China Biopharma and GSK Forge Major Collaboration on Two Blockbuster Respiratory Drugs; HKEX Innovative Drug ETF Surges Amid Strong Investor Interest

Hong Kong Stocks: Three Major Indices Rise Again Today!The China Stock Connect Innovative Drug ETF by China Universal Asset Management (159570), with 100% exposure to innovative drugs, continued its upward trend, rising nearly 2%. Its trading volume rapidly exceeded RMB 1.6 billion, attracting over RMB 600 million in net inflows in the past four trading days. The fund once again garnered investor favor during today's trading session. As of July 8, its latest assets under management surpassed RMB 22.4 billion, leading its peers.

In terms of corporate news, on July 8, Sino Biopharm announced a further deepening of its strategic cooperation with GlaxoSmithKline (GSK), securing exclusive commercialization rights in mainland China for two globally significant innovative respiratory drugs. The scope of collaboration between the two parties has expanded from liver diseases to the field of chronic respiratory diseases.Under the expanded agreement, CHIATAI TIANQING, a subsidiary of Sino Biopharm, will be fully responsible forFluticasone Furoate/Umeclidinium/Vilanterol Inhalation Powder (Trelegy Ellipta), Umeclidinium/Vilanterol Inhalation Powder (Anoro Ellipta)Import, distribution, hospital access, and promotional and non-promotional activities for the two products in mainland China. GSK will continue to serve as the Marketing Authorization Holder (MAH) for the two drugs, responsible for regulatory registration affairs, quality control, pharmacovigilance, and global brand strategy.Both products are blockbuster cornerstone therapies in the respiratory field, with cumulative global sales exceeding $23 billion.

On July 8, Sino Biopharm sealed a deal with AstraZeneca worth up to $1.9 billion.Sino Biopharmaceutical Co., Ltd. announced that its subsidiary, Chia Tai Tianqing Pharmaceutical Group Co., Ltd., has entered into an exclusive licensing agreement with AstraZeneca for TQC3721, a PDE3/4 inhibitor independently developed by Chia Tai Tianqing.Sino Biopharm is entitled to receive a $200 million upfront payment, as well as potential development, regulatory, and sales milestone payments, totaling up to $1.9 billion., and will also receive tiered royalties of up to a double-digit percentage based on the annual net sales of TQC3721.

AstraZeneca Partners with Abbisko, Introducing a New Variable to Targeted Therapy and Immunotherapy Combinations in NSCLC.Recently, Abbisko Therapeutics announced a strategic collaboration with AstraZeneca to jointly advance the Phase I/II clinical study of the oral PD-L1 inhibitor ABSK043 (lumipodlin) in combination with osimertinib for the treatment of EGFR-mutant, PD-L1-positive locally advanced or metastatic non-small cell lung cancer (NSCLC). On the surface, this is a clinical collaboration; however, viewed within the broader landscape of lung cancer therapy, it reflects the ongoing global pharmaceutical industry exploration of targeted therapy and immunotherapy combinations for EGFR-mutant, PD-L1-positive NSCLC.

New Drugs: On July 8, the CDE website showed that Haihe Biopharma’s marketing application for a new indication of aprometostat tablets was accepted.Based on clinical trial progress, the Insight database indicates its use for relapsed or refractory peripheral T-cell lymphoma (r/r PTCL) following prior second-line or later systemic therapy.

Performance Highlights, 2026H1HaiscoNet Profit Surges Over 500%.On July 8, Haisco Pharmaceutical released its 2026 semi-annual performance forecast. The net profit attributable to shareholders of the listed company reached RMB 790–870 million, representing a year-on-year increase of 513.25%–575.35%. The net profit after deducting non-recurring gains and losses amounted to RMB 690–770 million, a year-on-year increase of 377.1%–432.41%. According to the announcement, the reasons for the performance changes in the first half of the year include: 1) sustained rapid growth in domestic sales of innovative drugs; and 2) the signing of multiple out-licensing agreements, under which upfront payments and other fees were received during the reporting period, resulting in significant product licensing revenue.

China Stock Connect Innovative Drug ETF by China Universal (159570)Most popular stocks in the target index rose: Sino Biopharm surged over 5%, while Innovent Biologics, CSPC Pharmaceutical Group, and Akeso Biopharma each gained more than 2% (constituent stocks are shown for illustrative purposes only and do not constitute individual stock recommendations).

[Preview of 2026 Interim Results for Innovative Drugs]

Shenwan HongyuanSecurities firms note that, from a segmented sector perspective, the performance of innovative drugs and their industrial chain in Q2 2026 is expected to exceed expectations.R&D and licensing activities in the innovative drug sector remain robust. According to data from Insight (Dingxiang Yuan), the number of new drug clinical trial registrations with the Center for Drug Evaluation (CDE) in China reached 1,296 in the first half of 2026, a year-on-year increase of 36%. In the same period, Chinese companies completed 85 license-out pharmaceutical transactions, up 33% year on year, with a total disclosed value of $95.3 billion, representing a 41% year-on-year increase.

Notably, at the 2026 ASCO Annual Meeting, the number of Chinese studies selected reached a new high, with multiple breakthrough oncology drugs reporting positive data. The number of projects selected for key sessions also hit a record high, with 12 abstracts included in the Late-Breaking Abstracts (LBA) session.During the Plenary Session, the HARMONi-6 study became the first research achievement on an original innovative drug from China to be selected since the establishment of ASCO. Furthermore, as domestically developed novel drugs progressively enter the overseas commercialization phase, China’s innovative pharmaceutical industry is poised to enter a period of concentrated gains from international commercialization.

(Shenwan Hongyuan 20260706 "Preview of the 2026 Interim Report Performance of the Pharmaceutical and Biotechnology Industry")

Zheshang Securitiesstated that the recovery in domestic demand driven by the surge in domestic business development (BD) and overseas expansion opportunities are key drivers behind the continued improvement in fundamentals of the upstream sector in 2Q26, yet the earnings elasticity of individual stocks has further diverged.At the current stage, we are more optimistic about upstream niche sectors where demand recovery is transmitted earlier and elasticity is more pronounced, such as reagents, bioprocess consumables, and model animals. Furthermore, we favor upstream companies that are tied to high-quality domestic innovative pharmaceutical firms and promising pipelines, and whose products possess global competitive advantages.

(Zheshang Securities 2026707 "Pharmaceutical Industry 2026 Semi-Annual Report Performance Preview")

[Core Focus of the Innovative Drug Sector Shifts! Overseas Clinical Trials + Key Data + Commercialization Profit Realization]

Orient SecuritiesIt is pointed out that the realization of overseas expansion is approaching; wait patiently at low valuations for the wind to rise.Since 2026, the innovative drug sector has entered a phase of volatile consolidation following the rapid realization of market expectations, yet positive developments at the industry level continue to accumulate.The core focus of the current sector is shifting from “whether companies can go global or secure business development (BD) deals” to “whether overseas clinical trials, key data, and commercialization profits can be realized.”Global clinical and regulatory milestones for potential blockbuster drugs going overseas are becoming increasingly clear, with continuous breakthroughs in frontier areas such as cell therapy and AI-driven drug discovery. Profitability signals from innovative pharmaceutical companies are further solidified, alongside intensive share buybacks by industry leaders. In the short term, market sentiment, industry policies, and the pace of earnings realization may still lead to volatility;In the medium to long term, it is advisable to seize allocation opportunities in high-quality innovative pharmaceutical companies by focusing on themes such as the realization of overseas expansion, breakthroughs in frontier technologies, earnings resilience, and the revaluation of undervalued assets.：

1. Continued overseas expansion, with global commercialization imminent.

Current BD transactions remain highly active, but sector-wide rallies driven solely by deal values may be difficult to replicate.The focus of innovative drugs going global is shifting from “deal signing and execution” to “clinical and commercial realization.”Based on the portfolio of products already launched overseas, global clinical development for several potential blockbuster drugs is accelerating. Key milestones, including the release of critical overseas data and regulatory approvals, are approaching sequentially. Products with global competitiveness, clear overseas development timelines, and imminent core milestones are poised to become significant catalysts in the future.

2. Continuous breakthroughs in cutting-edge technologies are expected to lead the world.

Chinese Enterprises Are Gradually Achieving Breakthroughs in Cutting-Edge Fields Such as Cell Therapy and AI-Driven Drug Discovery:In vivo CAR-TContinuously validate technical feasibility, such as the excellent data achieved by Legend Biotech's dual-target in vivo CAR-T;Autologous CAR-TExpanding the Indication Boundary: CT041 from CARsgen Therapeutics Approved as the World’s First CAR-T Therapy for Solid Tumors, Demonstrating the Leading R&D Strength of Chinese Enterprises in the Field of Cell TherapyIn the Field of AI Drug Discovery, Insilico Medicine has entered into a major collaboration with Eli Lilly, advancing INS018_055 into Phase III clinical trials, marking the transition of AI-driven drug discovery from an “algorithm platform” to a source of high-quality innovative drug assets that are verifiable, tradable, and developable.

3. Profitability signals become clearer, while operational resilience is put to the test.

Core products of multiple innovative pharmaceutical companies have entered the harvest phase, with profitability continuously improving driven by national reimbursement drug list (NRDL) inclusion, commercial insurance coverage, and optimization of expense ratios.2026 is a critical window for assessing the profitability of innovative pharmaceutical companies. Some firms have already signaled positive momentum in their Q1 results, with mid-year earnings reports set to further validate the sustainability of this trend.Meanwhile, given factors such as the tightening of industry compliance regulations since May, innovative drug companies will also face tests in their compliant sales capabilities, the certainty of product volume ramp-up, and cost control abilities.Companies with ramping-up core products, mature commercialization systems, and strong operational resilience are poised to stand out.

4. Share Buyback Surge Signals Confidence; Undervalued Stock Price Becomes Consensus.

Recently, the pharmaceutical sector has witnessed a surge in share buybacks, with leading innovative drug companies such as Sino Biopharm and Akeso announcing substantial repurchase plans.Hengrui MedicineThe Company also continues to advance its share repurchase program.Most companies explicitly stated in their announcements that the current stock price is undervalued and expressed strong confidence in long-term development. Share buybacks alone are not the sole driver of short-term stock prices; however, against the backdrop of sustained fundamental improvement, approaching overseas milestones, and increasingly clear profitability signals,Helps reinforce market recognition of the long-term value of high-quality innovative drug assets; the valuation repair of the sector deserves attention.。

[Focus on China's Hard-Core Innovative Drug Power, the Representative of New Quality Productive Forces, Choose the Hang Seng Stock Connect Innovative Drug ETF by China Universal Asset Management (159570)]

China Stock Connect Innovative Drug ETF by China Universal Asset Management (159570): Its underlying index is 100% allocated to innovative drugs! As of July 6, the top ten constituents accounted for over 73% of the weighting, concentrating the essence of innovative drugs accessible via the China Stock Connect! The underlying assets are Hong Kong-listed stocks, allowing for T+0 trading!