Investment Rating - The report does not explicitly state an investment rating for the biopharmaceutical industry, but it suggests a positive outlook based on upcoming catalysts and potential drug approvals. Core Insights - The biopharmaceutical sector is expected to see significant developments in 2026, with multiple domestic drugs anticipated to report key clinical data. This includes drugs from companies like Betta Pharmaceuticals, Hutchison China MediTech, and CanSino Biologics, which are expected to read out critical clinical data in 2026 [3][21]. - The report emphasizes that the long-term theme for the innovative drug sector is international expansion, with several sub-themes to focus on, including overseas business development (BD) licensing, key clinical trials, and unexpected overseas sales growth [3][18]. Summary by Sections Weekly New Drug Market Review - From December 22 to December 28, 2025, the top five gainers in the new drug sector were Dongyao Pharmaceutical (+23.15%), Beihai Kangcheng (+19.27%), Junshengtai (+16.41%), Shiyao Group (+6.95%), and Ailis (+5.78%). The top five losers were Gakos (-16.11%), Jiahe Biotech (-10.29%), Laika Pharmaceuticals (-9.33%), Yunding Xinyao (-8.98%), and Yongtai Biotech (-6.94%) [1][14]. Weekly Focused Stocks - The report suggests focusing on several stocks with high overseas expansion potential, including: 1. Companies with MNC certification and high overseas volume certainty: Sanofi, United Pharmaceuticals, and Kelun-Biotech. 2. Companies with overseas data catalysts: Betta Pharmaceuticals, Hutchison China MediTech, and InnoCare Pharma. 3. Potential heavyweights for overseas MNC licensing: Junshi Biosciences, Shiyao Group, and Yifang Biotech. 4. New innovative drug technology breakthroughs: small nucleic acids, in vivo CAR-T, fat loss and muscle gain, autoimmune CAR-T/bispecific antibodies, and gene therapy [2][18]. Weekly New Drug Approval & Acceptance Status - This week, 23 new drug or new indication applications were approved in China, and 10 new drug or new indication applications were accepted [4][19]. Weekly New Drug Clinical Application Approval & Acceptance Status - This week, 99 new drug clinical applications were approved, and 64 new drug clinical applications were accepted [5][24]. Key Domestic Market Events - Notable events include: 1. Xiansheng Zhaoming announced a global exclusive licensing agreement with Ipsen for an ADC drug, potentially worth up to $1.06 billion. 2. He Yu Pharmaceuticals received approval for its CSF-1R selective small molecule inhibitor. 3. Tongyi Pharmaceuticals announced a licensing agreement for a peptide conjugate drug for prostate cancer, with potential payments totaling around $2 billion [10]. Key Overseas Market Events - Significant overseas events include: 1. Novo Nordisk received FDA approval for a 25mg oral semaglutide tablet for weight loss. 2. Sanofi announced a cash acquisition agreement for Dynavax Technologies Corporation, valued at approximately $2.2 billion. 3. Agios Pharmaceuticals announced FDA approval for an oral PK activator for treating α or β thalassemia in adult patients [11].

Core Viewpoint - The article highlights the increasing trend of innovative drug companies in China achieving profitability through product sales rather than one-time business development (BD) transactions, with examples including Innovent Biologics and others focusing on both domestic and international markets [1][2]. Group 1: Company Performance - On March 26, 2024, Innovent Biologics reported a revenue of 9.422 billion yuan, a year-on-year increase of 51.8%, and reduced its annual loss from 1.028 billion yuan to 94.631 million yuan, a decrease of 90.8% [2]. - The company achieved its first positive Non-IFRS profit and Non-IFRS EBITDA of 332 million yuan and 412 million yuan, respectively [2]. - The stock price of Innovent Biologics surged by 17.41% to close at 45.850 HKD per share, with a market capitalization of 75.11 billion HKD [3]. Group 2: Revenue Breakdown - Product revenue reached 8.228 billion yuan, up 43.6%, while licensing fee income doubled from 447 million yuan to 1.1 billion yuan [4]. - Despite significant revenue growth, the company still could not cover operational costs and expenses solely from sales revenue in 2024, indicating reliance on increased licensing fee income for reduced losses [4][5]. Group 3: Future Prospects - Innovent Biologics anticipates improvement in 2025 as several drugs, including lung cancer and hematological malignancy treatments, have been approved for market entry [5]. - The company aims to achieve 20 billion yuan in product revenue by 2027 and has set a goal to have five pipelines enter global multi-center Phase III clinical trials by 2030 [2][5]. - The establishment of a cardiovascular and metabolic (CVM) division is underway, with a focus on diverse marketing strategies and building a consumer-facing brand image [6]. Group 4: Strategic Collaborations and Market Expansion - Innovent Biologics formed a strategic partnership with Meinian Health focusing on precise interventions for overweight patients with fatty liver [7]. - The company has engaged in BD transactions, including a notable deal with Roche for the exclusive rights to develop, produce, and commercialize IBI3009, a targeted ADC for small cell lung cancer, with an upfront payment of 80 million USD and potential milestone payments of up to 1 billion USD [7][8]. - Innovent plans to expand clinical research from China to key markets like the US, with ongoing studies for innovative therapies [8].