① The Hong Kong stock market's Innovative Drugs are strong again; what bullish catalysts are Institutions focusing on? ② The Biomedical Index has continuously outperformed the Large Cap for the past four months; how strong has the performance been this year?
According to financial reports on May 9 (Editor: Feng Yi), the Innovative Drugs concept stocks in the Hong Kong stock market collectively strengthened again today.
As of the close on the 9th,$CARSGEN-B (02171.HK)$rising over 9%,$JACOBIO-B (01167.HK)$and rising over 8%.$JW THERAP-B (02126.HK)$Many stocks have also risen more than 5%.$GRAND PHARMA (00512.HK)$It has continuously set new highs for the year, driving the enthusiasm of the sector to rise.
Funding data also shows that$E Fund Hang Seng SCHK Innovative Drug ETF (159316.SZ)$has received increased funding for three consecutive trading days. In fact, since the beginning of this year, Hong Kong stocks $Hang Seng Hong Kong-Listed Biotech Index (800805.HK)$ have continued to show an independent market trend, with an overall increase that is nearly double that of the Hang Seng Index during the same period.
According to Wind data, as of the close on May 9, the Hang Seng Hong Kong-Listed Biotech Index has performed remarkably this year, with a cumulative increase of 27.43%, while during the same period,$Hang Seng TECH Index (800700.HK)$the increase was 15.94%,$Hang Seng Index (800000.HK)$with a cumulative increase of only 13.98%.
It is worth mentioning that the three products managed by the star medical fund manager Ge Lan showed differentiated net value performance in the first quarter, with the China Europe Medical Innovation, which can invest in Hong Kong stock symbols, rebounding significantly, with a net value return of over 20%.
This also indicates the strong position of the Hong Kong stock Innovative Drugs concept in current pharmaceutical stock investments. Data shows that Ge Lan increased holdings in Hong Kong stocks, especially in Innovative Drugs and the Biomedical Sector.
Sinolink's medical team pointed out in its industry report on May 4 that the ongoing commercial sales and business development performance of leading Innovative Drugs companies continuously validate the logic for the sector to establish its independent market trend.
The report states that with clinical pushes,$Shinwa (7607.JP)$Data reveals that the expectations for major products in China’s Innovative Drugs enterprises in the fields of oncology, autoimmune diseases, and chronic diseases are continuously increasing, providing strong support for the growth space and valuation recovery of leading companies in these segmented tracks. Global leading innovative varieties are gradually entering the performance release period, while internationally leading clinical breakthroughs or BD (licensing in or going overseas) are continuously emerging.
Note: License-out (domestic to overseas) transaction situation of China’s Innovative Drugs from 2021 to the first quarter of 2025.
According to the NextPharma database, in the first quarter of 2025, there have been 41 license-out transactions for China’s Innovative Drugs, with a total amount reaching 36.929 billion USD. In just 3 months, this figure is close to the total for the entire year of 2023 and has exceeded the total transactions in the first half of 2024. Overall, BD transactions are showing explosive growth, which further supports the view of the performance release of innovative drug companies.
Sinolink believes that the most noteworthy area in the Pharmaceutical Sector will still be the Innovative Drugs track, and grasping investment opportunities in innovative medicine will be the main focus throughout the year 2025.
From a longer-term industrial trend perspective, China’s Innovative Drugs are accelerating towards global.
GF SEC stated in a previous strategy report that in recent years, License-out transactions of Chinese pharmaceutical companies in overseas markets have achieved leapfrog development, demonstrating the global competitiveness of China’s innovative drug R&D.
In addition, the NextPharma database shows that in 2015, there were only 9 FIC Innovative Drugs developed by domestic companies entering clinical trials in China, accounting for less than 10% globally. After nearly 10 years of development, by 2024, there will be 120, accounting for over 30% (second only to the USA).
Looking ahead, The Pacific Securities indicates that against the backdrop of improved liquidity and risk appetite in the Hong Kong stock market, coupled with the concentration of relevant data releases at meetings such as AACR and ASCO from April to June, the attention on the trends in the Innovative Drugs Sector may significantly increase.
Editor/Rocky
