China Approves 38 Class 1 Innovative Drugs in H1 2026, 11 with New Targets and Mechanisms

By Investment Times & Benchmark Research | Reporter: Zhang Jingyu

Breakthrough Achievements in Domestic Innovative Drugs

China's first AI-assisted innovative drug—Yisitevir Hydrochloride Tablets—has been approved for marketing, targeting mild to moderate cases of COVID-19 in adults. This milestone marks a significant leap in the country's pharmaceutical innovation landscape.

According to the National Medical Products Administration (NMPA) , in the first half of 2026, China approved 38 Class 1 innovative drugs, of which 11 featured new targets and mechanisms, all independently developed by domestic enterprises. Notably, a series of "world-first" innovative drugs have emerged in recent years, signaling a shift from "following standards" to "participating in—and even defining—standards."

Selected "World-First" Innovative Drugs

• Baiyang Investment & Incubation — China's first innovative nuclear drug approved (Source: Qilu Yidian, 2026.9.21)
• Yizekang combined PD-1 monoclonal antibody — Breakthrough therapy designation for first-line locally recurrent unresectable or metastatic triple-negative breast cancer (Source: China Securities Journal, 2026.9.22)
• Keji Pharmaceutical — CAR-T therapy advances into solid tumors (Source: 21st Century Business Herald, 2026.9.14)
• Global-first drugs — A paradigm shift in Chinese pharmaceutical innovation (Source: Sina Finance, 2026.9.21)
• Chinese innovative drugs — Stepping onto the global stage (Source: Guangming Online, 2026.9.18)

Analysts view the concentrated approval of global-first drugs by domestic enterprises in 2026 as a structural inflection point for China's innovative drug industry. Previously dominated by imports, generics, and follow-on innovation, the sector now demonstrates enhanced capabilities in original R&D, target discovery, and clinical translation, approaching international advanced levels.

Future Development Trends

Fundamental Drivers

The core driving force has shifted from R&D expectations to a dual engine of:

• Profit inflection point realization
• Global innovative asset value monetization

Three key financial indicators:

1. Multiple biotech companies turned profitable in the first half of 2026
2. Revenue share of innovative drugs at traditional large pharmaceutical companies continues to rise
3. Overseas expansion models upgraded to diversified partnerships

(Source: Ping An Securities, 2026.9.9)

Technological Landscape

The newly approved Yisitevir Hydrochloride Tablets—developed from molecular discovery to clinical trial completion in just 3.5 years—mark the commercialization of AI-driven drug development in China.

As of end-2025, China had 4,751 innovative drugs in R&D, accounting for approximately 30% of the global total, ranking second worldwide. Chinese companies demonstrate global competitiveness in frontier areas including:

• ADC (Antibody-Drug Conjugates)
• GLP-1 receptor agonists
• Small nucleic acid drugs
• Radiopharmaceuticals

(Source: Securities Daily, 2026.9.9; China Research Network, 2026.9.16)

Policy Support

On September 18, 2026, ten Chinese government departments jointly released the "15th Five-Year Plan for Pharmaceutical Industry Development", setting ambitious targets:

• Annual average growth rate of innovative drug industry scale exceeding 20% by 2030
• First-in-class (FIC) drugs accounting for no less than 25% of global share

The plan incorporates global innovation share, competitive product strength, leading enterprise clusters, and world-class ecosystems into the development framework, elevating the strategic positioning of China's innovative drug industry.

(Source: Cailianshe, 2026.9.18)

Expert Outlook

Industry professionals describe the "15th Five-Year" period as a critical five-year transition from "quantitative" to "qualitative" change in China's biomedical sector. Key opportunities include:

• Accelerating global biomedical technology paradigm shifts
• Increasing pressure on multinational R&D pipelines
• Rising demand for external innovation collaboration
• Gradual improvement of China's multi-tiered medical security system
• Steady enhancement of domestic innovative R&D capabilities

(Source: Xinhua Finance, 2026.9.18)

Investment Information

Yinhua offers the following funds for investors seeking exposure to the innovative drug sector:

• Hong Kong Stock Innovative Drug ETF Yinhua (159567) and its linked funds (Class A: 023929, Class C: 023930)
• Innovative Drug ETF Yinhua (159992) and its linked funds (Class A: 012781, Class C: 012782)

Interested investors should evaluate within their own risk tolerance.

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Investment involves risk. Please invest cautiously.

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Before making investment decisions, carefully read the fund contract, prospectus, and product summary. Fully understand the fund's risk-return profile and characteristics, and consider your own investment objectives, time horizon, experience, and financial situation.

Yinhua Fund Management Co., Ltd. provides the following risk disclosures:

1. Funds are categorized by investment type (equity, hybrid, bond, money market, fund-of-funds, commodity, etc.). Higher expected returns generally entail higher risk.
2. Funds face market risk, management risk, technical risk, and compliance risk. Open-end funds may face large redemption risk—if net redemption requests exceed a certain percentage (10% for open-end funds, 20% for periodic open-end funds), investors may not be able to redeem all shares or may experience delayed payment.
3. Regular fixed-amount investment differs from savings plans. It does not guarantee returns or avoid inherent fund risks.
4. Special product risks:

• ETF investors should note index volatility and ETF-specific risks. Linked funds face tracking deviation and performance difference risks.
• Hong Kong Stock Innovative Drug ETF and its linked funds invest in Hong Kong Stock Connect securities, facing risks from differences in investment environment, market systems, and trading rules.

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Keywords: Hong Kong Stock Innovative Drug ETF Yinhua (159567) | Innovative Drug ETF Yinhua (159992)