In 2025, apart from LABUBU, innovative drugs will be the most popular

Article source: MedTrend Medical Trend

In 2025, apart from LABUBU, innovative drugs will be the most eye-catching in the current market. Similar to the former, innovative drugs have witnessed a magical market performance this year: the focus of the public opinion market has shifted from the release of various clinical data to ASCO becoming the main venue in China, and the funds in the secondary market have moved from speculating on BD to speculating on BD forecasts.

As an important indicator of market trend, Hong Kong-listed innovative drugs have emerged from the "trough" of stock prices over the past four years and finally witnessed a continuous surge. The share prices of some Biotech companies have doubled. So far this year, among the top ten 18A companies by market capitalization, the share price of Kolon Biotech has risen by 102.8%, and that of Junshi Biopharma has increased by 102.9%.

Many investors in the primary market are getting ready. According to statistics, 18 innovative pharmaceutical companies have submitted their applications to the Hong Kong Stock Exchange since the beginning of the year. In May, Hengrui listed on the Hong Kong Stock Exchange, becoming the largest IPO in the Hong Kong pharmaceutical sector in the past five years. In the first half of June alone, seven companies filed for listing on the Hong Kong Stock Exchange, setting a new historical record.

In a newly released report, the Belfer Center at Harvard University pointed out: "China has the most likely opportunity to surpass the United States in the field of biotechnology."

In the Goldman Sachs report, the share of the healthcare sector in the trading volume of Hong Kong stocks has risen from less than 5% a year ago to 15%. The top ten ETFs are all Hong Kong Stock Connect innovative drug ETFs. In my memory, it's been a long time since innovative drugs became so prestigious.

The transformation of industry confidence is related to multiple factors behind it:

First, high-value BD transactions are the incentive. In the first quarter of 2025, there were 41 License-out transactions of innovative drugs in China, with a total value of 36.929 billion US dollars. This figure approached the full-year level of 2023 in just three months and has already exceeded the total transaction volume of the first half of 2024. Among them, Sisheng Pharmaceutical set a new record for the first payment of 1.25 billion US dollars for overseas expansion. The 11.5 billion US dollars paid by BMS to BioNTech for the products it obtained were the assets BionTech acquired from domestic Biotech companies in 2023.

However, in the collectible toy industry, what can survive the cycles is not blockbusters but the systematic IP operation capabilities. If the innovative drug industry fails to address issues such as BD transactions being merely a down payment game and the transformation of innovative drug payment methods, the myth of market value may become an "expensive illusion".

Second, the approval of innovative drugs has been accelerated, allowing capital to flow back. In just half a year in 2025, the number of approved domestic innovative drugs has approached the level of the entire last year. In addition, at the 2025 ASCO Annual meeting, 74 studies from China were selected, a 40% increase compared to 2024, which also reflects the explosive growth of domestic clinical data.

The combination of the two has brought the leading Hong Kong-listed innovative pharmaceutical companies to a turning point in profitability this year.

Third, policy support becomes a stimulant. From the expansion of 18A by the end of 2024, when the China Securities Regulatory Commission announced the optimization of the IPO process, to the beginning of 2025, when the National Healthcare Security Administration proposed to explore the formation of a Class C directory to connect with commercial insurance, compared with the previous "soul-cutting bargaining", this provides new imagination space for innovative drugs.

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Entering 2025, all the Biotech stocks listed in Hong Kong rose.

Beigene, the leading innovative drug in the Hong Kong stock market, continues to top the list. Its share price reached 15.58 billion yuan, up 42.7%, and its market value rose from 151.2 billion yuan at the beginning of the year to 239.9 billion yuan. Rongchang Bio is undoubtedly the biggest dark horse. It rose from the 10th place on the Hong Kong stock list at the beginning of the year, with a market value of 7.838 billion yuan, to the fifth place, with a market value of 28.35 billion yuan and a 44.1% increase in its share price. The share prices of Junshi Biopharmaceuticals rose by 102.9% and those of Kolon Biotech increased by 102.8%. The share prices of the two biotech companies have doubled.

Since its listing, Yingen Biotech has performed strongly, with its share price soaring to HK $246.8 per share, up 31.8%. Its market value has reached 21.73 billion yuan, making it onto the top 10 list of innovative drugs in the Hong Kong Stock market in 2025.

Genting Biologics was once the biggest "dark horse" in the Hong Kong stock market in 2024. Relying on the commercialization of its products, its market value rose by 133.6% to 15.8 billion yuan in 2024, leaving the market far behind! However, despite the fact that in 2025, Cansino Biologics' market value reached 16.49 billion yuan, a slight increase of 10%, and it lagged slightly behind the leading Biotech companies in Hong Kong, it still frequently made it onto the TOP10 list.

In addition, there are also a number of Biotech companies that have seen a significant increase in BD. Previously, Cansino Biologics gained capital favor by relying on bispecific antibodies. Sansheng Pharmaceutical and Baili Tianheng became very popular due to ADCs. As for the new dark horse in ADCs, Stone Pharmaceutical can no longer hide it. By 2025, it can be seen that the market is showing a preference for ADCs.

In addition, as the share prices of leading innovative pharmaceutical companies soared, with the influx of capital, a host of Biotech companies finally made it through.

This is inseparable from the support of policies behind the scenes. By the end of 2024, the 18A rules of the Hong Kong stock market will be expanded: AI diagnostics, nuclear medicine, and synthetic biology will be included in the scope of "unprofitable listing", attracting a number of leading companies in the industry such as Xiantong Medicine and Baoji Pharmaceutical.

Meanwhile, the China Securities Regulatory Commission announced the optimization of the IPO process, and the pace of ipos in the Hong Kong stock market has accelerated this year.

According to statistics, in the first half of 2025, a total of six medical and health companies were listed on the Hong Kong Stock Exchange, while only five were listed throughout 2024. Moreover, from the perspective of ipos, the ipos in 2024 will mainly be early-stage Biotech companies (such as CoDI Group, which raised 470 million Hong Kong dollars), and the pipelines are mostly in preclinical/Phase I.

In contrast, by the late 2025 period, clinical enterprises will take the lead, with over 70% of the enterprises submitting applications having Phase III/production application pipelines.

Among them, on May 23rd, Hengrui Medicine, the "king of innovative Drugs", went public in Hong Kong. Its stock price rose by more than 30% on the first day, and it only took four months to go public.

On April 15th, Yingen Biotech was listed on the Hong Kong Stock Exchange. On its first trading day, its share price soared by 113.74%, with a market value of 17.5 billion Hong Kong dollars.

The listing of Yingen Biotech was once regarded by the market as a barometer of the restart of the 18A market on the Hong Kong stock Exchange: since the financing winter of 2021, the listing of 18A companies has almost come to a standstill, but Yingen Biotech broke this deadlock with a 14-fold oversubscription and a fundraising amount of 200 million US dollars.

After two months of market growth, its share price has been climbing steadily, with a market value reaching as high as 21.73 billion yuan.

Moreover, the market's focus on Yingen Biotech lies behind its BD transactions.

For instance, the latest overseas product of Yingen Biotech, DB-1418, is regarded by the founder of the buyer as a BIC in the EGFR/HER3 bispecific antibody ADC field. The maternal HER3 antibody was from Beijing Xiantong. It was purchased in just 10 months with an initial payment of 1 million US dollars. On the surface, Yingen Biology reaped a 50-fold profit margin upon reselling.

In addition, on January 21st, Baili Tianheng submitted an application for listing on the Hong Kong Stock Exchange, planning to go public in Hong Kong. At present, it has carried out 50 clinical studies, including 8 late-line Phase III clinical trials.

Of course, in terms of the queuing enterprises, up to now this year, nearly 30 enterprises in the Hong Kong-listed pharmaceutical and biological industry have filed for IPO applications. Judging from the IPO and stock price response, currently, a large number of Biotech companies rely on their late-stage pipeline (such as ADC) and BD trading capabilities.

In the future, this situation may continue.

Behind the rise, first of all, policies have boosted the Hong Kong stock market.

At the beginning of the year, the medical insurance bureau proposed to explore the formation of a Class C directory and connect it with commercial insurance. Compared with the previous "soul-cutting bargaining", this provides new imagination space for innovative drugs.

The subsequent explosive growth in the approval of new drugs is undoubtedly one of the catalysts.

In the first half of the year, the number of innovative drugs approved for marketing in China reached 54, among which 34 were domestic innovative drugs and 20 were imported new drugs. In contrast, the number of approved domestic new drugs in 2024 was only 37. In just half a year of 2025, the number of approved domestic innovative drugs has approached the level of the whole of last year.

This "feast of new drugs" has injected strong confidence and impetus into capital inflows into the Hong Kong stock market.

From the perspective of approved enterprises: Among domestic companies, Hengrui Medicine has performed outstandingly and emerged as the biggest winner, with six new drugs already on the market. Secondly, there is the Kaleyin Pharmaceutical Group, which has three new drugs on the market. Kelun Pharmaceutical and Dongyangguang each have two products.

From the perspective of approved types: Anti-tumor drugs remain a gathering place for innovative drugs, with 8 types (accounting for 26.67%). Secondly, there are immunosuppressants, with 5 types (accounting for 16.67%), 4 types of diabetes drugs and 4 types of antiviral drugs respectively, and 2 types of lipid regulators, analgesics and cough suppressants, expectorants and antiasthma-relieving drugs respectively.

At the 2025 ASCO Annual meeting, 74 studies from China were selected, a 40% increase compared to 2024, which also reflects the explosive growth of domestic clinical data.

Moreover, with the significant increase in transaction volume, the quantitative change has led to a qualitative change.

In the first quarter of 2025, there were 41 License-out transactions of innovative drugs in China, with a total value of 36.929 billion US dollars. This figure approached the full-year level of 2023 in just three months and has already exceeded the total transaction volume of the first half of 2024.

With the market enthusiasm ignited by License-out, some innovative pharmaceutical companies have launched a new BD model: the preemptive BD, highlighting the capital operation wisdom of mature pharmaceutical companies.

On May 30th, Stone Pharmaceutical released a "preview" BD: Stone Pharmaceutical disclosed that currently, there are three deals with a total value of up to 15 billion US dollars under negotiation. The secondary market was in an uproar, pushing Stone Pharmaceutical's market value back up to 100 billion Hong Kong dollars.

On the evening of June 11th, Rongchang Biotech announced that several BD managers from multinational pharmaceutical companies reached out proactively and had in-depth exchanges on business expansion directions such as international cooperation and technology licensing of telitaciclib. Subsequently, Rongchang Biotech's Hong Kong shares rose by 20.1%.

On June 12th, China Biopharmaceuticals sent out a key signal at the Goldman Sachs Global Healthcare Annual Conference: the company is about to reach a "landmark and significant licensing deal". The news immediately sent shockwaves through the capital market - the company's share price soared by as much as 17% during trading, leading the gains in the innovative drug sector of the Hong Kong stock market.

By releasing potential transaction signals, innovative pharmaceutical companies not only gain a boost in their stock prices but also establish a bargaining advantage in negotiations.

Leading domestic pharmaceutical companies have shifted from passively seeking buyers to actively managing capital.