To The Moon

Today at the opening, Hong Kong-listed innovative drug stocks surged, with $石药集团(01093)$ jumping 14.28%, $药明康德(02359)$ rising 5% to hit a record high, and $百济神州(06160)$ climbing over 3.58%.

On the news front, the rally was boosted by a breakthrough in R&D from a U.S. pharmaceutical company. On August 19, $Moderna, Inc.(MRNA)$ and Merck jointly announced the successful Phase III trial of their partnered mRNA vaccine, sending Moderna's stock soaring 176.97% in a single day and adding $40 billion to its market capitalization. This marks the first successful Phase III trial for mRNA technology in cancer treatment.

In fact, innovative drug companies have been gradually showing a bullish trend this year, even amid the AI-driven market frenzy. Since the start of the year, WuXi AppTec has risen nearly 108%, while BeiGene and WuXi PharmaTech have gained over 24% and 52%, respectively, far outperforming the Hang Seng Index as well as tech giants like Tencent and Alibaba.

Behind the bullish run of Hong Kong-listed innovative drug stocks lies years of accumulated R&D progress and earnings growth. According to a recent study, the number of new anticancer drugs approved for market by Chinese drug regulators has surpassed that of U.S. regulators over the past few years. Between 2020 and 2025, China's National Medical Products Administration (NMPA) approved a total of 94 novel oncology drugs for marketing, while the U.S. Food and Drug Administration (FDA) approved 87 during the same period. In 2025 alone, the number of new anticancer drugs approved in China was nearly three times that of the United States.

In addition, Chinese innovative drug out-licensing has shown a clear trend of accelerated volume growth: the total transaction value climbed from approximately $8.4 billion in 2020 to $135.655 billion in 2025, representing a more than 15-fold increase over five years. In the first half of 2026 alone, the total reached $99.7 billion, roughly twice the full-year figure for 2024, and the annual total is expected to hit a new record high.

Alongside this scale expansion, individual deal sizes have also continued to grow. The average upfront payment rose from around $52 million in 2022 to $172 million in 2026, more than tripling, reflecting a significant improvement in the bargaining power of Chinese innovative assets. The collaboration model has also evolved from early "molecule-selling" to deeper, more integrated partnerships involving "technology platforms + multi-project packages + co-development." Multinational pharmaceutical companies' recognition of Chinese biotechs has shifted from valuing cost-effective assets to systematically pricing their fundamental R&D capabilities. The near-term earnings impact has been particularly notable: upfront payments in the first half of 2026 reached approximately $5 billion, equivalent to 70% of the full-year 2025 total, with most representing real cash received upfront. Companies such as CSPC Pharmaceutical Group, Innovent Biologics, and Hengrui Medicine have each signed individual deals worth billions to tens of billions of dollars, making overseas expansion the most direct profit growth engine for innovative drugmakers.