Core Insights - The ASCO conference has witnessed the rise of Chinese innovative drugs, with a significant increase in the number of oral presentations and Late-Breaking Abstracts from Chinese researchers over the past decade [1][2][4] - Chinese biopharmaceutical companies are now recognized for their quality research, with many studies presenting groundbreaking results that have global implications [4][5] - The "ASCO effect" has begun to influence stock prices of Chinese pharmaceutical companies, reflecting the growing importance of their research in the global market [5][6] Company Highlights - China Biologic Products set a record with 12 oral presentations at ASCO 2025, including 4 Late-Breaking Abstracts, totaling over 40 studies presented [4] - Innovative studies such as the DIAMOND trial by Junshi Biosciences have demonstrated significant advancements in treatment protocols, marking a shift from merely participating to leading in global research [4] - Companies like Innovent Biologics and Hengrui Medicine are at the forefront of ADC and bispecific antibody development, with numerous studies presented at ASCO [8][12] Industry Trends - The ADC sector is dominated by Chinese companies, with 89 out of 184 ADC-related studies presented at ASCO coming from China, representing approximately 48.4% of the total [8][10] - The bispecific antibody (bispecific) pipeline from China accounts for nearly 50% of the global total, with significant clinical advancements reported at ASCO [12][14] - The trend of increasing license-out transactions and upfront payments for Chinese innovative drugs indicates a shift in the global pharmaceutical landscape, with a notable rise in the use of the NewCo model for collaborations [18][24] Market Impact - The stock prices of companies like China Biologic Products and Innovent Biologics have seen significant increases following the ASCO conference, indicating a positive market response to their research presentations [6] - The total value of license-out transactions for Chinese pharmaceutical companies has surged, with a notable increase in upfront payments, reflecting enhanced negotiation power [20][24] - The emergence of new treatment modalities and innovative drug pipelines positions Chinese companies as key players in the global biopharmaceutical market [16][18]

金融界5月30日消息，上证指数低开低走，中华交易服务香港生物科技指数 (中华香港生物科技， CESHKB)下跌0.48%，报6455.02点，成交额124.56亿元。 数据统计显示，中华交易服务香港生物科技指数近一个月上涨9.43%，近三个月上涨20.05%，年至今上 涨44.75%。 据了解，"中华交易服务香港生物科技指数由中华证券交易服务有限公司(中华交易服务)委托中证指数 有限公司(中证指数)进行编制，指数编制方案由中华交易服务以及中证指数共同确定。中华交易服务香 港生物科技指数(中华香港生物科技)为证券价格指数，旨在反映于香港上市的生物科技公司的整体表 现"该指数以2014年12月12日为基日，以2000.0点为基点。 从中华交易服务香港生物科技指数持仓的市场板块来看，香港证券交易所占比100.00%。 从中华交易服务香港生物科技指数持仓样本的行业来看，医药卫生占比100.00%。 本文源自：金融界 从指数持仓来看，中华交易服务香港生物科技指数十大权重分别为：信达生物（11.61%）、百济神州 （10.06%）、药明生物（9.62%）、中国生物制药（9.37%）、康方生物（9.26%）、三生制药 （6 ...

Group 1 - The core viewpoint of the news highlights the significant performance of the innovative drug sector, with the Tianhong Innovative Drug ETF (517380) showing a nearly 20% increase year-to-date as of May 29, 2023 [1] - The Tianhong Innovative Drug ETF, launched in 2021, tracks the "Hang Seng Shanghai-Shenzhen Hong Kong Innovative Drug Selected 50" index, providing comprehensive coverage of the innovative drug industry across A-shares and Hong Kong stocks [1] - On May 29, the National Medical Products Administration approved 11 new drugs, with five being from innovative companies listed on the Sci-Tech Innovation Board, covering various therapeutic areas including oncology and autoimmune diseases [1] Group 2 - The upcoming 2025 ASCO Annual Meeting in Chicago is expected to showcase significant data from domestic innovative drug companies, with 71 original research results from Chinese pharmaceutical companies selected for presentation [2] - The innovative drug sector is anticipated to gain increased attention and positive market sentiment, with institutional holdings currently at low levels and the sector's valuation significantly below historical averages [2] - The total amount of outbound transactions for innovative drugs has reached $45.5 billion since the beginning of 2025, indicating a strong trend towards internationalization and potential for future growth [3] Group 3 - The Chinese innovative drug industry has transitioned from imitation to rapid following and now to original innovation, marking a significant evolution in its development [3] - Most domestic innovative drugs currently in the U.S. are in clinical stages, with future milestones expected to validate the growth and internationalization of Chinese innovative drugs [3]

Market Overview - The market experienced fluctuations in the early session, with the ChiNext Index leading the decline. The focus of the market was primarily on the consumer and pharmaceutical sectors [1] ETF Performance - Several ETFs related to innovative drugs saw significant gains, with the Hong Kong Stock Connect Innovative Drug ETF (159570) rising by 2.61% and the Hong Kong Innovative Drug ETF (159567) increasing by 2.22% [2] - The Hong Kong Innovative Drug ETF (513120) also rose over 2%, with a total scale of 95.23 billion, tracking the CSI Hong Kong Innovative Drug Index [5] Investment Logic - The innovative drug industry in China is expected to reach a turning point by 2025, shifting from capital-driven to profit-driven trends, presenting opportunities for both performance and valuation recovery [2] - A new round of technological advancements is anticipated to propel domestic innovative drugs into a new development phase [2] Key Stocks in Innovative Drug Sector - Notable companies in the innovative drug sector include: - Innovent Biologics (信达生物) with a market cap of 885.89 million - BeiGene (百济神州) with a market cap of 2,034.42 million - WuXi Biologics (药明生物) with a market cap of 938.65 million - Other significant players include CanSino Biologics (康方生物), China Biologic Products (中国生物制药), and Hengrui Medicine (翰森制药) [3][6][7] Index Composition - The CSI Hong Kong Innovative Drug Index selects up to 50 listed companies involved in innovative drug research and development, reflecting the overall performance of the innovative drug sector in the Hong Kong market [5][6]

Core Viewpoint - The Chinese innovative pharmaceutical sector is gaining international recognition, highlighted by significant deals and promising clinical data, leading to increased interest in related ETFs [1][3][4]. Group 1: Market Performance - The innovative drug ETF (517110) has rebounded nearly 15% since early April, reflecting strong performance in the pharmaceutical sector [1]. - The biopharmaceutical ETF and vaccine ETF also showed positive movements, with respective increases of 1.17% and 0.89% [2]. Group 2: ASCO Conference Insights - At the 2025 ASCO conference, over 70 research outcomes from Chinese pharmaceutical companies were presented, showcasing advancements in ADC and bispecific antibody technologies [3]. - Notable performances include Zai Lab's ZG005 and Huahai Pharmaceutical's HB0025, which exceeded expectations in early clinical trials for cervical and endometrial cancers, respectively [3]. Group 3: Business Development Trends - Recent business development (BD) activities in the innovative drug sector have seen record-breaking upfront payments, such as the $12.5 billion upfront payment from Pfizer for a PD-1/VEGF bispecific antibody from 3SBio [4][7]. - The increase in upfront payments and total deal values indicates growing international recognition of Chinese innovative drugs [7]. Group 4: Future Outlook - The innovative drug sector is expected to benefit from ongoing BD transactions, advancements in artificial intelligence across the pharmaceutical value chain, and the implementation of new healthcare policies [7]. - The overall sentiment and valuation in the pharmaceutical sector may improve due to domestic policy optimizations and a recovery in medical equipment procurement [7].

Core Viewpoint - The announcement by Kolun Botai Biotech-B (06990.HK) regarding the receipt of an initial payment from Windward Bio under a licensing agreement highlights the progress in the development of SKB378/HBM9378/WIN378, a novel monoclonal antibody targeting TSLP for treating immune diseases such as asthma and COPD [1][2] Group 1: Licensing Agreement and Financial Aspects - The company has received an initial payment from Windward Bio, which includes a cash payment expected in February 2025 and equity from Windward Bio's parent company, contingent upon regulatory approvals in China [1] - The global rights for SKB378/HBM9378/WIN378 are shared equally between the company and Heptares Therapeutics [1] Group 2: Product Development and Clinical Trials - SKB378/HBM9378/WIN378 is a recombinant fully human monoclonal antibody that effectively binds to the TSLP ligand, blocking its interaction with the TSLP receptor, thereby inhibiting TSLP-mediated signaling pathways [1] - The IND application for SKB378/HBM9378/WIN378 for the treatment of chronic obstructive pulmonary disease (COPD) was approved by the National Medical Products Administration (NMPA) in January 2025 [2] - The company has completed a Phase I clinical trial in healthy subjects in China for treating moderate to severe asthma, and Windward Bio is preparing for a Phase II trial [2]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][20]. Core Views - The company is recognized as a leading ADC platform in China, with a focus on drug pipeline value realization and key inflection points approaching [4][11]. - The core product, Lukanosatuzumab, is the second TROP2 ADC approved globally and is expected to generate significant sales in both domestic and international markets [19][42]. - The company is transitioning from a biotech firm to a comprehensive biopharmaceutical platform, with potential operational breakeven in two years [19][20]. Financial Overview - Revenue projections for 2023 to 2027 are as follows: - 2023: 1,540 million RMB - 2024: 1,933 million RMB - 2025: 2,038 million RMB - 2026: 3,004 million RMB - 2027: 4,300 million RMB - The expected CAGR for revenue from 2025 to 2027 is 45%, with product sales CAGR reaching 82% [7][20]. Product Pipeline - The company has developed approximately 20 drug candidates across three major platforms: ADC, large molecules, and small molecule targeted drugs [11][21]. - The ADC pipeline includes 11 candidates, with one approved and others in various stages of clinical development [11][27]. - The company has established significant collaborations with Merck, involving over 10 billion USD in total transaction value [11][36]. Market Potential - The global ADC market is projected to grow from 13.2 billion USD in 2024 to 115.1 billion USD by 2032, with a CAGR of 35% [21][24]. - The TROP2 ADC market in China is expected to reach 3.4 billion RMB by 2032, with a CAGR of 91.8% [42][49]. Competitive Landscape - The competitive environment for TROP2 ADCs is moderate, with opportunities for Lukanosatuzumab to gain market share against existing products [49][50]. - The company’s unique molecular design and clinical data provide a competitive edge in the ADC space [42][49].

Group 1 - The Hang Seng Medical Index ETF has shown significant liquidity with a turnover of 1% and a transaction volume of 2.6148 million yuan, with an average daily transaction volume of 27.4616 million yuan over the past month [2] - The ETF's scale has increased by 28.6087 million yuan in the past month, ranking first among comparable funds, with a share increase of 12 million units in the last two weeks, also the highest among peers [2] - In terms of capital inflow, the ETF has seen net inflows on 5 out of the last 8 trading days, totaling 14.5271 million yuan [2] - The current price-to-earnings ratio (PE-TTM) of the Hang Seng Medical Healthcare Index is 23.4, which is in the 4.36% percentile over the past year, indicating a valuation lower than 95.64% of the time in the past year, suggesting historical low valuations [2] - The top ten weighted stocks in the Hang Seng Medical Healthcare Index account for 57.09% of the index, including companies like WuXi Biologics and BeiGene [2] Group 2 - Since the reform of new drug research and development policies in 2015, China's innovative drug industry has developed a strong ecosystem, integrating excellent resources in preclinical and clinical stages, which has gained recognition from multinational corporations (MNCs) [3] - The pharmaceutical and biotechnology sector's Q1 2025 financial reports show stable revenue and profit performance, with notable improvements in certain sub-industries, indicating a return of market enthusiasm for the sector [3] - There is a recommendation to focus on international biotech companies, revaluation of innovative pipelines in generic companies, and companies in the CXO industry with significant order and operational improvements [3] - Investors without stock accounts can access investment opportunities in the Hong Kong medical sector through the Hang Seng Medical Index ETF linked fund (018433) [3]

Investment Rating - The investment rating for the biopharmaceutical industry is "Positive" (maintained) [2] Core Insights - The report highlights the aggressive nature of small cell lung cancer (SCLC), with extensive stage SCLC accounting for approximately 75% of cases, which often rely on systemic treatment and have a poor prognosis [6][21] - The first-line treatment for extensive stage SCLC primarily involves PD-1/PD-L1 immunotherapy combined with doublet chemotherapy, while there are limited approved drugs for later-line treatments, indicating a significant unmet clinical need [24][30] - The report identifies three key areas of focus for research and development in the SCLC field: Antibody-Drug Conjugates (ADC), DLL3 T-cell engagers (TCE), and next-generation immune-oncology (IO) therapies [30][34] Summary by Sections 1. SCLC Overview - SCLC accounts for about 15%-20% of all lung cancer cases, with a high incidence of early metastasis [18][19] - The majority of SCLC cases are extensive stage, which has a poor prognosis and relies heavily on systemic therapies [21][22] 2. Treatment Landscape - The standard treatment for extensive stage SCLC has been established as a combination of chemotherapy and PD-1/PD-L1 immunotherapy, but the overall prognosis remains poor [24][25] - The NCCN and CSCO guidelines recommend various treatment options, including the recent inclusion of Tarlatamab as a preferred second-line treatment [28][29] 3. Research and Development Focus - ADCs are rapidly advancing in the SCLC field, targeting multiple hot spots such as B7-H3, DLL3, and TROP-2, with no ADC products currently approved for SCLC [37][38] - DLL3 TCEs, particularly Tarlatamab, have shown promising early data and are expected to reshape the treatment landscape for SCLC [30][31] - Next-generation IO therapies are being developed to challenge the current PD-L1 standard in first-line SCLC treatment [8][36] 4. Investment Recommendations - The report suggests that companies with strong pipelines in the SCLC space, such as Zai Lab, Zai Lab-U, Innovent Biologics, and others, are likely to benefit from the anticipated growth in the market as new data emerges [9]

Summary of the Conference Call Industry Focus - The report focuses on the pharmaceutical industry, specifically highlighting innovative drugs and contract research organizations (CXO) Core Insights and Arguments - Continuous recommendation of innovative drugs with positive growth outlook, including: - 恒瑞医药 (Hengrui Medicine) - 华东医药 (East China Pharmaceutical) - 翰森制药 (Hansoh Pharmaceutical) - 贝达药业 (Betta Pharmaceuticals) - 信立泰 (Sinopharm) - 科伦药业 (Kelun Pharmaceutical) - 百利天恒 (Baili Tianheng) - 荣昌生物 (Rongchang Biopharmaceutical) - 科伦博泰生物 (Kelun Biotech) - 石药集团 (Shijiazhuang Pharmaceutical Group) [1][1][1] - Recommendation of CXOs showing signs of profit growth turning points, including: - 药明生物 (WuXi Biologics) - 药明康德 (WuXi AppTec) [1][1] - Positive outlook on domestic replacement of innovative medical devices, specifically: - 惠泰医疗 (Huitai Medical) [1] - Anticipation of recovery in consumer healthcare, particularly: - 爱尔眼科 (Aier Eye Hospital) [1] Other Important Points - The report emphasizes the ongoing trend of recommending companies that are positioned well within the pharmaceutical sector, particularly those that are expected to benefit from market dynamics and growth opportunities - The focus on innovative drugs and CXOs indicates a strategic approach to capitalize on emerging trends in the healthcare market - The mention of domestic replacements in medical devices suggests a shift towards local production and innovation, which could impact market competition and supply chains - The recovery in consumer healthcare points to potential growth areas as the market stabilizes post-pandemic