Significant news has emerged from China's innovative drug sector. On June 1, at the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting, **AKESO (HKG: 09926)** announced the significantly positive overall survival (OS) results from the Phase III HARMONi-6/AK112-306 study. This study evaluated Ivonescimab combined with chemotherapy versus tislelizumab combined with chemotherapy for the first-line treatment of advanced squamous non-small cell lung cancer (sq-NSCLC). The study results showed that, compared to tislelizumab combined with chemotherapy, Ivonescimab combined with chemotherapy significantly extended patient OS. The risk of lung cancer death was further reduced by 34% compared to PD-1 inhibitor plus chemotherapy, with a hazard ratio (HR) of 0.66. An industry analyst noted that PD-(L)1/VEGF bispecific antibodies, represented by AKESO's Ivonescimab, are expected to usher in the 2.0 era of tumor immunotherapy. The excellent OS data from this clinical trial positions it as a potential next-generation global blockbuster drug. How did the secondary market react? In early trading on June 1, **AKESO (HKG: 09926)** shares gapped higher, breaking through four key moving averages including the half-year, monthly, annual, and quarterly lines, surging over 10% at one point. At the time of writing, gains were over 6%. The news initially provided a strong boost to the Hong Kong Stock Connect innovative drug sector. The **HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (SHH: 520880)**, which tracks 100% innovative drug R&D targets, rose over 3% initially. Subsequently, individual stocks within the sector showed divergent performance, and the ETF's gain moderated to around 1%. In the previous trading session (May 29), the ETF's price surged 3.57% on heavy volume. Regarding the outlook for Hong Kong Connect innovative drugs, a recent institutional report stated that the OS data for AKESO's Ivonescimab in first-line NSCLC significantly exceeded expectations, greatly enhancing the certainty of realizing the global multi-billion dollar immuno-oncology and ADC market. The report expressed firm optimism for the beta trend in innovative drugs. Another securities firm pointed out that there are no fundamental negatives for innovative drugs, citing policy support, bottom valuations, strong overseas expansion momentum, and an earnings inflection point, advising investors to remain confident. The innovative drug sector has been undergoing an adjustment for over eight months. For investors looking to position for a potential rebound in innovative drugs at low levels, two key investment tools are highlighted: For pure exposure to innovative drugs, consider the **HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (SHH: 520880)**, which invests 100% in innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, highlighting its focus on leading companies. The underlying assets are Hong Kong-listed stocks, offering high potential volatility and T+0 trading. For investors seeking to lower portfolio volatility, an alternative is another ETF with a unique "70% innovative drugs + 30% traditional Chinese medicine" allocation, a rare combination in the market that aims to balance the high growth potential of innovative drugs with the high dividend characteristics of traditional Chinese medicine.
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