Core Insights - The Chinese innovative pharmaceutical industry is transitioning into a new phase characterized by "in China, in Global," indicating a shift from merely serving local needs to integrating into the global ecosystem [1][7][10] - The surge in business development (BD) transactions has reignited investor interest, but concerns about undervaluing early-stage innovations persist [1][3][9] Group 1: Industry Development - The Chinese innovative drug sector has evolved from "in China, for Global" to "in China, in Global," reflecting a more integrated role in the global value chain [1][7] - The industry has seen a 400% increase in drug development activities over the past decade, surpassing international growth rates [7] - The emergence of a new BD transaction model, Co-Co, allows for shared responsibilities and profits between Chinese biotech firms and multinational corporations [4][5][10] Group 2: Business Development Transactions - Recent BD transactions have reached unprecedented amounts, with a notable deal between Innovent Biologics and Takeda Pharmaceuticals valued at up to $11.4 billion [3][4] - The Co-Co model represents a departure from traditional licensing agreements, enabling Chinese firms to retain more control and share in the commercialization process [4][5] - The number of BD transactions is increasing, indicating a growing acceptance of Chinese biotech capabilities in the global market [5][6] Group 3: Market Dynamics - Despite the increase in BD activity, the capital market's response has been lukewarm, with concerns about the sustainability of these transactions and the potential for future "washouts" [9][12] - The focus is shifting from individual "star pipelines" to platforms that demonstrate ongoing innovation capabilities, with AI integration becoming a standard expectation [12] - Multinational companies are increasingly establishing R&D centers in China, attracted by local scientific talent and technological advancements [10][11]