Group 1 - The current hot topics in innovative drugs are bispecific antibodies (双抗) and antibody-drug conjugates (ADC), which are favored by overseas investors [1] - AI development, AI healthcare, and gene therapy are expected to gain popularity in the future, although they are still in early stages compared to ADC and bispecific antibodies [1] - The current leading companies in innovative drug licensing are primarily those focused on bispecific antibodies and ADCs [1] Group 2 - The performance of innovative drugs varies across different markets, with Hong Kong stocks performing well initially, followed by the STAR Market, while A-shares lagged behind [2] - A-shares' slower performance is attributed to many companies transitioning from traditional chemical drugs to innovative drug businesses, resulting in less elasticity compared to pure innovative drug companies [2] - Investors seeking stability can consider pure A-share innovative drugs or a combination of Shanghai, Shenzhen, and Hong Kong innovative drug ETFs [2] Group 3 - There is significant differentiation within the pharmaceutical sector, including biological drugs, chemical drugs, traditional Chinese medicine, medical devices, and medical services [3] - The innovative drug sector can be further divided into chemical innovative drugs and biological innovative drugs, with many investors lacking clarity on these distinctions [3] - For investors who recognize the trend in innovative drugs, it is recommended to invest through funds or ETFs to capture the development of this trend [3] Group 4 - Various indices related to innovative drugs have corresponding products, such as the STAR Market innovative drug ETF and the Shanghai-Shenzhen-Hong Kong innovative drug ETF [4] - Investors can choose based on their preferences, whether they prefer pure A-share innovative drugs or Hong Kong and STAR Market options [4] - It is important for investors to manage their risk tolerance and prepare psychologically for market fluctuations [4]

Core Viewpoint - The key driving factors for the innovative drug market this year can be summarized as "policy support + performance realization + risk appetite" [1] Performance Realization - The basic premise for performance realization is the surge in licensing transactions, known as BD, where innovative drug companies sell their intellectual property, creating significant potential for future performance release [1] - The supply-demand relationship is driven by the "patent cliff" faced by large pharmaceutical companies in the U.S., where the expiration of patents leads to a surge in generic drugs, causing a sharp decline in revenues for these companies [1][2] - Chinese biopharmaceutical companies have accumulated a wealth of innovative drug patents since 2016, which can be sold to U.S. companies, forming a complementary supply-demand relationship [2] - Many innovative drugs are not sold domestically due to high R&D costs and initial high prices, leading companies to sell their intellectual property to recover initial investments [2] Policy Support - Two significant policies are highlighted: the inclusion of 37 expensive innovative drugs into commercial insurance, which may eventually lead to inclusion in national insurance, and the expedited review and approval process for clinical trials, reducing the timeline to 30 working days [3] - These policies are expected to shorten the R&D cycle for pharmaceutical companies, allowing for quicker capital recovery and potentially extending the lifecycle of their products [3] Risk Appetite - The stock market has shown a "slow bull" trend since mid-June, which has positively influenced the risk appetite for the innovative drug sector [3][4] - The innovative drug index has seen a 98% increase this year, with the sustained risk appetite contributing to the continuation of this trend [4] Investment Opportunities - Current main areas for BD licensing include dual antibodies and ADC, while AI drug development and gene therapy are seen as potential hotspots [4] - Investors are advised to consider ETFs for exposure, with options for high elasticity or stable investments available [4]

Group 1 - The innovative drug sector is experiencing a strong surge, driven by the wave of BD (business development) going overseas, with the related ETF (589720) rising over 2% during trading [1] - The BD boom is a significant catalyst for the explosive growth of China's innovative drug market, with license-out transactions doubling year-on-year since 2025 [3] - Recently, major pharmaceutical companies have reached important licensing agreements, such as Heng Rui Pharma granting GSK exclusive global rights for PDE3/4 inhibitor HRS-9821, with an upfront payment of $500 million and potential milestone payments totaling around $12 billion [3] Group 2 - The application of AI in the pharmaceutical sector is igniting market sentiment, with expectations that AI will enhance the overall valuation of innovative drugs by improving R&D efficiency and reducing costs [4] - The innovative drug industry is poised for significant growth due to continuous breakthroughs in international markets, ongoing policy benefits, and the steady improvement of R&D capabilities among Chinese innovative drug companies [4] - Investors looking to capitalize on the high growth potential and internationalization opportunities in the innovative drug sector are encouraged to pay attention to the Guotai Innovative Drug ETF (589720) [4]