Guosheng Securities: China's pharmaceutical industry has the highest innovation efficiency in the world, seizing opportunities for the innovation industry chain and domestic and foreign demand to resonate with AI

The Zhitong Finance App learned that Guosheng Securities released a research report saying that China accounts for about 30% of the world's new drugs, ranking second in the world, and the innovation efficiency of the Chinese pharmaceutical industry is among the highest in the world. On the R&D side, the number of clinical trials with new drugs is increasing year by year. In 2025, the total number of clinical trials surpassed 5,000 for the first time, reaching a record high. Demand for AI-driven drug development (AIDD) is growing rapidly, and customers are shifting from single procurement to end-to-end solutions to improve stickiness and revenue sustainability. With the gradual implementation of industry policies this year and the continued clearance of corporate inventories, the fourth quarter results are expected to show a gradual recovery trend.

Guosheng Securities's main views are as follows:

The innovation efficiency of China's pharmaceutical industry is among the highest in the world, and the total amount of overseas travel has reached a record high

China accounts for about 30% of the world's new drugs, ranking second in the world, and the innovation efficiency of the Chinese pharmaceutical industry is among the highest in the world. The total amount of overseas transactions from January to September 2026 has exceeded the full year of 2024 (US$56.676 billion). In the top 10 global transactions from January to September 2026, Chinese companies occupied nine seats. Companies such as CSPC Group, Ruibo Biotech, and Cinda Biotech are all sold as a “platform+pipeline”, reflecting the recognition of Chinese pharmaceutical companies' platform-based R&D capabilities.

On the R&D side, the number of new drug clinical trials is increasing year by year. In 2025, the total number of clinical trials surpassed 5,000 for the first time, reaching a record high. Among them, clinical trials of new drugs accounted for 57.5%. Innovative drug development continues to accelerate: 1) IO 2.0 has expanded from a single PD-1/VEGF dual antibody circuit to a multi-competitive pattern of “double antibody+cytokine fusion protein+triple antibody”; 2) ADC and IO combination therapy continues to expand, and clinical boundaries continue to expand; 3) RAS, the “unformable drug” target, is entering a period of accelerated development. Innovative treatments such as micronucleic acid, CAR-T, and mRNA vaccines have also had many impressive results.

AI Empowerment Brings Innovative Drug Industry Chain R&D to Accelerate Leap Forward

Demand for AI-driven drug development (AIDD) is growing rapidly, and customers are shifting from single procurement to end-to-end solutions to improve stickiness and revenue sustainability. AI drug discovery is nearing an important inflection point in the development of the industry. The Anthropic report shows that drug development bottlenecks are scattered throughout the chain, and embedding AI deeply into the end-to-end process is the key to unlocking value and increasing the stickiness of cooperation.

Some newly-needed medical sectors showed a month-on-month improvement trend, which is expected to resonate with performance and valuation.

Some medical device companies have reached an inflection point in their performance. The net profit growth rate of companies such as New Industries, Antu Biotech, and Sannuo Biotech all exceeded 20% in the third quarter, and their month-on-month performance also increased. With the gradual implementation of industry policies this year and the continued clearance of corporate inventories, the fourth quarter results are expected to show a gradual recovery trend.

Related targets:

1) Innovative drugs: Kangfang Biology, Hanson Pharmaceuticals, CSP Pharmaceuticals, Colun Botai, Cinda Biotech, Sansheng Pharmaceuticals, Hengrui Pharmaceuticals, China Biopharmaceuticals, Baili Tianheng, Allis, Junshi Biotech, Deqi Pharmaceuticals, Hebo Pharmaceuticals, and Zengsheng Pharmaceuticals;

2) CXO: Medicinal Kangde, Kanglong Chemical, Medicinal Biotech, and Pharmacoming Joint;

3) AI Pharmaceuticals: Insili Intelligence, Kingsley Biotechnology, Jingtai Holdings, Bepsis, Jietai Technology, Hualan Co., Ltd.

4) Non-pharmaceutical sector: Mindray Healthcare, Lianying Healthcare, New Industries, Huitai Healthcare, Nanwei Medicine, Kaili Healthcare, Yuyue Healthcare, and Kefu Healthcare;

Risk warning: 1) Negative pharmaceutical policies exceed expectations; 2) industry growth falls short of expectations; 3) industry competition increases risks; 4) overseas expansion falls short of expectations; 5) BD transactions fall short of expected risks.