For the innovative drug sector, the secondary market may sustain a pessimistic outlook for an extended period, and the process of restoring confidence could take longer than anticipated. However, this cyclical fluctuation in sentiment does not diminish the core long-term intrinsic value of truly exceptional innovative drug assets.

From a broader industry development perspective, the current prolonged valuation contraction acts as a rigorous stress test for the entire innovative drug sector. Companies lacking differentiation will quickly expose vulnerabilities in their pipeline quality and cash flow, accelerating the industry's cleansing of low-quality, ineffective assets. Simultaneously, a select group of leading enterprises with genuine innovation capabilities, core products, and global market access continue to expand revenue, improve profit structures, and convert years of R&D and organizational investment into verifiable business results.

This is destined to be an era of K-shaped divergence for the innovative drug industry. In the intense August half-year reporting season, core high-quality assets in the innovative drug chain are strongly validating their irreplaceable fundamental value through above-expectation performance. The three leading companies in the secondary market innovative drug sector—百济神州 (BeiGene), 信达生物 (Innovent Biologics), and 药明康德 (WuXi AppTec)—each occupy a critical position: global commercialization of innovative drugs, domestic product realization, and the pharmaceutical R&D service chain. Against this backdrop, the half-year results of these three companies offer industry-level insights that extend beyond their individual performance.

百济神州 (BeiGene): A Testament to Global Value

In August 2026, BeiGene, often called the "top innovative drug stock" in A-shares, delivered a financial report that serves as an industry cornerstone: total operating revenue surged to 222.20 billion yuan, a year-on-year increase of 26.8%; net profit attributable to the parent company reached 3.271 billion yuan, a staggering 627.1% year-on-year jump. The core growth engine is its BTK inhibitor, 百济神州 (BeiGene)'s Zanubrutinib, which has successfully launched in major global markets including China, the US, and Europe. In the first half of 2026, Zanubrutinib's global sales hit 16.127 billion yuan, up 28.7% year-on-year, with the US and Europe as its top two markets, accounting for over 85% of sales. This is a classic example of self-validation: a truly globally best-in-class innovative drug can transcend macroeconomic cycles and geopolitical barriers to capture a high-margin share within mainstream international payment systems. In essence, once an innovative drug establishes a genuine global product advantage, its long-term value is defined by global patient demand and international market share.

信达生物 (Innovent Biologics): A Realistic Path to Success

While BeiGene validates the immense appeal of globalization, 信达生物 (Innovent Biologics)'s half-year report demonstrates a more pragmatic path for Chinese innovative drug companies: leveraging domestic clinical needs, expanding revenue through a diversified product portfolio, and improving new product realization efficiency via a mature commercial system. 信达生物 (Innovent Biologics)'s product revenue in the first half of 2026 exceeded 8.2 billion yuan, a year-on-year increase of over 55%; second-quarter product revenue alone surpassed 4.3 billion yuan, growing about 60% year-on-year. For a company that has already achieved a substantial revenue base, this is not a temporary boost from a low base, but a material leap from an established commercial scale. This also indicates that the domestic innovative drug market has never truly lacked demand. China's vast population and rising healthcare awareness ensure the long-term existence of medical needs. What the market truly lacked in the past was high-quality products that can genuinely improve clinical outcomes while remaining accessible. This aligns with the significant diversification trend in 信达生物 (Innovent Biologics)'s product structure, which is shifting from reliance on a few core oncology products to being driven by multiple therapeutic areas including oncology, cardiovascular and metabolic diseases, and autoimmune disorders. 信达生物 (Innovent Biologics)'s performance argues that the domestic market is not just for low-cost generics; as long as a company can continuously launch clinically competitive products, the Chinese market offers ample commercial depth and revenue potential.

药明康德 (WuXi AppTec): The Upstream Engine of Innovation

If the half-year reports of BeiGene and Innovent Biologics highlight the commercial value of quality innovative drugs, 药明康德 (WuXi AppTec)'s report reveals another truth from the upstream of the industry chain: global innovative drug R&D has not stalled due to capital cycles or market sentiment shifts. A truly advantaged CXO platform continues to share in the significant incremental value created by its clients' advancing pipelines and product successes. 药明康德 (WuXi AppTec)'s 2026 half-year report shows consolidated revenue of 289.0 billion yuan, a 38.9% year-on-year increase; adjusted non-IFRS net profit attributable to the parent company was 115.7 billion yuan, up 83.2% year-on-year; and gross margin improved to 53.9%, a rise of about 9.5 percentage points. More forward-looking are its order data. As of the end of June 2026, 药明康德 (WuXi AppTec)'s backlog from continuing operations reached 664.3 billion yuan, a 25.2% year-on-year increase, climbing steadily from 483.6 billion yuan in the first quarter of 2025. Amid fluctuating innovative drug financing and external uncertainties, the continuous accumulation of backlogs indicates that clients have not stopped investing in drug discovery, process development, and commercial manufacturing capabilities. This performance leap by 药明康德 (WuXi AppTec) should be understood as the long-term accumulation of its CRDMO model entering a phase of concentrated realization. Early-stage molecules accumulated over many years are migrating to later clinical stages, new capacity is achieving higher utilization, and process optimization and refined operations are further amplifying profit leverage. The half-year report of 药明康德 (WuXi AppTec) proves that cycles do not eliminate innovation; rather, they effectively screen it. The commercial value of a CXO capability that truly improves R&D efficiency, reduces development risk, shortens time-to-market, and ensures commercial production will not disappear due to secondary market sentiment. It will stand out in industry competition, affirmed by client orders.

Long-Term Index Investment Strategy

The uniqueness of the innovative drug industry lies in the long-term coexistence of relatively certain industry prospects and the highly uncertain fate of individual companies. Core assets like 百济神州 (BeiGene), 信达生物 (Innovent Biologics), and 药明康德 (WuXi AppTec), which have firmly established their leading positions, have often survived years of brutal market selection. For ordinary investors at an earlier stage, it is difficult to consistently and accurately identify the winners of the next phase. Therefore, a more practical approach for most individual investors is to use innovative drug index funds to diversify risks associated with a single pipeline or single company, participate in industry growth through a portfolio holding approach, and let market and index adjustment mechanisms handle the process of natural selection.

Among the more mainstream innovative drug investment tools in the Hong Kong market, the Hang Seng Hong Kong-Listed Biotech & Innovative Drug Selection Index and the CSI HK Stock Connect Healthcare Theme Index use different asset organization methods, constituting two noteworthy index-based investment frameworks. The Hang Seng Hong Kong-Listed Biotech & Innovative Drug Selection Index essentially aims to distill core innovative drug assets: it limits candidate companies to the innovative drug and biotechnology fields, selects up to 50 companies based on their relevance to innovative drug business, imposes a 10% weight cap on any single stock, and emphasizes innovation purity and value elasticity of leading enterprises. This is an index that is 100% allocated to innovative drug R&D leaders. The CSI HK Stock Connect Healthcare Theme Index represents a different asset organization strategy. It selects 50 healthcare-themed companies from the Hong Kong Stock Connect universe, covering multiple segments of the innovative drug industry chain, with broader coverage and more comprehensive asset types. It gives higher weight to CXO chain assets, with CXO content exceeding 48% of the index. Notably, the WuXi family (药明生物 (WuXi Biologics) + 药明康德 (WuXi AppTec) + 药明合联 (WuXi XDC)) accounts for 35.3% of the weight, making it the index with the highest CXO concentration in the market. Currently, multiple ETF and other tool-type products tracking these indices are available. In actual allocation, investors can prioritize products with mature manager brands, sufficient fund size, good on-market liquidity, and low tracking error. For most individual investors lacking specialized pharmaceutical research capabilities, using index-based tools to diversify non-systematic risks from individual companies, individual pipelines, and clinical trial failures is clearly more stable than continuously betting on the success or failure of a single company, and it is more aligned with the highly divergent industrial characteristics of the innovative drug sector.