Deliverable innovative drugs are standing in the "best era"
The innovative drug track has officially entered the stage of "performance delivery first".
In the first three quarters of 2026 (hereinafter referred to as "the reporting period"), domestic innovative drugs have witnessed changes in all aspects. In terms of performance, a pattern has taken shape where some mature products achieve volume growth to underpin revenue, and proceeds from BD (out-licensing transactions of products) are received to improve financial statements. In terms of capital operation, most enterprises have taken a defensive stance, as the valuation logic is changing. In terms of R&D, multiple innovative products have achieved breakthroughs, paired with the latest national medical insurance policies.
For high-potential innovative pharmaceutical enterprises with strong capabilities, this is the best of times.
Commercialized products + continuous BD performance delivery
During the reporting period, the financial performance landscape of innovative pharmaceutical enterprises shows obvious differentiation, and the profit sources can be clearly divided into two categories.
The first category relies on the sustained volume growth of mature innovative drugs in hospitals to generate stable and sustainable sales revenue. The second category relies on out-licensing of product pipelines, using upfront payments and one-off clinical milestone payments from BD transactions to boost current-period profits. These two profit paths are essentially an inevitable choice for enterprises at different stages of development.
As a representative of performance delivery in the Biotech camp, I-Mab (688428.SH) recorded a revenue of RMB 2.099 billion during the reporting period, representing a year-on-year increase of 88.21%. Its attributable net profit and non-recurring profit and loss deducted net profit reached RMB 656 million and RMB 586 million respectively, maintaining a sustained profitable state. Among them, drug sales amounted to RMB 1.449 billion, up 41.47% year on year. The core product orelabrutinib continued to see volume growth, while tanezumab and zletretinib contributed new sales revenue.
Meanwhile, I-Mab completed subsequent milestone deliveries under the licensing agreement with Zenas, bringing in USD 25 million in cash and 2 million ordinary shares of Zenas. This combination of "commercialized products + continuous BD performance delivery" enabled the net cash flow generated from operating activities of the enterprise to reach RMB 220 million during the reporting period, turning from negative to positive year on year.
Similarly, during the reporting period, Junshi Biosciences (688180.SH) recorded a revenue of RMB 2.513 billion, up 39.18% year on year. The core driving force for growth came from the domestic sales volume growth of its PD-1 drug, with sales revenue reaching RMB 1.964 billion, a year-on-year increase of 31%.
It can be seen that the profit base of these enterprises still comes from drug sales. A common feature is that the patient scale of each core drug is large enough to support sales of more than RMB 1 billion. In contrast, more enterprises in the market do not yet have relevant conditions, so they need to highly rely on heavyweight BD transactions at this stage.
For example, Dizal Pharmaceutical (688192.SH) achieved profitability for the first time during the reporting period, with attributable net profit reaching RMB 3.634 billion. During this period, the enterprise licensed the global rights of savolitinib to AstraZeneca, and received an upfront payment of USD 600 million.
In other words, the booming BD transactions have given a big boost to many innovative pharmaceutical enterprises. But the market has also noticed that enterprises with deeper foundations have adopted longer-term strategies.
During the reporting period, Akeso (09926.HK) reached ecological cooperation of joint development and equity binding with Summit and AstraZeneca. AstraZeneca directly made a strategic investment in Summit, and the three parties jointly promoted the clinical development and commercialization planning of relevant bispecific antibody projects.
This cooperation model is completely different from License-out, with no one-off upfront payment recorded, so its short-term boost to performance is very limited. But in the long run, subsequent clinical milestones and sales revenue sharing can not only reduce the cash consumption of the enterprise's own R&D, but also benefit the financing valuation in the future.
Of course, those innovative pharmaceutical enterprises that have long achieved a closed commercial loop in the innovative drug sector continue to see volume growth. During the reporting period, Hengrui Medicine (600276.SH) recorded innovative drug revenue of RMB 13.871 billion, up 17.05% year on year, and its proportion in total drug sales revenue rose to 64.59%. In the same period, Innovent Biologics (01801.HK) recorded product revenue of RMB 12.901 billion, up about 51% year on year.
Defensive stance in capital operation
From the moment innovative pharmaceutical enterprises step into the capital market, capital operation is destined to be a permanent topic. During the reporting period, most enterprises in the track have taken a defensive stance, which is essentially the re-pricing of the enterprises' performance delivery capabilities by investors.
Among them, private placement remains the most important financing tool for innovative pharmaceutical enterprises, but the investment preference of institutions has shifted significantly. During this period, Aidi Pharmaceutical (688488.SH) voluntarily lowered the upper limit of its fundraising scale, removed the originally planned overseas M&A projects, and all the raised funds were refocused on the R&D of its core HIV pipeline.
While Frontier Biotech (688221.SH), a peer in the same track, successfully completed a private placement of over RMB 1.5 billion, with all the raised funds invested in the global clinical trials of the long-acting new HIV drug FB1002 and the construction of production and industrialization base.
These changes are the epitome of the current financing situation of innovative pharmaceutical enterprises. Market funds no longer support cross-border M&A and pipeline expansion layout, and funds are only willing to invest in the most mature and highest-certainty core assets. That is to say, the financing channels for pure early-stage pipelines that only have early molecules, no commercialized products, and no signed BD contracts in the market are almost narrowed, and many projects have been put on hold or reduced their clinical investment.
Therefore, against the background of rising difficulty in obtaining financing support, "deleveraging divestment and focusing on main business" has become the operation choice of many enterprises. The multi-pipeline layout model that burns cash is unsustainable, and enterprises have begun to actively make asset trade-offs, concentrating resources on tracks with higher success rates and clearer commercialization prospects.
For example, Junshi Biosciences transferred the equity of TopAlliance Biosciences, which is mainly responsible for overseas operations and has no hope of becoming a new growth curve in the short term. After the divestment, Junshi Biosciences can concentrate cash and R&D manpower on advantageous platforms such as monoclonal antibodies, bispecific antibodies and ADCs that already have clinical or commercialization progress.
Similarly, Fosun Pharma (600196.SH) also carried out asset sorting, disposing of some equity-held startup targets at the right time within the internal authorization framework, and further tilting resources to mature platforms such as Henlius (02696.HK) and Fosun Pharmaceutical Industrial.
In this context, the popular "A+H" listing in 2025 has now become one of the few "offensive" breakthrough paths for innovative pharmaceutical enterprises, and many enterprises with outstanding pipeline highlights have chosen to go for secondary listing in Hong Kong.
During this period, SinoCell (688520.SH) and Dizal Pharmaceutical respectively submitted prospectus materials to the Hong Kong Stock Exchange. SinoCell focuses on the recombinant protein and vaccine track, hoping to connect with global biomedical industry capital through the Hong Kong stock market. Dizal Pharmaceutical had previous Hong Kong IPO experience, and this renewed attempt reflects that the Hong Kong Stock Exchange's review places more emphasis on the delivery of pipeline clinical data and commercialization expectations, rather than pure early molecular layout.
Of course, not all enterprises have taken a defensive stance. During the reporting period, China Biopharma (01177.HK) increased its shareholding in Chia Tai Tianqing, further consolidating control. As a leading domestic pharmaceutical enterprise integrating generic drugs and innovative R&D, Chia Tai Tianqing has a mature national commercial sales network, strong hospital access and academic promotion capabilities. Therefore, the enterprise's increase in shareholding may strengthen the commercial synergy of generic drugs, improved new drugs and innovative drugs within the group.
At the end of the day, the underlying logic of these capital actions is highly consistent: investors are no longer willing to pay for pure pipeline stories, and most enterprises that can deliver results already have commercialized products or signed BD contracts.
Performance delivery first
BD proceeds and capital transactions are mostly phased variables. The advancement of pipeline clinical trials, the approval and launch of new drugs, and the pace of medical insurance access determine the long-term revenue curve of pharmaceutical enterprises. During the reporting period, the domestic innovative drug industry ushered in a dense cycle of clinical and registration, coupled with the adjustment of medical insurance negotiation rules, the commercialization path of innovative drugs has been reshaped.
First, heavyweight new drugs are approved intensively. During this period, Hengrui Medicine successively obtained marketing authorization for three Class 1 new drugs, covering three differentiated tracks: metabolism, endocrinology, and hematological rare diseases.
Among them, the new-generation URAT1 inhibitor Lvzuonuolei Sodium Tablets targets gout and hyperuricemia, and has differentiated advantages in renal safety and administration frequency compared with similar overseas products; the long-acting insulin analog Shudi Insulin focuses on stable blood sugar control and reducing the risk of hypoglycemia; the complement inhibitor Likangkepan Fumarate Capsules is used for rare blood diseases such as paroxysmal nocturnal hemoglobinuria (PNH), filling the gap of domestic independent complement-targeted drugs.
Second, global clinical and overseas registration milestones are delivered intensively. The relevant indication of toripalimab from Junshi Biosciences simultaneously reached the dual primary endpoints of EFS (Event-Free Survival) and MPR (Major Pathological Response), which is a milestone data breakthrough for domestic PD-1. It can not only apply for new indications in China, but also reserve core evidence for subsequent overseas registration applications.
Meanwhile, the tislelizumab combined chemotherapy regimen of BeiGene (688235.SH) was approved by the FDA, marking that domestic PD-1 has once again obtained a major indication for mainstream solid tumors in the United States following Brukinsa.
This batch of clinical results sends a clear signal: leading domestic innovative drugs no longer only rely on the single domestic market. Through simultaneous layout of domestic and overseas applications via global multi-center clinical trials, the reliance on the domestic national medical insurance catalog can be reduced.
When it comes to medical insurance, 2026 has witnessed multiple rule reforms, which can be said to reshape the pricing and volume growth logic of innovative drug commercialization.
On the one hand, this year's national medical insurance negotiation has added a pre-declaration mechanism for the first time, relaxing the declaration time window, so that new drugs with late launch time that could not catch up with previous years' declaration nodes also have the opportunity to be included in the negotiation of the current year. On the other hand, the national medical insurance catalog is linked with inclusive commercial insurance and city-based inclusive health insurance at the same time. Some high-priced innovative drugs can share the payment pressure through commercial insurance, alleviating the pressure of pure medical insurance price reduction.
In the final analysis, looking at all listed companies during the reporting period, the innovative drug industry has gone through a complete valuation cycle. Enterprises with scarce platform pipelines and sustainable BD monetization capabilities will gradually attract the favor of external institutions and the capital market. The investment logic of innovative drugs has officially entered the stage of "performance delivery first".
(This article is for reference only and does not constitute investment advice. The market is risky, and investment should be cautious.)
This article is from the WeChat official account "Investor Network - Thinking Finance", author: Cai Jun, published with authorization from 36Kr.