Chinese innovative drug companies have experienced a notable surge in both A-share and Hong Kong stock markets, capturing widespread investor interest and signaling strong sector momentum.
On Thursday, the Hang Seng Innovative Drug Index in Hong Kong climbed as much as 4.7% during intraday trading. Brokerage analysts have pointed to a reassessment of valuations for innovative drug firms, driven by accelerating growth prospects and increased market confidence. Leading this surge was China Biologic Products, whose stock soared by up to 17%. Other prominent companies including WuXi Biologics, Betta Pharmaceuticals, Yunda Medical, and Zai Lab also recorded significant gains, ranging from 4.1% to 10.1%. Meanwhile, on the mainland A-share market, pharmaceutical and biotechnology stocks continued their upward trajectory in Thursday’s morning session. Notably, companies such as Kanghui Pharmaceutical and Yixintang reached their daily price limits, reflecting strong bullish sentiment that had already taken hold since Wednesday.
According to a research report from BOC International Securities, two main factors are fueling this positive reassessment: rapid overseas expansion and robust government policy support. The policy environment has shifted to more actively protect the profit margins of innovative drug manufacturers, signaling a strategic emphasis on sustaining industry growth and innovation. Additionally, the National Medical Products Administration (NMPA) has markedly enhanced its drug approval process, reducing bureaucratic delays and facilitating quicker market access for new pharmaceutical products.
Further underscoring the sector’s dynamism, Industrial Securities reported that licensing deals executed by Chinese innovative drug firms from January through May totaled an impressive $45.5 billion in market value, already exceeding the total deal value for the first half of 2024. This surge in overseas licensing activity highlights increasing global acceptance and recognition of Chinese pharmaceutical innovation, positioning the country’s biotech sector as a rising force on the international stage.
Industry experts believe that the combination of these factors—policy support, streamlined regulatory approvals, and global market expansion—is likely to sustain investor enthusiasm and drive continued growth in China’s innovative drug sector throughout 2025 and beyond.
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