Domestic innovative drugs are thriving both domestically and internationally, with the Hang Seng Innovative Drug Index rising over 11% year-to-date

"Jin Zheng Yan" Xun Feng/Author

Public data from the National Medical Products Administration shows that in the first quarter of 2026, the total value of China's innovative drug licensing deals exceeded $60 billion, close to half of the total for the whole of 2025. As of March 27, 2026, China has approved 10 innovative drugs this year, including 2 imports and 8 domestic products, achieving a historic breakthrough and maintaining strong growth momentum and potential.

Against this backdrop, the CSI Hang Seng Innovative Drug Index serves as a core financial tool to anchor the internationalization process of domestic innovative drugs and capture industry upgrade dividends. The performance and market behavior of its constituent stocks reflect, to some extent, industry development trends and core growth logic.

From 'Generic to Innovative Transformation' to 'Overseas Expansion Worth Billions,' China's innovative drug industry flourishes both domestically and internationally

Currently, China’s innovative pharmaceuticals sector has transitioned from a model of 'generic and innovation combination' towards original innovation, while expanding from the domestic market to global markets.

It is important to note that the CSI Hong Kong Innovative Pharmaceuticals Index selects up to 50 companies within the scope of Stock Connect whose main businesses involve innovative drug R&D and providing services such as drug research, development, and production for pharmaceutical enterprises. These selected listed securities aim to reflect the overall performance of innovative drug theme companies in the Hong Kong market.

On the industry front, data released by the National Medical Products Administration shows that in 2025, 76 innovative drugs were approved for marketing domestically, surpassing the 48 drugs approved in 2024 and setting a new record high. Additionally, in 2025, the total value of overseas licensing deals for domestic innovative drugs exceeded $130 billion, with over 150 transactions completed, also a record high. In 2025, the National Medical Products Administration approved 76 innovative drugs, with domestically produced innovative drugs taking a dominant position. China’s biopharmaceutical innovation capabilities continue to grow, transitioning from following to running alongside and even leading in certain fields, establishing itself as a key player on the global biopharmaceutical innovation landscape.

It should be noted that BD in innovative drug BD transactions refers to Business Development, which involves pharmaceutical companies pursuing strategic objectives like business growth, market expansion, and resource integration through various means such as strategic partnerships, licensing deals, and mergers and acquisitions.

On the payment side, the multi-layered medical security system continues to improve. The release of the 'Commercial Health Insurance Innovative Drug Directory' in December 2025 opened new commercialization opportunities for innovative drugs.

At the same time, the 2026 government work report, for the first time, listed biomedicine as an emerging pillar industry, providing clearer policy guidance for the long-term development of innovative drugs. The positioning of biopharmaceuticals has evolved from fostering new growth drivers to becoming one of the core engines of economic growth, with innovative drugs being a crucial component of the biopharmaceutical industry.

Two, the 'triple resonance' of R&D, production, and commercialization drives the CSI Hong Kong Innovative Pharmaceuticals Index to rise over 11% year-to-date

Amidst the global wave of pharmaceutical innovation, the Hong Kong stock market, with its international capital environment and flexible listing system, has attracted a large number of dynamic biopharmaceutical companies, becoming a bridgehead for China’s innovative drugs to reach the global stage.

Driven by multiple favorable factors, the Hong Kong innovative drug sector delivered 'impressive' performance. As of April 10, 2026, the CSI Hong Kong Innovative Pharmaceuticals Index gained 6.71% over the past month and rose more than 11% year-to-date, significantly outperforming the CSI 300 Index during the same period.

Specifically, the top ten constituents of the CSI Hong Kong Innovative Pharmaceuticals Index (931787) are Innovent Bio, BeiGene, Akeso Biopharma, Wuxi Bio, CSPC Pharma, Hansoh Pharma, Sino Biopharm, Wuxi Apptec, 3SBio, and XtalPi Holdings. The combined weight of the top ten constituents reaches 70.22%, indicating a high concentration that fully reflects the development trend of industry leaders.

In short, this index includes both global leaders in innovative pharmaceuticals like BeiGene and Innovent Bio, as well as emerging companies with global competitiveness in cutting-edge technologies such as bispecific antibodies and ADC, like Akeso Biopharma and RemeGen. It also covers globally leading pharmaceutical outsourcing service providers such as Wuxi Bio and Wuxi Apptec, comprehensively spanning the entire innovation-driven drug research, production, and commercialization value chain.

From an industry structure perspective, the index is highly focused on the core track of innovative pharmaceuticals. According to the tertiary industry classification, the weight distribution for chemical drugs, biologics, and pharmaceutical and biotech services stands at 39.65%, 36.36%, and 23.99%, respectively.

In terms of weighted stock performance, multiple listed companies achieved historic breakthroughs in 2025. Among them, BeiGene reported total operating revenue of $5.343 billion in 2025, with a net profit of $287 million, reversing losses year-on-year and demonstrating significant global commercial success. Innovent Bio's total revenue reached 13.042 billion yuan in 2025, representing a year-on-year growth of 38.4%, with a net profit of 814 million yuan. Industry leaders such as Wuxi Apptec and Wuxi Bio also achieved double growth in both revenue and profits.

Overall, the Hong Kong stock market’s innovative pharmaceuticals sector is in a new upward phase of long-term growth. The '15th Five-Year Plan' outline elevates innovative pharmaceuticals to a national strategic level, empowering the entire value chain from R&D, evaluation, payment systems to international expansion, promoting high-quality development of innovative drugs.

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