2026-02-24 03:00Summary of Key Points from the Conference Call Industry Overview - The focus is on the Pharmaceutical (Pharma) and Biopharmaceutical/Biotech sectors, highlighting companies with potential for value re-evaluation and those entering a performance ramp-up phase [1][2]. Core Insights and Arguments 1. Value Re-evaluation of Pharma Companies: - There is a recommendation to further support Pharma companies that have the potential for value re-evaluation, particularly emphasizing key marginal changes. The BD (Business Development) revenue for Pharma is expected to normalize, which will drive an upward shift in the valuation framework [1][2]. 2. Performance Ramp-up in Biopharma/Biotech: - Continuous recommendation for Biopharma/Biotech companies that are entering a performance ramp-up phase and have pipelines that are consistently delivering results. The expectation is that by 2026, leading Biopharma/Biotech companies will enter a period of accelerated performance [2]. 3. Key Marginal Changes: - The core marginal change driving the value re-evaluation logic for Pharma companies is the normalization of BD revenue. This is supported by two main factors: - Leading Pharma companies have a more comprehensive technology platform and pipeline layout, enhancing their ability to continuously produce BD assets [2]. - External transactions are evolving from sporadic single-asset licensing to a more platform-based and series-based licensing model, making upfront payments, milestones, and revenue sharing more replicable and predictable. Recent collaborations, such as the partnership between Shiyao and AstraZeneca for a long-acting weight loss drug (total package of $18.5 billion) and Innovent with Eli Lilly in oncology and immunology (total package of $8.9 billion), exemplify this trend [2]. Recommendations - Specific companies recommended for investment include: - Hengrui Medicine - Hansoh Pharmaceutical - Shiyao Group (new addition in February) - China National Pharmaceutical Group - Sinopharm (new addition in February) - Haisco [2]. Additional Important Insights - The oncology, metabolism, and autoimmune sectors are expected to see a concentration of critical data releases. The integration of new technology platforms such as small nucleic acids, bispecific/trispecific antibodies, next-generation ADCs, and PROTAC/molecular glue is anticipated to provide significant valuation elasticity for leading companies at key data points, potentially opening up overseas BD opportunities [3].