Core Insights - The domestic innovative drug BD (business development) transactions have reached $104.2 billion by the end of October 2025, with upfront payments totaling $8.1 billion, both figures surpassing the total for the previous year, indicating a significant surge in BD transactions in China's innovative drug sector [1] Group 1: BD Transactions and Industry Dynamics - BD transactions are reshaping the innovative drug ecosystem by integrating internal R&D with external markets, enhancing funding, global collaboration, and ecosystem building [4] - The efficient integration of funds and resources allows multinational pharmaceutical companies facing patent expirations to leverage BD collaborations to introduce Chinese innovative drugs at low costs, while local companies can quickly recoup funds to support further R&D [5] - China has become the largest source of authorized transactions in the innovative drug sector globally, with over 90% of leading international MNCs engaging in BD collaborations with domestic innovative drug pipelines [5] Group 2: Strategic Evolution of BD - The concept of BD is evolving from short-term transactions focused on "selling pipelines" to long-term strategic layouts aimed at "building ecosystems," with the Co-Co model (co-development + co-commercialization) becoming mainstream [6] - In the technology platform sector, BD strategies are transitioning from "single technology licensing" to "platform output," enhancing global pharmaceutical companies' R&D capabilities and creating sustained technical licensing revenue [7] Group 3: Investment Logic in Innovative Drugs - The innovative drug sector is exhibiting dual investment value characterized by "supported profit growth" and "logical valuation enhancement" [10] - Policy support from the government in R&D, review, and payment processes is providing a safeguard for corporate profitability, while Chinese innovative drugs are achieving global leadership in areas like ADC and bispecific antibodies, opening up global growth opportunities [11] - The market's perception of Chinese innovative drugs is improving due to their low R&D costs and rapid iterations, making them preferred options for multinational companies facing patent cliffs [12]