Whether it is the approval of new drugs, overseas exports or overall profitability, the innovative drug sector ushered in explosive growth. Innovative drug ETF Cathay (517110) and GEM pharmaceutical ETF Cathay (159377) both continued to lead the market, and today the two ETFs rose by more than 4%.
Innovative drug ETF Cathay (517110) hit a new high of 0.668 yuan this year; GEM pharmaceutical ETF Cathay (159377) also hit a new high of 1.132 yuan since its listing this year.
Innovative drug ETF Cathay (517110), Innovent Biologics rose by more than 8%; WuXi Biologics, Kangfang Bio, Kelun Biologics, etc. rose by more than 5%; BeiJie Biologics, Kelun Pharmaceuticals, etc. followed suit.
From the news, the innovative drug sector has ushered in multiple positive news.
A total of 73 research data from China were selected, setting the highest in history, of which 32 were more concerned oral reports and 11 were the most important Late-Breaking Abstract (the latest breakthrough abstract).
As the sector with the highest technological content in the pharmaceutical track, in 2025, the pharmaceutical field ushered in explosive growth in the approval of new drugs. According to statistics from the Moen Pharmaceutical Database, as of May 29, the number of new drugs approved for marketing in China has risen to 54, including 34 innovative drugs made in China and 20 imported new drugs. It is worth noting that the number of domestically produced new drugs approved in 2024 was only 37. In just half a year this year, the number of domestically produced innovative drugs approved has approached the level of last year's entire year.
Huafu Securities statistics From 2020 to 2024, the total transaction amount of innovative drug BD increased from US$9.2 billion to US$52.3 billion, and the down payment amount increased from US$600 million to US$4.1 billion. Since the beginning of 2025, the total amount of innovative drugs overseas transactions has reached US$45.5 billion, and the down payment has reached US$2.2 billion, which is expected to hit a new high for the whole year.
From the fundamentals of the domestic innovative drug industry, the overall profitability of the domestic innovative drug industry has been significantly improved. According to statistics, among the 98 A-share innovative drug concept companies, 62 disclosed their 2024 annual reports, of which 34 achieved year-on-year growth in net profit attributable to shareholders. The innovative drug sector performed well in 2024 and the first quarter of 2025, driving the continued prosperity of the pharmaceutical sector. Although the overall revenue of the pharmaceutical sector fell by 1.5% year-on-year in 2024, the performance of innovative drugs was particularly outstanding, driving the recovery of the pharmaceutical sector.
From the policy perspective, since the end of last year, favorable policies for the innovative drug sector have been released one after another, and medical insurance accounts have begun to cover more innovative drug products. China's innovative drugs have shifted from "medical insurance dependence" to "commercial insurance + medical insurance dual-wheel drive". The significant improvement on the payment side has brought long-term sustainable benefits to the innovative drug sector.
Innovative drug plates exploded, driving outstanding performance in the secondary market. The innovative drug ETF Cathay (517110) has entered an upward channel since April 9, with an increase of more than 26% in two months; the ChiNext pharmaceutical ETF Cathay (159377) has also continued to rise since its listing on April 15, with the ring rising by more than 11% during the trading session on June 9.
Cathay Haitong released a research report saying that the performance of various sub-sectors of pharmaceuticals in 2024 and 2025Q1 has differentiated, and innovative drugs have driven the continued upward prosperity of the pharmaceutical sector. Many sub-sectors are expected to usher in a turning point, and the main lines such as innovative drugs are continued to be recommended. We continue to recommend innovative drugs with upward economic conditions and CXOs that gradually reflect the turning point of profit growth. We are also optimistic about the domestic replacement of innovative devices and the recovery of consumer medical care.
Relevant institutions pointed out that 2025 will be the first year of explosive growth of China's innovative drug industry. Three core factors drive the industry into an upward cycle of at least three years: First, the heavy BD transactions of innovative drugs continue to be implemented, and the down payments have repeatedly hit new highs; Second, leading companies will turn losses into losses in 2025, and the turning point of industry profits has emerged; Third, the domestic innovative drug policy environment continues to be optimized. Institutions estimate that the scale of China's innovative drug market will exceed 2 trillion yuan in 2030, with an annual compound growth rate of 24.1%.
Innovative drug BD is full of climaxes. With the support of multiple factors such as policy and financial support, talent return and engineer dividends, China's innovative drug industry is in a stage of booming development. Interested investors can continue to pay attention to the investment opportunities of innovative drug ETF Cathay (517110) and GEM pharmaceutical ETF Cathay (159377), and enjoy the opportunities brought by the explosive growth of innovative drugs with one click.
(The institutional view of this article comes from licensed securities institutions and does not constitute any investment advice. The market is risky, so investment should be cautious)
