Liu Dan of Pivotal Bioventures: The global share of China's new drug BD will continue to increase, but it should shift from pursuing "amount and quantity" to "cooperation quality" | Medical Outlook 2026
After four years of "de - foaming" and "reshuffling", the medical and health track has finally turned the corner. A series of BD transactions, combined with the continuously rising profit expectations of innovative pharmaceutical companies and policy dividends such as the restart of the "Technology Enterprises Special Route" on the Hong Kong Stock Exchange and the fifth set of rules on the Science and Technology Innovation Board, have led the secondary market to kick off a new upward cycle.
In the whole year of 2025, a total of 39 medical and health companies successfully issued IPOs, with a total fundraising scale of 35.9 billion yuan. At the individual stock level, the annual increase of more than 100 companies exceeded 100%. The market values of 14 companies, including China Biopharmaceutical, Hengrui Medicine, BeiGene, Baili Tianheng, and Innovent Biologics, exceeded 100 billion yuan. The overall composition of the top 10 medical and health companies by market value has also shifted from traditional comprehensive pharmaceutical companies and CXOs to innovative drug concept companies.
Next, can the IPO dividend period of the Hong Kong stock market and the Science and Technology Innovation Board continue? How will the overseas expansion boom catalyzed by innovative drug BD change? At the beginning of 2026, 36Kr interviewed nine investors and entrepreneurs in the medical and health track and summarized the following ten trends and insights. For details, see 2026 Medical Outlook: Hundreds of Companies Queueing up for Hong Kong Stock Listings, Can the Medical Sector Create Another "Myth".
Meanwhile, to ensure the continuity of views, all the views of the interviewees are published separately here. In this article, Dr. Liu Dan, the Managing Partner of Pivotal bioVenture China (Biwo Capital), will share his observations with readers.
The following is the full text of Liu Dan's views:
Currently, multinational pharmaceutical companies are still highly enthusiastic about purchasing Chinese innovative drugs, and this enthusiasm is gradually spreading from the major field of tumor immunology to other therapeutic fields.
From the perspective of disease fields, there has been a lack of major new breakthroughs in the underlying mechanisms in the field of tumor immunology, and current research and development mainly focuses on iteration and improvement. In fields such as autoimmunity, metabolism, respiration, and neurology, due to their increasingly mature accumulation, potential directions such as TSLP and M1/M4 targets have emerged and are gradually being listed as key layout tracks.
From the perspective of new therapy platforms (Modality), with the successive approval of relevant drugs, the popularity of emerging fields such as small nucleic acids and cell therapy continues to rise; polypeptide and cyclic peptide drugs are gradually emerging. I once predicted that Chinese innovative drug BD would provide more than half of the project sources for the global market and become one of the leading forces in the international industrial chain. Especially in the field of cell therapy, overseas research breakthroughs are relatively limited, while many domestic companies are in the stage of reading out phase I or phase II clinical data.
At the same time, it should be noted that last year, the total amount of Chinese innovative drug BD transactions accounted for 50% of the global total. I believe this proportion will continue to rise, but the year - on - year growth rate will slow down. One reason is the influence of geopolitical industrial balance; the other is that the label of "high - quality and low - cost" for Chinese new drugs has been somewhat weakened.
At the 2026 JPM (J.P. Morgan Healthcare Conference), many multinational pharmaceutical companies and US - dollar funds mentioned that some Chinese pharmaceutical companies have begun to have unrealistic "high - price expectations" for transaction valuations relatively aggressively. In the past few years, the overall valuation of Chinese new drug assets was in a reasonable range of "good cost - performance". If they deliberately pursue increasingly high "sky - high prices", it may damage the global reputation of Chinese Biotechs and is not conducive to the formation of a benign ecological cycle between the Chinese and American pharmaceutical industries.
In addition, multinational pharmaceutical companies have significantly different payment willingness for different types of assets. For example, PD - 1/VEGF are recognized as the second - generation cornerstone drugs for tumor immunology and have previously fetched high - premium acquisitions. However, the number of such benchmark products is scarce, and most target combinations are exploratory for pipeline supplementation, with relatively limited value space. I believe that in the future, the amount of most transactions will be concentrated in the range of 500 million - 2 billion US dollars.
For our Pivotal Biwo Capital, in 2026, we will still continue our science and data - oriented style when selecting investment targets, taking pre - clinical and clinical data as the core decision - making basis. The key directions include:
In the oncology field, targets such as CTLA - 4 were once highly anticipated but have not performed as well as expected in the past. I believe that based on the R & D progress of its new designs and new programs, it is expected to bring substantial breakthroughs to this target and reshape the pattern of tumor immunotherapy. For example, the recent overseas transaction of HBM's CTLA - A antibody at 1.2 billion US dollars fully demonstrates the market's attention to this track;
In the central nervous system (CNS) field, we are closely monitoring the upcoming key clinical data, especially for diseases with a high degree of unmet clinical needs such as epilepsy, Parkinson's disease, and depression;
In the metabolic field, the value of the GLP - 1 target goes far beyond weight loss. Future R & D iterations will focus on two dimensions. One is dual - target or multi - target to overcome the limitations such as side effects of existing single - target drugs; the other is to explore its therapeutic potential in indications such as metabolic - related liver and kidney diseases.
In addition, the field of AI - driven drug discovery is also developing very rapidly. Some AI - assisted designed molecules have entered phase III clinical trials, which have high expectations from the industry. However, current AI technology cannot completely replace the core roles of medicinal chemists and biologists and is far from the ideal state of "hitting the target every time". Overall, recent breakthroughs in this field are mainly reflected in the optimization and adaptation of existing models rather than the innovation of underlying methods.
As an international US - dollar life - science fund, we adhere to a prudent valuation principle and will focus on the medium - and long - term actual value of pipeline assets rather than just the technology platform.
In the secondary market, we have always been actively participating in the international placement of new drug companies on the Hong Kong stock market. At the end of 2025, we observed that several companies on the Hong Kong stock market had their share prices fall below the issue price, and the market was briefly cold. However, the performance of Insilico Medicine, RiboBio, etc. at the beginning of this year makes us believe that it was just a regular low - frequency trading period at the end of the year rather than a systematic correction of the Hong Kong stock market. Subsequently, it will tend to recover in waves and evolve in a differentiated manner.
We are relatively optimistic about the IPO issuance on the Hong Kong stock market in 2026, and the market will continue to rise amidst slow setbacks. Of course, the stock market is uncertain, so many companies will consider conducting Crossover round financing to hedge against the issuance window and market adjustments. There are also signs of tightened policies and a orientation to support high - quality companies to go public.