In recent years, the global glucagon-like peptide-1 receptor agonist (GLP-1) drug sector has maintained intense momentum, with related markets experiencing accelerated expansion. GLP-1 drug sales revenue exceeded $50 billion in 2024, and in the first half of this year, the blockbuster drug semaglutide, leveraging its "triple engine" of Ozempic, Rybelsus, and Wegovy, achieved sales of $16.632 billion, surpassing Keytruda to top the global pharmaceutical sales rankings and once again igniting enthusiasm in global capital markets.

The market has observed numerous high-quality targets in Hong Kong's GLP-1 drug sector. Previously, Innocare Pharma saw its IPO dark pool surge 270%, while PEGBIO CO-B (02565) has seen its stock price climb more than 4-fold over three months, both demonstrating investors' pursuit of this hot sector. Although current Hong Kong stock-related star targets have shown outstanding price gains, the market trend is far from over.

Taking PEGBIO as an example, this emerging domestic company, supported by its proprietary platform technology, is challenging international pharmaceutical giants like Novo Nordisk in GLP-1 drug indication expansion and has already shown initial success. The company's core product PB-119's marketing authorization application has been accepted, with domestic commercialization about to launch; the blockbuster product PB-718 has delivered impressive clinical data readouts.

The continuous release of innovative value has earned PEGBIO positive feedback from the secondary market. On September 3, the company's intraday stock price touched HK$43.28, setting a new listing high and driving the company's total market capitalization past HK$160 billion. PEGBIO has the potential to become the first Hong Kong-listed innovative weight-loss drug leader with a hundred-billion market capitalization.

**Challenging the MASH "R&D Black Hole" - Clinical Value Emerges**

As a biotechnology company focused on independent research and development of innovative therapies for chronic diseases, PEGBIO has been dedicated to researching cutting-edge innovative therapies for chronic diseases. After more than a decade of development, the company has established its proprietary High-Efficiency Target Screening and Molecular Modification Platform (HECTOR®).

This innovative technology platform mainly includes three components: metabolic disease data collection, drug molecular design platform, and compound screening platform. The drug molecular design platform features PEGBIO's polyethylene glycol (PEG) technology, which can extend compound half-life, enhance long-acting efficacy, improve compound stability, reduce immunogenicity, and lower research costs.

Based on its proprietary technology platform, PEGBIO has developed different types of drug candidates. Besides the core product vupelnatin (PB-119), another blockbuster investigational product PB-718 is equally noteworthy.

Globally, GLP-1 drug development has evolved from single-target to multi-target approaches. Unlike first-generation GLP-1 drugs that primarily targeted single targets, new-generation drugs tend toward multi-target synergistic effects, activating multiple metabolism-related receptors including GLP-1R, GIPR, and GCGR, enabling multi-target drugs to break through single-target efficacy bottlenecks and achieve significant improvements in comprehensive metabolic improvement, weight reduction, and medication compliance.

PB-718 is precisely a novel GLP-1/GCGR dual receptor agonist developed by PEGBIO. Its mechanism of action includes not only glucose-dependent insulin secretion and appetite suppression but also promotes fat breakdown and energy consumption, comprehensively improving metabolic disorders through multiple pathways. Its core therapeutic direction is precisely the MASH treatment field, once called the "R&D black hole."

From a market perspective, the global MASH patient population is expected to reach 486 million by 2030, with a corresponding market size potentially reaching hundreds of billions of dollars, representing enormous unmet treatment needs. However, over the past several decades, more than a hundred drugs have failed in the MASH field, including numerous pharmaceutical companies like Gilead investing over $100 billion in R&D funding yet repeatedly encountering failures, hence being called the "R&D black hole."

This reflects, to some extent, the complexity of MASH disease mechanisms and the limitations of single-target drugs, ultimately causing many investors and pharmaceutical companies to shy away from this hundred-billion-dollar market.

Against this backdrop, semaglutide recently became the second drug after Rezdiffra to receive FDA approval for MASH treatment, triggering widespread attention from the global industry and markets. In Hong Kong's market, PEGBIO is similarly a scarce target for investors to allocate in the MASH treatment sector, with PB-718 as its key vehicle.

Recently, PEGBIO disclosed results from a Phase Ib/IIa clinical trial of PB-718. The study showed that after dose titration, 1.6mg dose of PB-718 treatment for 18 weeks significantly reduced hepatic fat content (MRI-PDFF), with a mean percentage change from baseline of -57.14% and maximum reduction reaching 62%.

Notably, semaglutide's previous Phase II MASH study showed that its 2.4mg dose treatment for 24 weeks resulted in only a 46.2% reduction in patients' hepatic fat content from baseline. This means PEGBIO's PB-718 observed significant hepatic fat reduction in a shorter treatment period, suggesting this drug may provide clinically valuable treatment options for patients.

Currently, few products have been approved for market in this hundred-billion blue ocean of MASH. Taking the first approved product Rezdiffra as an example, after receiving FDA accelerated approval in 2024, its sales have continued to climb. The first full commercial year saw cumulative sales exceed $300 million, with Q2 this year alone generating $213 million in revenue, significantly exceeding market expectations, demonstrating strong market development potential while showing urgent global clinical demand for MASH treatment.

For PEGBIO, the preliminary evidence obtained by PB-718 not only supports its scientific value and application prospects for continued development in this field but also reflects the company's R&D capabilities based on deep innovation around GLP-1 targets. As the MASH treatment field develops rapidly, PEGBIO and its innovative product PB-718 are expected to expand new development space for Chinese biopharmaceutical companies in international competition, increasing the company's certainty in MASH treatment field R&D while also benefiting further stock price increases.

**Facing Broad Markets, Mining Hundred-Billion Leader Potential**

Behind innovative pharmaceutical companies' development, competition in technology and patents never ceases. Currently, major global innovative drug companies are increasing R&D investment to compete for market share after technology maturation.

In fact, in the global GLP-1 sector, the "dual dominance" battle between Novo Nordisk and Eli Lilly has entered a white-hot phase. First-half 2025 data shows semaglutide became the global "drug king" with $16.632 billion in sales, while Lilly's tirzepatide closely followed with $14.734 billion, a gap of less than $2 billion.

However, concurrent data shows Lilly's tirzepatide demonstrated stronger growth momentum. In terms of US GLP-1RA market prescription volume, Lilly's current share reached 57.0%, significantly leading Novo Nordisk's 42.5%. Moreover, Lilly's weight-loss version Zepbound saw first-half sales grow 223% year-over-year, far exceeding Novo Nordisk's Wegovy's 75% growth rate.

In overall diabetes market share, Novo Nordisk fell from 72% in 2024 to 53% in Q2 this year. The reason lies in tirzepatide's excellent efficacy, with head-to-head clinical trial SURMOUNT-5 results showing tirzepatide superior to semaglutide in both primary endpoint data and all five secondary endpoint data.

This translated to secondary market performance where Novo Nordisk's market capitalization evaporated nearly $400 billion within a year, while Lilly, leveraging tirzepatide's excellent performance, now approaches $700 billion in market capitalization.

This demonstrates that the global GLP-1 sector still believes in "technology supremacy," with better products expected to continuously drive enterprise valuation expectations in secondary markets.

Returning to PEGBIO, semaglutide's success has shown the market the value of GLP-1 drugs expanding in the hundred-billion MASH market, while PEGBIO is expected to precisely position itself in the MASH blue ocean market with PB-718, a potentially superior blockbuster product.

Additionally, PEGBIO has a core Class 1 new drug supported by the national "Major New Drug Creation" major science and technology project - the novel GLP-1 receptor agonist vupelnatin. This drug also demonstrates significant clinical performance, achieving "rapid onset" and "durable and stable treatment," and under similar baseline levels, vupelnatin's glucose target achievement rate matches or exceeds international first-line products. It also possesses high safety and treatment compliance and is the only GLP-1 receptor agonist demonstrating no rebound for up to 52 weeks in Phase III clinical trials, potentially reshaping the domestic T2DM treatment market landscape.

PEGBIO's continuously rising stock price trend since listing undoubtedly represents the market's recognition of its hardcore innovation and product strength. Although the company's stock price has surged over 4-fold in recent three months, the overall trend shows its stock price and market capitalization have not yet reached this round's peak, still having enormous space for continued growth.

The reason is that unlike the previous 2015-2021 innovative drug bull market driven by policy (drug review acceleration + Hong Kong Stock Exchange 18A new policy), this round of Hong Kong innovative drug market's core driving factors focus more on enterprises themselves, with "hardcore innovation - global monetization - performance validation" becoming the key logic for judging innovative drug companies' "investment certainty."

Benchmarking against Lilly's market capitalization growth curve, PEGBIO, holding multiple superior blockbuster GLP-1 products of the same class, is expected to become the first hundred-billion market capitalization Hong Kong-listed innovative weight-loss drug leader after future products successively launch.

Considering the latest macroeconomic trends, with Fed expectations for continued rate cuts in the second half of this year heating up, this is expected to attract more global capital inflows into the Hong Kong pharmaceutical sector currently undergoing valuation revision. Recent domestic pharmaceutical policy updates have released signals of payment system optimization, also expected to further unlock quality pharmaceutical companies' commercialization potential.

Under multiple positive catalysts, this round of Hong Kong pharmaceutical valuation recovery will inevitably be a highly certain long-term process. Against this backdrop, PEGBIO, as a high-quality value target in Hong Kong's innovative drug sector, leveraging competitively strong blockbuster products, sees its "hundred-billion market capitalization" expectations steadily rising, with the allocation window already open and worthy of investors' continued attention.