Sinolink: Internal and external resonance + favorable policies, Chinese innovative drugs march towards the global stage.

Sinolink released a research report stating that China's innovative drugs continue to provide production capacity on the global supply side, with the number of pipelines taking the lead in the world, gradually becoming the center of global new drug development. In recent years, Chinese companies have been closely involved in technological innovation, with many leading innovative drug companies continuously opening up head-to-head research, showing superior efficacy compared to foreign competitors, using strict clinical data to prove the enormous product power of Chinese innovative drugs. At the same time, in recent years, the national level and various provinces and cities have issued several supportive policies for innovative drugs, supporting the development of innovative drugs from multiple dimensions such as evaluation and approval, procurement access, and the entire chain. Recommended companies include Jiangsu Hengrui Pharmaceuticals (600276.SH), BEIGENE (688235.SH), HANSOH PHARMA (03692), etc. Sinolink's main views are as follows: Breakthrough in R&D capabilities, highlighting global competitiveness. The Chinese innovative drug industry has experienced rapid development and has now entered an era of comprehensive harvest; China's innovative drugs continue to provide production capacity on the global supply side, with the number of pipelines taking the lead in the world and gradually becoming the global center for new drug development. At the same time, Chinese innovative drugs have a technological advantage in ADC, dual/multi-antibodies, and many other areas, with the fastest and highest-quality molecules emerging globally, demonstrating the characteristics of "quantity and quality rising together" in this round of R&D wave. With multiple advantages, Chinese innovative drugs have attracted close collaboration with overseas pharmaceutical companies in recent years, ushering in a wave of License-out transactions: From "importing" to "exporting": the number of transactions continues to rise, and starting in 2023, the number of License-out transactions exceeded License-in transactions, becoming the main theme of cross-border transactions; Deals with real money have landed, and the logic of global high-quality assets has been validated: the down payments and transaction amounts have repeatedly reached new highs, with overseas mature pharmaceutical companies (especially the global TOP20 MNCs) as the main players in the transactions. The advantages of Chinese companies are highlighted in international transactions. The heat of License-out for ADCs remains high, and the heat of License-out for dual/multi-antibodies is rapidly increasing. Advantageous tracks and early research pipelines are becoming more favored by overseas markets. Internal and external resonance, grasping high-quality tracks and the main line of going abroad. Several leading multinational pharmaceutical companies worldwide have several heavyweight products nearing the patent cliff and urgently need to lay out the next growth point. They also have high cash reserves and a strong willingness to cooperate on BD. Meanwhile, with technological developments, in recent years, ADCs, dual antibodies, CAR-T, small nucleic acids, and other technologies have blossomed, with Chinese companies actively participating and quickly leading the global pharmaceutical industry to show a new face. In recent years, many leading innovative drug companies have continuously opened up head-to-head research, showing superior efficacy compared to foreign competitors, using strict clinical data to prove the enormous product power of Chinese innovative drugs. With multiple head-to-head data victories, Chinese new drugs are showing an industrial trend of replacing overseas drugs and achieving clinical iteration, leading top domestic pharmaceutical companies to accelerate going abroad. In the field of diseases, tumors are witnessing upgrades and iterations with domestic dual antibodies, ADCs, and other technologies. Diseases such as autoimmune diseases, COPD, weight loss, etc. all have domestic new drugs showing breakthrough potential, and subsequent progress is worth close attention. Policy boosts, marginal improvement in performance. Ten batches of centralized medicine procurement have been completed, with the next batch of procurement raising quality requirements and countering "internal cannibalization," weakening the marginal impact. Pharma procurement is gradually being cleared, entering a period of innovation transformation and harvest. In recent years, various supportive policies for innovative drugs have been promulgated at the national level and in various provinces and cities, providing comprehensive support for the development of innovative drugs from multiple dimensions such as evaluation and approval, procurement access, and the entire chain. In addition, medical insurance policies are becoming more favorable, and friendly payment ends are expected to help innovative drugs rapidly increase in volume. With the accelerated construction of a diversified medical security system, commercial insurance is expected to provide additional volume for payment for innovative drugs. Recommended companies: Jiangsu Hengrui Pharmaceuticals, BEIGENE, HANSOH PHARMA, INNOVENT BIO, AKESO, CSPC PHARMA, SKB BIO-B, Huadong Medicine, 3SBIO, REMEGEN, Gan & Lee Pharmaceuticals, INNOCARE. Risk warning: Risks of underperforming performance, risks of slower-than-expected R&D progress, currency risks.