According to Zhitong Finance APP, the pharmaceutical stocks are performing strongly. As of the time of publication, LEPU BIO-B (02157) is up 15.17%, trading at HKD 6.15; RemeGen (09995) is up 13.88%, trading at HKD 109.1; CanSinoBIO-B (02162) is up 10.96%, trading at HKD 67.35; 3SBio (01530) is up 9.98%, trading at HKD 24.9; Innovent Biologics (09969) is up 9.29%, trading at HKD 14.82.

On the news front, the pharmaceutical industry has recently welcomed multiple catalysts. The latest data released by the National Medical Products Administration shows that in the first three months of this year, the total value of out-licensing (BD) transactions for innovative drugs in China exceeded USD 60 billion, approaching half of the total amount of USD 135.7 billion expected for the entire year of 2025. Additionally, the 2026 AACR Annual Meeting is approaching, and according to various institutions, 104 Chinese pharmaceutical companies will showcase over 250 innovative drugs and related research results, covering several current hot targets. Notably, recent annual performance reports from several pharmaceutical companies indicate that innovative drugs are entering a profit cycle, with leading innovative drug companies such as BeiGene and Innovent Biologics achieving profitability first.

Industrial Securities believes that in the past two years, the number and value of out-licensing transactions for innovative drugs in China have continuously reached new highs. The landing of BD (business development) transactions is the first step in going overseas. With the subsequent initiation of overseas Phase III clinical trials, the certainty of overseas listings is expected to increase, and valuations are likely to continue to rise (based on the potential peak sales and success rates of products). Based on this, future progress of BD varieties can be a key focus, as they have stronger certainty compared to non-BD varieties, and subsequent developments will continue to provide catalysts, bringing valuation uplift potential