Global Times｜China's innovative drug companies rallying on stock market, driven by strength in global market penetration
The innovative drugs in China has witnessed a robust growing trend, dazzling equity market investors as it shines brightly in both the A-share and Hong Kong stock markets.
In the Hong Kong stock market, the Hang Seng Innovation Drug Index staged an impressive rally, surging by as much as 4.7 percent during Thursday's intraday trading, a move that has analysts from brokerage firms suggesting a revaluation of innovation drugs is underway.
Leading the rallying, Sino Biopharmaceutical Limited soared by 17 percent at one point. Meanwhile, WuXi Biologics, Shandong Boan Biotechnology Co, Grand Pharmaceutical Group, and Zai Lab Limited also reported strong performances, with their shares climbing between 4.1 percent and 10.1 percent.
On the Chinese mainland's A-share market, the pharmaceutical and biological sector showed significant strength during the morning trading session on Thursday. By 9:49 am, stocks like Kanghui Pharmaceutical Co and Yixintang Pharmaceutical Co had hit the daily limit. The surge extends the momentum on Wednesday where multiple pharmaceutical stocks experienced consecutive daily limit increases, which indicates the sector's bullish momentum.
According to a research note from BOCI Securities, the combination of the rapid advancements in overseas expansion and strong policy support is catalyzing the revaluation of innovation drugs.
At the policy level, there is a clear shift towards protecting the profit margins of innovative pharmaceutical companies. Additionally, the National Medical Products Administration has significantly enhanced the efficiency of its review and approval processes, facilitating a smoother path for new drugs to enter the market, according to BOCI Securities.
And, Industrial Securities said that from January to May, the total market capitalization of license-out transactions by Chinese innovative drug companies reached a staggering $45.5 billion, surpassing the total transaction value during the first half of 2024. This explosion in overseas licensing deals underscores the growing global recognition and acceptance of Chinese innovation drugs.