Market review: Last week, the A-share pharmaceutical and biological index fell 3.74%, 1.66pp lower than the CSI 300 Index and 0.94pp lower than the GEM Composite Index, ranking 19th among 31 sub industries, with average performance. Hong Kong shares, represented by the Hang Seng Medical Health Index, fell 8.22% last week, underperforming the Hang Seng SOE Index by 3.46pp.
Tracking of research and development progress of listed companies: Last week, the NDA application of Gakos Glarex citrate tablets was newly undertaken; The clinical applications for IBI354 of Cinda Biology, SHR-3821 injection and SHR-7787 injection of Hengrui Pharmaceutical were newly undertaken; IND of BG-68501 of Baekje China applied for new undertaking. Last week, SHR7280 and trastuzumab rezetecan of Hengrui Pharmaceutical were in phase III clinical trials; TQB2102 with fine weather in Chia Tai is undergoing phase II clinical treatment; INR101 of Yunnan Baiyao is in the first phase of clinical treatment.
Viewpoint of this week: The innovative medicine policy continues to advance, and the innovative medicine industry chain is firmly optimistic.
Embrace the new quality productivity, and the policy is conducive to the innovative development of the pharmaceutical industry. The 2024 government work report mentioned the need to foster the development of innovative medicine industry; Strengthen the research, development and application of people's livelihood science and technology such as health and elderly care; Improve the ability of medical and health services, and emphasize that the main tone of the development of the pharmaceutical industry in 2024 is innovative development. Since then, Beijing, Guangzhou, Zhuhai and other places have successively issued relevant policies to support the high-quality development of the biomedical industry or innovative medicine and equipment, created a whole process service system, accelerated the process from research and development to application, and optimized the pricing and payment settlement mode of innovative medicine and equipment. In addition, with the upcoming ASCO Conference, several Chinese pharmaceutical enterprises announced their participation in the new drug research of this session of ASCO Conference, and the attention of the innovative drug market has increased. The Federal Reserve is biased towards dove as a whole, and the interest rate cut is expected to benefit innovative drug risk assets. Hengrui Pharmaceutical and Qianhong Pharmaceutical are mainly recommended. It is suggested to pay attention to Fuhong Hanlin (H), Kain Technology, Yifang Biologic-U, Xinda Biologic-U, Konoa (H), Kelun Botai Biologic-B (H), Baili Tianheng - U, Kangfang Biologic-H, Lepu Biologic-B (H), Maiwei Biologic-U, etc.
Annual investment strategy in 2024: reshape the value orientation and start a new pharmaceutical cycle. We emphasize that innovation driven, domestic substitution and brand leadership are the main lines of future pharmaceutical investment, and we mainly recommend Hengrui Pharmaceutical, Jingxin Pharmaceutical, Wuming Kangde (A+H), Yuyue Medical, Top Nine Biology, Mindray Medical, Taiji Group and Yifeng Pharmacy.
Risk analysis: cost control policies exceed expectations, R&D failure risks, policy support is less than expectations, and sector valuation falls
