According to statistics from the NMPA and PharmaGO, the total business development value for domestic innovative drugs in the first quarter of 2026 exceeded $60 billion, surpassing the full-year 2024 total and approaching half of the full-year 2025 level. Both average upfront payments and average transaction sizes reached record highs. Notably, China's pipeline of first-in-class and best-in-class drug candidates continues to expand. With the upcoming international academic conferences such as AACR, ASCO, EHA, and ESMO, data releases are expected to further validate the quality and efficiency of domestic innovation, driving continued momentum in the innovative drug sector.
Key viewpoints from the analysis include accelerated business development for domestic innovative drugs, supported by improved R&D efficiency and clinical resource advantages. Driven by active participation from multinational corporations, several Chinese innovative assets are expected to enter the drug application stage in 2026. Based on recognition of domestic companies' innovation capabilities, multiple early-stage platform collaboration deals have been successfully concluded. Domestic new drugs have evolved from competing on cost-effectiveness to gradually gaining pricing power, comprehensively penetrating the global pharmaceutical innovation value chain.
Clear policy direction is accelerating the commercialization of innovative drugs, with leading companies taking the lead. The 2026 government work report for the first time listed biopharmaceuticals as an "emerging pillar industry." As medical insurance payments increasingly favor innovative drugs and commercial insurance formularies for these drugs progress, the valuation ceiling for domestic innovative drugs is expected to rise. Recent annual reports show impressive sales data for innovative drugs from several leading pharmaceutical, biopharmaceutical, and biotechnology companies, indicating an acceleration in the realization of domestic innovation.
Notable achievements from domestic companies are anticipated in 2026, with progress across various fields such as small interfering RNA, bispecific antibodies, antibody-drug conjugates, and CAR-T therapies. Breakthroughs are accelerating in areas including heart failure, metabolism, central nervous system disorders, and autoimmune diseases. China's pipeline of first-in-class and best-in-class candidates continues to strengthen. Data presentations at upcoming international academic conferences are likely to further confirm the substance and efficiency of domestic innovation, sustaining the innovative drug wave.
Recommended stocks include Hengrui Pharma, Remegen, Junshi Bio, Beigene, Akeso, RiboLife-B, KELUN-B, Innovent Biologics, DualityBio-B, HUTCHMED, Ascentage Pharma, Sino Biopharmaceutical, CSPC Pharmaceutical Group, Henlius, Kelun Pharmaceutical, and Huadong Medicine. Risk factors include R&D outcomes falling short of expectations and business development performance below forecasts.
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