Shenwan Hongyuan Securities·2025-11-09 14:12Investment Rating - The report maintains a positive outlook on the innovative pharmaceutical sector, indicating a preference for companies within this space due to their strong performance and growth potential [3][10]. Core Insights - The pharmaceutical and biotechnology sector experienced a decline of 2.4% this week, ranking 29th among 31 sub-industries [4][6]. - The overall valuation of the pharmaceutical sector stands at 30.1 times earnings, placing it 10th among 31 primary industries [6][14]. - The report highlights the successful conclusion of the 2025 National Basic Medical Insurance Drug List negotiations, with 120 companies participating [10]. - The implementation of AI in healthcare is emphasized, with a goal for widespread adoption by 2030 [11]. - Notable performance in the third quarter was observed among weight-loss drug manufacturers, with Eli Lilly reporting a 125% increase in sales for its drug, totaling $24.837 billion [3][17]. Market Performance - The pharmaceutical sector's index fell by 2.4% this week, while the Shanghai Composite Index rose by 1.1% [4][6]. - Among the sub-sectors, chemical preparations saw a decline of 4.4%, while traditional Chinese medicine increased by 0.8% [6][10]. Recent Key Events - The report notes the collaboration between Eli Lilly and NVIDIA to develop a supercomputer for drug discovery [15]. - Manifold Bio's partnership with Roche aims to create new blood-brain barrier drugs, with a total deal value exceeding $2 billion [16]. - Pfizer's acquisition of Metsera for up to $8.625 billion focuses on obesity treatments [17]. Company Performance - The report summarizes the third-quarter performance of major pharmaceutical companies, with Eli Lilly achieving a 54% year-over-year revenue increase [18][19]. - Notable companies include Merck, which reported a 4% increase, and Pfizer, which experienced a 6% decline in revenue [18][19]. Investment Recommendations - The report recommends focusing on innovative drug sectors, medical devices, and AI healthcare applications, highlighting companies such as Hengrui Medicine, Mindray Medical, and WuXi AppTec [3][10].