CICC released a research report stating that it maintains Heyo-B (02256) “outperforms the industry” rating, and the target price for 2023 remains unchanged at HK$6.76 in its profit forecast. The company recently announced a number of developments in products such as ABSK021 (CSF-1R inhibitor), including active clinical data updates for TGCT at the CTOS annual meeting, initiation of phase II clinical administration for pancreatic cancer, and more clinical progress of early pipeline molecules.
The main views of CICC are as follows:
ABSK021 was used for TGCT phase Ib data updates, and the response rate was further improved.
According to the company's official website, the ORR of 32 patients in the ABSK021 50mg q.d. group reached 87.5% (including 3 cases of CR), which is an improvement over previous data, and safety is better. TGCT is a type of rare tumor that urgently requires more drug treatment. Currently, the approved drug pexidartinib has a response rate of only 20-38% in TGCT, and a black frame warning has been added due to severe and potentially fatal liver damage. Another phase III candidate, vimeSeltinib, is progressing rapidly, but compared across studies, its response rate is inferior to ABSK021, and there is a higher risk of CPK levels 3-4. The bank believes ABSK021 has response and safety advantages. At present, the phase III clinical trial of ABSK021 for TGCT has begun administration in China, the US, and Europe, and has obtained breakthrough therapy/priority drug qualification from the NMPA/FDA/EMA; the company expects this clinical trial to complete enrollment in early 2024 and read it out in 2024. The bank suggests focusing on progress in subsequent clinical trials and potential commercialization arrangements.
More cutting-edge molecules revealed preliminary clinical data, showing potential for differentiation.
The company disclosed preliminary clinical data of ABSK011 (FGFR4) and ABSK043 (oral PD-L1) in ESMO 2023, of which: 1) ABSK011 had positive initial response data in FGF19+ HCC, and the safety data were good. Considering the difficulty of developing FGFR4 inhibitors and poor clinical progress in the history of potential competitors, the bank expects ABSK011 to reverse progress; 2) ABSK043 is expected to reverse progress; 2) ABSK043 is expected to reverse progress; 2) ABSK043 has positive clinical response data and overall safety is good, and none of the dosage groups have been reported peripheral neuropathy or grade 4/5 adverse event. In addition, the company also updated preclinical data on ABSK131, a selective PRMT5*MTA inhibitor, at a recent academic conference. The bank recommended focusing on the future progress of these drug candidates.
Cash reserves are relatively abundant, actively promoting the monetization of drug discovery capabilities.
As of the end of June 2023, the company's net account cash exceeded 2 billion yuan. According to the company's official website, its cash consumption for the full year of 2023 is expected to be less than 75 million US dollars. The bank expects the existing capital to support the company's operations in the next few years. At the same time, it actively promoted its drug discovery capabilities and early pipeline monetization, and reached cooperation on early drug development with multinational pharmaceutical company Lilly and domestic pharmaceutical company Alice in January 2022/March 2023. The bank believes that on the one hand, such cooperation reflects the company's excellent small molecule drug discovery and development capabilities, and on the other hand, it also provides more opportunities for monetization of the company's drug discovery capabilities.