A wave of encouraging signals has recently emerged across the healthcare industry. The National Healthcare Security Administration and the National Medical Products Administration have coordinated efforts from both the payment and regulatory ends, unveiling a series of combined measures to bolster innovative drug development and chart a clear direction for high-quality growth in biomedicine during the "15th Five-Year Plan" period.
At the industry level, interim results from leading pharmaceutical companies continue to validate the sector's robust prosperity, with multiple innovative drug developers reaching profit inflection points. The trend of out-licensing innovative drugs abroad is also strengthening, as domestic companies increasingly gain global recognition for their research capabilities in areas such as ADCs, bispecific antibodies, and weight-loss medications.
Looking ahead, could the innovative drug segment be poised for a strong rally? In response, Liang Furui, fund manager of CCB Healthcare Industry Fund, stated that the pharmaceutical sector is likely to see structural opportunities in the second half of the year, with a particular focus on high-prosperity directions represented by innovative drugs.
Liang explained that the July-August interim reporting season has confirmed the high prosperity of sub-tracks within the innovative drug supply chain, including CXO and life science upstream sectors. Additionally, major global academic conferences such as the World Conference on Lung Cancer (WCLC) in September and the European Society for Medical Oncology (ESMO) in October are set to unveil clinical data from multiple product pipelines, including ADCs, bispecific antibodies, and panRAS inhibitors. The upcoming innovative drug medical insurance negotiations are expected to drive commercial sales expansion for more innovative drug candidates in the future. As a result, high-prosperity tracks such as innovative drugs and their supply chains are likely to continue attracting capital attention.
Furthermore, although the sector has already rebounded somewhat, institutional holdings in pharmaceutical stocks are estimated to remain relatively low, suggesting there is still room for incremental capital to flow back in. From a medium-to-long-term perspective, Liang believes that the development trajectory for high-prosperity sub-tracks like innovative drugs and their supply chains remains consistently positive. The continuous emergence of new technologies and new fields within the sector is expected to generate additional demand growth.
He noted that China's innovative drug industry and its supply chain are becoming increasingly competitive globally, while valuations for quality companies in these related tracks remain attractive, and institutional allocation ratios are still relatively low. Therefore, Liang believes the upward trend in the pharmaceutical sector is likely to be a medium-to-long-term movement, and the current period remains a favorable window for positioning in high-prosperity tracks and quality companies from a long-term perspective.
For pharmaceutical investment in the second half of the year, he advises seeking opportunities from high-prosperity sub-tracks. "At the current juncture, the high-prosperity sub-tracks in the pharma sector remain innovative drugs and their upstream supply chains—CXO and life science upstream—which are supported by policy, sustained out-licensing deals, commercial sales ramp-ups, and advancing R&D pipelines. So, for the second half, I remain bullish on innovative drugs as well as the innovative drug supply chain, including CXO and life science upstream," Liang emphasized.
Regarding the performance divergence between A-share and Hong Kong-listed innovative drug stocks, Liang noted that short-term movements may differ due to factors such as investor composition and market liquidity in the two markets. However, from a medium-to-long-term perspective, the stock performance of innovative drug companies in both markets is primarily driven by their own development fundamentals. Leading quality innovative drug companies are progressively building advantages in early-stage product positioning, R&D advancement, out-licensing deals, and commercial sales. It is expected that innovative drug stocks on both A-shares and H-shares will experience differentiation, with companies possessing stronger competitiveness charting their own alpha trends. Meanwhile, innovative drug companies that rely on "storytelling" or "overpromising" without delivering results are likely to be gradually abandoned by capital.