Shanghai Medicilon Inc

Two biopharmaceutical CRO companies on the STAR Market, Medicilon and Innostar, have released their 2026 half-year reports, both swinging to profitability. Medicilon reported first-half revenue of 761 million yuan, up 40.91 percent year on year, with net profit attributable to shareholders of 51.6 million yuan, compared with a loss of 12.9 million yuan in the same period last year. Innostar reported first-half revenue of 465 million yuan, up 23.92 percent year on year, with net profit attributable to shareholders of 39.17 million yuan, compared with a loss of 15.19 million yuan a year earlier. Both companies said the improvement was driven by a recovery in global innovative drug R&D demand, ample order backlogs, and higher capacity utilization. CRO leader WuXi AppTec previously disclosed in its half-year report that first-half revenue reached 28.9 billion yuan, up 38.93 percent year on year, with net profit attributable to shareholders of 11.08 billion yuan, up 29.43 percent, and raised its full-year revenue guidance to between 58.5 billion and 60.5 billion yuan.

Medicilon released its 2026 half-year report, with first-half net profit attributable to the parent of 51.6 million yuan, turning from a loss to a profit year-on-year. The company's operating revenue was 761 million yuan, up 40.9 percent year-on-year; net profit attributable to the parent after deducting non-recurring items was 43.03 million yuan, compared with a loss of 26.73 million yuan in the same period last year; net operating cash flow was 135 million yuan, up 80.5 percent year-on-year. Second-quarter operating revenue was 397 million yuan, up 45.2 percent year-on-year, and net profit attributable to the parent was 35.99 million yuan, up 2,083.1 percent year-on-year. The company said the performance growth was mainly due to a recovery in global demand for innovative drug research and development, with all business segments achieving significant growth.

The A-share CRO sector surged on the morning of August 7, with the sector index climbing 7.37% to top all sector gainers. Among the 41 constituent stocks, 15 rose more than 10%, including Bide Pharmaceutical, Yaokang Bio, Baihua Pharmaceutical, Apeloa Pharmaceutical, and Asymchem hitting their daily limit up, while another 17 stocks such as BioMap, Joinn Laboratories, Tigermed, and WuXi AppTec gained over 5%. Earnings were the main driver, after BioMap released a profit forecast the previous evening, projecting attributable net profit of 236 million to 246 million yuan for the first half of 2026, a year-on-year increase of 3.92 to 4.13 times. So far, eight CRO companies have reported half-year results or profit forecasts, with six expecting double-digit or higher growth. Joinn Laboratories and Medicilon had previously forecast first-half profit to double. Sector leader WuXi AppTec reported in its half-year results this week that attributable net profit reached 11.08 billion yuan in the first half, up 29.43% year-on-year, surpassing 10 billion yuan for the first time in a first half. It also raised its full-year 2026 revenue guidance to between 58.5 billion and 60.5 billion yuan, with continuing operations revenue growth raised to 35% to 39%. The turnaround in CRO earnings stems from rising orders, as a sustained recovery in global pharmaceutical investment and financing drives renewed demand for innovative drug R&D. BioMap said its two major business lines achieved dual-engine growth, while WuXi AppTec's continuing operations backlog reached 66.43 billion yuan as of end-June, up 25.2% year-on-year. A research note from China Post Securities argued that overseas R&D outsourcing demand is steadily recovering, and a boost in domestic R&D outsourcing demand is expected to materialize in 2026.

WuXi AppTec released its 2026 half-year report, with first-half net profit attributable to the parent company surpassing 10 billion yuan for the first time to reach 11.08 billion yuan, up 29.43 percent year on year. The results triggered multiple limit-up moves in the CXO and pharmaceutical sectors across both A-shares and Hong Kong stocks on August 4. WuXi AppTec's A-shares hit the 10 percent daily limit up that day, while its Hong Kong shares closed 11.17 percent higher. The company's first-half revenue was 28.9 billion yuan, up 38.93 percent year on year, and it raised its full-year revenue guidance to a range of 58.5 billion to 60.5 billion yuan. Buoyed by WuXi AppTec's performance, A-share companies such as GemPharmatech, Porton Pharma Solutions, and Medicilon rose over 13 percent, while Hong Kong-listed GenScript Biotech gained over 11 percent, and Pharmaron, Asymchem, and Tigermed climbed more than 5 percent. Several CXO firms had previously issued positive profit alerts. Pharmaron expects first-half net profit to grow 34 to 45 percent year on year, Joinn Laboratories forecasts a staggering 884.9 to 1,377.4 percent surge in net profit attributable to the parent, and Medicilon anticipates swinging to a profit. The innovative drug segment also strengthened, with Biopuris and HitGen rising over 14 percent, while Luoxin Pharmaceuticals, Jimin Health, and ZBD Pharmaceutical hit the 10 percent daily limit up. Meanwhile, Alphamab announced it has granted overseas rights for its TROP2/HER3 bispecific antibody-drug conjugate SKN016 to Pathos AI, in a deal with a total potential value exceeding 2.2 billion US dollars.

As of the close on July 23, 99 A-share biomedical companies have released their 2026 half-year earnings forecasts, with 60 projecting growth in net profit attributable to the parent and 39 forecasting a decline. Fushine Pharma expects net profit attributable to the parent to rise by 2,487 percent to 3,204 percent, Joinn Laboratories anticipates an increase of 884.9 percent to 1,377.4 percent, and Medicilon, Haisco Pharmaceutical, and ST Wanbang also see maximum growth exceeding 500 percent. The chemical pharmaceutical sector is broadly positive, with 25 of the 36 companies that issued forecasts expecting growth. The biologics segment is underperforming, with only 2 of the 9 companies that issued forecasts projecting an increase. Out-licensing of innovative drugs overseas is active, with total out-licensing deal value in the first half reaching approximately 110 billion US dollars. Haisco Pharmaceutical achieved significant performance growth through multiple out-licensing deals. The price of laboratory monkeys continues to rise, with the unit price of cynomolgus monkeys climbing to 178,000 yuan, driving substantial profit forecast increases for CRO companies such as Joinn Laboratories and Medicilon.

As of 2:45 p.m. on July 22, 2026, constituents of the SSE STAR Board Biomedical Index were mixed. BrightGene led gains with 12.20%, Medicilon rose 5.98%, Bloomage Biotechnology gained 5.40%, while Hotgen Biotech led declines. The Sci-Tech Innovation Board Healthcare ETF Huaxia last traded at 1.05 yuan, with intraday turnover of 15.98% and turnover of 61.5624 million yuan. Average daily turnover over the past week was 77.0437 million yuan. In news, as of July 20, 94 of the 504 A-share pharmaceutical and biotech companies had disclosed earnings forecasts, a disclosure rate of 18.65%. Among them, 55 companies reported positive net profit growth for the first half of the year, accounting for 58.51%. The innovative drug industry chain and the CXO sector performed notably well. Tianfeng Securities pointed out that in the first half of 2026, there were 621 global transactions, of which 90 involved Chinese molecules, accounting for 14.5%. The total global transaction value reached 302.893 billion US dollars, of which Chinese molecules accounted for 95.905 billion US dollars, or 31.66%. The influence of Chinese innovative molecules is steadily growing worldwide. The Sci-Tech Innovation Board Healthcare ETF Huaxia closely tracks the SSE STAR Board Biomedical Index, which selects 50 listed companies in the biomedical and related fields with larger market capitalizations from the STAR Board as samples. The top ten weighted stocks account for a combined 51.84%.

An innovative drug with a new target, co-developed and filed for approval globally, has been approved for market launch first in China, marking a historic breakthrough where an original-target innovative drug from global multi-center development is first reported and launched in China. The National Medical Products Administration has newly approved a selective orexin-2 receptor agonist for the treatment of type 1 narcolepsy in adolescents and adults aged 16 and above. Boosted by this news, the STAR Market Healthcare ETF Huaxia turned positive in the afternoon, rising 0.58 percent to 1.05 yuan, with intraday turnover of 11.46 percent and trading volume of 41.29 million yuan. The SSE STAR Market Biomedical Index rose 0.69 percent, with constituent stocks Medici rising 8.95 percent, Yirui Technology up 8.93 percent, and BeiGene gaining 6.29 percent.

Medicilon announced that it expects to return to profit in the first half of 2026, with net profit attributable to the parent estimated at 42 million to 63 million yuan, representing an increase of 425.62 percent to 588.43 percent. Net profit attributable to the parent after deducting non-recurring items is expected to be 35 million to 52.5 million yuan, an increase of 61.73 million to 79.23 million yuan compared with the same period last year. The improvement in performance is mainly due to the recovery of global demand for innovative drug research and development, sufficient order reserves, and the enhanced efficiency of the company's preclinical integrated platform, with operating revenue growing approximately 40 percent year-on-year. Higher capacity utilization and cost structure optimization also played a positive role in the performance growth.

The Sci-Tech Innovation Board Medical ETF Huaxia closed up 2.22% at 1.06 yuan, while the underlying SSE STAR Market Biomedical Index surged 2.38%. Among constituents, Medicilon rose 12.77%, Olymvax Biopharmaceuticals gained 11.54%, and YD Bio advanced 8.49%. Recent policy tailwinds continue to unfold, including optimized review and approval for cell and gene therapies and the initial inclusion of drugs in medical insurance and commercial insurance catalogues. Meanwhile, domestic innovative drug overseas licensing deals approached 100 billion US dollars in the first half of the year, blockbuster new drugs received intensive approvals, and some pharmaceutical companies reported positive half-year earnings forecasts, steadily improving industry fundamentals. Donghai Securities noted that the pharmaceutical and biomedical sector offers significant medium- to long-term investment value and recommended active positioning.

The STAR Market Healthcare ETF Huaxia rose 3.86% to 1.08 yuan, with net inflows for 10 consecutive days, attracting a total of 135 million yuan. The SSE STAR Market Biomedical Index surged 3.93%, with constituent stocks Medici rising 15.28%, Yundong Biotech up 11.44%, and Olin Biotech up 10.38%. In news, the National Essential Medicines List 2026 edition added 165 new drugs, and in the first half of 2026, the total value of China's innovative drug out-licensing deals approached the 100 billion dollar mark. Nanjing Securities noted that with the upcoming WCLC and ESMO conferences, cutting-edge fields such as bispecific antibodies and antibody-drug conjugates will enter a period of intensive clinical data disclosure, accelerating the alignment of China's innovative drug valuation system with global standards.