The main theme of pharmaceutical investment for 2026 emerges

By Yi Yao

The PD-1/VEGF bispecific antibody track has recently witnessed a dramatic capital story with contrasting fortunes: Axion returned the PD-L1/VEGF bispecific antibody developed by I-Mab, dampening expectations for its pipeline value; whereas RemeGen secured a licensing deal worth $5.6 billion with AbbVie for its PD-1/VEGF bispecific antibody RC148. This one step back and one step forward not only reflects the growing divergence in the bispecifics track but also quietly outlinesThe core theme of pharmaceutical investment for 2026 – certainty.

Looking back at 2025, the wave of 'BD is king' swept through China's pharmaceutical investment market. At that time, outbound licensing deals by innovative drug companies became the core logic pursued by capital, essentially reflecting the market's maximal realization of the future value of innovative pipelines. Amidst the capital frenzy, the number and amount of BD transactions were seen as the core measure of a company’s value, often overlooking the clinical potential and commercial feasibility of the pipelines themselves as underlying support.

However, high expectations eventually face reality. As enthusiastic capital returns to rationality, the market begins to reconstruct the valuation logic of BD deals—no longer blindly following the hype of 'every licensing deal leads to a surge', but shifting towards an in-depth examination of the execution capability of these deals. BD collaborations that can translate into clinical progress and possess commercialization potential will see significantly differentiated valuations compared to licensed projects lacking data support and remaining only at the conceptual stage.

This shift directly points to the core essence of pharmaceutical investment in 2026:Moving away from generalized sector hype, and embracing the definitive value of 'broad yet optimal.'The concept of 'definitive value' is not a one-dimensional criterion but instead comprises three key anchors running through the entire cycle of innovative drug R&D and commercialization: expectation certainty, product certainty, and performance certainty.

(1) Expectation Certainty

The core of expectation certainty is to abandon the blind pursuit of the total amount of BD deals and rationally assess their ultimate feasibility. From an industry perspective, the probability of new drugs globally progressing from early clinical trials to final market launch is only 7.9%. Moreover, there is a significant gap between 'market approval' and 'commercial success.' Even after successful approval, subsequent challenges such as competitive pressures and market access barriers remain, meaning that the high expected value of most BD deals will ultimately be difficult to fully realize.

Take the currently hyped PD-1/VEGF bispecific antibody track as an example. Akeso Biopharma, 3SBio, and RemeGen have reached overseas licensing partnerships with total amounts of $5 billion, $6.05 billion, and $5.6 billion respectively. In an ideal vacuum environment, such transaction sizes might offer room for imagination, but the reality is that all three are on the same competitive track, with highly overlapping targets and indications, making it impossible for all players to achieve the expected value realization. This scenario mirrors the狂欢与分化 (excitement and divergence) of the previous PD-1 monoclonal antibody overseas BD deals.

For investors, penetrating the BD valuation bubble requires grasping three core judgment criteria:First, look at the proportion of upfront payments(Upfront payment is the only nearly 100% guaranteed income; the higher the proportion, the stronger the short-term certainty).Second, evaluate the strength of the partner(Collaborating with top global pharmaceutical companies like AbbVie ensures better clinical progress, regulatory communication, and commercialization capabilities, significantly increasing the probability of milestone achievements);Third, assess the competitive landscape of the field(If successful business development (BD) cases for the same target have already emerged, later entrants should adjust their expectations downward to avoid overvaluation).

(2) Product certainty

The core of product certainty is determining whether the pipeline can achieve substantial sales growth post-launch. The ultimate value of a drug lies in its commercial monetization; products with a clear growth logic deserve higher valuation premiums, while those with questionable growth logic warrant caution against valuation pullback risks.

The representative with the most certain growth potential in 2026 isWantai Bio's nine-valent HPV vaccine,Xinkeening®9This product not only demonstrated equivalence to imported vaccines through head-to-head trials but also, with its pricing of 499 RMB per dose (only 40% of the price of imported vaccines), broke the long-standing 'premium' perception of imported vaccines. This lays the foundation for penetration into third- and fourth-tier markets and below. The enormous unmet demand in these下沉 markets is expected to drive overall market expansion for the nine-valent HPV vaccine.Innovent Bio, as a core player in the domestic nine-valent HPV vaccine space, will likely enter a rapid sales growth cycle starting from 2026 after achieving domestic substitution.

In contrastInnovent BioofMazydotide , its commercialization certainty is notably weaker. Although Masitide peptide outperformed Semaglutide in head-to-head trials, the competitive landscape has fundamentally shifted, with Eli Lilly and Co's Tirzepatide emerging as the core competitor. More critically, the price war between Tirzepatide and Semaglutide has fully erupted, directly compressing the pricing room and market share for Masitide peptide, significantly lowering its peak sales expectations and substantially diminishing its commercial value.

(3) Earnings Certainty

The essence of earnings certainty lies in identifying companies and sectors with clear expectations of earnings growth or recovery. The essence of investing is capturing expectation gaps. Under the 2025 wave of 'BD as king,' the innovative drug sector has attracted most of the capital attention, whereas sub-sectors like medical devices, CXO, and vaccines have been undervalued by the market. Among these, targets with earnings growth support are expected to see valuation recovery by 2026.

Wuxi Apptec’s earnings forecast announcementis a typical testament to earnings certainty. On January 12, the company discloseda net profit of 14.957 billion RMB for 2025, representing a substantial year-over-year increase of 41.33%. While revenue grew steadily, profitability surged significantly, which not only confirms the cornerstone position of China's CXO leader in the global pharmaceutical industry chain but also gradually reverses the undervaluation brought on by geopolitical factors over the past two years. As global pharmaceutical companies’ R&D investments recover, the earnings growth certainty of CXO leaders with full industrial chain capabilities further strengthens.

The vaccine industry also presents significant opportunities driven by expectation gaps. Following previous industry consolidation and inventory reductions on the demand side, domestic vaccine companies have seen their performance bottom out. From a long-term perspective, China’s vaccine industry is still in its early stages of development, with vast potential for domestic substitution and overseas market expansion only just beginning. The current valuation of the vaccine sector has hit rock bottom, while the certainty of earnings recovery is gradually increasing, making investment opportunities far outweigh the risks.

In summary,This marks a shift from the capital game of 'trading on BD (business development) expectations' to the tangible realization of results through 'delivering certainty.'This is the logic behind what we believe will be a shift in pharmaceutical investment trends by 2026.

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