On September 30, the final trading day before the National Day holiday, A-shares staged a session of "stable index but internal divergence." Throughout the day, the Shanghai Composite Index rose 0.31%, with the index gaining only slightly, but capital was busy the entire time. The innovative drug mainline showed a strong money-making effect, with CRO, anti-cancer drugs, innovative drugs, peptide drugs, blood products, and vaccines leading the entire market. Tenoaibo-U and CanSino both hit the "20CM" daily limit. Meanwhile, the real estate chain, which had surged on September 29, initially fell sharply in the morning of September 30, but was subsequently pulled back up by policy-driven capital. Shenzhen Property A even successfully staged a "floor-to-ceiling" reversal.

Pharmaceutical Stocks Lead the Market

On September 29, the real estate sector surged 4.46%, leading all 31 Shenwan broad industry categories. On the morning of September 30, the real estate chain saw profit-taking, with a batch of individual stocks hitting the daily limit-down directly. Real estate services, real estate development, rental-sale equal rights, and property management all ranked at the bottom of the decliners' list. But near midday, the real estate sector bottomed out and rebounded, with Zhongtian Service and Lujiazui hitting the daily limit. Shenzhen Property A staged a "floor-to-ceiling" reversal (see Figure 1), and Vanke A also turned positive from its limit-down position. At the same time, however, the semiconductor industry chain remained sluggish all day. Money has always been in the market, just rapidly rotating along the line of "certainty." Real estate had the fiscal interest subsidy set to land on October 1, and pharmaceuticals had freshly signed overseas blockbuster deals and the upcoming ESMO. Obviously, whichever sector has clear positive catalysts will receive capital pursuit.

On September 30, the innovative drug industry chain led A-shares, with CRO, anti-cancer drugs, innovative drugs, peptide drugs, blood products, and vaccines lining up at the top of the concept sector gainers' list (see Figure 2). Tenoaibo-U and CanSino hit the "20CM" daily limit, while a string of companies including Vland Biotech, Joinn Laboratories, Menovo Pharmaceutical, Kangchen Pharmaceutical, and Aosaikang hit the "10CM" daily limit. The comparison of ETFs is even more convincing: the E Fund Innovative Drug ETF rose 3.41%, and the ChinaAMC Biotechnology ETF rose 2.49%, while the Shanghai Composite Index gained only 0.31% on the same day. It was not the broad market pulling pharmaceuticals up, but pharmaceuticals pushing the broad market forward.

Multiple Positive Catalysts

Why did the innovative drug industry chain collectively rise on September 30? Mainly thanks to multiple positive catalysts in recent days. On September 29, Akeso's overseas partner Summit announced that AstraZeneca would make a strategic equity investment of US$2 billion in it and lead the advancement of Akeso's globally first-in-class PD-1/VEGF bispecific antibody ivonescimab, combined with AstraZeneca's CLDN18.2 ADC drug, for clinical research in multiple gastrointestinal tumors. The relevant data will be presented at the Presidential Symposium of the 2026 ESMO (European Society for Medical Oncology) Annual Congress. The significance here is that the multinational giant did not buy rights, but spent real money on an equity investment and also brought out its own core ADC pipeline for combination use. The market has always asked "whether Chinese innovative drugs are really worth this price," and AstraZeneca voted yes with US$2 billion.

Also on September 29, Hengrui Pharmaceuticals announced it would license its GLP-1/GIP dual receptor agonist HRS-1596 to Novo Nordisk, with a US$300 million upfront payment and a potential total transaction value of up to US$2.6 billion. The licensee is one of the global top players in the GLP-1 track, which amounts to stamping the quality of this molecule with approval. On the same day, HUTCHMED announced that its partner AstraZeneca had submitted a new drug application to the US FDA for savolitinib combined with osimertinib. At the same time, Moderna announced that three research abstracts for an individualized mRNA neoantigen therapy jointly developed with Merck had been accepted for the 2026 ESMO and would be presented at the congress held in Madrid from October 23 to October 27. The news boosted market sentiment and transmitted through the entire industry chain of mRNA, recombinant proteins, tumor vaccines, and CRO.

Adding another longer-cycle narrative, on September 18, the Ministry of Industry and Information Technology and nine other departments jointly issued the "15th Five-Year Plan for Pharmaceutical Industry Development," reiterating the pharmaceutical industry's new positioning as an emerging pillar industry and highlighting innovation and globalization. Nomura Securities explicitly pointed out in a research report that this move benefits innovative drug companies and CRDMOs. Institutions generally believe the plan treats innovative drugs as a core incremental direction for the industry, focusing support on global first-in-class drug R&D and industry going overseas. Industry catalysts, overseas blockbuster deals, technological breakthroughs, and policy direction—multiple positives have converged in recent days.

Innovative Drug Earnings Growth Is Encouraging

From a growth perspective, based on 2026 interim report data, the pharmaceutical and biological industry achieved total operating revenue of 1,264.431 billion yuan in the first half, up 2.18% year on year, and achieved net profit attributable to parent of 109.488 billion yuan, up 9.82% year on year. But in the sub-sectors, innovative drugs achieved total operating revenue of 389.451 billion yuan and net profit attributable to parent of 45.79 billion yuan during the same period, completing year-on-year increases of 6.25% and 28.54%, respectively. Among individual stocks, many companies even achieved doubled earnings growth (see attached table).

Going overseas is the core variable in all of this. According to institutional statistics, from 2022 to 2025, License-out transactions by Chinese innovative drug companies increased from 54 to 154, with total value rising from US$27.976 billion to US$142.3 billion; in the first half of 2026, 103 deals worth US$100.113 billion had already been achieved. Industrial Securities said that in the first half, the total value of BD transactions by Chinese pharmaceutical companies accounted for 58% globally; as previously licensed products are successively approved in Europe and the United States, it is expected that more than five domestic innovative drugs will begin overseas commercialization in 2027, and Chinese innovative drugs are moving toward the era of overseas expansion 4.0. Ammunition is also being replenished. Bank of America Securities said that in the first half of 2026, China's primary market saw 814 healthcare financing deals, up 13.8% year on year, with total financing of 72.6 billion yuan, up 41.7% year on year, of which innovative drug financing was 41.8 billion yuan, up 79.1% year on year. China Merchants Securities statistics show that from January to August 2026, global pharmaceutical investment and financing reached US$53.8 billion, up 72% year on year. Institutions judge that with more money in the primary market, it will gradually transmit into CXO orders.

The industry believes that BD going overseas has changed from an "individual case" to an "industry trend," with a 58% global share showing that the cost-effectiveness of Chinese innovative assets is recognized by the international market; as the "water seller," CXO is not affected by the success or failure of any single new drug R&D, and its certainty is better than that of Biotech itself; aging, domestic substitution, and payment-side optimization are slow variables on a ten-year dimension; current public fund positions are at new lows in recent years, and the chip structure is healthy.

Of course, it should be noted that BD upfront payments are one-time and not sustainable revenue. Haisco recognized a US$265 million upfront payment in the first half, with net profit up 427% year on year; RemeGen recognized AbbVie's US$650 million upfront payment, with revenue up 433% year on year, turning profitable. The numbers are beautiful, but if there is no transaction of comparable scale next year, earnings will be sharply revised down. When looking at innovative drug companies, one should look at the commercialization ramp-up of the products themselves, not one-time licensing revenue.