Hong Kong Stock Research Agency: “Davis Double Click” for Innovative Drugs

In the first quarter of 2026, the total transaction volume of innovative drug BD in my country exceeded US$60 billion, approaching half of the transaction volume for the whole year of 2025. This explosive growth is a concentrated reflection of the reform of China's new drug review and approval system, the accumulation of local scientific research capabilities, and the profound restructuring of the global pharmaceutical supply and demand relationship in the past decade.

Under these deep-seated driving factors, the better-than-expected performance of the annual reports of innovative drugs was a matter of course, and the overall sector rose steadily. The sector continues to recover. Among them, InnoCare Pharmaceutical Co., Ltd., which just picked up a "U" in March, saw a significant increase in market attention during the company's annual report disclosure period (March 25-April 13). A shares rose by 18.15%, H shares rose by 24.42%, and institutional net inflows were approximately HK$150 million. It has become one of the hot companies in the innovative drug sector recently.

The current performance resonates with the company's stock price, and Davis's classic double-click scene is repeated again. "Davis Double Click" was first proposed by the famous American investor Shelby Davis. In the capital market, it usually refers to the dual effects of corporate profit growth and market valuation improvement.

Speeding up again under high base

In 2025, InnoCare Pharmaceutical Co., Ltd. handed over the most beautiful report card in the ten years since its establishment - revenue of 2.375 billion yuan, a year-on-year increase of 135.27%; net profit of 640 million yuan, turning losses into profits for the first time. Compared with the long journey of domestic Biotech from listing to profitability, InnoCare Pharmaceutical Co., Ltd. completed the magnificent transformation into a "profitable Biopharma" in just 3 years.

On the evening of April 23, InnoCare Pharmaceutical Co., Ltd. released its financial report for the first quarter of 2026. Drug revenue increased by 44.5% year-on-year to 450 million yuan, and total revenue in the first quarter was 530 million yuan, a year-on-year increase of 38.7%. The company achieved sustained profitability, with net profit in the first quarter increasing 607.7% year-on-year to 100 million yuan. Management stated at the previous 2025 performance briefing that overall product revenue is expected to achieve a year-on-year growth of approximately 35% in 2026.

The current valuation level of Hong Kong stocks shows potential characteristics of value restoration.

Based on the excellent performance throughout 2025, the company will continue to maintain high-quality and rapid development in the first quarter of 2026. InnoCare Pharmaceutical Co., Ltd.'s continued performance has triggered extensive market discussions on the company's growth, including new expectations for valuation. The pricing difference between the A-share and Hong Kong-share markets also provides a rare window for observing a company's value.

Against the background of continued improvement in fundamentals and steadily increasing market attention, the process of bridging Hong Kong stock pricing and the company's intrinsic value may enter a more predictable stage.

From "single advance" to "multiple blooms"

The core product Orelabrutinib, which is the basis of InnoCare Pharmaceutical Co., Ltd.'s performance, continues to grow. All four approved indications are included in medical insurance; first-line CLL/SLL indications are included in the Level I recommendation of the "CSCO Lymphoma Diagnosis and Treatment Guidelines 2025 Edition"; the exclusive indication of MZL (marginal zone lymphoma) continues to contribute barriers.

But what really makes the market re-evaluate the company's value is Orelabrutinib's "second curve" - the field of autoimmune diseases. Phase III clinical trials for ITP (essential thrombocytopenia) have been completed, and the company expects to submit a marketing application in the first half of 2026. The Phase IIb clinical trial of SLE (systemic lupus erythematosus) has reached the primary endpoint and has the potential to become a FIC, and the Phase III registration study is progressing. Global Phase III clinical trials for MS (multiple sclerosis) have been launched. This means that orelabrutinib is moving from a "single advance" in hematological tumors to a two-wheel drive of "tumor + autoimmunity".

Of particular concern is the unique blood-brain barrier penetration advantage of orelabrutinib. Its cerebrospinal fluid exposure is sufficient to significantly inhibit B cells and microglia within the central nervous system. This is regarded as the key to overcoming MS patients' "non-relapsing disability progression". Currently, only aurelizumab has been approved by PPMS in the world, with sales reaching 7 billion Swiss francs (approximately US$8.5 billion) in 2025. If orelabrutinib can prove its clinical value in PPMS and SPMS, an area that lacks effective treatments, it is expected to open up a huge potential for growth.

The product matrix is further expanded,

From "one product dominates" to "troika"

In 2025, InnoCare Pharmaceutical Co., Ltd.'s commercial product matrix will expand from 1 to 3. Tanxituzumab was approved for DLBCL indication, becoming the first CD19 monoclonal antibody approved in China; zolecitinib was approved, becoming the first domestically produced pan-TRK inhibitor. Among them, tanxituzumab targets DLBCL, which accounts for the highest proportion of subtypes in non-Hodgkin lymphoma. More than half of relapsed patients belong to the target population of this drug. The regimen combined with lenalidomide has shown excellent efficacy (mDOR and mOS are 3-4 times longer than traditional regimens). The commercialization of tanxituzumab is worth looking forward to.

The in-depth layout of pipelines under development is also worthy of attention.

The BCL2 inhibitor Mesutoclax is the next blockbuster candidate in InnoCare Pharmaceutical Co., Ltd.'s hematoma pipeline. Its research on treating myeloid malignant tumors has been selected for the 2026 ASCO Annual Meeting, and the market is paying close attention to it. If Mesutoclax can enter the market with differentiated clinical data, it will face a reachable market of approximately US$20 billion for four indications (CLL/SLL, MCL, AML, MDS) (statistics from Frost Sullivan and other institutions).

The autoimmune sector takes two TYK2 inhibitors as its core pivot. ICP-332 (Soficitinib) has currently completed the enrollment of Phase III clinical patients with moderate to severe atopic dermatitis (AD). It is expected that the data will be read out in 2026 and it will be declared for marketing in 2027. There is a huge market space for other indications such as vitiligo and urticaria. The Phase III clinical enrollment of ICP-488 for the treatment of psoriasis has been completed. The data will be read out in the middle to the second half of 2026. It will be expanded to multiple indications such as cutaneous lupus and Sjogren's syndrome. In addition, targets such as VAV1 and IL-17 have made the market full of expectations.

In terms of early R&D pipeline, the B7H3-targeting ADC product ICP-B794 released preclinical data in the form of a poster at the AACR annual meeting, demonstrating potent anti-tumor activity and a safety window that far exceeds that of similar drugs. The hot track requires differentiated data, and the safety window is precisely the biggest variable that determines whether ADC drugs can improve their position.

InnoCare Pharmaceutical Co., Ltd.’s “tumor + autoimmunity” matrix layout is moving from blueprint to reality step by step.

Conclusion

When a Biotech finally takes off the "U" label, what the market really cares about is no longer whether it can make a profit, but whether the profit can be sustained. If 2025 is InnoCare Pharmaceutical Co., Ltd.’s “year of proven profitability,” 2026 is expected to be the “year of jump in value.” ITP's NDA, SLE's Phase III launch, MS's two global Phase III accelerations, a series of data readouts for ICP-248, and Phase III data readouts for ICP-332 and ICP-488 - at least 4 major catalysts will be released intensively in the next 12 months. When performance growth (on the profit side) and valuation repair (on the valuation side) work together, it is the most classic scene of Davis's double-click.

Source of information:

• Roche reports strong 2025 results with 7% sales growth
• Data of InnoCare's Orelabrutinib for the Treatment of MS Released at 2025 ACTRIMS Forum
• NEJM: Ocrelizumab versus Interferon Beta-1a in Relapsing Multiple Sclerosis
• 21st Century Business Herald: InnoCare Pharmaceutical Co., Ltd. “surges” in the blood cancer track