logic that some innovative drug assets from China have entered a more prominent discussion position—not because of "national advantages," but because they have already achieved a level of maturity that can interface with the global development system in certain directions. The Premise for Attention on Chinese Innovative Drugs is Clinical Progress, Not Cost Advantages It is important to clarify that the attention on Chinese innovative drugs does not mean that their overall cost advantages are being "priced at a premium." In fact, in the decision-making of multinational pharmaceutical companies, R&D costs are only a secondary variable; the core factors are time and certainty. The report points out that in certain oncology, autoimmune, and metabolic indications, some projects from Chinese pharmaceutical companies have already entered the forefront of global competition for the same targets. This leading position is not reflected in the mechanism innovation itself, but more in clinical execution efficiency, patient enrollment speed, and the pace of indication advancement. When an asset has the opportunity to enter critical clinical stages earlier, its commercial potential will naturally be assessed in advance. This is also the main reason why Chinese assets are systematically included in evaluations, rather than simply being "valued cheaply." External Licensing is Becoming a Risk-Sharing Tool, Rather Than a One-Way Value Transfer Structurally, external licensing at the current stage is more of a risk management tool rather than a passive monetization. For Chinese innovative drug companies, the core role of external licensing is: On one hand, leveraging the clinical, registration, and commercialization systems of multinational pharmaceutical companies to reduce the uncertainty of a single company in global development; on the other hand, shifting the asset valuation logic from a single regional market to broader global sales assumptions. However, this mechanism does not automatically come into effect. Only when the asset itself has a clear clinical positioning and scalability can external licensing truly amplify its long-term value; otherwise, licensing transactions are more likely to be a one-time financial arrangement The Current Changes Are More Like an "Upgraded Screening Mechanism" Rather Than an Overall Revaluation of the Industry From the information released at the conference, a more accurate statement is not that "China Meheco has entered the global core," but rather that multinational pharmaceutical companies are tightening and advancing their screening mechanisms for external assets. In this process, some Chinese innovative drug projects, due to their progress and data quality, happen to fall within the scope of being comparable and benchmarked. This means that the internal differentiation within the Chinese pharmaceutical sector will further intensify. Projects that can enter the global evaluation system may receive greater capital attention; whereas projects that cannot provide clear clinical value may see a decline in their marginal attractiveness. From an investment perspective, what is truly worth tracking is whether specific projects possess the following characteristics: Whether the clinical data has differentiation or clear positioning, whether it can smoothly enter multi-regional clinical and registration pathways, and whether it has realistic feasibility for integration by multinational pharmaceutical companies. Only under these conditions can Chinese innovative drug projects transition from being "comparative objects" to "transactional objects." Risks Still Primarily Concentrated on Clinical Results and Mismatched Timelines It is important to emphasize that the current trend does not diminish the inherent risks of the pharmaceutical industry. Clinical failures, changes in competitive landscapes, and regulatory uncertainties may still significantly impact the value judgment of individual assets. Additionally, if market expectations for mergers and acquisitions and external licensing are overly front-loaded, it may also lead to phase-based valuation fluctuations. Therefore, assessing the globalization potential of Chinese innovative drugs should always be based on verifiable data and pathways, rather than on the trend narrative itself. In summary, what the JP Morgan Global Healthcare Conference reflects is not an emotional optimism towards Chinese pharmaceuticals, but rather a more realistic and efficiency-oriented reassessment of external innovation sources under resource constraints in the global pharmaceutical industry. In this process, Chinese innovative drugs have entered the "must evaluate" range in certain areas, but this does not imply a universal value revaluation. The key in the future is not "whether it is China," but whether it possesses the ability to be continuously validated and absorbed by the global system