Core Viewpoints - The pharmaceutical sector is influenced by market pricing power and capital influx, with a focus on investment strategies for innovative drugs and related industry chains [1] - The innovative drug sector is experiencing increased liquidity and risk appetite, with a significant rise in attention towards biotech catalysts [1] - The raw material drug market is expected to see a substantial increase in demand due to patent expirations, with a projected sales impact of $390 billion from 2025 to 2030 [1] Summary by Category Innovative Drugs - The IPOs of innovative biotech companies peaked between 2019 and 2021, and the current period is critical for validating core pipelines and concept verification for second-tier pipelines [1] - The A + H share innovative drug index has seen an increase in market capitalization, which is likely to improve local financing conditions [2] Raw Material Drugs - From 2025 to 2030, the expiration of patents for over half of the top 15 small molecule drugs is expected to create a demand surge for raw materials [1] - In the first half of 2025, the production of raw materials by large-scale industrial enterprises reached 1.935 million tons, an 8.2% year-on-year increase [1] - India’s imports of raw materials and intermediates from China amounted to $1.652 billion, with a slight decrease in value but an 11.59% increase in volume, indicating a recovery in demand [1] CXO Sector - The Federal Reserve is expected to initiate a rate cut cycle, with a 90% probability of a 25 basis point cut by September 2025, which may lead to improved market liquidity [2] - The recovery in overseas demand is anticipated to boost CXO demand and performance [2] Investment Strategies - Key factors to monitor include changes in Federal Reserve interest rate policies, marginal changes in financing, gradual recovery in overseas demand, geopolitical relations, and the introduction of supportive policies for innovative drugs [3]