Western Securities: The innovative drug market will change to “data is king” in 2026, and we look forward to reading and catalyzing global multi-center clinical trial data

The Zhitong Finance App learned that Western Securities released a research report saying that looking ahead to 2026, the innovative drug market will change from “BD is king” to “data is king.” BD's down payment and overall scale are certainly important, but investing in innovative drugs is by no means a simple game of the BD incident; it is an increase in the global market share of Chinese innovative drugs. This process takes a long time. Among them, BD is only the first step at the beginning. Whether it can actually achieve a significant increase in corporate revenue still needs to go through multiple clinical data verification and major tests of commercialization capabilities. In clinical data, data from global multi-center clinical trials revealed that 2026 will be the most anticipated catalyst for 2026. The bank believes that 2026 will still be an exciting year with innovative drug data, and it is also a more attractive step to invest in innovative drugs.

The main views of Western Securities are as follows:

In 2025, the pharmaceutical industry ushered in a reversal of the market as scheduled. Led by innovative drugs, CXO and the upstream industry chain benefited, and the increase extended to all other secondary sectors was quite impressive. Among them, the performance of innovative drugs in Hong Kong stocks was the most prominent. At its peak, it has risen by more than 80% since the beginning of the year. In the first half of the year, it was one of the sectors that received the most attention in the market. The core catalyst for innovative drugs comes from the continuous implementation of the industry logic of policy support+BD going overseas. Transactions with initial payments of more than 1 billion US dollars, such as Sansheng Pharmaceutical and Cinda Biotech, have been implemented one after another, verifying the international competitiveness of China's innovative drugs.

At the policy level, the payment side, which is under the most pressure, has ushered in important reforms. On October 30, 2025, the commercial insurance innovative drug catalogue price negotiations, which began at the same time as the annual health insurance negotiations, officially kicked off the “dual track parallel” of China's health insurance. This change stems from a sharp contradiction between basic health insurance and high-value innovative drugs — seven years of negotiations allowed 835 drugs to be included in medical insurance, and sky-high prices of drugs such as noxinacin were drastically reduced to benefit people's livelihood, but innovative drugs over one million, such as CAR-T therapy, were still difficult to get into medical insurance. The change of name from the medical insurance category C category to the commercial insurance innovative drug catalogue in 2025 is a key step in using system design to guide commercial insurance to cover such coverage gaps.

On the BD side, the number of Chinese pharmaceutical companies' license-outs in 2025 showed a rapid growth trend. As of November 13, the total amount of down payments reached US$6.298 billion, an increase of 53% over the previous year, and the total transaction amount reached US$118.862 billion, with a year-on-year growth rate of 125%. The number of transactions was 156, and the year-on-year growth rate was 22%. The growth rate structure indicates that the down payment and total amount for individual projects have increased dramatically. Drugs driven by new technologies such as dual antibodies and ADC account for a high proportion of BD transactions.

Risk warning: R&D progress falls short of expectations, US interest rate cuts fall short of expectations, competition intensifies, etc.