Shanxi: Biological medicine is positioned as a national pillar industry, and innovative drugs are entering a period of continuous growth.

Shanxi releases research report stating that during the National Two Sessions in 2026, the biopharmaceutical industry will become a key industry supported by national policies. The country has elevated the biopharmaceutical industry to become an emerging pillar industry, and domestic innovative drugs are also experiencing a continuous explosive growth stage. It is recommended to focus on high-quality assets in the domestic innovative drug sector. Main points from Shanxi are as follows: Biopharmaceutical industry identified as an emerging pillar industry The government work report for 2026 proposes to cultivate and expand emerging industries and future industries, implement industrial innovation projects, encourage central and state-owned enterprises to lead in opening up application scenarios, and develop emerging pillar industries such as integrated circuits, aerospace, biopharmaceuticals, and low-altitude economy. This is also the first time that biopharmaceuticals have been elevated to the status of a "pillar industry." Domestic innovative drugs have become the core development direction of the biopharmaceutical industry and have entered a period of sustained explosive growth 2025 was a year of explosive growth for Chinese innovative drugs going global, with all data reaching historical highs. According to data from the PharmCube database, the total annual transaction amount for Chinese innovative drugs going global in 2025 reached $135.655 billion USD (compared to $51.9 billion USD in 2024), with an initial payment of $7 billion USD, and a total of 157 transactions (compared to 94 in 2024). All dimensions of the data reached historical highs. For example, INNOVENT BIO reached a total BD transaction amount of up to $11.4 billion USD with Takeda Pharmaceuticals, marking the largest single transaction in China Meheco Group's history; and the authorization agreement reached by 3SBIO and Pfizer for a PD-1/VEGF bispecific antibody involved an initial payment of up to $1.25 billion USD, setting a record for the highest initial payment for a BD transaction in China. The momentum of Chinese innovative drugs going global in 2026 has continued from 2025. In January-February 2026, the total transaction amount for domestic innovative drugs going global reached $53.276 billion USD, with as many as 44 transactions, surpassing the total for any single quarter of 2025 in just the first two months of the year, and approaching the level for the entire year of 2024. For example, on January 30th, CSPC PHARMA announced a comprehensive strategic cooperation agreement with AstraZeneca for the discovery of innovative peptide molecules and the development of sustained-release products, with CSPC PHARMA receiving $1.2 billion USD in upfront payment and up to $3.5 billion USD in potential research milestone payments and up to $13.8 billion USD in potential sales milestone payments. Investment recommendations: It is recommended to focus on Jiangsu Hengrui Pharmaceuticals, BEONE MEDICINES, INNOVENT BIO, 3SBIO, AKESO, SBP GROUP, CSPC PHARMA, REMEGEN, Kelun-Biotech, Sichuan Biokin Pharmaceutical, Chengdu Olymvax Biopharmaceuticals Inc, Brightgene Bio-Medical Technology Co.,Ltd., Haisco Pharmaceutical Group, Pibet, Innovent Biologics, Fujian Cosunter Pharmaceutical, SIMCERE PHARMA, Shanghai Yizhong Pharmaceutical, Walvax Biotech, and others. Risk reminders: Risks include lower-than-expected global economic growth, intensified competition in the development of innovative drugs, and risks of failure in research and development, as well as risks of lower-than-expected sales for innovative drugs after they are launched.