Hua Yuan Zheng Quan·2025-10-19 11:49Investment Rating - The investment rating for the pharmaceutical industry is "Positive" (maintained) [3] Core Viewpoints - The report emphasizes that the fourth quarter is expected to see a rebound in innovative drugs, driven by a concentration of business development (BD) activities and upcoming events such as the ESMO conference and medical insurance negotiations [4][16] - The Chinese pharmaceutical industry has completed a transition from old to new growth drivers, with innovative drugs significantly opening new growth avenues for Chinese pharmaceutical companies [16][35] - The report suggests that the demand for healthcare will continue to rise due to an aging population, and the payment side is also expected to grow steadily, supported by the development of a multi-tiered payment system [35] Summary by Sections 1. BD + ESMO - The number of license-out transactions in China has been increasing, with 135 transactions occurring from January 1, 2025, to October 17, 2025, totaling $10.2996 billion [8][9] - The report highlights that the international pharmaceutical industry recognizes the value of Chinese innovative drug assets, which are characterized by high quality and low cost [8][9] - The ESMO conference will showcase 23 studies led by Chinese scholars, indicating a significant increase in international recognition of Chinese innovation [12][13] 2. Industry Perspective - The report maintains that innovative drugs will remain the main focus for the year, with attention on manufacturing, overseas expansion, and aging-related consumption [16][35] - The pharmaceutical index has shown a decline of 2.48% in the past week, but an increase of 18.85% year-to-date, indicating a mixed performance [16] - The report lists several companies to watch, including innovative drug manufacturers and those involved in the supply chain [38]