Who is accumulating innovative drugs at the bottom? A $60 billion BD deal leaks the secret. Must-watch companies in April!

When I was writing my post on Sunday night, I thought about it![Taoguba]
Pharma: Could it become the independent winner in the Middle East tug-of-war?!

And it turned out that this thinking was right—and even more so, a lesson from the year before last!

April 2025: Innovation-drug leader: Yantai? Shuitai? Shens? ! It started on April 9! A 11x rally! In 4 months!

At the same time, there are also 5x to 8x movers such as Guangshengtang and Yipinred, etc. This shows the value of innovative drugs and how much capital loves them! It also shows the imagination space for them! So who will it be this year?
And can this year replicate last year’s innovative-drug rally? Also, after earnings blowups—like Demingli, Ouke Yi, etc.—perhaps innovative drugs are actually the best safe harbor instead!

I. Why might innovative drugs surge in April? Five major core catalysts in resonance

April is often a “traditional peak season” for the innovative-drug sector. The April innovative-drug rally is basically a fivefold positive shock—fundamentals, policy, events, capital, and valuation—converging to trigger the core drivers below:

1、 Q1 BD overseas: a historically-level explosion (the strongest fundamentals)
Total deal value: $60 billion (2026 Q1), close to 44% of full-year 2025 ($135.7B), exceeding full-year 2024
Number of deals: 49,同比**+73%**
Upfront payments: $3.3B, 47% of full-year 2025 ($7B)
Share of global blockbuster deals: 15 out of 21 global blockbuster transactions came from China (75%)
Core signal: China’s innovative drugs have upgraded from “value-for-money” to global pricing power and technological leadership, reshaping the cash-flow and valuation framework

2、 Policy landing in dense succession: fully empowering (the strongest policy floor)
April 1: Implementation of the revised National Reimbursement Drug List. 114 new drugs (50 Class 1 innovative drugs) get admitted; for outpatient reimbursement, cancer patients ≥90% for employees and ≥80% for residents; it opens up the “two channels” (dual pathways)
2026 Government Work Report: for the first time, biopharmaceuticals are listed as a**“emerging pillar industry”**—approval accelerates, medical insurance tilts, commercial insurance expands
Mild procurement reform: price suppression eases, and profitability expectations for innovative drugs recover

3、 AACR global grand event: data catalyst (strongest event driver)
Time: April 17–22 (San Diego, U.S.)
Scale: 100+ Chinese pharma companies, nearly 400 research abstracts (ADC, bispecifics, radiopharmaceuticals, cell therapy, mRNA)
Key highlights: 30+ oral presentations (highest level), concentrated release of FIC/BIC global data
Expect: blockbuster clinical data from Kelun? (Kelun?), Kangfang, Xinda, Hengrui, BeiGene, etc., validating global competitiveness
4、 Earnings delivery + valuation at a low level (the strongest safety cushion)
Annual report / Q1 report: Hengrui (innovative-drug revenue +26%), Rongchang (net profit +429%), and BeiGene among others turning loss-making to profit / high growth
Valuation: after 1 year of sector adjustment+, PE/Pipeline sit at historical lows; the sector has both risk-hedging and a “repair” attribute
5、 Capital + liquidity: global return flow (strongest incremental support)
Rate-cut expectations from the Fed: global growth style warms up; innovative drugs = high growth + anti-cycle
MNC buying spree: multinational pharma “patent cliff” (200B+ USD), urgently needing China pipelines to make up performance
Domestic capital: rotation between sectors (high/low), pharma receives net inflows from main funds (80B+）

II. China innovative-drug BD: the underlying logic capital favors

1、 What is innovative-drug BD? When does it get concluded?
BD (Business Development): specifically refers to License-out. Chinese pharma companies sell overseas development/commercialization rights to MNCs, while retaining domestic rights.
Golden moments for deals: from the early stage of Phase II to the beginning of Phase III (after POC validation).
Too early (preclinical): risk is too high, and MNCs don’t want to pay a high price.
Too late (after approval): the price is too expensive, and MNCs have no profit to make.
Best: after proof of concept (POC) is completed—data shows it’s effective, but before large-scale commercialization. At this time, risk drops substantially, and MNCs have enough time to lay out the global market.
Revenue structure: upfront payments (immediate cash flow) + milestones (clinical/approval/sales) + sales royalties (5%-15%)
Deal stage (earlier = more valuable, and risks shared):
Preclinical/I phase: tech validation, high risk, higher upfront share
Phase II (most golden): POC achieved, valuation jumps, intensive BD period
Phase III: higher certainty, higher total price, MNCs rush to sign
2、 BD explosion in the past 3 years: the world’s top tier

Historical data (2023-2025)

2026Q1: $60 billion, 49 deals, 75% of global blockbusters
Forecast for the next 3 years (2026-2028)
Annual deal value: $150–200B, CAGR**+25%**
Global market share: 55%-65%, firmly #1 globally

Drivers: MNC pipeline gaps, China’s FIC/BIC explosion, cost/efficiency advantages

3、 Why is China BD “exclusively favored” globally? Five core advantages

R&D efficiency + cost domination

R&D costs: only 20%-30% of those in Europe and the U.S., but the quality of clinical data has already met global standards (FDA recognized).
Clinical timeline: Chinese patient recruitment is faster—40% shorter than the U.S., and 2–3x faster enrollment. In rapidly iterating tracks (like ADC, GLP-1), speed is life.
Engineer dividend: young teams, salaries are 1/5 of the U.S.
Pipeline quality: from “following” to “leading”
Pipelines under development globally: 30% (second place)
FIC (first-in-class) globally: 24% (only behind the U.S.’s 43%)
Bispecifics, ADC, small nucleic acids, CAR-T: globally leading
Global essentials: MNCs’ “life-saving straw”
Patent cliff 200B+ USD from 2025 to 2030
China’s high value-for-money and fast delivery—only supplier capable of scaling up pipeline replenishment
Policy + ecosystem: golden soil
Approval acceleration: IND/NDA cycle shortened by 60%+
Medical insurance + commercial insurance: payment side fully expands
Complete industry chain: CRO/CDMO (WuXi? (WuXi Biologics), Tig? (Kanglong?))—world’s strongest supporting capabilities
Valuation undervaluation: global pricing reassessment
China pharma companies’ valuations are only 1/3 to 1/2 of overseas peers
BD landing cash flows + certainty double boost; valuations repair quickly

III. Why are innovative drugs worth money? High risk + high monopoly = super returns

1、 R&D difficulty: extremely high entry barriers, the “pinnacle” where one survives out of nine lives
Two Ten Laws: a cycle of 10+ years, costs of $1B+ (now risen to $2.6B+)
Success rate: only 3%-10%
Phase I: 65%, Phase II: 42%, Phase III: 28% (slightly higher in China); from 5,000–10,000 compounds to 1上市
Failure means everything goes to zero: no residual value; all early investment is sunk
2、 After success: monopoly super-profits (10 years of exclusivity + pricing power)
Patent protection: after approval, it has a 20-year patent term (actual sales exclusivity is about 7–10 years). During that period, no generic-drug competition. (Clinical exclusivity: 5–8 years; post-launch exclusivity: 12–15 years)
Pricing power:
Oncology / rare diseases: annual treatment cost $100k–$1M+
Blockbuster products: annual sales $5–30B (Keytruda? K drug nearly $30B), and patient stickiness is extremely high, providing long-term stable cash flow.
ROI is astonishing: 1 successful case covers 9 failures; net profit margin 70%-90% (traditional manufacturing 5%-15%)
3、 Capital’s favorite: anti-cycle + deep moat + long cash flows
Demand is absolutely rigid: diseases have no economic cycle, and no geopolitics either
Moat is extremely deep: five-layer barriers—technology, patents, clinical evidence, approvals, commercialization
Perpetual cash flow: one drug generates stable cash flow for 10–15 years, and ** the pipeline continues iterating**

IV. BD drives a pipeline value reassessment: rebuilding the global pricing system

BD deals are the “anchor” for innovative-drug valuation; they change the pricing logic:
1、 From “involution pricing” to “global pricing”:
Previously: only looked at domestic medical insurance reimbursement; the ceiling for peak sales is low (10-30 亿 RMB).
Now: through overseas BD, the market space expands to the global arena ($5–10B). The valuation model switches from domestic DCF to global r-NPV (risk-adjusted net present value).
Core change: pipeline value ×3-10x (China valuation → global valuation)
2、 MNC endorsement = quality certification:
Multinationals (like Eli Lilly and AstraZeneca) conduct extremely strict due diligence. They are willing to pay a large upfront payment, which is equivalent to telling the capital market: “This drug’s technology and data are real and valuable.” This eliminates information asymmetry and directly lifts valuations.
Clinical-stage premium: Phase II (POC) valuation jumps 50%-200%; tech platform premium: bispecific/ADC/small nucleic-acid platform-type companies’ valuations further ×2-3
Overseas expansion certainty premium: companies that have done BD are valued 40%-80% higher than those without BD.
3、 Typical cases

Shij? Pharma → AstraZeneca: upfront payment 1.2B + milestones 3.5B + sales royalties; total 18.5B
Xinda → Eli Lilly: upfront payment 350M + milestones 8.5B
China Biol? → Sanofi: total consideration 1.53B

V. List of the companies that benefit the most (5 categories)

1、 BD blockbuster: Phase 2/Phase 3 clinical, one-of-a-kind FIC/BIC

2、 Platform-type enterprises (technology moats)

3、 Supporting CXO (water-seller)

4、 Upstream APIs/intermediates
Hao? Yuan Pharma, BiDe Pharma: innovative-drug intermediates, volume and price both rising
Fuxiang Pharma, Mino? V? : specialty APIs, benefiting from the BD industrial chain
5、 AACR major debut (most likely to explode in April)

Summary: value reassessment from “a story” to “profits”
When “selling drugs” is no longer just the end of a sales process, but the comprehensive fulfillment of global BD transactions, clinical data, and commercialization capability, China’s innovative-drug sector is shifting from “telling stories” to “calculating profits.” The bigger the storm, the more expensive the fish. This time, China’s innovative drugs are transforming from “followers” into “rule changers.” And the AACR conference in April will be another milestone in this value reassessment.
Under the triple catalyst resonance—$60B in BD in the first quarter of 2026, the AACR conference on April 17, and the Government Work Report for the first time listing biopharmaceuticals as an “emerging pillar industry”—the innovative-drug sector is entering a long-awaited window for value reassessment.
For investors, the most core judgment is: China’s innovative drugs are no longer just a “value-for-money” option for selling saplings; they have become an indispensable core force in the global pharma innovation ecosystem. From technology followers to rule changers—every step along this road corresponds to valuation reconstruction and value release.
But do you understand who the real core focus is? And if you can’t find the core, how should you keep up with this main line? Who will be the leader this time? Will it have staying power? I’m only sharing my thought process. In the end, whether you can capture your own value depends on your own understanding—not just watching pictures! This article is long—4000 Chinese characters. If you can read it all, you’re the patient person who can obtain future value!
If you don’t get it: like + share + comment: Who is scooping up innovative drugs at the bottom? $60B BD deals leak the truth—these 5 types of companies to watch in April!
(But also consider: will the innovative drugs surrounded by quants finally break out and win the battle!)

The above are only my personal trading review and reflections. Investing involves risk; trading requires caution! Plans never change faster than you expect—everything should move in combination with the market. The article’s content is personal thinking and records; it serves as my personal sharing of my understanding of the market, and does not constitute any investment advice. For reference only. Any buying/selling based on this is at your own risk, and gains/losses are your own!
(Extracting and organizing materials is not easy. Your: likes + shares + comments are the motivation for our efforts—thank you!)

Market overview: Today’s broader market saw further volume expansion and a breakout. Moreover, as expected, once it broke through the 3950 resistance, the trading volume returned to 2.01 trillion. However, whether it can continue remains to be seen. Whether the main theme—pharma—and whether it can keep爆発 is also the core point. If it can continue, then overall acceleration is the key to keeping the rally going. Right now, 4,228 stocks are up, and 851 are down. And at the January 1 turning point, seeing the 7th—today’s action was a high-open and high-close. I can’t judge it well. I can only watch whether there is a further breakthrough of 3956 tomorrow. If overall it’s bullish until the 7th, then otherwise it could further shake down and return toward around the 7th as the key low point. So you must pay attention to the breakout of this 100-point range consolidation.

Sentiment: sentiment is split. There are 56 stocks hitting limit-up, 6 hitting limit-down, and the board-packing rate is 78%. There are 12 stocks with consecutive limit-ups, as high as 4 boards.
On sectors: the core main line right now is pharma, and the strongest sector is computing power engineering + pharma. Overall, power and chemical sectors still have more time to hold, but now pharma has broken out a main-line trend. Another is computing power’s continued strength, so you can further observe here. ! Support: lithium batteries + shipping + AI applications + chips!
Pharma: the leader is Jinzhou Pharma? (Jin Yao? ) 4 boards; the runner-up is Kailaiying 2 boards. The last time was after Mino? V? had 5 boards, and then once again 5 boards—whether it can break through and bring opportunities depends on the later push. As of now, a single core story still hasn’t been clearly found; most are talking about their own themes, so more thinking is needed here. But the core is thinking about innovative drugs + BD.
Computing power engineering: the leader is Aoruid? 11 days, 6 boards. Also, Meili? went 1 board. After further reversal and repurchase, it falls into strengthening? (unclear). Then look at the back ranks: in photonics, Minpu? and Hengrun!
There is no shortcut to success—only self-discipline and persistence. Wishing you, keep pushing on the road of struggle; the more you work, the luckier you become!

What to watch today:
1、 Rolls-Royce stock price surged 10%, hitting the biggest gain within 8 months.
2、 Europe’s main stock indexes opened higher across the board. The STOXX 50 index rose 2.74%, the UK FTSE 100 rose 1.65%, France’s CAC 40 rose 2.32%, and Germany’s DAX 30 rose 3.12%.

Tracking commodity themes

1. Live hogs 10.03 (-0.49%, pig cost 12, Muyuan 11.6 yuan, feed over 50%, labor 10-15%).
2. Battery-grade lithium carbonate 15.1万 (-1.23%, salt lake cost 3-4万, mica 6-9万, spodumene 6-8万.)
3. Praseodymium-neodymium oxide 72.25万 (0.21%), NdFeB N35: 169.5万 (0%) (light cost 35万-40万. MP79万, Australia 45-50万. Mining: 8,000–10,000 yuan/ton, heavy rare earth 130–150万 yuan/ton)
   First like, then watch. Monthly income of a million! Thanks everyone for your support!