Trump becomes the "drug price butcher"! Sci-tech innovation board pharmaceutical stocks fell sharply, which companies were wrongfully killed?

"Science and Technology Innovation Board Daily" on May 12 Recently, U.S. President Trump announced that he would sign an executive order that is expected to reduce the price of local prescription drugs and drugs by 30% to 80%. Affected by this news, the concept of science and technology innovation medicine fell rapidly at the opening of today, as of the close, BeiGene fell more than 9%, Baili Tianheng fell more than 6%, and Yifang Biotech, Zhixiang Jintai and others fell one after another.

The Science and Technology Innovation Board Daily has reviewed 29 listed companies in the pharmaceutical industry on the Science and Technology Innovation Board and found that 4 companies have achieved an overseas revenue share of over 60% in 2024. Among them, Jankai Technology, BeiGene, and Novotech reached 62.69%, 62.85%, and 63.2%, respectively, while Baillie Gifford reached 91.59%.

Public information shows that Baile Tianheng focuses on the research, development and production of ADC drugs. In 2024, the company achieved operating revenue of 5.823 billion yuan, a year-on-year surge of 936.31%. The reason for this is that the company reached a cooperation agreement with its largest client BMS regarding BL-B01D1, with an advance payment of 800 million yuan received during the reporting period, resulting in a structural increase in overseas revenue. During the reporting period, the company achieved total sales of 5.334 billion yuan to BMS.

In fact, domestic pharmaceutical companies are no longer solely focused on the US market for their overseas expansion. On April 10, Novartis announced that it has reached a strategic cooperation with the well-known Middle Eastern pharmaceutical company Julphar, to establish relevant agreements regarding the supply of semaglutide raw materials in 22 countries in the Middle East and Africa, including the UAE and Qatar. In addition, BeiGene will also submit and apply for new indications in multiple countries and regions globally, including Europe and Japan, by 2025.

▌High domestic sales still account for the majority

Furthermore, among the listed pharmaceutical companies on the STAR Market, those primarily focused on domestic sales still account for the majority. Among them, 19 companies have a domestic sales revenue ratio exceeding 90%, and 12 companies have even achieved 100% domestic sales for their products.

In fact, small-cap companies such as Gibel and Frontier Bio have turned positive after a significant decline. Public information shows that Gibel's main product is Likujun tablets, which are used to treat leukopenia and thrombocytopenia. Frontier Bio's main product, Aikoning (accounting for 90.78% of sales), targets the HIV-1 virus and requires administration only once a week.

Open Source Securities stated that domestic innovative drug companies are quickly aligning with the global market, with "license-out" opportunities continuously emerging, and the commercialization environment gradually improving. At the same time, the competitive landscape in the industry is improving. As the United States enters a rate-cutting cycle and domestic support for the innovative drug industry continues, coupled with the phenomenon-level launch of weight-loss drugs, the pharmaceutical industry chain is expected to see a rebound in performance by Q1 2025, and the sector is likely to welcome new opportunities.

Xinda Securities believes that the export industry chain has experienced a significant withdrawal due to the continuous escalation of China-U.S. tariff policies, especially in the pharmaceutical sub-sectors with relatively large exposure to U.S. exports, such as the CXO sector and the bulk drug sector. With the marginal easing of tariff policies, these sub-sectors are expected to welcome a valuation repair.

In terms of investment, a recent research report by Founder Securities pointed out that the allocation in the pharmaceutical industry has reached a bottom reversal, and institutional sentiment is marginally improving. In the first quarter of 2025, the proportion of equity funds heavily invested in pharmaceuticals increased by 0.47 percentage points to 9.13%, ending a continuous downward trend since Q1 2024. Among them, the holding structure is significantly differentiated, with globally competitive innovative pharmaceutical companies and CXO enterprises being more favored.

Industrial Securities believes that in the first quarter of 2025, the allocation ratio of active equity funds in the pharmaceutical and biotechnology sector will be 10.58%, a slight increase compared to the previous quarter, but the positioning percentile remains at a historically low level of 18.3%. Overall, innovative drugs have shown marginal improvement, but the market enthusiasm is relatively low, with institutional holdings being low, still leaving room for expectation gaps.

Source: Science and Technology Innovation Board Daily

Author: Science and Technology Innovation Board Daily