Core Viewpoint - The announcement from Beijing Kangchen Pharmaceutical Co., Ltd. highlights the recent abnormal fluctuations in its stock price and reassures investors about the company's stable operational status while urging caution in trading activities [1][2]. Group 1: Production and Operational Status - The company confirms that its production and operational activities are normal, with no significant changes or undisclosed major events apart from previously disclosed information [1]. Group 2: Stock Market Trading Risks - The company's stock experienced a cumulative price increase deviation of over 20% across three consecutive trading days (July 9, 10, and 11, 2025), indicating abnormal trading activity [1]. - On July 14, 2025, the company's stock hit the daily limit up again, reflecting significant short-term price increases, prompting a warning for investors to be mindful of trading risks [1]. Group 3: Other Risks and Developments - The company has secured exclusive rights for clinical development and commercialization of Ensifentrine (Ohtuvayre™) in Greater China, a novel drug for treating chronic obstructive pulmonary disease (COPD) [2]. - Merck announced the acquisition of Verona Pharma for approximately $10 billion on July 9, 2025, which may impact the market landscape [2]. - The company's subsidiary holds a 4.96% stake in Nuance Biotech, which has not been profitable in the past five years, indicating that this investment is unlikely to significantly affect the company's overall performance [2].

Investment Rating - The report rates the pharmaceutical industry as "Overweight," indicating a positive outlook for the sector compared to the overall market performance [2][30]. Core Insights - The pharmaceutical sector saw a weekly increase of 1.8%, outperforming the Shanghai Composite Index, which rose by 1.1% [3][4]. - The National Healthcare Security Administration officially launched the 2025 medical insurance catalog adjustment, introducing a commercial health insurance innovative drug catalog for the first time, focusing on high-innovation and clinically valuable drugs [10]. - China has imposed restrictions on the procurement of medical devices from the EU, affecting government purchases exceeding 45 million RMB [10]. - Merck announced a $10 billion acquisition of Verona Pharma, focusing on a new COPD drug, marking a significant transaction in the pharmaceutical sector [11]. Market Performance - The pharmaceutical and biotechnology index increased by 1.8%, ranking 16th among 31 sub-industries [3][4]. - The overall valuation of the pharmaceutical sector stands at 30.2 times PE for 2025E, ranking 6th among 31 primary industries [4][9]. Key Events - The adjustment of the medical insurance catalog officially commenced on July 10, 2025, with a submission period for eligible entities from July 11 to 20 [10]. - The Chinese government has taken measures to restrict the procurement of certain medical devices from the EU, impacting the competitive landscape [10]. - Merck's acquisition of Verona Pharma is a notable event, emphasizing the trend of large-scale business development transactions in the innovative drug sector [11]. Investment Analysis - The innovative drug sector has shown rapid growth in product revenue and licensing deals over the past three years, with significant business development transactions occurring this year [11]. - Companies to watch include Heng Rui Medicine, Bei Da Medicine, and WuXi AppTec, which are expected to benefit from the upcoming changes in the medical insurance catalog and the overall growth in the innovative drug market [11].

Core Viewpoint - Beijing Kangchen Pharmaceutical Co., Ltd. experienced a significant stock price fluctuation, with a cumulative closing price deviation exceeding 20% over three consecutive trading days from July 9 to July 11, 2025, indicating abnormal trading activity [1][2]. Group 1: Stock Trading Abnormalities - The company's stock price increased significantly, with a cumulative closing price deviation exceeding 20% over three consecutive trading days [1]. - The company conducted a self-examination and confirmed that there were no undisclosed significant information related to the stock price fluctuations [2]. Group 2: Business Operations - The company's production and operational activities are reported to be normal, with no significant changes in daily operations [1]. - There are no major undisclosed events such as asset restructuring, stock issuance, or significant business collaborations that could impact the stock price [2]. Group 3: Sensitive Information - During the period of stock price fluctuation, company executives and major shareholders did not engage in buying or selling the company's stock [2]. - The company holds a 4.96% stake in Nuance Biotech and has exclusive rights for the clinical development and commercialization of Ensifentrine in Greater China, valued at approximately $10 billion [2].