CRO-related stocks extended their upward momentum into the afternoon session, with Genscript Bio (01548) surging 10.71% to HK$34.32, Asymchem (06821) climbing 8.5% to HK$142.90, Tigermed (03347) gaining 7.11% to HK$41.56, and Pharmaron (03759) rising 3.9% to HK$29.30.
The rally comes as improving fundamentals in the innovative drug sector accelerate across the CRO supply chain. With business development (BD) transactions in innovative pharmaceuticals remaining highly active, R&D funding for drugmakers has become more ample. To capitalize on development windows and safeguard project timelines, these companies are increasingly willing to pay for outsourced research services, driving a simultaneous rise in both order volumes and pricing across CRO firms.
Notably, the first original drug developed domestically with the assistance of artificial intelligence, Aipushiwei, has received conditional marketing approval from the National Medical Products Administration. Analysts note that AI-assisted drug R&D has advanced beyond a conceptual stage, now demonstrably supporting original medicines from discovery through clinical trials to market approval.
Research from China Merchants Securities indicates a clear uptrend in the CXO sector's momentum. In the first half of this year, domestic CXO companies posted year-on-year revenue growth of 24.5% and net profit growth of 52.7%, with profit expansion approaching the peaks of the previous cycle. Both orders on hand and new contract signings have rebounded broadly, prompting industry leaders to raise their full-year guidance.
Overseas, demand for preclinical research is also turning a corner, with Charles River's DSA division reaching a four-year high in book-to-bill ratio. Furthermore, AI-driven drug development is expected to reshape pharmaceutical R&D dynamics, enhancing efficiency across the board, a trend that should further benefit the sector.
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