From "R&D Accumulation" to "Value Realization": Innovative Drugs May Enter a New Cycle

How can AI·Libeweitab single antibody accelerate the value realization of innovative drugs?

On March 16, the world’s first domestically developed original research drug, Libeweitab injection, was prescribed. This drug is the first antibody-based medication in the field of viral hepatitis worldwide, filling a gap in the industry.

Some analyses suggest that in recent years, with the rapid development of AI intelligent agents, modern biotechnology, and interdisciplinary integration, the technological pathways for innovative drugs are experiencing multiple breakthroughs. China’s innovative drug industry may be shifting from “following innovation” to “original innovation.” In this context, how should we view the long-term investment value of innovative drugs? (References: Beijing Daily “First Landed Global First Dose of Beijing Major Innovative Drug,” 2026.3.17; Xinhua Finance “Innovative Drugs: From ‘Research and Development Accumulation’ to ‘Commercial Realization’,” 2026.3.16)

Industry Trend: Innovative Drugs Enter a New Cycle of Value Realization

Starting from the beginning of the 14th Five-Year Plan, China’s innovative drug industry is gradually moving from “catch-up” to “leading,” with accelerated synergy between R&D breakthroughs and commercial realization opening up broad prospects for high-quality industry development. (Reference: Xinhua Finance “Innovative Drugs: From ‘Research and Development Accumulation’ to ‘Commercial Realization’,” 2026.3.16)

AI + Pharmaceutical Industry Enters the “Validation Period of Industrial Effectiveness”

Currently, domestic AI + pharmaceutical efforts are transitioning from “concept” to the “validation period of industrial effectiveness.” AI’s penetration across the entire drug development process—including target discovery, molecule generation, and clinical design—is deepening, gradually becoming a vital infrastructure for innovative drug R&D.

A recent industry report indicates that traditional drug development requires synthesizing and testing 3,000–5,000 compounds over 40–50 months to identify preclinical candidates, whereas AI technology can reduce the number of tested molecules to under 200, shortening the development cycle to 12–18 months. Industry financing and collaboration are rebounding, and AI-involved drug pipelines are accelerating into clinical trials. Leading domestic AI pharmaceutical companies demonstrate strong platform capabilities and commercial potential. (Reference: Guotai Haitong Securities “Progress in AI Drug Development Continues, Multinational Pharma Accelerates Layout,” 2026.3.10)

Accelerated Transformation of R&D Results and Release of Commercial Potential

Since 2026, the trend of domestic innovative drugs going global continues.

According to Pharma Cube statistics, as of March 6, 2026, China’s innovative drug outbound BD transactions totaled $56.8 billion with an initial payment of $3.3 billion. Compared to previous years, the total transaction amount in the first two months of this year has already exceeded the full-year level of 2024, reaching 41% of the total for 2025; initial payments have reached 46% of the 2025 total, indicating a clear acceleration in commercialization. (Reference: Dongwu Securities “Weekly Industry Tracking: Two Sessions List Innovative Drugs as Emerging Pillar Industry, 2026 BD Outbound Accelerates,” 2026.3.8)

Policy Support: Focus on “Independent Innovation + Policy Benefits” Dual Main Lines

This year’s government work report first included biomedicine as a new pillar industry. Meanwhile, during the Two Sessions, many representatives and committee members proposed suggestions to address industry bottlenecks, including strengthening basic research, removing barriers for national talk drugs to enter hospitals, establishing multi-channel payment systems for innovative drugs, and ensuring returns on corporate innovation.

Some analyses indicate that China’s policy orientation encouraging innovation has never changed. The large patient population and strong demand for precision medicine are core reasons multinational companies are committed to long-term roots in China, and they are also key supports for the biopharmaceutical industry to navigate industry adjustments. (Reference: 21st Century Business Herald “Positioned as a New Pillar Industry, How Will Biomedicine Break Through the Transformation and Critical Period?” 2026.3.16)

Institutions believe that under the resonance of upward industry trends and increased policy support, high-quality pharmaceutical assets with differentiated innovation capabilities and sustained realization potential remain key areas for focus. Specifically, attention can be directed toward “independent innovation” and “policy benefits.” (Reference: Great Wall Guorui Securities “Annual Report Disclosure Period Has Arrived; Domestic Policy Continues to Release Positive Signals,” 2026.3.16)

Long-term investors optimistic about China’s innovative drug prospects may consider related ETFs under Yinhua Fund:

Hong Kong-listed Innovative Drug ETF (Code: 159567) and its linked funds (Class A: 023929; Class C: 023930)

Innovative Drug ETF (Code: 159992) and its linked funds (Class A: 012781; Class C: 012782)

Risk Warning:

Hong Kong Innovative Drug ETF Fee Details

1. Subscription/Redemption Fees:

Investors subscribing or redeeming fund shares through authorized brokers may be charged a commission up to 0.5%, including relevant fees from stock exchanges, registrars, etc.

2. Management Fee:

The management fee is calculated at 0.50% annual rate based on the previous day’s net asset value (NAV). The calculation method is:

H = E × 0.50% ÷ days in the year

Where H is the daily management fee, and E is the previous day’s NAV.

The management fee is accrued daily and accumulated until the end of each month. After verification by the fund manager and custodian, the fee is paid in a lump sum within five working days from the first day of the following month.

3. Custodian Fee:

The custodian fee is calculated at 0.10% annual rate based on the previous day’s NAV, using the same calculation method as above.

Yinhua Guozheng Hong Kong Stock Connect Innovative Drug ETF Initiation-Linked Fee

1. Subscription Fee:

Applicable when investors subscribe to Class A shares through other sales channels:

• M < 1 million RMB: 1.00%

• 1 million RMB ≤ M < 2 million RMB: 0.80%

• 2 million RMB ≤ M < 5 million RMB: 0.50%

• M ≥ 5 million RMB: fixed fee of 1,000 RMB per transaction

2. Redemption Fee:

Redemption fees are paid by the shareholders redeeming their shares and are not included in the fund’s assets. The fees are used to cover registration and other necessary expenses.

• Class A shares: For holdings less than 7 days, redemption fee is 1.50%; for holdings of 7 days or more, fee is 0.

• Class C shares: For holdings less than 7 days, fee is 1.50%; for 7 days or more, fee is 0.

4. Management Fee:

No management fee is charged on the portion of the fund invested in target ETFs. The management fee is 0.50% annually on the NAV of the remaining fund assets after deducting ETF holdings.

5. Custodian Fee:

No custodian fee is charged on the ETF portion. It is calculated at 0.05% annually on the remaining NAV after deducting ETF holdings.

6. Sales Service Fee:

Class A shares: no sales service fee.

Class C shares: 0.20% annual rate on the previous day’s NAV.

Other fees are detailed in the fund prospectus under “Fund Expenses and Taxes.”

Investors should be aware that investing involves risks. Funds are long-term investment tools primarily used for diversification and risk reduction. Unlike fixed-income products like bank deposits, funds do not guarantee returns; investors may share in gains or losses.

Before making investment decisions, please carefully read the fund contract, prospectus, and product summary, understand the risk-return features and product characteristics, consider your risk tolerance, and evaluate your investment objectives, experience, and financial situation. Make rational and cautious decisions based on product information and sales suitability advice.

Yinhua Fund Management Co., Ltd. hereby issues the following risk disclosures in accordance with relevant laws and regulations:

1. Based on the investment target, funds are categorized into equity, hybrid, bond, money market, fund of funds, commodity funds, etc. Different types of funds offer different return expectations and risk levels. Generally, higher expected returns entail higher risks.

2. During operation, funds face various risks, including market risk, management risk, technical risk, and compliance risk. A particular risk for open-end funds is the large redemption risk: if net redemption requests on a single open day exceed a certain proportion of total fund units (10% for open-end funds, 20% for periodic open funds, except for special products regulated by the China Securities Regulatory Commission), investors may not be able to redeem all requested units promptly, or payments may be delayed.

3. Investors should understand the differences between regular fixed investment and savings methods like fixed deposits. Regular fixed investment encourages long-term, averaged-cost investing but does not eliminate inherent investment risks or guarantee returns. It is not an equivalent financial product to savings.

4. Risks of special product types:

• Be aware of index volatility risks and the specific risks associated with ETF investments. For linked funds investing in target ETFs, risks include tracking deviation, performance gap with the target ETF, other risks related to ETF investments, and tracking error control risks.

• Hong Kong Stock Connect Innovative Drug ETF and its linked funds may invest in Hong Kong Stock Connect stocks, facing risks from market environment, investment targets, market systems, and trading rules under the Stock Connect mechanism.

5. The fund manager commits to managing and using fund assets honestly and diligently but does not guarantee profits or minimum returns. Past performance and NAV do not predict future results. The performance of other funds managed by the manager does not guarantee this fund’s future performance. Investors bear the risks associated with fund operation and NAV fluctuations. The fund manager, custodian, sales agencies, and related institutions do not make any promises or guarantees regarding investment returns.

6. This fund is registered and issued by Yinhua Fund Management Co., Ltd. in accordance with laws and regulations, with approval from the China Securities Regulatory Commission (CSRC). The fund contract, prospectus, and product summary are available on the CSRC electronic disclosure platform.