Core Viewpoint - The innovative drug sector has become a "star track" in the market, with an ETF increase of over 40% since May, indicating strong growth potential and investment opportunities [1]. Group 1: Reasons for the Surge in Innovative Drugs - Continuous favorable policies have shifted from "price control" to "encouraging innovation," as evidenced by the issuance of measures to support high-quality development of innovative drugs [2]. - China's biopharmaceutical innovation capabilities have significantly improved, with over 1,250 new drugs in the R&D phase in 2023, surpassing the EU and nearing the US [4]. - Internationalization is entering a harvest period, with the amount of overseas licensing agreements skyrocketing from $38 billion in 2023 to $60.8 billion in the first half of 2024, nearly doubling [7]. - The valuation of the pharmaceutical sector is at historical lows, providing significant room for recovery, with companies like WuXi AppTec showing strong revenue and profit growth [10]. Group 2: Investment Strategies - For conservative investors, focusing on industry leaders with strong fundamentals and clear profit models is recommended [12]. - For aggressive traders, high-volatility stocks in niche areas such as ADC development or companies with strong overseas clinical data should be prioritized [14]. - For low-risk strategies, investing in innovative drug ETFs or healthcare ETFs can provide diversified exposure to the sector [16]. - The current market is seen as a prime opportunity to invest in innovative drugs, as the sector is transitioning from imitation to innovation and from domestic to global markets [18].