When "Value Realization" Becomes the New Theme for China's Innovative Drug Industry in 2026

The Spring of Innovative Drugs is Back.

The actual change is that the scene is heating up.Huagai Capital 2025 Healthcare Fund Investor Conference, for the first time ever outside Beijing, took place in the coastal city of Yantai. The number of registrants continued to rise, reaching a record high of nearly 300 participants. On-site, whether during the buffet lunch or in the elevators, lively conversations filled the air. Scanning the WeChat QR code of innovative pharmaceutical company founders, scheduling tea room meetings after dinner, or diving straight into discussions: what new projects have been invested in recently, which company has filed its prospectus, whose booth created a buzz at JPM, and who has made an oversubscribed exit. This atmosphere seems to be the long-awaited confidence boost for innovative drugs.

Confidence Comes from the Data — According to Zero2IPO Research Center, in 2025, a total of 43 companies in China's healthcare sector went public, marking a year-on-year increase of 126%, and collectively raising RMB 41.1 billion, reflecting a year-on-year surge of 428%. In the particularly active Hong Kong stock market, 29 healthcare companies went public throughout the year, showing a 142% year-on-year growth, accounting for nearly one-quarter of all Hong Kong IPOs, with a total fundraising amount of RMB 30.9 billion.

In terms of BD, by December 31, 2025, the total annual transaction value of China's pharmaceutical industry outbound BD reached 135.7 billion US dollars, with upfront payments amounting to 7 billion US dollars and the number of transactions reaching 157, far surpassing the 51.9 billion US dollars and 94 transactions in 2024. Statistical data in all dimensions have reached record highs.

Looking back over the past decade, since the establishment of the first Zhejiang medical industry fund in 2014, Huagai Capital has formed a full-stage layout of medical investment from early stage, growth stage, PIPE, to S funds and mother funds, accompanying China's Biotech through technological explosion, overseas breakthroughs, and reaching the critical point of value realization. By 2025,Huagai Capital has achieved top-tier results globally: managing funds exceeding 30 billion yuan; over 30 invested companies going public; and BD transaction amounts of invested companies surpassing 20 billion US dollars.

Standing at this juncture, Huagai Capital's 2025 Healthcare Fund Investor Conference has set its sights on a flourishing array of Biotech targets. Through this conference, we may be able to analyze what a fund that has accompanied China's pharmaceutical innovation through a tumultuous decade has done, what it aims to do, and what it has achieved.

 Xu Xiaolin, Founding Partner and Chairman of Huagai Capital

In 2026, China's biopharmaceutical industry will reach a "qualitative change" singularity – the core contradiction will shift from "technological innovation" to "value realization." At the same time, the打通 of a closed-loop path will clarify the way forward for full-cycle Biotech.

"Flowers and trees facing the sun are more likely to welcome spring" means that those oriented towards sunlight tend to usher in spring more easily. The solar term 'Great Cold' has just passed, indicating that the severe cold is over and spring is on its way. In the history of China's biomedicine development, the determined GP and the gradually emerging LP have undoubtedly played the role of sunshine, water, or air.

"In the new decade, there will be more opportunities for original innovations from 0 to 1 based on Chinese research institutions and pharmaceutical companies, and tracks represented by AI healthcare will place greater emphasis on practical applications. Moreover, 99% of the value of Chinese companies is attached to their founders."Xu Xiaolin, Founding Partner and Chairman of Huagai Capital, emphasized.

Different from the past logic of "invest and forget," Huagai Healthcare Investment emphasizes prudence before investment and deep cultivation afterward — not just being the "money provider," but also the "problem solver": In the hardcore innovation screening for First-in-Class/Best-in-Class, it not only focuses on the scalability and differentiation of the technology platform but also deeply evaluates the continuous execution ability of the founding team, seeking those who internalize "value realization" as part of the team's DNA.Biotech founders — they no longer just talk about technological superiority but prove with execution results that every step is paving the way for value realization.

Huagai Capital-led Series A Round NKCell Therapeutics, Aiming to Be a World-leading Cell Therapy Company with Deep Expertise in NK Cell Therapy and Cutting-edge Technologies. Its founder mentioned that the natural function of NK cells is to eliminate senescent cells, thereby improving various inflammations, diseases, and other aging manifestations caused by the increase of senescent cells and the decline of NK cells, covering a very wide range of cell therapy fields. "The development of cell therapy is essentially a competition of science and technology; the underlying logic determines the ceiling of cell therapy — only by uncovering the fundamental attributes can we solve real problems. Technological improvements that deviate from the underlying logic will eventually hit a bottleneck."

Huagai Capital and Tencent jointly invested in Series A funding for Fanli Biotech, a biotech company with AI+ platform-based antibody drug R&D capabilities. Fanli Biotech's founder and CEO, Pengcheng Fan, stated that pipeline speed and capital efficiency are key to navigating the highly competitive and high-risk antibody drug development landscape. Fanli Biotech’s approach is to advance early-stage, robust, and high-certainty projects through business development (BD), quickly verifying team execution capabilities. This provides reassurance to investors and BD partners, thereby creating time and financial space for subsequent innovative pipelines. The goal is to achieve a virtuous cycle of "exchanging BD for trust, and trust for the future."

Huagai Capital’s Angel Round Investment in Puno Intelligence: An AI Drug Discovery Platform Enterprise Incubated by ShanghaiTech University. Mei Jingping, the Co-founder, Chairman, and CEO, mentioned that the essence of AI drug discovery is “Pharmaceuticals + AI” rather than “AI + Pharmaceuticals.” AI should be regarded as a member of the R&D team rather than a replacement tool. Its value depends on the deep integration of algorithms with biomedicine, breakthroughs in data quality and quantity, and mutual trust and open-mindedness within interdisciplinary teams. In the future, AI will move from screening optimization towards the discovery of entirely new structures and play a disruptive role at every stage of the clinical evaluation process.

Feng Ji, founder and chairman of Kexinda, believes that medical devices can fully replicate the BD path of innovative drugs to drive value realization, but the premise is having a globally pioneering level of innovation, an intellectual property system covering the globe, and product strength with significantly leading performance parameters and clinical performance. Compared with giants, start-up companies' advantages lie in high-quality decision-making and extremely agile teams, building survival space in precise tracks.

Hu Guoqiang, Co-founder and CEO of TargetLink Bio, mentioned that his previous identity as a clinical doctor inspired a two-way thinking process—tracing back from clinical endpoints to preclinical project initiation to avoid directional errors through scientific rigor. By carefully verifying and accumulating small victories into significant achievements, the strategy is to exchange for growth time and survival space through open collaboration.

It is not difficult to see that the emerging Biotech companies invested in by Huagai Capital in its early layout have all deeply embedded the "value realization" logic into their founding DNA — advancing pipeline value through BD collaborations and clinical validation, while seeking practical implementation plans in breakthroughs of underlying technologies and the construction of extensible platforms.

This is the core essence of Huagai Capital's "invest early, invest small" strategy: building on the foundation of mutual trust between the GP and the invested enterprises to capture high-return opportunities with fivefold or tenfold certainty in hardcore innovation.

From single-enterprise investment to building a full-cycle, differentiated Biotech matrix around core sectors, Huagai Capital adheres"Investment in Innovation and Industry Integration"——On the one hand, it requires product layout to be goal-oriented, meeting clinical needs and ensuring accessibility for commercial promotion, while maintaining relative scarcity and differentiation; on the other hand, it focuses on markets with sufficient capacity and long-term growth potential in high-development tracks. The weight loss track has thus become a typical breakout hit in this context.

 "Explosively Popular Weight Loss Track: Where Will the Future Lead?" Themed Roundtable

Roundtable special invited guest, Professor Ji Linong, Director of the Endocrinology Department at Peking University People's Hospital, pointed out that the indication for weight loss remains underdeveloped, especially in treatment plans oriented toward disease management and overall metabolic benefits. Notably, weight-loss drugs have a dual nature: they serve as "lifestyle medications" that meet psychosocial needs and improve body shape and appearance, while also acting as crucial long-term treatments for chronic diseases.

Current GLP-1 drugs face challenges such as poor efficacy maintenance, adverse reactions, low patient compliance, lack of long-term safety and efficacy data, and insufficient data in elderly populations.Professor Ji clearly prioritized "long-term adherence" as a key demand.——The average medication duration for current patients is only 2 to 3 months, while obesity, as a chronic condition, requires continuous medication to maintain effectiveness, which fundamentally conflicts with patients' expectation of "no rebound after stopping medication."

Looking further,The weight loss market is shifting from the traditional pharmaceutical logic to a new consumer goods logic.——Traditional GLP-1 diabetes drugs are prescribed by clinicians with patients passively accepting them, whereas GLP-1 weight-loss drugs have achieved unexpectedly successful market education in popular discourse. These drugs reach consumers directly through e-commerce platforms, enabling Eli Lilly to surpass Novo Nordisk within two years to become the world's first trillion-dollar pharmaceutical company. Consequently, the weight-loss drug market now demands products that can meet diverse needs, incorporate multiple therapeutic mechanisms and dosing regimens, cater to various细分限制症 populations, and potentially offer multi-tiered pricing.

Thus, Huagai Capital has built an investment matrix centered around "long-term medication management," focusing on the long-term adherence and differentiation of products:Prosth explores the GLP-1 combination pathway, addressing resistance while maintaining weight loss efficacy, promoting dual benefits of weight reduction and muscle preservation; Zhipptide Bio develops monthly formulations to solve compliance issues by extending the dosing cycle; Chengyi Bio adopts a small molecule differentiation strategy to complement the peptide market, achieving substantial BD with AZ based on solid clinical data; Derui Pharma, an AI + drug discovery technology platform company, has efficiently advanced its first AI + GLP-1 pipeline to Phase III clinical trials in just four and a half years—a key milestone for Derui Pharma and a significant breakthrough in the AI-driven pharmaceutical field.

The commonality between value realization and venture capital is the flow of money.

As the wave of Biotech listings in Hong Kong's stock market continues and the recognition of innovative assets by BD rises, Xu Xiaolin believes,Investment and exit in innovative drugs have formed a complete closed loop, and will remain the mainstream of China's pharmaceutical industry in the next decade.After the closed loop is打通, the flow of money continues to accelerate, with more funds flowing into innovative drugs. "Sunshine" will reach more flowers and trees, more cutting-edge corners, and more unexplored paths.

 "From Pipeline Breakthrough to Commercialization Closed-loop: The Path to Advancement" Roundtable Discussion

Lü Qiang, Co-founder and Chairman of GenFleet Therapeutics, mentioned that an IPO not only requires the team to have sufficient confidence in the company's fundamentals but also demands continuous listening, communication, and coordination. Due to the multi-party game and differing demands, the support of capital is crucial. Huagai Capital was the lead investor in the company’s Series C round in 2022 and helped introduce key resources in subsequent rounds. Before the IPO, Capital Health and Huagai Xincheng, both under Huagai Capital, each held 2.79% of the shares, with Huagai Capital collectively controlling 5.58% of the equity.

As the leader in RAS innovative drugs founded in 2017, Jifang Pharmaceuticals decisively submitted its listing application in January 2025 during the "market low point," resubmitted in June, and successfully went public in September, with a current market value exceeding 10 billion Hong Kong dollars. Lü Qiang pointed out,As batches of Chinese innovative pharmaceutical companies achieve oversubscription and rise in the market upon listing, a virtuous cycle will be established in the Hong Kong stock market – investors reinvest in early-stage innovation after gaining returns, Huagai Capital's leading GP builds an innovative ecosystem, benefiting more entrepreneurs and ultimately benefiting a wide range of patients.

"Analysis of Hengrui's Innovative Drug Layout Strategy" Speech by Zhang Lianshan, Director and Executive Vice President of Hengrui Medicine

Hengrui Medicine's Director and Executive Vice President, Zhang Lianshan, also emphasized the innovation ecosystem and positive cycle in his sharing: "China has a huge pharmaceutical market, and only with a large market can we drive significant investment. Money should not stay in one person's pocket; it is crucial to build a good innovation ecosystem..."Currently, in terms of overseas independent research and development and BD, Hengrui has recruited some talents in Boston. In the past, we wanted to "sail overseas by borrowing a boat," but now we are focused on "building our own ship to sail overseas.""At the strategic level, Hengrui adheres to the dual drivers of 'patient demand leadership' and 'Created in China, Used Globally,' while taking into account the trend of an aging population. Building on its core strength in oncology, the company has, for the first time, achieved a pipeline of non-oncology chronic disease management drugs surpassing its oncology drug pipeline."

 “Global Outlook on Biomedicine and China's Past, Present, and Future”Xi Zhou, Global Partner of McKinsey & CompanySpeech

"The Birth of Great Drugs is the Future of Medicine" - Speech by Yu Wenxin, Chief Analyst of the Pharmaceutical Industry at Guotai Haitong Securities

BD Essence: The Iteration of the Global Pharmaceutical Market Led by MNCs, Driven by External Demand in Global Competition.In practical operation, Huagai Capital seeks participants in the market's innovative ecosystem, focusing on high-quality assets, international layout, and team execution.

Gifore Pharmaceuticals Fundamentals: Starting from 2021, Gifore has successively reached large BD pipeline licensing agreements with Innovent Biologics, SELLAS, and Verastem; China's first KRAS G12C inhibitor, Fuzoras, was approved for marketing.Multiple core products launch overseas multi-center clinical trials; buildBD upfront payment, milestones, and sales revenue sharing, etc., to generate continuous cash flow, growing into a globally leading enterprise in the comprehensive development of RAS-targeted drugs.

"Pouring Heart and Soul into A Young Biotech's Global Journey" – Speech by Dennis Zhu, Founder, CEO, and Chairman of the Board of DualityBio

A more typical case is Duality Biologics, which experienced a continuous surge in value upon its IPO—more than 50% of the over 3,000 enrolled cancer patients are from overseas.Zhu Zhongyuan, founder, CEO and chairman of the board of Duality Biologics, said, "What we are thinking about is how to make Chinese Biotech a first-class enterprise or even a world-class international enterprise."

Actively embracing and integrating into the global market, Duality Biologics is no longer just a Chinese Biotech company but a key node in the global R&D network of multinational corporations (MNCs). This "heart-driven" ambition and execution of globalization precisely reflect the role of individual companies in the secondary market's innovation ecosystem — every turn of Duality’s innovation flywheel helps push the valuation ceiling for subsequent Chinese innovative pharmaceutical enterprises.

From the perspective of Huagai Capital, Duality Biologics is an important target in its ADC+BD globalization trend."Whether it's making investments or starting a business, you need to ride the trend and position yourself in the most advantageous direction within the industry," said Xu Xiaolin. This is precisely the deeper meaning of the first half of the phrase "Plants near the sun are the first to bloom," which corresponds to "A pavilion close to water gets the moonlight first."

In 2014, Huagai Capital determined the direction of its first healthcare fund to be "investing only in innovative drugs, not generic drugs," and invested 20 million US dollars in Henlius. In 2018, when AI healthcare was just beginning, Huagai led the investment in Shukun Technology. Today, it has developed into a leading Chinese AI large model healthcare company, encompassing clinical diagnosis and treatment, research systems, and digital doctors.

In the new decade, Xu Xiaolin believes that with innovation and successful expansion overseas, China's pharmaceutical industry will grow to include 3-5 large multinational companies.

Looking ahead, Biotech, nurtured by sunlight, is striving to grow and accelerating the realization of China's innovative value; GPs and LPs are stepping forward, exploring the value path of innovation from 0 to 1, and building a longer-term and broader ecosystem of innovative value.

The field of life sciences always stands at the forefront, embracing the ultimate and promising trends, because we are perpetually oriented towards the future.