Core Viewpoint - The article discusses the current state and future potential of China's innovative drug sector, highlighting the shift from "creating from nothing" to "refining existing innovations" driven by new technologies and market dynamics [1]. Group 1: Innovative Drug Sector Dynamics - The underlying logic of the innovative drug sector has shifted from "from nothing to something" to "from something to refinement," with a focus on high-level engineering and specific technology tracks like ADC and PD1 plus [1]. - The current market valuation of leading companies in the ADC and PD1 plus segments has not yet reached reasonable levels, indicating that the market may not have peaked [1]. - The global pharmaceutical market is valued at $2 trillion, with innovative drugs accounting for $1 trillion; the potential market share for Chinese innovative drugs is projected to be between $200 billion and $250 billion in sales [1]. Group 2: Market Valuation and Growth Potential - The main incremental market value in the innovative drug sector is expected to come from the realization of overseas value, with a target of achieving a 20-30% share of FDA-approved pipelines by 2030 [1]. - Current market capitalization of leading companies has increased from $1.3 trillion to $2.4 trillion, representing a growth of $1.1 trillion, which corresponds to 40-60% of the potential market value increase [1]. - In a neutral scenario, the projected profit from $200 billion in sales would yield a market value increase of $1.8 trillion, while an optimistic scenario with $250 billion in sales could lead to a $2.7 trillion increase [1]. Group 3: Future Catalysts - There are still numerous opportunities for companies to secure business development (BD) orders, which could act as a catalyst for growth [2]. - The backdrop of multinational corporations (MNCs) facing patent cliffs will likely lead to continued significant investments in the sector [2]. - The commercialization of Chinese gene-based innovative drugs in overseas markets is expected to expand significantly [3]. Group 4: Index and ETF Performance - The National Vaccine and Biotechnology Index (980015) consists of 50 companies involved in the biotechnology industry, reflecting the overall performance of quality listed companies in this sector [3]. - As of June 30, 2025, the top ten weighted stocks in the index accounted for 64.83% of the total index value, indicating a concentration of market power among these firms [3].

Group 1 - The National Vaccine and Biotechnology Index (980015) has seen a strong increase of 1.48% as of July 3, 2025, with key stocks such as ZhiHua Cell (688520) rising by 19.99% and Changchun High-tech (000661) by 8.34% [1] - Changchun High-tech announced that its subsidiary, Changchun Jinsai Pharmaceutical Co., Ltd., has received approval from the National Medical Products Administration for the injection of Fuxin Qibai monoclonal antibody, which is the first IL-1 inhibitor approved in China for treating acute gouty arthritis [1] - The drug shows rapid efficacy within 6 hours, comparable pain relief to steroids within 72 hours, and a nearly 90% reduction in the risk of first recurrence within 6 months, indicating a promising new treatment option for gout patients [1] Group 2 - Since the beginning of the year, the innovative drug sector has gained significant market attention due to policies, overseas expansion, and performance, although a slight adjustment has occurred recently due to accumulated gains [2] - The upcoming negotiations for the new round of medical insurance directory and the announcement of commercial insurance innovative drug directories are expected to catalyze further developments in the innovative drug sector, which remains a key investment theme [2] - The rapid development of artificial intelligence technology is anticipated to greatly benefit the pharmaceutical industry, particularly in drug development, auxiliary diagnosis, and service applications [2] Group 3 - As of June 30, 2025, the top ten weighted stocks in the National Vaccine and Biotechnology Index (980015) include Fosun Pharma (600196), Changchun High-tech (000661), and others, collectively accounting for 64.83% of the index [3]