Top 10 Mysteries of China's Pharmaceutical Industry in 2025
In the blink of an eye, 2025 is coming to an end.
This year, the innovative drug industry in China has finally shed the shackles of the “winter”. The total amount of external BD has reached a new high again, the IPO of pharmaceutical companies on the Hong Kong Stock Exchange has been booming, and the number of innovative drugs approved for marketing within the year has increased. A series of data outlines the strongest recovery curve in the past five years.
However, beneath the hustle and bustle, the industry is still shrouded in some key mysteries:
Where will the market of innovative drugs go in the future? Has the boom of pharmaceutical IPOs come to an end? Which track will the next blockbuster BD drug come from? When will those announced BD cooperations that have whetted the market's appetite be implemented?
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The answers to these questions will determine whether the innovative drug industry in 2026 will “fully recover” or “structurally differentiate”, and will reshape the industrial pattern in the next 3 - 5 years.
All of this remains to be revealed in 2026.
01
Where will the market of innovative drugs go?
The market of innovative drugs in 2025 was turbulent, but showed signs of weakness at the end of the year.
From the underlying logic, the current innovative drug industry has a foundation for continuous upward development, supported by solid facts.
First, the policy environment continues to improve. From the top - level design to the implementation of medical insurance negotiations and the implementation of commercial insurance, the pace of the entire industrial chain is accelerating.
Second, the fundamentals of enterprises are steadily rising. One innovative drug after another has been intensively approved and has officially entered the commercialization stage.
Of course, the above positive trends cannot conceal the reality that the valuations of some innovative pharmaceutical companies are high and the market expectations have reached their peak. Their high valuations ultimately need to be digested by subsequent performance.
The fluctuations in the market are always the result of the resonance of multiple factors. So, where will the market of innovative drugs go next? Will it continue the upward trend, turn downward for adjustment, or maintain a volatile and stable state to complete the key switch from beta general rise to alpha differentiation? Let's wait and see.
02
Has the IPO come to an end?
Compared with the market, the industry may pay more attention to IPOs. After all, IPOs are like a “lifesaving straw” for innovative pharmaceutical companies.
With the recovery of the market in 2025, many innovative pharmaceutical companies successfully listed on the Hong Kong Stock Exchange, and the financing scale even exceeded expectations. Even some companies that had failed to go public many times before successfully rang the bell this year and obtained crucial funds for R & D and operation.
However, the situation in the IPO market changed abruptly in December. Starting from Huaming Biotech, the 18A sector of the Hong Kong Stock Exchange fell into the curse of breaking the issue price and plummeting on the first day again.
This is not only affected by the cooling of market sentiment and the pressure on capital acceptance, but also closely related to the signal released by the regulatory authorities to “strictly control the quality of IPOs”. The Hong Kong Securities and Futures Commission and the Hong Kong Stock Exchange have jointly sent letters to sponsors, pointing out that the quality of some listing application documents is poor, and strengthening compliance requirements.
Some market insiders predict that if companies have not submitted their IPO applications to the Hong Kong Stock Exchange before the first quarter of 2026, they will basically miss this round of listing window period.
Will this prediction come true?
03
What will be the implementation effect of the commercial insurance innovative drug catalog?
For the Chinese pharmaceutical industry, the payment issue has always been the core concern of the market, especially the payment problem of high - priced innovative drugs. High - value therapies represented by domestic CAR - T have failed to truly open up the market for a long time.
The pharmaceutical industry has always been looking forward to whether the diversified payment system can truly activate the high - value innovative drug market. In 2025, there was finally a glimmer of hope for solving this problem.
In the same year, the National Healthcare Security Administration and the National Health Commission jointly issued the “Several Measures to Support the High - Quality Development of Innovative Drugs”, innovatively proposing to add a commercial insurance innovative drug catalog to make up for the functional limitations of the basic medical insurance in “ensuring basic needs” and open up diversified access paths for high - value innovative drugs.
Judging from the final implementation results, a total of 24 drugs participated in the price negotiation in this commercial insurance catalog, which is complementary to the basic medical insurance, and 19 of them successfully completed the negotiation. It includes 5 tumor treatment products such as CAR - T, which have been approved for marketing and are known as “sky - high price drugs”, as well as drugs for the treatment of major diseases such as neuroblastoma, Gaucher's disease, and Alzheimer's disease.
It is reported that the negotiated price reduction range of the drugs in this commercial insurance catalog is between 15% and 50%.
Can the implementation of the commercial insurance catalog truly promote the reasonable clinical application of high - price innovative drugs? The answer to this question will directly determine the incentive effect of the diversified payment system on the R & D of innovative drugs.
However, the final implementation effect could not be verified in 2025. The answer is expected to become clear in 2026.
04
What will be the next blockbuster BD drug?
The outbreak of the pharmaceutical market was directly ignited by blockbuster BD transactions.
The overseas cooperation of companies such as 3SBio and Innovent Biologics has followed one after another, directly promoting the re - evaluation of the value of Chinese innovative drug assets.
This trend has also driven many fund teams to study the direction of the next wave of BD and make layout and additional investments accordingly. From the underlying logic, the logic of continuous emergence of blockbuster BD transactions in domestic innovative drugs is still clear.
The overseas expansion boom in the past few years was not accidental, but an inevitable result of the comprehensive improvement of the engineer dividend, industrial chain dividend, and R & D ability (idea).
With the continuous iteration of technology, the Chinese innovative drug industrial chain will still remain at the core of the global stage. However, in which sub - field will the next blockbuster BD drug be born? Can blockbuster BD transactions drive the popularity of related stocks and even the entire industry to pick up again?
These questions await answers in 2026.
05
When will the announced BD be implemented?
Compared with betting on the birth field of the next blockbuster BD, the market also pays attention to whether the announced BD can be finally implemented.
In the past year, capital has become more and more enthusiastic about BD transactions. Some companies have begun to prospectively disclose the progress of announced BD for market value management and other needs. CSPC Pharmaceutical Group is a typical example.
On May 30, CSPC Pharmaceutical Group issued an announcement saying that many of its products, including EGFR ADC, are in the stage of BD cooperation negotiation, involving 3 potential transactions.
The announcement clearly mentioned that the total potential upfront payment, milestone payment, and commercialization share of each transaction is about $5 billion. One of the transactions has entered the late stage and is expected to be completed in June.
However, as of now, the BD cooperation announced by CSPC Pharmaceutical Group at that time has not been fully fulfilled. So, can CSPC Pharmaceutical Group finally fulfill the promise made in May? If the promise fails, what responsibilities and consequences does the company need to bear?
The answers to these questions also remain to be revealed in 2026.
06
Is the wave of BD lawsuits on the way?
The big wave of BD has shown us the accelerated rise of Chinese innovative drugs and their recognition in the global mainstream market. However, the development of innovative drugs has never been a smooth road. Behind the flowers and applause, thorns have quietly grown.
When the market focuses on the numerical game of transaction amounts, the legal risks behind are rarely discussed in depth, and few people pay attention to the risks of ongoing BD disputes.
The core is that R & D failure itself is not the greatest risk. Because the R & D of innovative drugs is a high - risk endeavor, and this risk will be magnified several times when combined with legal weapons.
To some extent, this is the case with the fraud scandal of Henry Pharmaceutical. Although it is still unknown whether Henry Pharmaceutical has committed fraud, it is certain that there will be more and more litigation cases caused by BD.
“Due to various BD terms of MNCs, once the results are not satisfactory, it may ultimately lead to arbitration,” a person in the industry warned.
And once this happens, most biotechs may not have the ability to bear it... So, is the wave of BD lawsuits on the way? Will more biotechs fall into the dilemma of BD lawsuits in 2026?
07
Where will Summit go?
For the Chinese pharmaceutical market, one of the most concerned topics is the future direction of Summit:
Will it be acquired?
What is the performance of the US clinical data of AK112?
When will it apply for marketing?
In 2025, none of these core questions were answered, and even more challenges emerged.
The scope of potential acquirers of Summit continues to shrink;
The results of the Harmoni trial have not been fully recognized by the market;
AK112, which was originally expected to apply for marketing in 2025, still hasn't received the news of the application.
These pending questions are expected to get final answers in 2026. And the crucial Harmoni - 3 trial, can it successfully prove its own value, or will it be falsified by the market? Let's wait and see.
08
Can domestic vaccines get out of the predicament?
Against the backdrop of the favorable market of innovative drugs, the domestic vaccine sector is the most desolate one.
The stock price of CanSino Biologics has dropped by nearly 50%, that of Zhifei Biological by nearly 30%, and that of Walvax Biotechnology by nearly 10%... Almost all stocks in the entire vaccine sector have declined, and it is hard to find a stock with positive returns.
The continuous weakness in the secondary market reflects the weakness of the industry's fundamentals. The serious homogenization of products, the fierce price war, the excessive dependence of enterprises on a single product, the obstruction of commercialization progress, and the sharp increase in profit pressure are a series of difficult problems weighing heavily on Chinese vaccine enterprises.
In 2026, will these problems be solved? Who can get out of the predicament first?
09
Will geopolitics still affect innovative drugs?
In 2025, the shadow of geopolitics continued to shroud domestic innovative drugs and their industrial chains. The full - chain control policy implemented during the Trump 2.0 era, including technology restrictions at the R & D end, strengthened FDA approval at the market end, and investment and financing restrictions at the capital end, formed a control barrier covering all links of the value chain, further increasing the uncertainty of the overseas expansion of domestic innovative drugs.
Although the direct impact of these controls has been temporarily alleviated, fundamentally, there are still concerns about the recurrence of geopolitical risks. The strategic orientation of the United States to promote the return of the pharmaceutical manufacturing industry and build a local supply chain remains unchanged. Its core goal of incentivizing local production through policies such as tariffs and strategic raw material reserves determines that the relevant control policies may be restarted or upgraded with the change of the situation.
In this context, the new cooperation model represented by NewCo has become the exploration direction of the industry, but the core questions still need to be answered: Can this model of promoting overseas expansion by establishing a new company through cooperation with overseas capital truly effectively avoid geopolitical risks? More importantly, how can enterprises ensure the control of core assets and the independent control of core technologies during the cooperation process?
Coupled with the current situation of intensified fluctuations in the global capital market, another practical problem is in front of enterprises: On the premise that the capital investment in overseas expansion needs to be continuous for a long time, how to balance this investment with short - term profit pressure and avoid the international layout from dragging down the enterprise's fundamentals?
These key questions related to the globalization process of domestic innovative drugs may get more answers in 2026.
10
Which biotech will be the next unexpected one?
In the past year, some star biotechs have made unexpected choices one after another.
For example, Lixian Biopharma was acquired by China National Pharmaceutical Group Corporation.
As an industry benchmark that has won two major authorizations from multinational giants in the ADC and bispecific antibody tracks and has a cumulative BD total of nearly $5 billion, the market generally expected that this star enterprise with abundant cash flow (still had a cash reserve of $450 million before the acquisition) would choose to go public independently. After all, the market of innovative drugs recovered in 2025, which was the window period for listing. However, in the end, Lixian Biopharma chose to become a wholly - owned subsidiary of CNPC with a total price of $951 million, giving up the path of independent listing.
Another example is the sudden dissolution of Tongrun Biotech.
At 9 a.m. on November 12, 2025, Tongrun Biotech held an all - staff meeting, and the management announced on the spot that the company would be dissolved and a liquidation team would be established. Just one year ago, this company just completed a blockbuster BD transaction that shocked the industry: It authorized its core asset, the CD3×CD19 bispecific antibody CN201, to Merck & Co. with an upfront payment of $700 million and a subsequent milestone payment of up to $600 million, totaling $1.3 billion. The upfront payment scale of this transaction is second only to the bispecific antibody ADC cooperation between BMS and BLT Bio - Pharm.
From a star target with tens of billions of authorizations to being acquired, from completing a billion - level BD to quickly liquidating and leaving the market, these extreme cases reflect the survival predicament of innovative drugs under the long - cycle and high - risk nature. How to balance the short - term return requirements of capital and the long - term R & D responsibilities of enterprises, and how to make a choice between “quick cash - out” and “continuous innovation” are becoming the core propositions that more and more biotech enterprises and investment institutions must face directly.
So, which biotech will be the next one to make an unexpected choice? What actions will it take, and what enlightenment and sighs will it leave us?
This article is from the WeChat official account “Amino Observation”. Author: Amino Jun. Republished by 36Kr with permission.