CITIC Securities: Continually optimistic about the full recovery of demand in the pharmaceutical industry chain

Question: What are the driving factors behind the increase in AI · BD transaction share to 40%?

Everyday Economic News AI Express, CITIC Securities research report states that, driven by the domestic innovative drug BD (business development) boom, downstream demand has rebounded, and the proportion of equity financing in corporate funding sources has significantly decreased. BD transactions have increased to nearly 40%, with the total outbound BD amount exceeding $60 billion in the first quarter of 2026, nearly half of the total for 2025. Looking at different segments, the small molecule CDMO’s share is rising due to China’s global supply chain advantage, coupled with domestic supply stability amid Middle East conflicts, potentially leading to more orders. Preclinical and clinical CROs are expected to see both volume and price increases as financing improves and early research demand transmits. Although the revenue of research services and upstream segments may be affected by exchange rate fluctuations in Q4 2025 in the short term, the demand for early research in 2026 is expected to continue, and leading companies’ revenue could grow over 20%, with current valuations considered reasonable. Recommendations to watch: ① Leading CXO companies; ② Key companies in preclinical and clinical CRO segments; ③ Research services and upstream fields with relatively reasonable valuations.

Everyday Economic News