Zhongjin: The trend of domestic innovative drug industry is improving, with many highlights in the academic field over the past 26 years.

Zhongjin issued a research report stating that according to the statistics from NMPA and Healthcare Magic Cube, the total amount of domestic innovative drugs in 2026Q1 exceeded 60 billion US dollars, surpassing the full-year level of 2024 and approaching half of the full-year level of 2025; and the average down payment and average transaction scale both reached historical highs. It is worth noting that the pipeline of Chinese FIC/BIC is becoming increasingly rich, and with the convening of international academic conferences such as AACR, ASCO, EHA, and ESMO, data catalysis is expected to further verify the quality and efficiency of domestic innovative drugs, driving the continuous evolution of the wave of innovative drugs. The main viewpoints of Zhongjin are as follows: R&D efficiency, advantages in clinical resources, accelerate the development and price increase of domestic innovative BD According to the statistics from NMPA and Healthcare Magic Cube, the total amount of domestic innovative drugs in 2026Q1 exceeded 60 billion US dollars, surpassing the full-year level of 2024 and approaching half of the full-year level of 2025; and the average down payment and average transaction scale both reached historical highs. With the active promotion of MNCs, multiple Chinese innovative assets are expected to enter the stage of IPO application in 2026; based on the recognition of the innovation capabilities of domestic enterprises, multiple early-stage platform cooperation transactions have been successively reached. Domestic new drugs have shifted from winning in terms of cost-effectiveness to gradually gaining bargaining power, fully penetrating the global pharmaceutical innovation value chain and will continue to shine. Clear policy orientation, leading companies accelerate the commercialization of innovative drugs The 2026 government work report for the first time listed biomedicine as an "emerging pillar industry". With medical insurance payments shifting towards innovation, and the gradual advancement of commercial insurance innovation drug directories, the valuation ceiling for domestic innovative drugs is expected to rise. Looking at recent annual reports, sales data for many leading pharma/biopharma/biotech innovative drugs have been impressive, leading the realization of domestic innovation entering an acceleration phase. The achievements of domestic new drugs in 2026 are worth looking forward to Domestic companies are blossoming in the fields of small nucleic acids, bispecific antibodies, ADC, CAR-T, etc., and are accelerating breakthroughs in areas such as heart failure, metabolism, CNS, self-immunity, etc. Currently, the Chinese FIC/BIC pipeline is becoming increasingly rich, and with the convening of international academic conferences such as AACR, ASCO, EHA, and ESMO, data catalysis is expected to further validate the quality and efficiency of domestic innovation, driving the continuous evolution of the wave of innovative drugs. Recommended targets: Jiangsu Hengrui Pharmaceuticals (01276), REMEGEN (09995), JUNSHI BIO (01877), BEONE MEDICINES (06160), AKESO (09926), RIBOLIFE-B (06938), SKB BIO-B (06990), INNOVENT BIO (01801), DUALITYBIO-B (09606), HUTCHMED (00013), ASCENTAGE-B (06806), SBP GROUP (01177), CSPC PHARMA (01093), HENLIUS (02696), Sichuan Kelun Pharmaceutical (002422.SZ), Huadong Medicine (000963.SZ), OCUMENSION-B (01477). Risk factors: R&D falling below expectations, lower than expected BD.