The acceleration of innovation value realization when shoes hit the ground, XUANZHUBIO-B(02575) welcomes the key configuration window period.

Recently, policies favoring innovative drugs have been continuously announced. In this year's government work report during the National Two Sessions, biopharmaceuticals were listed as a strategic emerging industry alongside high-end equipment, new materials, etc., emphasizing the continued support for medical innovation. With "innovative drugs" being mentioned in the government work report for three consecutive years, the investment logic of mainland funds has undergone a transformation, with the long-term value of leading enterprises being continuously explored. This is undeniably a huge advantage for XUANZHUBIO-B (02575) which is aligning with the core innovative varieties and gaining approval in the first-line indications. The landing of "entry into the market" has triggered a rush of capital layout Looking at a longer time frame, in 2025, the average daily turnover of the Hong Kong Stock Connect was HK$121.1 billion, accounting for 26.2% of the overall daily turnover of the Hong Kong stock market. By 2026, in the face of a complex external environment, southbound funds have continued to flow in against the trend, with a total net inflow of over HK$5 trillion, demonstrating mainland recognition of the long-term value of core assets. On March 9, amidst the turbulent market conditions in the Hong Kong stock market, southbound funds still reached a net buying amount of HK$37.213 billion, setting a new record for the highest single-day net inflow, coinciding with the official implementation of the new Hong Kong Stock Connect adjustment. According to the latest adjustment notices issued by the Shanghai and Shenzhen Stock Exchanges, 42 companies were included in the Hong Kong Stock Connect on March 9. Generally, companies included in the Hong Kong Stock Connect help expand shareholder base and improve trading liquidity, especially with southbound funds becoming a key incremental source of funds for the Hong Kong stock market, the impact is even more significant. Taking Xuanzhu Bio as an example, the company's stock price surged by 8.30% on March 9, with a daily trading volume of HK$483.875 million, up significantly by about 116% from the average daily trading volume of HK$224.4 million, indicating a rush of capital layout for Xuanzhu Bio by the Hong Kong Stock Connect. The next day after being included, the company's stock trading volume continued to rise to HK$61.5959 million, showing the rush of capital layout by the Hong Kong Stock Connect for Xuanzhu Bio. In fact, Xuanzhu Bio's active trading in the secondary market and the rush of capital layout can be attributed to the market investors' recognition of the company's clear investment logic of "innovation-commercialization". It is understood that, supported by the dual drive of digestion and tumors, by 2025, Xuanzhu Bio will enter the period of commercialization explosion: two core tumor drugs, Palbociclib and Ribociclib, have successively been approved, along with another core variety, Proton Pump Inhibitor, forming a commercial matrix of the "Three Musketeers", representing the company's core innovation and commercialization alignment strategy receiving dual recognition from the industry and the market. Just on the eve of successfully entering the market on March 3, Xuanzhu Bio's core commercial variety Palbociclib (trade name: Xuanyueting) was approved for a new indication, making a strong entry into first-line treatment of breast cancer, covering the HR+/HER2- population, adding another significant weight to the company's commercialization scale and long-term value. The "first and only in China" innovative drug brings high growth certainty As a class 1 new drug independently developed by the company, the CDK2/4/6 inhibitor Palbociclib (Xuanyueting) was approved for use in combination with aromatase inhibitors for the first-line endocrine initial treatment in HR+/HER2- advanced breast cancer patients. This is the third indication approved for Xuanyueting in China, following the previous approvals for combination therapy with Fluvestrant and monotherapy. With this approval, Xuanyueting becomes the first and only similar drug in China that covers the entire treatment course of HR+/HER2- advanced breast cancer in first-line, second-line, and subsequent lines. The strong entry of Xuanyueting into first-line treatment of breast cancer has attracted widespread attention from the industry and the market. It has been reported that Xuanyueting has excellent efficacy and safety throughout the treatment course. The approval of a new indication marks a significant breakthrough for China's domestically innovative drugs in the field of breast cancer treatment. Looking at the commercialization expectations, on the one hand, driven by the wave of new CDK2/4/6 inhibitors entering the market and being included in the national medical insurance catalog, the Chinese CDK2/4/6 inhibitor market has increased from 100 million yuan in 2018 to 3 billion yuan by 2024, with a compound annual growth rate of 78.8%, and is expected to reach 13 billion yuan by 2032. On the other hand, breast cancer, as the most common malignancy in women globally, is expected to reach approximately 435,000 cases in China alone by 2032, with about 75% being the HR+/HER2- subtype, indicating a significant unmet need for treatment. In this market context, Xuanyueting is expected to leverage its status as the first and only China-developed drug with single drug approval, unique CDK2/4/6 multi-target inhibition mechanism, low hematological toxicity, and coverage of the entire treatment course from later lines to first line, to enter the phase of commercialization at scale strongly, following market access and first-line indication approval, becoming a "heavyweight bomb" that will continue to increase Xuanzhu Bio's revenue and profits in the future. Accelerating the landing of differentiated innovations, further validating Biopharma value As mentioned earlier, under the dual drive of digestion and tumors in recent years, Xuanzhu Bio has established a "Three Musketeers" product end consisting of Palbociclib, Ribociclib, and Anelara Sodium. While promoting the scaled commercialization of the "Three Musketeers", the company is also committed to accelerating the landing of its differentiated innovative pipeline varieties, further validating the company's Biopharma value. It is understood that in terms of R&D, Xuanzhu Bio confirmed R&D investments of 239 million yuan and 186 million yuan in 2023 and 2024 respectively, providing steady support for innovative R&D. Xuanzhu Bio has established three major technical platforms including small molecule drug R&D platform, biological drug R&D platform, and clinical development platform, helping the company efficiently advance the full process of R&D from early discovery to clinical validation. These three innovative technology platforms not only support the development of the company's current pipeline but also provide systematic safeguards for the continuous production of innovative candidate drugs. To date, Xuanzhu Bio has more than ten drug assets actively in development, covering digestive system diseases, tumors, and non-alcoholic steatohepatitis (NASH). In addition to the commercialized "Three Musketeers", the company's innovative pipeline also includes a drug project in the Phase III clinical trial stage, several drug projects in the Phase I clinical trial stage and IND approval, forming a product development pattern of "step-by-step orderly, focused breakthrough, and multi-product reserve". It is worth noting that, unlike many current 18A companies and many domestic innovative drug companies that have not yet generated revenue, Xuanzhu Bio has successfully entered the innovative commercialization stage by relying on differentiated innovation and efficient commercialization execution. In the 2025 National Medical Insurance Drug List adjustment results, Xuanyueting of Xuanzhu Bio was included in the National Medical Insurance Catalog through negotiations and successfully renewed for the company's digestive area product Anjiuwei (the drug entered the current medical insurance catalog through negotiations in 2023 and successfully renewed in this round of medical insurance negotiations, being the only single product in the proton pump inhibitor field currently in the medical insurance catalog). For innovative drug companies, medical insurance access is not just a simple pricing game but a core hub for translating clinical value into market value. Under this logic, Xuanzhu Bio, with two core medical insurance varieties, stands out among the many 18A target companies that have not yet commercialized products; these two core varieties cover the two major diseases of tumors and digestive diseases, aligning with the current investment focus in the Hong Kong stock market on innovative solutions to clinical needs. As the company's scaled commercialization continues, its strong revenue and profit expectations are expected to provide solid support for the steady increase of the company's valuation.