From "R&D Accumulation" to "Value Realization": Innovative Drugs May Enter a New Cycle

On March 16, the world’s first domestically developed original research drug, Tlebewe Tanta monoclonal antibody injection, was prescribed. This drug is the first antibody-based medication in the field of viral hepatitis worldwide, filling a gap in the industry.

Some analysts say that in recent years, with the rapid development of AI intelligent agents, modern biotechnology, and interdisciplinary integration, innovative drug development has achieved multiple breakthroughs. China’s innovative pharmaceutical industry may be shifting from “following innovation” to “original innovation.” In this context, how should we view the long-term investment value of innovative drugs? (Reference materials: Beijing Daily “First Global Launch of Major Innovative Drug in Beijing,” 2026.3.17; Xinhua Finance “Innovative Drugs: From ‘Research and Development Accumulation’ to ‘Commercial Realization’,” 2026.3.16)

Industry Trend: Innovative Drugs Enter a New Cycle of Value Realization

Starting from the beginning of the 14th Five-Year Plan, China’s innovative drug industry is gradually moving from “catch-up” to “leading,” with accelerated synergy between R&D breakthroughs and commercial realization opening up broad prospects for high-quality industry development. (Reference: Xinhua Finance “Innovative Drugs: From ‘Research and Development Accumulation’ to ‘Commercial Realization’,” 2026.3.16)

 AI + Pharmaceuticals Enter the “Industrial Effectiveness Verification Period”

Currently, domestic AI + pharmaceuticals are transitioning from “concept” to the “industrial effectiveness verification period.” AI’s penetration into target discovery, molecular generation, clinical design, and other stages of drug R&D continues to deepen, gradually becoming an essential infrastructure for innovative drug development.

A recent industry report indicates that traditional drug R&D requires synthesizing and testing 3,000-5,000 compounds over 40-50 months to identify preclinical candidates, while AI technology can reduce the number of tested molecules to under 200, shortening the R&D cycle to 12-18 months. Industry financing and collaboration are rebounding, and AI-involved drug pipelines are accelerating into clinical trials. Leading domestic AI pharmaceutical companies demonstrate strong platform capabilities and commercialization potential. (Reference: Guotai Haitong Securities “Progress in AI Drug Development, Accelerated Global Pharmaceutical Company Deployment,” 2026.3.10)

 Accelerated Conversion of R&D Results and Release of Commercial Potential

Since 2026, the trend of domestic innovative drugs going abroad continues.

According to Pharma Magic, as of March 6, 2026, China’s innovative drug outbound BD transactions totaled $56.8 billion in total deal value, with an upfront payment of $3.3 billion. Compared to previous years, the total deal value in the first two months of this year has already exceeded the full-year 2024 level, accounting for 41% of the total for 2025; upfront payments reached 46% of 2025’s total, indicating a significant acceleration in commercialization. (Reference: Dongwu Securities “Pharmaceutical and Biotech Industry Weekly Tracking: Two Sessions List Innovative Drugs as Emerging Pillar Industry, BD Outbound Accelerates in 2026,” 2026.3.8)

Policy Support: Focus on “Independent Innovation + Policy Benefits” Dual Mainlines

This year’s government work report included biomedicine for the first time as an emerging pillar industry. Meanwhile, during the Two Sessions, many representatives and committee members proposed suggestions to address industry bottlenecks, including strengthening basic research, removing barriers for national talk drugs to enter hospitals, establishing multi-channel payment systems for innovative drugs, and ensuring returns on corporate innovation.

Some analysts believe that China’s policy orientation encouraging innovation has never changed. The large patient population and strong demand for precision medicine are core reasons multinational companies have long rooted in the Chinese market and are also vital supports for the biopharmaceutical industry to navigate industry adjustment periods.

(Reference: 21st Century Business Herald “Positioned as an Emerging Pillar Industry, How Will Biomedicine Break Through the Transformation and Overcome Challenges?” 2026.3.16)

Institutions believe that under the resonance of upward industry trends and increased policy support, high-quality pharmaceutical assets with differentiated innovation capabilities and sustained realization potential remain key areas to watch. Specifically, focus on the two main directions: “independent innovation” and “policy benefits.” (Reference: Great Wall Securities “Annual Report Disclosure Period Has Arrived, Domestic Policy Continues to Signal Positive Developments,” 2026.3.16)

For investors optimistic about the long-term prospects of China’s innovative drugs, relevant ETFs under Yinhua Fund include:

 Hong Kong Stock Innovative Drug ETF (Code: 159567) and its linked funds (Class A: 023929; Class C: 023930)

 Innovative Drug ETF (Code: 159992) and its linked funds (Class A: 012781; Class C: 012782)

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