Core Viewpoint - The Hong Kong Innovative Drug ETF (159570) is experiencing significant inflows and growth, driven by a favorable market environment and accelerated clinical trial approvals for innovative drugs in China [1][3]. Group 1: Market Performance - The Hong Kong Innovative Drug ETF (159570) rose over 1%, with a trading volume exceeding 800 million yuan, leading its peers in scale and liquidity [1]. - The ETF has attracted a net inflow of nearly 140 million yuan in a single day, accumulating over 2.2 billion yuan in the last ten days, with a total size surpassing 6.4 billion yuan [1]. Group 2: Regulatory Developments - The National Medical Products Administration (NMPA) has announced a new 30-day approval process for innovative drug clinical trials, aimed at supporting key national research projects and encouraging global early-stage and multi-center clinical trials [3]. - The average time from application to approval for innovative drugs in China has been reduced by 57 days compared to other drugs, with priority-reviewed innovative drugs seeing an even greater reduction of 189 days [6]. Group 3: AI in Drug Development - A domestic innovative drug company has entered a strategic research collaboration with a global multinational corporation (MNC) focused on AI drug development, involving an upfront payment of 110 million USD and potential milestone payments totaling up to 16.2 billion USD [4]. - The trend of MNCs actively engaging in AI collaborations is accelerating, with over 30 partnerships in the AI drug development space in 2023, valued at approximately 10 billion USD [4]. Group 4: Domestic Innovative Drug Market Growth - The total value of domestic innovative drug business development (BD) transactions is projected to rise from 9.2 billion USD in 2020 to 52.3 billion USD by 2024, with upfront payments increasing from 600 million USD to 4.1 billion USD in the same period [5]. - The share of innovative drugs in China's core hospital market is expected to grow from 21% in 2015 to 29% by 2024, driven by policy improvements and market demand [12]. Group 5: Policy Support for Innovative Drugs - Since 2015, a series of healthcare reform policies have been implemented to facilitate the transition from generic to innovative drugs in China, including expedited drug approval processes and improved resource allocation [5][14]. - The entry of innovative drugs into the medical insurance directory has accelerated, with nearly 90% of successfully negotiated innovative drugs entering the directory within two years of approval from 2021 to 2024, compared to only 43% in 2019 [9].