Nomura: Multinational drug and medical device companies’ China businesses rebound: New products and a low base drive growth, while procurement pressure persists

Which new products drove growth in China?

Lilly’s China revenue rose 69% year over year to 947 million dollars in the third quarter of 2026, or 62% at constant exchange rates, driven mainly by strong demand for Mounjaro. Management said the drug generated more than 1 billion dollars in its first full year on the market in China.
Novartis’s China sales rose 25% year over year to 1.2 billion dollars over the same period, or 18% at constant exchange rates. Drivers included continued sales growth for the cholesterol-lowering drug inclisiran after its inclusion on the national reimbursement list, and initial demand following remibrutinib’s launch in China.
Merck’s pharmaceutical sales in China rose 14% year over year to 429 million dollars in the third quarter, compared with a low base in the third quarter of 2025.

Profit performance varied among companies. Merck’s global sales rose 5% year over year to 18.1 billion dollars in the third quarter, while net profit fell 12% to 5.1 billion dollars. Novartis’s global net sales rose 4% to 14.5 billion dollars, while net profit fell 70% to 1.2 billion dollars.
Lilly’s global revenue rose 39% year over year to 24.4 billion dollars over the same period, and net profit grew 16% to 6.5 billion dollars. The company raised its full-year 2026 sales guidance from 85 billion–87 billion dollars to 91 billion–92 billion dollars.
AstraZeneca’s third-quarter global revenue rose 7% year over year and net profit grew 23%. China revenue rose 9% to 1.9 billion dollars; the company estimated growth at approximately 15% excluding the impact of centralized procurement on certain drugs, indicating that centralized procurement weighed on growth.

GE HealthCare’s China revenue rose 7% year over year to 586 million dollars in the third quarter. Management said the growth came mainly from currency movements, while also observing improved procurement activity and ongoing tenders.
Illumina’s Greater China sales rose approximately 14% year over year to 59 million dollars in the third quarter. Management said the China business had returned to growth, but did not expect concentrated budget spending beyond normal seasonality in the China market in the fourth quarter.
Boston Scientific’s management expects greater price pressure in China in 2027, and growth may not be sufficient to offset pressure on its electrophysiology and WATCHMAN businesses. The company’s global sales rose 1.5% year over year in the third quarter of 2026, while net profit fell 23%.

In a phase III endometrial cancer trial, sac-TMT, a TROP-2 antibody-drug conjugate developed through a partnership between Merck and Kelun-Biotech, extended median overall survival by nearly 7 months. Merck plans to start a phase III trial combining it with the PD-1/VEGF bispecific antibody MK-2010 in the first half of 2027.
In a phase III trial involving previously treated EGFR-mutant non-small cell lung cancer, iza-bren, a bispecific ADC developed through a partnership between Bristol Myers Squibb and Biokin, achieved median progression-free survival of 11.1 months, compared with 5.7 months in the chemotherapy group.
AstraZeneca management believes active R&D in China presents opportunities for further partnerships and also means competition will intensify.