Investment Rating - The report maintains a positive outlook on the pharmaceutical industry, recommending a focus on innovative drugs and sectors with improving performance, such as medical devices and upstream segments [3][4]. Core Insights - The pharmaceutical sector experienced a decline of 1.0% this week, ranking 17th among 31 sub-industries. The overall valuation of the pharmaceutical sector stands at 29.2 times earnings, placing it 10th among the primary industries [2][4][7]. - Key events include Fosun Pharma granting exclusive global rights for its oral GLP-1 drug to Pfizer, with potential total payments reaching $2.085 billion. Additionally, Eli Lilly's GLP-1/GIP/GCGR agonist Retatrutide showed promising Phase III clinical data, achieving a weight loss of 28.7% over 68 weeks [3][14][17]. - The report highlights significant mergers and acquisitions, such as Sobi's acquisition of Arthrosi for $950 million upfront and $550 million in milestone payments, and Zhaoli Pharmaceutical's planned acquisition of a multi-trace element injection asset group for approximately RMB 356 million [3][15][22]. Market Performance - The pharmaceutical index decreased by 1.0% this week, while the Shanghai Composite Index fell by 0.3%. The overall performance of the pharmaceutical sector was ranked 17th among 31 sub-industries [2][4][6]. - The report details the performance of various sub-sectors, with notable declines in medical circulation (-4.2%), offline pharmacies (-4.3%), and blood products (-4.1%), while medical R&D outsourcing saw an increase of 3.7% [7][11]. Recent Key Events - The report discusses recent business developments, including the approval of Shanghai Pharma's new drug, and the change of control at Tailong Pharmaceutical, which will now be under Jiang Pharmaceutical Holdings [20][22]. - It also notes the IPO application of Shiyao Innovation, which was accepted with a market value of RMB 47.9 billion, focusing on health-related sectors and innovative drugs [23]. Company Valuation - The report provides a valuation table for key companies in the pharmaceutical sector, indicating projected earnings per share (EPS) and price-to-earnings (PE) ratios for 2025 to 2027. For instance, Mindray Medical is projected to have a PE of 23 in 2025, while Hengrui Medicine is expected to have a PE of 48 [29].