Looking back at the beta in 2025, the participating guests unanimously agreed that it was not an isolated phenomenon but rather the concentrated culmination of nearly two decades of accumulation in China's pharmaceutical industry.

The rise of the CRO/CDMO industry, the alignment of regulatory policies with international standards, and the substantial investments and development of R&D systems during the "Golden Decade" have collectively laid the foundation for today's wave of global expansion.

According to market research data, the scale of China's innovative drug market has reached $170 billion, accounting for approximately 10% of the global innovative drug market.

"A major change in recent years is that China's innovative drugs are beginning to expand from occupying about 10% of the global market into the remaining 90%," Hong Tan pointed out.

The core driving force behind this progress lies in the recognition of China's R&D quality by international mainstream pharmaceutical companies (MNCs), as well as the increasing maturity of the domestic full-chain research system, from target discovery to clinical translation.

Looking ahead to 2026, "going global" is still regarded as the dominant beta. Hong Tan believes that the fundamental dynamics of external cooperation will not change, but the specific logic of License-out may evolve.

Past models of early-stage "seedling-style" authorizations and unconventional market reactions in stock prices post-transaction are prompting investors and companies to reconsider: at what stage and through which business models should external cooperation be conducted to maximize value?

Based on this, the guests believe that future business development (BD) may become more diversified, with greater emphasis on transaction structures and long-term synergies.

Amidst the opportunities, risks should not be overlooked.

Chinese transactions already account for over 40% of global License Deals. Their rapid rise is reshaping the global R&D ecosystem, particularly in the United States, potentially triggering certain reactions and scrutiny. Meanwhile, MNCs’ strong demand for Chinese assets following patent cliffs has led to two distinct strategic positions in the ecosystem.

Hong Tan emphasized that maintaining a healthy global cooperation ecosystem is crucial. Chinese pharmaceutical companies need to systematically prove their value through successful validation in overseas clinical trials for more projects, fostering a symbiotic rather than zero-sum relationship with the global R&D system.

While global expansion remains the main theme, a single beta is insufficient to define 2026. New growth drivers are emerging from the technological foundation, fueling innovation at its source.

Li Jia emphasized that regardless of the technological pathway (Modality), the focus must ultimately return to addressing unmet clinical needs. The potential for breakthroughs, as demonstrated by GLP-1 drugs expanding into the consumer health field, highlights significant market opportunities.

In her view, cutting-edge areas such as small nucleic acid drugs, bispecific antibodies, ADCs, TCEs, and in vivo CAR-T are full of promise. However, the key lies in their practical ability to solve clinical problems, not merely their technological labels.

Taking a longer-term perspective, Zhou Rui pointed out that the ongoing third wave of the pharmaceutical industry is fundamentally driven by technology. Its foundation lies in China’s unique "engineer dividend" and supply chain advantages.

"In many modalities, China has established strong engineering-based screening platforms. This platform advantage, combined with a high-efficiency and cost-effective R&D model in the past, has helped set a pricing benchmark for global innovative drugs," he noted.

Looking ahead to 2026, he believes that with China’s robust industrial system and vast clinical demand, niche sectors such as brain-computer interfaces, synthetic biology, cell and gene therapy, and radiopharmaceuticals are poised for sustained growth.

AI in drug discovery is widely regarded as a critical variable for 2026. Having moved beyond a "frontier concept," it has now entered a crucial phase of "clinical validation and commercial implementation," becoming a core technological driver for the industry’s next wave of growth.

Zhou Rui highlighted during the discussion that drugs fully designed by AI are already in Phase II and III trials, with critical clinical data expected soon. If concept validation is achieved through this, 2026 could mark the "first year" of AI-driven drug discovery.

Additionally, the collaboration between industry giants Eli Lilly and NVIDIA, along with Eli Lilly’s move last year to open data to strategic partners, signals the beginning of an era of "feeding models with high-quality data." Zhou Rui believes this will trigger a "Cambrian explosion" in the field of AI drug discovery, potentially even giving rise to new "species."

In 2025, with the continued release of cross-border capital market policy dividends and the reopening of IPOs, Chinese innovative pharmaceutical companies, amidst a challenging winter, once again saw a path forward.

Driven by AI and business development (BD), the performance of the innovative drug sector in the secondary market was particularly notable in 2025. According to Southwest Securities, since 2025, A-share innovative drug stocks and Hong Kong-listed innovative drug stocks rose by 54.38% and 145.0%, respectively, outperforming the broader market by 38.3 percentage points and 115 percentage points.

However, the enthusiasm in the secondary market has not fully translated to the primary market. Whether in China or the United States, early-stage financing for innovative pharmaceutical companies remains extremely challenging.

Why is this phenomenon occurring? Liu Weidong analyzed the structural changes behind it.

He pointed out that for venture capital (VC), the traditional investment cycle involves supporting projects to complete early-stage clinical trials overseas. Once promising data is generated, the projects are either acquired by large pharmaceutical companies or advance toward product approval, thereby completing an investment cycle.

Today, the rise of numerous high-quality Chinese CROs and CDMOs, along with the emergence of top-tier biotech companies, has fundamentally disrupted this traditional "cycle." China has almost become the "Yiwu" of innovative drug pipelines, attracting multinational corporations (MNCs) to rush in for acquisitions.

Simultaneously, a deeper challenge lies in the mounting pressure on the return on investment (ROI) in the global innovative drug industry.

Taking 2025 as an example, the U.S. FDA approved 46 new drugs, with only over 30 targeting larger therapeutic markets. "Globally, approximately $300 billion is invested in innovative drug R&D annually. If, by 2035, the FDA continues to approve only this many drugs each year, one can imagine the industry's ROI would collapse," he noted.

However, Liu Weidong emphasized that the underlying business model is undergoing transformation. R&D efficiency is expected to improve significantly over the next 5 to 10 years. "In 2026, the beta in the innovative drug industry will still exist, but it will be more reflected in business model innovation. The industry is entering a phase of substantial adjustment in its business models."

Based on this, he identified two promising models:

First, the "Global Innovation + Chinese Engineering" model: This approach efficiently integrates cutting-edge global innovation with China's robust CMC (Chemistry, Manufacturing, and Controls) and engineering capabilities, enabling rapid product translation and scalable manufacturing.

Second, the transformation of traditional pharmaceutical companies: Established generic drug or large pharmaceutical companies with strong commercialization foundations and manufacturing capabilities may achieve more sustainable and successful transitions into innovation compared to biotech firms solely reliant on venture capital funding. They are poised to become a significant force in industry consolidation and value realization.

In summary, the beta of China's innovative drug industry in 2026 will be a composite: it represents both the deepening and evolution of the "going global" strategy, the explosion of cutting-edge technologies transitioning from breakthroughs to applications, and the proactive restructuring of business models under pressure from capital and efficiency demands.

The industry will shift from a phase of broad-based "flood-irrigation" growth to a more focused phase of targeted "drip-irrigation," characterized by structural differentiation. Within this divergence, those companies that can genuinely address unmet global clinical needs and build sustainable commercial closed-loops will emerge as the key players defining the next cycle.