According to reports, China Merchants Jinling International has published a research report stating that the MSCI China Healthcare Index has risen by 58.6% from the beginning of 2025 to date, outperforming the MSCI China Index by 24.2%. Recently, the healthcare sector has experienced a slight pullback, with the MSCI China Healthcare Index retreating by 10% since October. The firm believes this presents a bottom-fishing opportunity. Due to the recovery of capital market financing and the increase in overseas transaction scale for innovative drugs, there has been a noticeable warming in the demand for domestic innovative drug development. Coupled with interest rate cuts in the United States, the CXO sector is expected to see performance recovery in the second half of 2025. Furthermore, investors are advised to pay attention to the clinical advancements of authorized innovative drug pipelines overseas. The firm recommends buying 3SBIO (01530), Genscript Biotech (02273), Genor Biopharma (02367), Wuxi AppTec (02268), China Biologic Products Holdings (01177), and Innovent Biologics (01801).

The report highlights the release of several significant clinical data at the ESMO conference. Key points to note include: 1) SKB264 (Korean Biotechnology): Currently, the only drug that has shown statistical significance in overall survival (OS) for EGFR-TKI resistant NSCLC in Phase III trials. In the OptiTROP-Lung04 Phase III study, the mOS for SKB264 monotherapy in second-line patients has yet to be reached, compared to 17.4 months in the chemotherapy group, with HR=0.56. 2) Ivonescimab (CanSino Biologics): In HARMONi-6, the mPFS for AK112 combined with chemotherapy for first-line SQNSCLC was 11.1 months versus 6.9 months for Tislelizumab combined with chemotherapy (HR=0.60), with OS data not yet mature. Summit has revised the HARMONi-3 trial protocol to evaluate efficacy in both SQNSCLC and NSQNSCLC separately, with mPFS results for the SQNSCLC cohort expected in the second half of 2026. 3) 707 (3SBIO): In first-line colorectal cancer, the uORR for 707 5 mg/kg Q3W + chemotherapy reached 82.6%, with a cORR of 65.2%. In comparison, in a Phase II trial, CanSino's ivonescimab (20 mg/kg Q2W) combined with chemotherapy showed an ORR of 81.8% for first-line colorectal cancer. The firm indicates that the driver for the stock price from business development (BD) is weakening, suggesting focus on the clinical progress of authorized pipelines abroad. Recently, innovation drug BD has continued to land, but stock prices have reflected this weakly. The firm believes this is mainly due to valuation and expectations. Innovent Biologics has announced a global strategic partnership with Takeda Pharmaceuticals for IBI363 (PD-1/IL-2) and other drugs. Regarding IBI363, Innovent will bear 40% of the global R&D costs and share 40% of the commercial rights in the U.S. The firm observes that Innovent's choice to share risks with Takeda reflects both its strong confidence in IBI363 and its high emphasis on and investment in global strategies. Although Takeda's portfolio in solid tumors is limited, its excellent global clinical and commercialization capabilities will support the value discovery of IBI363. The firm recommends that investors focus on the clinical progression of authorized pipelines abroad due to 1) high certainty in clinical advancements, which could serve as a catalyst for stock price increases, and 2) the realization of final value will derive mostly from milestone payments and sales sharing instead of initial license transaction fees. The firm anticipates that Pfizer will announce the overseas clinical plans for 3SBIO's 707 within the year, with a focus on the combination of 707 and several ADC products from Pfizer.