Shanxi Securities released a research report stating that during the 2026 National People's Congress sessions, the biopharmaceutical industry became a key focus for national policy support. The country has elevated biopharmaceuticals to the status of an emerging pillar industry, and domestic innovative drugs have also entered a phase of sustained explosive growth. The report recommends focusing on high-quality assets within the domestic innovative drug sector. The main points from Shanxi Securities are as follows:
Biopharmaceuticals have been confirmed as an emerging pillar industry. The 2026 Government Work Report proposed cultivating and strengthening emerging and future industries, implementing industrial innovation projects, and encouraging central and state-owned enterprises to take the lead in opening application scenarios to develop emerging pillar industries such as integrated circuits, aerospace, biopharmaceuticals, and low-altitude economy. This marks the first time biopharmaceuticals have been elevated to the height of a "pillar industry."
Domestic innovative drugs have become the core development direction of the biopharmaceutical industry and have entered a period of sustained explosive growth. 2025 was a year of explosive growth for Chinese innovative drugs going global, with various data points reaching record highs. According to the PharmaBI database, the total transaction value of Chinese innovative drug BD out-licensing deals for the full year 2025 reached $135.655 billion (compared to $51.9 billion in 2024), with upfront payments of $7 billion and a total of 157 deals (94 deals in 2024). Data across all dimensions reached historical highs. Notably, a BD deal between Innovent Biologics and Takeda Pharmaceutical, with a total value of up to $11.4 billion, became the largest single transaction in the history of Chinese pharmaceutical BD. Meanwhile, the licensing agreement between 3SBio and Pfizer for a PD-1/VEGF bispecific antibody featured an upfront payment of $1.25 billion, which not only topped the 2025 upfront payment charts but also set a new record for domestic BD upfront payments.
At the beginning of 2026, the momentum of Chinese innovative drug BD out-licensing has continued from 2025. From January to February 2026, the total value of domestic innovative drug BD transactions reached $53.276 billion, with as many as 44 deals. The transaction value in just the first two months of the year exceeded that of any single quarter in 2025 and was close to the level for the entire year of 2024. Among these, on January 30, CSPC Pharmaceutical Group announced a comprehensive strategic collaboration with AstraZeneca for the discovery of innovative polypeptide molecules and the development of long-acting delivery products. CSPC Pharmaceutical Group will receive a $1.2 billion upfront payment and is eligible to receive up to $3.5 billion in potential R&D milestone payments and up to $13.8 billion in potential sales milestone payments.
Investment recommendation: It is advised to focus on Jiangsu Hengrui Pharmaceuticals, BeiGene, Innovent Biologics, 3SBio, Akeso, Sino Biopharmaceutical, CSPC Pharmaceutical Group, RemeGen, Klus Pharma, Baili Pharma, Olon Biopharma, BrightGene Bio, Haisco Pharmaceutical Group, Bebeite, Duality Biologics, GuangShengTai, Simcere Pharmaceutical Group, Shanghai YingZhiJian, and Liminatus Pharma.
Risk warnings: Risks include global economic growth falling short of expectations, intensified competition in innovative drug R&D and the risk of R&D failure, and the risk of innovative drug commercialization and sales underperforming expectations.
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