The Hong Kong Stock Connect innovative drug sector finally sprung to life on September 4, posting its third consecutive session of gains with rising volume. The HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (520880), which focuses 100% on innovative drug R&D, successfully reclaimed all moving averages except the annual line. Leading the charge, individual stock AKESO (09926) surged 11.45% in a single day, establishing itself as the absolute sentiment leader in the sector. What's driving AKESO's rally, and what factors are propelling the broader Hong Kong Stock Connect innovative drug sector? Is a new upward trend beginning?
Core Product Achieves Another Milestone
On September 3, AKESO announced the latest results from its HARMONI-2 study: in a pre-specified interim overall survival (OS) analysis, the study successfully met the key secondary endpoint, with ivonescimab demonstrating a statistically significant and clinically meaningful improvement in OS compared to pembrolizumab (Keytruda). As OS is the most rigorous clinical endpoint for oncology drugs, these results indicate that ivonescimab monotherapy is genuinely superior to Keytruda monotherapy.
This is not an ordinary data readout. HARMONI-2 had already achieved its primary PFS endpoint in May 2024: median PFS was 11.14 months for the ivonescimab arm versus just 5.82 months for the Keytruda arm, with an HR of 0.51, representing nearly a 50% reduction in disease progression risk. However, a core question lingered in the market: can PFS benefits translate into OS benefits? This positive OS result dispels the concern that the drug "only delays progression without extending survival," elevating the clinical evidence from "significant PFS with a trend in OS" to a dual-positive PFS/OS outcome. This reinforces ivonescimab's differentiated advantage as a next-generation cornerstone immuno-oncology agent.
Pembrolizumab (Keytruda) is one of the most commercially successful innovative drugs globally, with worldwide sales exceeding $30 billion in 2025. The fact that ivonescimab has defeated this "blockbuster of blockbusters" in a head-to-head comparison and achieved dual PFS and OS benefits could reopen the imagination around its commercial value.
Clinical Data Catalyst Window Approaching
It's worth noting that since the second half of the year, several leading innovative drug developers have made significant clinical progress. Domestic innovative drugs are transitioning from "following" to "leading," particularly in the ADC, bispecific antibody, and immuno-oncology 2.0 tracks, where clinical data is being rapidly generated, with multiple studies representing global firsts (First-in-Class).
China Biopharmaceutical: The Phase III study of TQB2102, the world's first HER2 bispecific antibody ADC, has reached its pre-specified endpoints. Kelun-Biotech: The world's first Phase III positive result for an ADC+IO combination in first-line NSCLC could rewrite the first-line treatment landscape for PD-L1 positive NSCLC. Baili Starlight: The world's first DLL3 ADC to enter a Phase III study in first-line extensive-stage small cell lung cancer (ES-SCLC) has received FDA approval for its Phase III clinical trial application. Haixi New Drug: HX9428, potentially the world's first oral treatment for retinal diseases (such as nAMD), has been granted FDA Fast Track designation and has initiated a second Phase II clinical trial in China.
Looking ahead, the WCLC (World Conference on Lung Cancer) on September 12 and the ESMO (European Society for Medical Oncology Congress) on October 23 are fast approaching. Innovative drug companies will enter a period of dense clinical data disclosure. The progress of Phase III development for partnered assets and the data delivery of high-quality pipelines will be unveiled sequentially, making the conference-driven rally highly anticipated.
Fundamentals Align with Policy Support
On the fundamental front, interim results have fully validated the high prosperity of the innovative drug industry. Taking the HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (520880) as an example—which is 100% focused on innovative drug R&D—of its 48 covered innovative drug R&D companies, 31 achieved profitability in the first half, 6 of which turned from loss to profit year-over-year. Meanwhile, 33 companies, nearly 70%, reported positive growth in net profit attributable to shareholders. The three major heavyweights, each with a weight exceeding 10%, continued to deliver strong performances, with BeiGene reporting a staggering 385.79% year-over-year surge in net profit.
With the interim reporting season concluded, policy support has swiftly taken over. On September 1, the "National Essential Medicines List (2026 Edition)" officially came into effect. For the first time, the new list breaks the convention of excluding high-cost innovative therapies from essential medicines, including four domestically developed Class 1 innovative drugs. Institutions point out that this sends a strong policy signal supporting the development of innovative drugs, further broadening channels for these drugs to enter primary care and the basic medication system. On September 4, at a State Council Information Office press conference, the National Healthcare Security Administration stated it would continue to adjust the national basic medical insurance drug list annually, incorporating more eligible innovative drugs for major diseases and key areas such as oncology, chronic diseases, rare diseases, and pediatric conditions into medical insurance reimbursement. Additionally, the administration will optimize the catalogue of innovative drugs for commercial health insurance, recommending commercial medical insurance for first-payment of innovative drugs that exceed the scope of basic medical insurance but are highly innovative, have significant clinical value, and offer substantial patient benefits.
Related ETFs
With multiple positive catalysts—clinical validation, earnings delivery, and policy support—converging on the Hong Kong Stock Connect innovative drug sector, investors seeking comprehensive exposure can consider two T+0 trading "tools":
HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (520880): Closely tracking the Hang Seng Hong Kong Stock Connect Innovative Drug Selection Index, with 100% allocation to innovative drug R&D companies and approximately 70% of positions in innovative drug R&D leaders. OTC feeder fund: 025221.
HUABAO HONG KONG STOCK CONNECT HEALTHCARE ETF (159137): Closely tracking the Hong Kong Stock Connect Healthcare Thematic Index, with heavy allocation to the innovative drug industry chain—50% CXO and 20% innovative drugs, of which WuXi series companies account for over 38%. OTC feeder fund: 026922.
Data sources: Shanghai-Hong Kong-Shenzhen exchanges, CSI Index Company, Hang Seng Index Company, and other public information. Weight data as of August 31, 2026. Fund fee rates: ETF funds do not charge sales service fees. When subscribing or redeeming fund shares, the authorized broker may charge a commission of no more than 0.5%, which includes fees charged by the stock exchange and registration institutions. For detailed fee rates, please refer to each fund's legal documents. Special note: The fund manager assesses the risk level of HUABAO HONG KONG STOCK CONNECT HEALTHCARE ETF, HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND, and their feeder funds as R4 (medium-high risk), suitable for aggressive (C4) and above investors. Risk disclosure: The index constituent stocks mentioned in this article are for display purposes only. Individual stock descriptions do not constitute investment advice in any form and do not represent the holdings or trading activities of any fund under the manager's umbrella. The weightings of the mentioned individual stocks in the Hang Seng Hong Kong Stock Connect Innovative Drug Selection Index are shown in the accompanying charts. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must bear responsibility for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses arising from the use of the content herein. The performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Past performance does not represent future results. Fund investment carries risks.
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