AACR Concludes Successfully with Innovative Drug Stocks Rebounding; Akeso and Hansoh Pharma Rise Against the Trend! Harvest CSI HKEX Connect Innovative Drug ETF (159570) Attracts Nearly RMB 3.9 Billion in 6 Days!

On April 22, the overall A-share market showed a pattern of upward volatility, with the ChiNext Index leading the gains, closing up 1.73%. The Hang Seng Index fell more than 1%, and the CSOP HSCEI Innovative Drug ETF (159570) slightly pulled back along with the sector, closing down 0.72%. However, the capital inflow remained strong, with the ETF accumulating nearly 3.9 billion yuan in net inflows over the past six trading days! As of April 21, its latest scale exceeded 30.7 billion yuan, leading among all pharmaceutical ETFs in the Chinese market!

As of the close of the Hong Kong stock market, the constituent stocks of the Hang Seng Innovation Drug ETF (159570) showed mixed performance: Akeso and Hansoh Pharma closed over 1% higher against the trend; most other heavyweights saw slight pullbacks, with CSPC Pharmaceutical Group and Zai Lab falling more than 2%, and Innovent Biologics,BeiGene3SBio falls over 1%.

Note: The constituent stocks are for display only and do not serve as individual stock recommendations.

On the news front, Eli Lilly announced its second acquisition this year related to in vivo CAR-T, a $3.25 billion upfront cash acquisition of Kelonia Therapeutics. Kelonia is a specialist company in lentiviral vector delivery, with its core project being an in vivo CAR-T therapy targeting BCMA, KLN-1010, which released partial data from its Phase 1 clinical trial last year. In treating relapsed/refractory multiple myeloma, the minimal residual disease-negative response rate reached 100% among the first four patients evaluated. According to the announcement, the total value of this transaction could reach up to $7 billion.

【Conference Side: AACR Chinese Pharmaceutical Companies Unveil Dense Data Cycle, Initiating Market Trends】

AACR 2026 Annual Meeting:The 2026 AACR Annual Meeting, held from April 17 to 22 in San Diego, USA, as the world's largest and most authoritative cancer research conference, has become a centralized stage for showcasing the strength of China's innovative drugs. The participation of Chinese pharmaceutical companies reached an all-time high at this conference, with a total of 104 Chinese enterprises presenting more than 250 innovative drugs and nearly 400 cutting-edge research achievements, covering globally advanced technological fields such as ADC drugs, radiopharmaceuticals, cell therapy, mRNA, and protein degraders.

Among them, ADC drugs have become the absolute main battlefield, with 92 domestically produced ADC products showcased, accounting for 36% of the total ADCs at the conference.Targets cover popular directions such as HER2, TROP2, Claudin18.2, CDH17, Nectin-4, and B7-H3. In terms of technological iteration, bispecific ADCs, multi-payload/dual-toxin ADCs, and next-generation linker technologies have become the focus, with some products demonstrating excellent data in overcoming resistance or enhancing efficacy and safety.

Orient SecuritiesIt was pointed out that Chinese pharmaceutical companies are no longer limited to the "fast-follow" model, with multiple products showing potential as either global first-in-class (FIC) or best-in-class (BIC).Hengrui MedicineMultiple TCE drugs,Betta PharmaceuticalsThe pan-KRAS PROTAC, the Nectin-4 ADC developed by Kelonia Therapeutics in collaboration with Merck, were both selected for oral presentation as LBA at the conference; achievements by Antengene, VibeBio, and Henlius in the TCE field demonstrated China's global leadership in next-generation immunotherapy.RemeGenThe DAC platform, and Shijiazhuang Pharmaceutical Group's IKZF1/3DAC, also demonstrated preliminary preclinical data, positioning themselves in the cutting-edge technology track. (Source: Orient Securities 20260419 "Pharmaceuticals and Biotechnology Industry 2026 AACR China Focus: Comprehensive Breakthroughs in China-produced Innovative Drugs, Global Competitiveness Reaches New Heights")

ASCO (American Society of Clinical Oncology Annual Meeting):At the end of May, ASCO is approaching, and some data may be released in advance. This conference is a significant window for clinical data, with a focus on mid-to-late stage clinical results, head-to-head comparisons, real-world evidence, etc.

This year, Chinese pharmaceutical companies will continue to participate in AACR, with expectations of more late-stage data disclosures for ADCs, bispecific antibodies, IO+ADC combinations, etc. Some early AACR data may ferment before/during ASCO (e.g., indication expansion, combination therapies).

Innovative Drug Sector May Form a "Preheating in April at AACR – Realization in May at ASCO" Intensive Cycle，Focus on individual stocks with a strong pipeline and positive early signals.

ChinaBio Conference:ChinaBio (China Biopharmaceutical Partnering Forum) will be held in Shanghai on April 28-29. The conference will focus on global innovation and business partnering. As one of the largest cross-border collaboration platforms for life sciences in China, it will cover hot topics such as antibodies/ADCs, cell and gene therapy. With an emphasis on R&D, manufacturing excellence, and partnerships in 2026, the trend of international expansion is expected to continue. As a follow-up meeting in China after AACR, it will help transform international academic momentum into tangible BD/funding opportunities, further boosting industry confidence.

【Earnings Season: Innovative Drug Sector Reverses Losses, Revenue and Profits Hit New Highs】

In terms of performance, the recent concentrated disclosure of the 2025 annual earnings快报 by 28 STAR Market innovative drug companies has brought a historic turning point to the industry's fundamentals.Data shows that the 28 companies collectively achieved operating revenue of approximately 74 billion yuan, representing a year-on-year increase of nearly 30%, reaching an all-time high. The net profit attributable to shareholders reached about 1.6 billion yuan, successfully reversing years of losses and marking a transition from "heavy R&D investment" to overall profitability. This signifies that China's innovative drug industry, after more than a decade of accumulation, has officially entered a new phase of value realization.

Zhongtai SecuritiesThe analysis believes that the core of the industry's profit growth comes from two major factorsDriving Force: FirstCore Product Commercialization Scaling Up, the explosive growth in end-market sales of innovative drugs provides intrinsic performance support; secondlyConfirmation of Initial Payment for Overseas BD, The R&D strength of China-produced innovative drugs gains international recognition, and large-scale outbound licensing deals directly contribute to profits, becoming an important external driver for performance growth.

1. Leading Companies Achieve Explosive Growth in Overseas Expansion and Commercialization

Industry Leader's Performance Particularly Eye-Catching, Becoming the Main Force of Profit:

BeiGene: Achieved operating revenue of 38.225 billion yuan in 2025, a year-on-year increase of 40.46%; net profit attributable to parent company was 1.461 billion yuan, compared to a net loss of 4.978 billion yuan in 2024.Significantly Turned Loss into ProfitThe core product BTK inhibitor Brukinsa (zanubrutinib) achieved nearly 50% year-over-year growth in global sales, with overseas revenue accounting for over 90%. It has been approved in more than 75 markets worldwide, highlighting its role as a benchmark for independent expansion abroad.

RemeGen: Revenue reached 3.251 billion yuan in 2025, a year-on-year increase of 89.36%; net profit attributable to parent company was 709 million yuan, turning from loss to profit, driven by the commercial scaling up of core products bringing performance back to profitability.

Innovent Biologics: Achieved the first full-year profit after many years of establishment, with a parent company net profit of nearly 8.14 billion yuan in 2025. The mature commercialization system drove the continuous increase in product volume.

2025 China Innovative Drugs17 Profitable Biotech Companies, the profit camp is clearly stratified and its scale continues to expand:

Mature Profitability Team: Henlius, Hutchmed,Akeso, Betta Pharmaceuticals, and Harbour BioMed, etc.Profitable for three consecutive years or more, the commercialization model has been fully validated, with extremely strong performance stability;

Newly Profitable Tier: BeiGene, Innovent Biologics,InnoCare PharmaLeading companies, after years of R&D investment, have officially turned their profit statements positive, attracting the highest industry attention;

Turnaround梯队：Microchip BiotechAfter companies like Rongchang Bio shifted from profit to loss, they returned to profitability by relying on the sales of their core products, demonstrating strong performance resilience.

Data shows that these innovative drug companiesThe average time to first profit is approximately 11.4 years., reflecting the long-cycle and high-investment nature of the innovative drug industry, also signifies that China's innovative drug sector, after more than a decade of accumulation, has entered a new phase of batch profitability.

Innovative drug industry chain simultaneously ushers in a performance boom, with high prosperity in upstream segments continuously verified:

CXO Sector: In March-April, the annual reports of leading A+H CXO companies are密集ly disclosed, including Wuxi Biologics,Tigermed、Asymchemetc.Outstanding Performance and Order Data in HandNew orders signed have achieved double-digit growth, with the recovery of global innovative drug R&D and the acceleration of Chinese pharmaceutical companies' expansion overseas supporting the high certainty of sector performance growth.

API Sector: Multiple companies see dual growth in revenue and net profit in 2025. After five years of supply-side consolidation, the industry is experiencing a price recovery and turning point in performance. The performance elasticity of segments such as vitamins, antibiotics, and specialty active pharmaceutical ingredients (APIs) is gradually being released.

Improved Financing Environment: In February 2026, the financing amount in China's medical and health sector increased by 60% year-on-year, with a cumulative year-on-year increase of 74%. The industry's financial situation continues to improve, providing support for subsequent research and development and commercialization.

Overall, the 2025 earnings season becomes a pivotal moment for China's innovative drug industry.Profit Inflection Point, Driven by both commercial scale-up and overseas BD transactions, coupled with high growth in the industrial chain's performance, the industry's fundamentals have completely reversed, laying a solid performance foundation for the sector's long-term valuation recovery. (Source: Zhongtai Securities 20260420 "Pharmaceuticals and Biotechnology Industry: Positive Domestic Policies, Overseas AACR Full Text Gradually Released, ASCO Abstract Titles to be Published Soon – Actively Seize Opportunities in Innovative Drugs")

[Focus on China's Hardcore Innovative Drug Power, Representative of New Quality Productivity, Recognize Hang Seng Stock Connect Innovative Drug ETF Huitianfu (159570)]

HK Connect Innovative Drug ETF (159570) by Hui Tianfu 100% invests in innovative drugs! As of April 2, the top ten constituent stocks account for 73.14% of the weight, concentrating the essence of HK Connect innovative drugs!