Guojin Securities: The domestic pharmaceutical supply chain remains optimistic; recommend focusing on the two main core themes in the CXO industry

CITIC Securities APP has learned that Guojin Securities released a research report stating that global pharmaceutical investment and financing will bottom out and recover in 2025, with a total of $192.1 billion in the first 11 months. Both domestic and international markets are improving simultaneously, showing stable inflows in traditional sectors and increased investment in emerging sectors such as ADC and bispecific antibodies. Since 2025, the popularity of AI drug development technology has risen, and the momentum of global innovative drugs has continued. Coupled with the bottoming out and rebound of domestic biopharmaceutical investment and financing, industry market attention has continued to rise, and the recovery trend of fundamentals has become increasingly clear. Looking ahead to 2026, it is recommended to prioritize layout in leading industry companies and targets with a high proportion of overseas business, focusing on two core themes in the CXO industry.

Guojin Securities’ main viewpoints are as follows:

Breakthroughs in R&D capabilities highlight global competitiveness

In 2025, global pharmaceutical investment and financing bottomed out and recovered, with a total of $192.1 billion in the first 11 months. Both domestic and international markets improved simultaneously, with stable inflows in traditional sectors and increased investment in emerging sectors such as ADC and bispecific antibodies. Global and Chinese biopharmaceutical BD collaborations continued to heat up, with both transaction volume and value rising. Chinese innovative drugs are entering a multi-category attack phase overseas, with license-out transactions becoming the main line of cross-border deals. Meanwhile, China’s R&D capabilities for innovative drugs are becoming prominent, with continuous growth in IND, NDA filings, and approved marketed products. Research in ADCs, cell therapies, and other sectors leads globally in the number of ongoing projects, with FIC molecules ranking second worldwide. The gap in the approval timelines for original drugs between China and the US has significantly narrowed, and domestic innovative drugs have entered a stage of full commercialization.

Policy support continues from multiple parties, industry trend upward

Since 2025, pharmaceutical industry policies have continued to optimize, with marginal impacts of centralized procurement diminishing and shifting toward quality-oriented measures. The 11th batch of centralized procurement introduced anti-inflation measures, such as setting anchor prices and revival mechanisms, to ensure procurement success rates and reasonable price differences, while raising thresholds for quality and market scale. Biological similar drugs are expected to start centralized procurement in 2026, with moderate price reductions. Additionally, multiple departments have introduced policies supporting the entire industry chain, optimizing review and approval processes for innovative drugs, procurement access, and payment procedures. Medical insurance funds are tilted toward innovative drugs, and commercial insurance catalogues are expanding, forming a diversified payment system to facilitate rapid volume growth of innovative drugs and high-quality industry development.

Achievements are evident: innovative drug companies gradually enter the harvest period

Biotech companies are continuously optimizing their R&D expenses ratio, with breakeven points gradually approaching. Domestic companies continue to innovate, and 2026 will see intensive catalysis in biotech.

Internal and external resonance, seize high-quality sectors and overseas main lines

Growth of traditional blockbuster drugs globally is slowing, and multinational pharmaceutical companies face patent cliff pressures, urgently needing pipeline replenishment. Against this backdrop, Chinese innovative drugs show substitution potential across multiple sectors: PD-1 bispecific antibodies with excellent efficacy are expected to iterate existing monoclonal antibodies; ADC drugs in broad tumor fields have significant potential for iterative chemotherapy; small nucleic acid drugs, with their unique mechanisms, are becoming hot sectors. Meanwhile, innovative drugs in fields such as atopic dermatitis, psoriasis, and COPD are advancing simultaneously, with accelerated development and commercialization of GLP-1 drugs. Domestic companies are actively deploying and establishing overseas presence through BD collaborations, becoming key targets for global pharmaceutical companies.

Pharmaceutical supply chain: continued upward trend, new technologies drive industry expansion

Since 2025, AI drug development technology has gained popularity, and the momentum of global innovative drugs has persisted. Coupled with the bottoming out and rebound of domestic biopharmaceutical investment and financing, industry market attention continues to rise, and the recovery of fundamentals is increasingly clear.

Looking ahead to 2026, investment in the CXO industry can focus on two core themes:

1. Prioritize layout of industry leaders: Leading companies, with technological barriers, capacity scale, and customer resources, will capture larger market shares during the industry recovery cycle, with more certain performance growth. 2) Focus on targets with a high proportion of overseas business: Overseas markets tend to be more stable, and the benefits from commercialization orders are continuously released. Companies with a high proportion of overseas business can effectively hedge some domestic market uncertainties and achieve steady growth.

Meanwhile, as the domestic biopharmaceutical investment and financing recovery benefits gradually transmit, companies in various CRO segments are also expected to see performance inflection points, offering long-term allocation value.

Risk warnings

Exchange rate risk, domestic and international policy risks, clinical trial progress below expectations, and product approval and review delays.