HK Stock Market Move | Innovative drug concept stocks fell across the board. Expectations of a Fed rate hike hit the innovative drug industry. Institutions say the marginal risk from BD policy has eased.

Innovative drug concept stocks fell across the board. As of press time, JW THERAP-B (02126) dropped 9.35% to HK$2.665; REMEGEN (09995) fell 7.11% to HK$73.2; KEYMED BIO-B (02162) declined 5.10% to HK$74.5; InnoCare Pharma (09969) dropped 4.57% to HK$15.03. On the news front, Federal Reserve Governor Michael Barr said on Wednesday that the Fed needs to raise interest rates further to suppress stubborn inflation. Several Fed officials have previously indicated the possibility of further rate hikes. China Securities Co.,Ltd. noted in a strategy research report that AI, innovative drugs, and industrial metals are all interest-rate-sensitive sectors. If the Fed embarks on a rate hike cycle, the fundamentals and valuations of related industries could face certain pressure. It is worth noting that recent reports said the U.S. Treasury Department is drafting rules related to pharmaceutical investment in China, and most ordinary drug licensing may still be allowed to continue. SPDB International pointed out that neither the U.S. Treasury Department nor the White House has commented on the reports, so we view this news as a marginal change in regulatory direction rather than a final policy stance. The bank believes that the risk of Chinese innovative drug companies being widely banned or substantially restricted from licensing ordinary therapeutic drugs to U.S. pharmaceutical companies has marginally decreased.