5 minutes, hitting the daily limit! A hundreds-of-billions giant, completely ignited! The entire sector surges collectively.

Today it’s the turn of innovative drugs!

Yesterday it was lithium batteries, today it’s the turn of innovative drugs. On the morning of March 27, the innovative drug concept continued to rise, with Menouhua hitting the daily limit within five minutes of opening, Keta Biotech also reaching a daily limit, Wanbangde, Lianhuan Pharmaceutical, and Shuanglu Pharmaceutical hitting the daily limit, while Rejing Biotech and Yinuosi rose over 10%. The A-share innovative drug sector surged by 3%.

In the Hong Kong stock market, there was also a response, as Innovent Biologics achieved its first comprehensive profit, and a significant strategic cooperation accelerated the realization of the global value of its pipeline, with the stock rising more than 7% at one point. This completely ignited the entire biopharmaceutical sector. Additionally, the core compound patent for semaglutide from Novo Nordisk expired in China. This product, known as the “king of drugs” globally, breaks the long-standing monopoly pattern and has sparked market enthusiasm for Chinese weight loss drug concept stocks.

Innovative drugs soar collectively

On the morning of March 27, innovative drugs surged over 3%. Wanbangde rose to the limit, Lianhuan Pharmaceutical previously hit the daily limit, Menouhua reached a four-day limit, Rejing Biotech rose over 15%, and more than ten stocks including Yinuosi, Haichuang Pharmaceutical, Shutaishen, Hengrui Pharmaceutical, and Bailitianheng rose over 6%.

In the Hong Kong stock direction, innovative drugs also soared collectively. The sector rose nearly 3%, and Innovent Biologics rose over 7% at one point. On March 26, Innovent Biologics released its annual report for 2025, reporting total revenue of 13.042 billion yuan for the year, a year-on-year increase of 38.4%; achieving a net profit attributable to shareholders of 814 million yuan, a year-on-year increase of 959.72%, marking the company’s first annual profit. In the announcement, Innovent Biologics stated that 2025 is a significant milestone in the company’s development history, achieving historic breakthroughs in business scale, profitability, and global innovation.

Analysts believe that Innovent Biologics is based in China and is expected to become a top-tier international biopharmaceutical company by 2030, with 12 of its 18 listed products included in medical insurance. In the CVM field, products like marstudeptide and PCSK9 monoclonal antibodies are rapidly expanding, and new indications for PD-1 monoclonal antibodies in the oncology field are being included in medical insurance, driving product revenue growth of 44.6%. The cash for the initial payment of cooperation in 2025 exceeds 1.6 billion USD, with a total transaction amount exceeding 22 billion USD. By building independently and through strategic cooperation (such as with Takeda in a Co-Co model), it expands its global team and strengthens international R&D, registration, and commercialization capabilities. Innovent Biologics’ turnaround is of milestone significance, holding substantial value, breaking the market stereotype of innovative drug companies as “high investment, low output,” and is also an important catalyst for the valuation repair of the innovative drug sector.

In addition, the core compound patent for semaglutide from Novo Nordisk expired in China. Semaglutide is a new long-acting GLP-1 analog developed by Novo Nordisk, which tops the global prescription drug sales list due to its significant weight loss and blood sugar reduction effects, serving as the core engine for Novo Nordisk’s performance growth. According to a report by Zhaoshang Consulting, the domestic GLP-1 drug market has considerable potential. It is expected that by 2032, the market size for treatment of type 2 diabetes will reach 68.8 billion yuan, and the market size for obesity treatment will reach 42.7 billion yuan, with the two core indications combined exceeding 100 billion.

Expectation gaps still exist

Stock price increases are often due to expectation gaps. Huatai Securities believes that China’s innovative drugs are at the starting point of a long cycle, with quality assets being globally exported, and their potential is not fully reflected in A/H stock pricing.

The number and amount of outbound transactions for Chinese innovative drug BD have reached new highs, with a significant increase in global share, indicating that BD continues to grow with high foreseeability. There is a large expectation gap regarding the contribution of catalytic cash flow from BD. Between April and June, at major conferences such as AACR, ASCO, ADA, and others, a considerable amount of clinical data will be disclosed; the release of major data will bring a positive impact to the overall market; platform companies that continuously engage in BD will bring sustained high cash flow, and this “Chinese model” has not been fully valued.

Innovative drug assets are relatively undervalued in A/H shares, mainly due to the systematic underestimation of overseas income from Chinese innovative drug companies in the A/H capital markets and errors in the foreseeable judgment of future overseas cash flow. The BD of platform companies is sustainable and will become the main business model.

It is worth noting that the 2026 government work report proposed “building emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy.” Compared to the 2025 report’s statement of “cultivating and growing emerging and future industries,” the industrial positioning of biomedicine has clearly risen, being placed for the first time at the “emerging pillar industry” level, further strengthening its strategic significance.

Guosheng Securities believes that for the pharmaceutical sector, this means that the policy positioning of biomedicine is upgrading from “cultivating emerging tracks” to “an important pillar direction for economic growth and industrial upgrading,” with innovative drugs, as the most core high-value-added link in the biopharmaceutical industry, benefiting particularly clearly.

Layout: Wang Lulu

Proofread: Lü Jiubiao