Shares of Contract Research Organization (CRO) companies are leading gains in the Hong Kong market, driven by a wave of positive catalysts in the AI-driven drug discovery (AIDD) space. Genscript Bio (01548) surged 13.76% to HK$37.04, while Viva Biotech (01873) climbed 7.81% to HK$1.45. Biocytogen-B (02315) advanced 7.08% to HK$62.75, and Asymchem (06821) rose 6.02% to HK$174.40.

On the news front, the AIDD sector has seen a flurry of recent developments. Twist Bioscience and Genscript have both announced agreements with Eli Lilly's TuneLab, offering discounted wet lab services to TuneLab member companies to rapidly generate experimental data. Additionally, Novo Nordisk has partnered with Anthropic to leverage its Claude Science platform for accelerating new drug discovery.

At the same time, with the continuous activity in innovative drug business development (BD) deals, pharmaceutical companies now have more abundant research funding. To seize the window for innovative drug development and ensure project progress, these companies are showing a greater willingness to pay for external R&D services. This has resulted in CRO firms experiencing a trend of rising order volumes and prices simultaneously.

A recent research report from China Merchants Securities indicates a clear upward trajectory for the CXO sector. In the first half of this year, the domestic CXO industry saw revenue and net profit attributable to shareholders grow 24.5% and 52.7% year-over-year, respectively, with profit growth approaching the peak of the last cycle. Both on-hand orders and new bookings have fully rebounded, prompting industry leaders to raise their full-year guidance. Furthermore, AI-driven pharmaceutical development is expected to reshape the drug R&D landscape, enhancing efficiency, which should further benefit the sector.