5-minute limit-up! Billion-dollar giant completely ignites! The entire sector surges collectively.

Today it’s time for innovative drugs!

Yesterday it was lithium batteries, today it’s time for innovative drugs. On the morning of March 27, the concept of innovative drugs continued to rise, with Minophagen hitting the upper limit five minutes after the market opened, Kintor Pharmaceutical reaching a 20% limit up, Wanbang Biopharma, Lianhuan Pharmaceutical, and Shuanglu Pharmaceutical also reaching their limits, while Hotgene and InnoCare rose over 10%. The A-share innovative drug sector surged by 3%.

In the Hong Kong stock market, there was also a reaction, as Innovent Biologics achieved its first full-year profit, and a major strategic partnership accelerated the realization of the global value of its pipeline, with the stock once soaring over 7%. This completely ignited the entire biopharmaceutical sector. In addition, Novo Nordisk’s semaglutide patent expired in China. This product, known as the “king of global medicines,” has broken the long-standing monopoly, also triggering market enthusiasm for Chinese weight loss drug concept stocks.

Innovative drugs collectively soar

On the morning of March 27, innovative drugs surged over 3%. Wanbang Biopharma’s stock rose to its limit, Lianhuan Pharmaceutical had previously hit the limit, Minophagen achieved a fourth consecutive limit up, Hotgene rose over 15%, and more than ten stocks including InnoCare, Haichuang Pharmaceutical, Shuttai Shen, and Hengrui Medicine rose over 6%.

In the Hong Kong market, innovative drugs also soared collectively. The sector’s increase was close to 3%, with Innovent Biologics once rising over 7%. On March 26, Innovent Biologics released its 2025 annual report, revealing total revenue of 13.042 billion yuan for the year, a year-on-year increase of 38.4%; net profit attributable to shareholders was 814 million yuan, a year-on-year increase of 959.72%, marking the company’s first full-year profit. In the announcement, Innovent stated that 2025 is a significant milestone in the company’s development history, achieving historic breakthroughs in business scale, profitability, and global innovation across three dimensions.

Analysts believe that Innovent, based in China, is expected to become a top international biopharmaceutical company by 2030, with 12 out of 18 marketed products included in medical insurance. In the CVM field, Masitide and PCSK9 monoclonal antibodies are rapidly gaining traction, while in the oncology field, new indications for PD-1 monoclonal antibodies are included in medical insurance, driving product revenue growth of 44.6%. The cash from the first cooperation payment in 2025 exceeds 1.6 billion USD, with a total transaction amount exceeding 22 billion USD. By building its own global team through strategic partnerships (such as the Takeda Co-Co model), it strengthens international R&D, registration, and commercialization capabilities. Innovent’s turnaround is of milestone significance, highly valuable, breaking the market’s stereotype of innovative pharmaceutical companies being “high investment, low output,” and is also an important catalyst for the valuation recovery of the innovative drug sector.

Additionally, Novo Nordisk’s semaglutide patent has expired in China. Semaglutide is a new long-acting GLP-1 analogue developed by Novo Nordisk, which has topped the global prescription drug sales chart due to its significant weight loss and blood sugar-lowering effects, and is the core engine of Novo Nordisk’s performance growth. According to a report by Frost & Sullivan, the domestic GLP-1 drug market has considerable potential. It is expected that by 2032, the market size for type 2 diabetes treatment will reach 68.8 billion yuan, while the market size for obesity treatment will reach 42.7 billion yuan, with the two core indications combined exceeding 100 billion.

Expectations gap still exists

Stock price increases are often due to expectations gaps. Huatai Securities believes that the Chinese innovative drug sector is at the beginning of a long cycle, with high-quality assets being globally exported, and the potential has not been fully reflected in A/H share pricing.

The number and value of outbound transactions for Chinese innovative drug BD (Business Development) have reached new highs, with a significant increase in global share, and sustained growth in BD has high predictability. There is a substantial expectations gap contributing to the sustainability of BD cash flow. At the AACR, ASCO, ADA, and other major conferences from April to June, many clinical data disclosures will occur; the release of significant data will bring positive impacts to the overall market; platform companies’ continuous BD will bring sustained high cash flow, and this “Chinese model” has yet to be fully valued.

Innovative drug assets are relatively undervalued in A/H shares, primarily due to the systematic underestimation by the A/H capital markets of domestic innovative pharmaceutical companies’ overseas revenues and errors in predicting future overseas cash flows. The BD of platform companies is sustainable and will become the main business model.

It is noteworthy that the 2026 government work report proposed “building emerging pillar industries such as integrated circuits, aerospace, biopharmaceuticals, and low-altitude economy.” Compared to the 2025 report’s statement of “cultivating and expanding emerging industries and future industries,” the positioning of the biopharmaceutical industry has significantly elevated, being placed at the level of “emerging pillar industries” for the first time, further strengthening its strategic significance.

Guosheng Securities believes that for the pharmaceutical sector, this means that the policy’s positioning of biopharmaceuticals is upgrading from “cultivating emerging tracks” to “an important pillar direction for economic growth and industrial upgrading,” with innovative drugs being the most core and high value-added segment of the biopharmaceutical industry, benefiting direction especially clear.

Dongcai Illustration · Adding some valuable insights

(Source: Securities China)