Recently, China's innovative drug sector has received significant positive developments. Hengrui Pharmaceuticals has entered into a global strategic collaboration with Bristol-Myers Squibb (BMS), with a total potential value of approximately $15.2 billion, marking a transition for domestic innovative drugs from "outbound licensing" to a new era of "global co-creation." Concurrently, the Hong Kong version of the FDA (Hong Kong Centre for Medical Products and Devices Regulation) is planned to be established by the end of the year, while the adjustment of the mainland medical insurance catalog is accelerating, bringing multiple benefits to the innovative drug industry. Against this backdrop, the Fullgoal Hong Kong Stock Connect Healthcare Preferred Mixed Securities Investment Fund (Class A: 027041, Class C: 027042) is currently being issued and will conclude its subscription on May 22. This fund focuses on the Hong Kong stock healthcare sector, providing investors with a convenient channel to access leading innovative drug companies in Hong Kong.
Performance validation: Hong Kong stock innovative drugs reach a profitability inflection point. With the completion of the 2025 annual reports and 2026 first-quarter reports for the healthcare sector, Hong Kong stock innovative drug companies have delivered impressive results. According to Wind data, the total operating revenue of the Hong Kong stock innovative drug sector in 2025 reached RMB 176.108 billion, a year-on-year increase of 16.50%. Adjusted net profit attributable to shareholders was RMB 9.714 billion, indicating a potential profitability inflection point compared to 2024. The sector's gross profit margin remained stable with slight improvements, while the net profit margin turned positive. With the scaling effects brought by the increased volume of innovative drugs, the sector's net profit margin is expected to rise further.
Entering 2026, sales and transaction activity in Hong Kong stock innovative drugs remain robust. In the first quarter, product sales revenue for the sector grew by 31% year-on-year, laying a solid foundation for full-year performance.
Policy tailwinds: Dual drivers from Hong Kong's "FDA" plan and medical insurance reforms. The policy framework continues to provide strong support, creating opportunities for the development of the innovative drug industry. On May 11, the Asia Summit on Global Health announced that the Hong Kong Centre for Medical Products and Devices Regulation, referred to as the "Hong Kong FDA," is planned to be established by the end of this year. Once domestic innovative drugs and devices are approved in Hong Kong, they will gain easier recognition from international regulatory authorities, effectively reducing compliance costs and timelines for overseas expansion.
Simultaneously, mainland medical insurance access is accelerating, with a focus on supporting "genuine innovation." On May 9, the National Healthcare Security Administration released a draft for the 2026 medical insurance catalog adjustment work plan, emphasizing the policy direction of "truly supporting innovation, supporting genuine innovation, and supporting differentiated innovation" while maintaining the basic medical insurance's role of "ensuring basic coverage." On May 15, the "Implementation Measures for Drug Trial Data Protection" officially took effect, systematically establishing a classified data protection framework. Innovative drugs and original research drugs are granted a six-year protection period, strengthening the institutional barriers for "genuine innovation."
Industry advancement: From BD licensing to global commercialization, domestic innovative drugs enter a harvest period. Supported by both performance and policy, the overseas expansion of innovative drugs is achieving a "triple jump": primarily driven by BD in 2025, shifting to key clinical data for major products in 2026-2027, and with key overseas expansion products expected to achieve overseas commercialization after 2028. According to Wind data, the total value of BD transactions related to Chinese pharmaceutical assets in the first quarter of 2026 reached $61.4 billion, surpassing the total for the entire year of 2024, with transaction volume accounting for 31% globally.
Notably, on May 12, Hengrui Pharmaceuticals and BMS entered into a global strategic collaboration with a potential total value of approximately $15.2 billion. This collaboration not only provides substantial upfront and milestone payments but also includes options for co-developing specific projects. This new model of two-way licensing and collaborative R&D marks the entry of Chinese innovative drugs into a new stage of global co-research and co-creation.
Meanwhile, the academic influence of Chinese innovative drugs continues to grow. At the 2026 American Association for Cancer Research (AACR) annual meeting, Chinese abstracts reached 866, accounting for 7.5% of the total and ranking second globally. At the American Society of Clinical Oncology (ASCO) annual meeting, Chinese oral presentations totaled 94, with 12 key research abstracts, showing a continuous increase for three consecutive years. For the first time, a Chinese study was selected for the plenary session.
Currently, the Hong Kong stock innovative drug sector is experiencing a triple resonance of performance, policy, and industry advancements, making it a highly focused area in the capital markets. Against this backdrop, the Fullgoal Hong Kong Stock Connect Healthcare Preferred fund (Class A: 027041, Class C: 027042), currently being issued, focuses on the Hong Kong stock healthcare sector. It invests no less than 80% of its non-cash fund assets in Hong Kong Stock Connect-listed stocks and healthcare-themed stocks, ensuring high purity in Hong Kong healthcare investments. The proposed fund manager, Zhao Wei, possesses a composite background in "pharmaceutical industry + financial research," having previously worked at GlaxoSmithKline in innovative drug R&D, equipping him with the ability to deeply assess the clinical value of drug pipelines. At this stage, innovative drugs are transitioning from the "1.0 data interpretation era" to the "2.0 profitability realization era," with commercialization expected to bring potentially unexpected profit elasticity.
Comments