This article only represents the author's own views.

After a four-year slump, a new spring has finally come for Hong Kong’s innovative drug sector. Several factors are ushering in the new season, including improving market sentiment, policy tailwinds and greater commercialization by this previously revenue-challenged group. The result has been a more than 50% surge for the Hang Seng Innovative Drug Index since the beginning of the year, led by star performers with the best drug pipelines.

One of those, Akeso Inc. (9926.HK), hardly looks too promising at first glance, recently reporting its revenue fell 53% last year to 2.12 billion yuan ($290 million). But a closer look at the results, released at the end of last month, shows the drop was due to a steep decline in licensing income from 2.92 billion yuan in 2023 to only 122 million yuan last year. While the company swung to an annual loss of 510 million yuan from a profit of 1.94 billion yuan, its actual drug sales hit an all-time high of 2.03 billion yuan for the year, up 25% from 2023.