To The Moon

On April 1, the Hang Seng Biotech Index surged 6.78% in a single day, followed by another 0.89% gain on April 2, closing at 15,641.

From the ETF side, funds tracking healthcare and biotech moved higher in sync with the index. $CAM HSBIOTECH(03069)$ rose 0.58%, $CSOP HSBIOTECH(03174)$ gained 0.92%, and $GX CN BIOTECH(02820)$ increased 1.17%, showing a consistent upward trend alongside the broader sector. Capital allocation into passive products is also picking up.

At the stock level, $HANSOH PHARMA(03692)$ rose 5.18%, $INNOCARE(09969)$ gained 4.44%, $GENSCRIPT BIO(01548)$ increased 4.30%, $ZAI LAB(09688)$ advanced 4.16%, and $CMS(00867)$ climbed 3.62%. At the same time, $CHINARES PHARMA(03320)$ , $SINOPHARM(01099)$ , and $BEIGENE(06160)$ also moved higher, indicating that capital is spreading across both innovative drug makers and traditional pharmaceutical companies.

Among these companies, some already have clear overseas collaboration cases, with products such as ADCs and immuno-oncology therapies being introduced by multinational pharmaceutical firms. Others benefit from existing product sales and distribution channels, participating in the broader valuation recovery of the sector. Capital is not concentrated in a single type of company, but rather allocated across different segments.

Looking at the broader industry, global pharmaceutical companies are entering a period of patent expiration, with multiple blockbuster drugs set to lose protection in the coming years. To maintain their product portfolios, these companies need to continuously source external assets, and Chinese firms are increasingly participating in this process.

According to China’s National Medical Products Administration on March 28, the total value of outbound licensing deals for innovative drugs exceeded $60 billion in the first three months of this year. This figure represents total deal value, including upfront payments, milestone payments, and future royalties, rather than immediate cash revenue.

Compared with previous years, this level is already close to the full-year figures of 2024, indicating that deal activity is happening earlier and at a faster pace. What matters more for the market is the increase in deal flow, as it signals expanding future revenue potential.

From a global perspective, large pharmaceutical companies are entering a concentrated patent cliff cycle, with several key drugs set to lose exclusivity in the coming years. Under these conditions, BD activity is becoming more frequent. On one hand, large pharma needs to replenish its pipeline; on the other, Chinese companies receive upfront payments and long-term revenue participation through licensing, gradually reshaping their income structure.

Overall, the recent rally in Hong Kong-listed biotech stocks is taking place alongside the increase in outbound licensing activity and rising global demand driven by patent expirations. As both supply and demand evolve, capital is flowing back into the sector, and the market is gradually stabilizing.

Related ETFs:

$CAM HSBIOTECH(03069)$ tracks the Hang Seng Biotech Index and serves as a core passive tool for Hong Kong-listed biotech exposure. Total assets are about HKD 2.23 billion, with a management fee of 0.40%.

$CSOP HSBIOTECH(03174)$ focuses on the broader healthcare innovation theme, covering innovative drugs, CXO, and medical services. Total assets are about HKD 935 million, with a management fee of 0.99%.

$GX CN BIOTECH(02820)$ focuses on China’s biotech sector, mainly allocating to innovative drug developers. Total assets are about HKD 665 million, with a management fee of 0.55%.