[Trend Report] BD Data Surge and Performance Turning Point Resonance: The Innovative Drug Industry May Enter the Commercialization Realization Phase

The three major indices of A-shares had mixed results today. By the close, the Shanghai Composite Index rose by 0.24%, the Shenzhen Component Index fell by 0.25%, and the ChiNext Index dropped by 0.68%. The combined turnover of the Shanghai, Shenzhen, and Beijing markets exceeded 1.9 trillion yuan, a slight increase compared to the previous trading day. Most industry sectors saw gains, with precious metals, industrial metals, aerospace equipment, non-ferrous metals, pharmaceutical commerce, and agrochemical products leading the way, while electricity, public utilities, photovoltaic equipment, and insurance sectors saw the largest declines. In terms of individual stocks, the number of rising stocks exceeded 2,800, with more than 70 stocks hitting the daily limit.

Recently, the innovative drug sector has welcomed a dual opportunity for fundamental and emotional recovery. On the policy front, the “Two Sessions” have clearly listed pharmaceuticals and biotechnology as emerging pillar industries, alongside integrated circuits and aerospace, strengthening the strategic positioning of the industry. After half a year of adjustment, market expectations for innovative drugs have returned to rationality, focusing more on the quality of clinical data and long-term commercialization potential. In terms of industry data, in the first quarter of this year, the transaction value of external licensing for China’s innovative drugs exceeded $60 billion. Information released by the National Medical Products Administration on March 28 indicated that in the first quarter, the external licensing transaction value for China’s innovative drugs surpassed $60 billion, nearing half of the total for the entire year of 2025. As of March 27, ten innovative drugs have been approved for market launch this year, including two imported and eight domestic, marking a historic breakthrough for innovative drugs.

In addition, A-share biopharmaceutical companies are gradually transitioning from the long-term “cash-burning R&D” phase to a new stage of “profit realization.” As of March 29, over 70 biopharmaceutical companies have reported their performance for 2025. Among them, 61 companies achieved profitability, accounting for nearly 90%; 29 companies realized year-on-year growth in net profit attributable to shareholders (excluding those turning losses into gains), with seven companies’ performance doubling. Additionally, companies such as Rongchang Biopharmaceutical, Nuocheng Jianhua, and Digital People are expected to turn losses into profits, while companies such as Mengke Pharmaceutical, Junshi Biosciences, and Maiwei Biopharmaceutical have reduced their losses year-on-year.

Bank of China Securities stated that the innovative drug sector currently enjoys dual support from macro liquidity and industry fundamentals: U.S. Treasury yields are significantly negatively correlated with the A-share innovative drug market; if geopolitical conflicts ease and prompt a return to a rate-cutting cycle overseas, it is expected to attract global allocation funds back. Guojin Securities pointed out that the innovative drug sector is currently in a golden window period characterized by the overlap of “performance realization, valuation repair, and conference catalysts.”

Bank of China Securities: The innovative drug sector currently enjoys dual support from macro liquidity and industry fundamentals

The innovative drug sector currently enjoys dual support from macro liquidity and industry fundamentals: U.S. Treasury yields are significantly negatively correlated with the A-share innovative drug market; if geopolitical conflicts ease and prompt a return to a rate-cutting cycle overseas, it is expected to attract global allocation funds back; meanwhile, the deep adjustment since September 2025 has brought the sector’s valuation back down to a historically low median level. Against the backdrop of differentiated expectations for technology and cyclical markets, innovative drugs with strong performance certainty and sufficient adjustments are becoming a key allocation direction for capital rebalancing.

Guojin Securities: The innovative drug sector is currently in a golden window period characterized by three overlapping cycles

The innovative drug sector is currently in a golden window period characterized by the overlap of “performance realization, valuation repair, and conference catalysts.” Previously, the innovative drug sector underwent more than half a year of adjustment since the end of last year’s third quarter, and valuation risks have been largely released. However, short-term emotional suppression does not change the fundamental logic of the industry’s long-term improvement.

Guohai Securities: The innovation capability of domestic enterprises is gradually increasing

The AACR annual meeting is about to be held, with 104 Chinese pharmaceutical companies presenting over 250 innovative drugs, significantly increasing the overall visibility of Chinese innovative pharmaceutical companies. From a technical standpoint, ADC drugs remain the absolute mainstream, covering multiple popular targets; the small molecule drug sector also showcases numerous highlights, with data on cutting-edge technologies such as nuclear medicine and cell therapy to be disclosed. The logic of innovative drugs and devices has not changed, and the innovation capability of domestic enterprises is gradually increasing.

Huatai Securities: Since 2026, domestic innovative drugs have achieved 45 “going global” business deals

Since 2026, domestic innovative drugs have achieved 45 “going global” business deals, a year-on-year increase of 73%; the total disclosed amount is $57.5 billion, a year-on-year increase of 135%; and the upfront payment is $4 billion, a year-on-year increase of 1095%. From a global perspective, from the beginning of the year to now, the number of domestic innovative drug business deals and the disclosed amount account for 20% and 75% of the global total, respectively. Among the 21 significant deals that have been completed, 15 are Chinese transactions, accounting for over 70%.

Dongwu Securities: Innovative drug companies have ample time windows for technological breakthroughs and commercialization

Business development income has become an important source of funding for Chinese innovative pharmaceutical companies. By calculating “cash and cash equivalents / annual R&D expenses,” we can assess whether the funding in the innovative drug sector is sufficient. Overall, the current pharmaceutical sector has ample funding, with the vast majority of companies still maintaining over one year of R&D funding coverage capability, effectively supporting subsequent clinical trial progress, pipeline expansion, and technological innovation. This lays a solid financial foundation for the long-term high-quality development of the industry and provides ample time windows for innovative pharmaceutical companies’ technological breakthroughs and commercialization.

Guosheng Securities: The direction of benefits for innovative drugs is particularly clear

In the 2026 government work report, biopharmaceuticals were first listed as an emerging pillar industry. For the pharmaceutical sector, this means that the policy positioning for biopharmaceuticals is further upgraded from “nurturing emerging tracks” to “an important pillar direction for economic growth and industrial upgrading.” Among them, innovative drugs, as the core high-value-added segment of the biopharmaceutical industry, have a particularly clear direction of benefits.

(This article does not constitute any investment advice, and investors operate at their own risk. The market has risks, and investments require caution.)

(Source: Dongfang Caifang Research Center)