NO.1 Hang Seng Hong Kong Stock Connect Innovative Drug Index is about to be revised, explicitly excluding CXO companies

On June 30th, the Hang Seng Hong Kong Stock Connect Innovation Drug Index announced a revised compilation plan, adding a rule to exclude CXO (pharmaceutical outsourcing) companies. According to the new compilation plan, all the constituent stocks of the revised index are innovative pharmaceutical companies, making it one of the first innovative pharmaceutical indices tracked by ETFs to achieve a purity of 100%.

Pang Yaping, General Manager of the Index Research Department of E Fund, stated that CXO mainly provides services and does not directly acquire the core intellectual property rights of innovative drugs. Generally, CXO does not participate in the patent development and commercialization of innovative drugs and does not obtain patent authorization benefits. Therefore, after excluding CXO, the Hang Seng Hong Kong Stock Connect Innovative Drug Index can focus on core innovative drug companies and more purely reflect the development trend of the innovative drug industry in this round.

Comment: After the revision of the rules, the Hang Seng Hong Kong Stock Connect Innovative Drug Index plans to exclude CXO companies. This adjustment will increase the weight of Hong Kong stock innovative drug companies in the index, so that the index can better reflect the core trends and valuation logic of the development of the innovative drug industry.

No.2 Hengrui Pharmaceutical's alopecia areata drug has been approved for market launch

On June 30th, Hengrui Pharmaceutical announced that it had received a notice from the National Medical Products Administration approving the addition of indications for its independently developed Class 1 innovative drug, imatinib sulfate tablets (SHR0302 tablets), for use in adult patients with severe alopecia areata. Emaxicatinib sulfate tablets are a highly selective JAK1 inhibitor that can exert anti-inflammatory and immunosuppressive biological effects by inhibiting JAK1 signaling. In addition to the approved alopecia areata, the product has been approved for three indications in China, covering ankylosing spondylitis, rheumatoid arthritis, and atopic dermatitis.

At present, similar oral target drugs for alopecia areata have been approved for market worldwide, including Pfizer's rituxinib capsules and Eli Lilly's baritinib tablets, but no domestically developed JAK1 inhibitors have been approved for market.

Commentary: Data shows that there were approximately 3.49 million patients with alopecia areata in China in 2021, and the disease burden cannot be ignored. The approval of the indications for amoxicillin tablets for alopecia areata fills the gap in the field of domestically produced JAK1 inhibitors and reflects the technological breakthrough of local pharmaceutical companies in the field of autoimmune diseases.

NO.3 Huiyu Pharmaceutical approves a TCE triple antibody drug for clinical use

On June 30th, Huiyu Pharmaceutical announced that its wholly-owned subsidiary, Sichuan Huiyu Haiyue Pharmaceutical Technology Co., Ltd., recently received the "Drug Clinical Trial Approval Notice" approved by the National Medical Products Administration. The clinical trial of HY05350 for injection in the treatment of advanced solid tumors has been approved. HY05350 for injection is a three specific antibody TCE (T cell adapter) product independently developed by the wholly-owned subsidiary Huiyu Haiyue. It targets CD3, MSLN, and PD-L1 and is registered as a Class 1 innovative therapeutic biological product. As of the disclosure date of this announcement, there are no domestically or internationally approved products targeting the same target.

Comment: Huiyu Pharmaceutical's TCE triple antibody drugs have entered the clinical stage, demonstrating the strength and potential of Chinese pharmaceutical companies in innovative drug research and development. However, it should be noted that the development of such products is extremely difficult, and investors need to continue to monitor their clinical progress.

NO.4 Hanyu Pharmaceutical: Expected profit of 142 million to 162 million yuan in the first half of the year

On June 30th, Hanyu Pharmaceutical announced that it expects a net profit attributable to shareholders of the listed company of 142 million to 162 million yuan in the first half of 2025, a year-on-year turnaround. Benefiting from the continuous growth of global market demand, the approval certificate of Liraglutide Injection submitted by the company to the US Food and Drug Administration on December 23, 2024, and the continuous increase in sales of active pharmaceutical ingredients, the market competitiveness of the company's products, and strict cost control, the operating profit margin of international business is relatively high, further promoting the overall profitability of the company.

Comment: In the hot market atmosphere of GLP-1 drugs, Hanyu Pharmaceutical seized the opportunity to expand its raw materials overseas and successfully achieved a rebound in performance in the first half of this year. However, it should be noted that the current performance of the company depends on the overseas market demand for a few products, and future sustainability remains to be observed.