On the evening of July 5th, Shiyao Jingfeng (000908) disclosed an announcement regarding unusual stock price movements. This followed similar announcements from several other pharmaceutical companies, including Kelun Pharmaceutical, Dizal Pharma, and Zejing Pharmaceutical, on the evening of July 3rd. Compared to the subdued market performance in the first half of the year, this recent cluster of price fluctuation notices suggests a sustained increase in market interest for pharmaceutical stocks.
Multiple Stocks Experience Unusual Activity
The announcement from Shiyao Jingfeng stated that its stock had seen a cumulative price increase deviation of 23.21% over two consecutive trading days on July 2nd and 3rd. The company clarified that there were no undisclosed material events involving the company or its controlling shareholders. Notably, the company's stock abbreviation was just changed from "Jingfeng Pharmaceutical" to "Shiyao Jingfeng" on July 2nd.
Statistics show that on July 3rd, other pharmaceutical firms like Kelun Pharmaceutical, Dizal Pharma, Zejing Pharmaceutical, Allist Pharmaceuticals, and Huiyu Pharmaceutical also issued similar price movement announcements.
Trading data indicates that Kelun Pharmaceutical saw a cumulative price increase deviation of 20% over three days from July 1st to 3rd. Dizal Pharma, Zejing Pharmaceutical, Allist Pharmaceuticals, and Huiyu Pharmaceutical each reported a 30% cumulative deviation over the same period, with all stating no undisclosed material matters.
Over a longer period, Kelun Pharmaceutical gained 34.7% from June 18th to July 3rd, hitting a yearly high of 48.08 yuan per share on July 3rd. Dizal Pharma rose 28.97% from June 23rd to July 3rd. Zejing Pharmaceutical experienced a rapid surge, climbing 62.08% from June 23rd to July 3rd and reaching an intraday yearly high of 146.02 yuan on July 3rd.
Furthermore, Allist Pharmaceuticals surged 63.19% from June 12th to July 3rd, setting a new yearly intraday high of 134.85 yuan on July 2nd. Huiyu Pharmaceutical gained 24.6% from June 30th to July 3rd. In preceding sessions, other pharmaceutical stocks like Hotgen Biotech and Meinuoke had also released price fluctuation notices.
This recent strength contrasts sharply with the sector's underperformance in the first half of the year. Data shows that while the Shanghai Composite Index rose 3.16% in H1 2026, 425 out of 507 pharmaceutical stocks under the Shenyin & Wanguo industry classification underperformed the benchmark. Only 82 stocks outperformed.
Within the sector, 15 stocks, including *ST Yitong and Jinhao Medical, saw declines exceeding 50%, while 19 stocks, such as Linor Pharmaceutical Packaging, Hualan Shares, and Hightiger New Material, posted gains over 50%.
An industry expert noted that the recent rally is driven by multiple factors. These include ongoing policy support, a harvest period for domestic innovation, promising clinical data from pipelines in areas like ADC, bispecific antibodies, and cell and gene therapy (CGT), and significant overseas licensing deals. Additionally, the sector's previous deep correction left valuations at historical lows. A recovery in global biotech sentiment, evidenced by a rising XBI index, has further fueled the collective strength, leading to price movement triggers for leading stocks.
Policy Tailwinds Continue to Emerge
The sector's recovery is being supported by a steady stream of favorable policies. On July 3rd, the National Medical Products Administration solicited public comments on draft measures to optimize the review and approval process for cell and gene therapy products. The draft encourages R&D innovation and improves clinical development efficiency, focusing on key areas like malignant tumors and rare diseases. It proposes including eligible CGT products in a 30-day fast-track review channel for innovative drug trials.
On June 29th, the National Healthcare Security Administration published a preliminary list of drugs that passed the initial formal review for the 2026 National Reimbursement Drug List and a separate commercial insurance innovation drug catalog. A total of 818 applications were received, and 557 drugs passed the preliminary review for the basic list. Notably, this year's process introduced a pre-application mechanism for drugs that have completed technical review but are awaiting final approval.
An industry analyst commented that the fast-track CGT review, combined with the separate commercial insurance innovation catalog, creates a dual-driver system of accelerated R&D and expanded payment channels. The faster reviews shorten the translation cycle for cutting-edge therapies, while the commercial catalog addresses gaps in reimbursement coverage. This policy shift signals a regulatory move from pure cost control to also valuing innovation, which is a long-term positive for high-end innovative drugs and the CGT sector.
Innovative Drugs Take Center Stage
Innovative drugmakers appear to be the primary beneficiaries of this rally. Market observers point to a clear divergence in performance, with innovative drug leaders rising on solid fundamentals. Drivers include one-time gains from cross-border licensing deals, leading to strong profit growth in Q1 reports for several companies, and volume expansion for self-developed new drugs through dual reimbursement channels (NRDL and commercial insurance). Additionally, a full order book for the CXO industry chain and signals like share buybacks and positive clinical data are validating an earnings inflection point for many innovative drug companies that have moved past sustained losses. In contrast, sectors like generic drugs and auxiliary medications remain constrained by volume-based procurement policies and lack innovative growth, resulting in weaker performance and capital concentration on companies with original pipelines and internationalization capabilities.
Behind the rising market enthusiasm, Q1 reports from several innovative drug companies have already shown a turnaround in performance. For instance, Dizal Pharma reported Q1 2026 revenue of approximately 2.53 billion yuan, a 58.18% year-on-year increase, with a narrowed net loss of about 96 million yuan.
Zejing Pharmaceutical achieved Q1 revenue of 9.05 billion yuan, a surge of 440.07% year-on-year, and turned a net profit of 633 million yuan. This dramatic growth was primarily due to recognizing 654 million yuan in licensing revenue from ZG006, following a global collaboration agreement exceeding $1 billion with AbbVie signed on December 31, 2025.
Allist Pharmaceuticals reported Q1 revenue of about 15.84 billion yuan, up 44% year-on-year, with a net profit of approximately 636 million yuan, representing 54.94% growth.
Kelun Pharmaceutical presents a different case. In 2025, the company saw revenue decline 15.13% to about 185.13 billion yuan and net profit fall 42.03% to about 17.02 billion yuan, marking its first simultaneous drop in both revenue and profit since 2021. All its main product lines experienced revenue declines. The pressure continued into 2026, with Q1 revenue down 2.98% to about 42.59 billion yuan and net profit decreasing 22.34% to approximately 4.54 billion yuan.
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