Xin Lang Cai Jing·2025-05-26 02:36Core Viewpoint - The recent developments in the innovative drug sector, particularly the record-breaking licensing deal and the upcoming ASCO conference, highlight the growing competitiveness and potential of Chinese pharmaceutical companies in the global market [4][5]. Group 1: Market Performance - The Hong Kong Innovative Drug ETF (159570) opened high but closed lower, experiencing a 1% pullback after four days of gains last week, with trading volume reaching 300 million, indicating strong liquidity [1]. - Major component stocks of the ETF mostly declined, with notable drops including a more than 4% decrease for 3SBio and over 3% for both WuXi AppTec and Rongchang Biopharmaceutical [2]. Group 2: Licensing Deal - A historic licensing agreement was reached where Pfizer will pay a $1.25 billion upfront fee to Chinese companies for the PD-1/VEGF dual antibody SSGJ-707, with potential total payments reaching $4.8 billion [4]. - This deal sets a new record for Chinese innovative drugs entering the international market and is expected to enhance market valuation expectations for the innovative drug sector [4]. Group 3: ASCO Conference Insights - The upcoming ASCO conference is anticipated to showcase the global competitiveness of Chinese pharmaceutical companies, with numerous clinical studies being presented [5]. - Key highlights include the performance of domestic drugs that have shown potential to outperform established treatments, such as the combination of Bemarituzumab and Anlotinib against Keytruda in NSCLC [5]. - CAR-T therapies are also making significant strides, with Kintor Pharmaceuticals presenting promising data for their CLDN18.2 CAR-T therapy [5]. Group 4: Innovative Drug ETF Characteristics - The Hong Kong Innovative Drug ETF (159570) has a high concentration in innovative drugs, with over 85% of its weight in this category, making it the highest among all pharmaceutical indices [6]. - The ETF features a low valuation, with a five-year price-to-sales ratio at the 48.5th percentile, indicating potential undervaluation in the innovative drug sector [6].