Core Viewpoint - The Chinese innovative drug sector is experiencing a resurgence, driven by active business development (BD) transactions and favorable policies, leading to improved revenue expectations for innovative drug companies starting from mid-2024 [1][4][6]. Group 1: Market Performance - The Hong Kong innovative drug ETFs saw increases of 2.25% and 1.15% respectively on June 24, with notable stock price rises for companies like Rongchang Biopharma (6.38% increase in A-shares) and Green Leaf Pharmaceutical (over 9.5% increase in H-shares) [1]. - The A-share innovative drug sector has risen nearly 25% from its low on April 8 to June 23, with a total inflow of 945 billion and financing purchases of 1,148 billion [4]. Group 2: Business Development Trends - There has been a significant increase in "outbound" BD transactions for Chinese innovative drugs, with major deals such as the 6.7 billion USD agreement between Heptares and Otsuka Pharmaceutical [2]. - The trend of international pharmaceutical companies acquiring innovative drug projects before commercialization is becoming more common, driven by the need to replenish their pipelines due to patent expirations [2][3]. Group 3: Financial Performance - Companies like Saint Noble Bio are forecasting substantial profit increases, with expected net profits for the first half of 2025 projected to grow by 253.54% to 332.1% year-on-year [4]. - A total of 17 commercialized innovative drug companies are expected to achieve 913 billion in product sales revenue in 2024, reflecting a 35% year-on-year growth [5]. Group 4: Policy Support - Recent policies have been implemented to support innovative drug development, including expedited clinical trial approvals and a multi-layered insurance system that combines basic medical insurance with commercial insurance [6]. - The introduction of commercial health insurance for innovative drugs is expected to enhance the market environment, transitioning from reliance on basic medical insurance to a dual support system [6]. Group 5: Long-term Outlook - The innovative drug sector is anticipated to continue its upward trajectory due to ongoing policy support, technological advancements, and international expansion, with a potential for sustained valuation reassessment [7]. - Increased investment in innovative drug companies is expected, although caution is advised regarding potential overvaluation in some cases [7].

Core Insights - The article highlights the strategic partnership between HBM and Otsuka Pharmaceutical to advance the development of HBM7020, a BCMAxCD3 bispecific T cell engager, with a deal worth over $670 million [1] - This collaboration signifies a crucial step in HBM's global strategy and reflects the trend of re-evaluating the value of Chinese innovative pharmaceutical companies [1][3] Industry Performance - The innovative drug sector is experiencing a resurgence after four years of decline, with the Hong Kong healthcare sector showing a year-to-date increase of 43.40% as of June 22, 2025 [3] - Notably, over 25 companies in the 18A sector have seen stock price increases exceeding 100%, with Deqi Pharmaceuticals and HBM leading with returns of 383.08% and 318.82%, respectively [3][4] Market Dynamics - The market consensus indicates a positive shift in the innovative drug sector, supported by favorable policies such as the recent announcement from the National Medical Products Administration aimed at accelerating clinical trial reviews [5] - The number of BD transactions involving Chinese innovative drug companies has significantly increased, with the share of molecules introduced rising from 0% in 2019 to 31% in 2024 [5] Company Developments - HBM has transitioned from a model of "self-research + introduction" to a deep collaboration with multinational pharmaceutical companies, enhancing its technological platform and maximizing product value [6] - The company has established numerous strategic partnerships with major global pharmaceutical firms, covering various fields including antibody therapies and gene therapy [6][11] Valuation Trends - HBM's stock price surge reflects a correction of its previously undervalued status, as the company’s intrinsic value is increasingly recognized by the market [9] - Following two consecutive profitable financial years (2023-2024), HBM demonstrates strong growth potential and a promising future outlook [9][11] Strategic Positioning - HBM's dual-driven strategy of platform technology licensing and pipeline licensing has led to two years of financial profitability, positioning the company for significant future revenue from ongoing collaborations [11] - The company’s core technology, particularly its fully human heavy-chain antibodies, has broad application potential, indicating a successful transition to differentiated new drug pipelines [11] Conclusion - The trajectory of the Chinese innovative drug industry is becoming clearer, characterized by policy-driven growth, rational capital return, and the re-evaluation of outstanding companies like HBM [13] - The industry is entering a "comprehensive explosion period," with a shift from technological catch-up to commercial leadership, leading to a redefined valuation framework in the capital markets [13]

Group 1: Stablecoin Regulation in Hong Kong - The Hong Kong government has officially enacted the "Stablecoin Regulation," establishing a licensing system for issuers of fiat-backed stablecoins, enhancing the regulatory framework for virtual asset activities in Hong Kong [3][4] - The regulation aims to address the volatility of cryptocurrencies and is seen as a bridge between traditional finance and the crypto world, with stablecoins currently representing over 8% of the total cryptocurrency market capitalization, valued at over $240 billion as of May 20, 2025 [3][4] - The regulation is expected to accelerate the compliant development of stablecoins, leading to growth in the RWA ecosystem, including issuers, custodial banks, investors, and blockchain technology [4] Group 2: Domestic Innovative Drugs Approval - On May 29, 2025, China’s National Medical Products Administration approved 11 innovative drugs, marking a significant milestone in the domestic innovative drug sector, with many being the first of their kind in the country [8] - From the beginning of 2025 to the end of May, a total of 53 new drugs were approved in China, with 30 being domestic innovations, covering various therapeutic areas including oncology and rare diseases [8] - The innovative drug sector is expected to undergo a valuation reshaping, with upcoming national medical insurance negotiations being a critical event for newly approved drugs to gain market access and accelerate sales [8]