Group 1 - The core viewpoint indicates that the innovative drug sector in Hong Kong is showing clear signs of bottoming out, supported by several factors [1] - BD (Business Development) transactions have started to recover since October, with historical data showing that transactions from October to January account for over 50% of the annual total, and transaction amounts can reach 60% to 70% of the yearly total [1] - Positive data from ESMO (European Society for Medical Oncology) has emerged, with several important clinical studies, such as AK112 and 3SB707, showing promising results, which is expected to catalyze further trading and stock price increases [1] - The valuation of innovative drugs has reached an absolute bottom, with some companies having little room for further decline [1] Group 2 - As of October 21, 2025, the National Securities Hong Kong Stock Connect Innovative Drug Index (987018) shows mixed performance among its constituent stocks, with notable gainers including CloudTop New Drug (01952) up 5.29% and Zai Lab (09688) up 1.80%, while major decliners include Juno Therapeutics-B (02617) down 6.82% [2] - The Hong Kong Innovative Drug ETF (159286) closely tracks the National Securities Hong Kong Stock Connect Innovative Drug Index and has seen a slight increase of 0.22%, with the latest price at 0.93 yuan [2] - As of September 30, 2025, the top ten weighted stocks in the National Securities Hong Kong Stock Connect Innovative Drug Index account for 71.83% of the index, including companies like BeiGene (06160) and Innovent Biologics (09926) [2]

Group 1 - The core viewpoint of the article emphasizes the significant potential of China's innovative drug industry, particularly highlighted by the recent large-scale licensing deal involving innovative drugs [1] - The innovative drug sector is characterized by a "bet first, collapse later" nature, making it suitable to view through a "cycle" perspective, where the most attractive aspect is the value escalation cycle of a technology or product transitioning from obscurity to a major market player [1][2] - The value escalation cycle for PD1/CTLA4 and PD1/VEGF dual antibodies began around 2020/2021, with expectations that this cycle will continue at least until 2027/2028, barring any major setbacks [2] Group 2 - The comparison between Sanofi's 707 and Ivosidenib indicates that while there may be some local improvements, it does not significantly differentiate itself enough to disrupt the value escalation cycle of Ivosidenib [4] - The introduction of Sanofi's 707 may have short-term negative impacts on the original drug companies in Hong Kong, as it reduces the potential acquisition interest from partners like SUMMIT, but long-term effects may be limited [5][6] Group 3 - The original drug companies in Hong Kong are expected to see value escalation primarily through three phases, with the current phase being the second stage that has been active for 4-5 years and is projected to continue for another 2-3 years [7][8] - The market's perception of the potential value of Ivosidenib in various cancers appears to be underappreciated, with estimates suggesting that its overseas licensing could support a market value of approximately 320-480 billion HKD for the licensing party [8][9] Group 4 - The future value expansion for companies hinges on their ability to ignite the "third stage rocket," which involves developing universally applicable therapies that can enhance the efficacy of PD1 dual antibodies [10][11] - Companies are already pursuing clinical trials for TROP2*NECTIN4 dual antibody ADCs and mRNA tumor vaccines, indicating a proactive approach to maintaining value escalation in the face of potential market shifts [11][13]