A landmark event has shaken the pharmaceutical world. Moderna and Merck announced that their jointly developed personalized mRNA cancer vaccine, Intismeran (V940), successfully met both the recurrence-free survival (RFS) and distant metastasis-free survival (DMFS) primary endpoints in a Phase III clinical trial for the adjuvant treatment of high-risk melanoma. This marks the first-ever positive Phase III result for mRNA technology in oncology.
Overnight, US pharmaceutical stocks surged, with Moderna shares skyrocketing by an incredible 177%. Merck hit an all-time high, and Eli Lilly rose 4.46% to also reach a record high, propelling its market capitalization to over $1.2 trillion and making it the first pharmaceutical company in human history to achieve that valuation.
On August 20, A-share and Hong Kong-listed pharmaceutical stocks rallied broadly, leading the market. As of 1:50 PM, the A-share pharmaceutical and biotech sector (SW) saw net main capital inflows exceeding RMB 20.6 billion, far outpacing all other industries. The CSI Healthcare Index opened high and continued to climb, with 8 of its constituent stocks rising over 10%. Porton Pharma Solutions and MGI Tech hit the 20% daily limit, while Kingmed Diagnostics saw a 10% limit-up. The Healthcare ETF Huabao (512170) surged with exceptionally active trading, seeing turnover surpass RMB 1.15 billion, more than double the previous day's total.
The Hong Kong Stock Connect innovative drug sector also launched a fierce attack. Everest Medicines skyrocketed over 61%, CanSino Biologics gained over 44%, and both Sino Biopharmaceutical and CP Pharmaceutical Group rose more than 10%. The Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880) showed strong momentum, with turnover exceeding RMB 800 million by press time, also significantly surpassing its full-day volume from the previous session.
What exactly does this Phase III success for an mRNA tumor vaccine mean? Analysts point out that although melanoma accounts for only about 1% of skin cancer cases, it is the leading cause of skin cancer death, with recurrence peaking 2-3 years after surgery. The vaccine, combined with Keytruda, was used as an adjuvant therapy in over 1,100 patients with high-risk melanoma who had undergone complete surgical resection. The trial achieved its key endpoints of improving recurrence-free survival and reducing the risk of distant metastasis. These results further corroborate the positive efficacy seen in the five-year follow-up of the Phase IIb trial.
The Phase III trial will continue to follow the overall survival endpoint. Full data will be presented at an international medical conference, with the US filing timeline yet to be determined. If the complete data confirms significant clinical benefit and the commercialization barrier of individualized manufacturing can be overcome, mRNA tumor vaccines could become the cornerstone of a new generation of cancer immunotherapy, following in the footsteps of PD-1 and ADC drugs.
This major industry breakthrough, combined with the strong performance of US pharma stocks, has powerfully boosted bullish sentiment for A-share and Hong Kong-listed pharmaceutical stocks. Feng Chencheng, fund manager of the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), previously noted that driven by commercial and business development (BD) momentum, the industry is expected to broadly deliver better-than-expected profits this year. Coupled with potential BD deals in Q3 and Q4, as well as AI-related collaborations, innovative drugs are poised to take over from CXO and ignite a new market rally.
For full-chain exposure to innovative drugs, ETFs offer a more efficient route. For innovative drug investment, consider the T+0 tradeable Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), which excludes CXO companies and invests 100% in innovative drug R&D firms, with 70% of its positions in innovative drug R&D leaders. For A-share innovative drug opportunities, watch the Pharma ETF Huabao (562050), the only ETF tracking the pharmaceutical index, with over 70% innovative drug content. For CXO exposure, the T+0 tradeable Huabao Hong Kong Stock Connect Healthcare ETF (159137) contains over 50% CXO companies, of which the WuXi system accounts for over 38%. For A-share CXO opportunities, consider the Healthcare ETF Huabao (512170), which covers 8 CXO leaders with a combined weight of over 30%.
Data is sourced from public information from the Shanghai and Shenzhen Stock Exchanges, CSI Index Company, and Hang Seng Index Company. Weight data as of 2026.8.19. Note: ETFs do not charge sales service fees. When subscribing or redeeming fund shares, the agency may charge a commission of up to 0.5% per the standard, including fees charged by securities exchanges and registration institutions. For fund fee rates, refer to the legal documents of each fund.
Risk Disclosure: The index constituent stocks mentioned in this article are for display purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund under the management of the fund manager. The fund manager assesses the risk level of Healthcare ETF and Pharma ETF Huabao as R3-Medium Risk, suitable for balanced (C3) and above investors. The fund manager assesses the risk level of Hong Kong Stock Connect Healthcare ETF Huabao and Hong Kong Stock Connect Innovative Drug ETF Huabao as R4-Medium-High Risk, suitable for aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers, nor are they liable for any direct or indirect losses resulting from the use of this content. Past performance of other funds managed by the fund manager is not a guarantee of fund performance. Past performance of a fund does not represent its future performance. Fund investment carries risks.
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