Core Viewpoint - Innovent Biologics announced promising results from a Phase 2 clinical study of picankibart, an IL-23p19 antibody, showing robust efficacy and a favorable safety profile in patients with plaque psoriasis who had inadequate responses to previous biologic treatments [1][2][5]. Clinical Study Results - The study involved 152 patients who switched from other biologics to picankibart, with 64.6% of patients achieving skin clearance or near clearance after 16 weeks of treatment [2][3]. - The primary endpoint was met with nearly half (48.2%) of patients with prior inadequate responses achieving an sPGA score of 0 or 1 and BSA of <3% [5]. - Secondary endpoints showed that 64.6% of patients with baseline sPGA of ≥2 and BSA of ≥3% achieved sPGA of 0 or 1 [5]. Patient Demographics - Among the 152 enrolled patients, 54.6% were classified as inadequate responders, with a median disease duration of 12 years [4]. - A significant majority (96.4%) of these patients had previously been treated with IL-17 inhibitors [4]. Safety Profile - The safety profile of picankibart was favorable, comparable to other studies, with no new safety signals identified [6]. - Long-term follow-up is ongoing to assess the full data on efficacy and safety [6]. Future Developments - Innovent plans to advance the Phase 3 clinical trial of picankibart, which is currently under review for a New Drug Application (NDA) by the NMPA [7][9]. - The company aims to address unmet clinical needs in psoriasis treatment and provide more options for patients with inadequate responses to existing biologics [7][9]. About Psoriasis - Psoriasis is a chronic inflammatory disease affecting a significant portion of the population, with over 7 million patients in China alone [8]. - Biologics have become the primary systemic treatment for moderate to severe psoriasis, with IL-23 inhibitors showing rapid onset and robust efficacy [8]. About Picankibart - Picankibart (IBI112) is a monoclonal antibody developed by Innovent, targeting the IL-23p19 subunit, with potential applications in treating psoriasis and other autoimmune diseases [9]. - Multiple clinical studies are ongoing, including a Phase 3 study for moderate to severe plaque psoriasis, which has already met its endpoints [9]. About Innovent - Innovent is a leading biopharmaceutical company focused on developing high-quality medicines for various diseases, having launched 11 products and with several new drug applications under regulatory review [10][11].

Investment Rating - The report assigns a "Buy" rating for the company, Xinda Biopharma (01801.HK), marking its first coverage [2][6]. Core Insights - Xinda Biopharma has established itself as a comprehensive biopharma entity with significant commercialization achievements. The company is expected to reach a profitability inflection point as new products continue to receive approvals [3][4]. - The company has a robust pipeline in oncology, particularly focusing on IO+ADC strategies, with promising data emerging from its self-developed products [3][4]. - In non-oncology areas, the company is advancing treatments for obesity and Type 2 Diabetes Mellitus (T2DM), with major products expected to be approved within 1-2 years, providing new growth momentum [3][4]. - Overall, the company is viewed as undervalued in the market, with strong growth potential as a leading innovative drug company [3][4]. Summary by Sections Company Overview - Founded in August 2011, Xinda Biopharma has become a significant player in the biopharma sector, with 11 commercialized products and several others in various stages of clinical development [18][19]. - The company has established strategic partnerships with major international firms, enhancing its research and development capabilities [18][19]. Oncology Pipeline - The company has a deep focus on the oncology pipeline, with its PD-1 monoclonal antibody, Sintilimab, achieving nearly 2.8 billion yuan in sales in 2023, leading the domestic market [3][4]. - The PD-1/IL-2 dual antibody, IBI363, shows significant efficacy in PD-1 resistant cancer patients, positioning it as a potential leader in second-generation IO therapies [3][4]. - Multiple ADCs are in clinical stages, including IBI343 targeting CLDN18.2, which is in Phase III trials [3][4]. Cardiovascular and Metabolic Pipeline - The GLP-1 dual-target product, Masitide, is progressing well, with NDAs submitted for obesity and T2DM treatments, indicating a substantial market opportunity [3][4]. - The company has also received approval for its PCSK9 monoclonal antibody, marking a significant milestone in treating high cholesterol [3][4]. Autoimmune and Ophthalmology Pipeline - The company is expanding its autoimmune and ophthalmology product lines, with several innovative drugs entering clinical trials [3][4]. - Notable products include IBI302 for age-related macular degeneration and IBI112 for plaque psoriasis, both showing promising clinical data [3][4]. Financial Projections and Valuation - Revenue projections for 2024-2026 are estimated at 80.19 billion, 108.53 billion, and 139.04 billion yuan, with growth rates of 29.22%, 35.34%, and 28.11% respectively [4][6]. - The company is expected to achieve profitability by 2025, with a reasonable equity value estimated at 966.1 billion yuan, corresponding to a target stock price of 64.91 HKD [4][6].

Investment Rating - Buy (First Coverage) [2] Core Views - The company is a leading Biopharma in China, transitioning successfully from Biotech to Biopharma with 11 approved products and a robust pipeline in oncology, immunology, metabolism, and ophthalmology [2] - The oncology segment is a key driver, with a strategy combining IO (Immuno-Oncology) and ADC (Antibody-Drug Conjugate) to solidify its leadership position [2] - Non-oncology pipelines, particularly in cardiovascular, metabolic, and autoimmune diseases, are expected to open new growth curves [3] - The company's revenue is projected to grow significantly, with 2024-2026 revenue estimates of 8.094 billion, 11.327 billion, and 14.551 billion RMB, respectively, representing a CAGR of 30.43%, 39.94%, and 28.46% [3][6] Oncology Segment - The company's PD-1 inhibitor, Sintilimab, is the only PD-1 drug in China that covers first-line treatment for five major cancer types and is included in the national medical insurance [2] - The company is advancing its IO+ADC strategy with promising candidates like IBI363 (PD-1/IL-2), IBI343 (CLDN18.2 ADC), and IBI389 (CLDN18.2/CD3 bispecific antibody), which show potential in overcoming immune resistance and treating cold tumors [2] - IBI363, a PD-1/IL-2 bispecific fusion protein, has shown promising efficacy and safety in clinical trials, particularly in treating immune-resistant non-small cell lung cancer (NSCLC) and melanoma [23][29][34] Non-Oncology Segment - The company's GLP-1R/GCGR dual-target drug, Mazdutide, is a key growth driver, with NDA submissions for obesity and type 2 diabetes in 2024 [3] - In the autoimmune space, the IL-23p19 inhibitor, IBI112, has shown potential as a best-in-class drug for psoriasis, with its NDA submitted in September 2024 [3] - In ophthalmology, IBI311 (IGF-1R) for thyroid eye disease (TED) has submitted its NDA in May 2024, giving the company a first-mover advantage [3] Financial Projections and Valuation - The company's revenue is expected to grow from 8.094 billion RMB in 2024 to 14.551 billion RMB in 2026, with a DCF-based valuation of 93.9 billion RMB, equivalent to 101.5 billion HKD [3][6] - The company is projected to achieve profitability by 2025, driven by its diversified product portfolio and operational efficiency improvements [6][8] Key Catalysts - The commercialization of Mazdutide in 2025 is expected to be a significant growth driver, leveraging the large market potential for GLP-1 drugs in China [3][8] - The advancement of IBI363 in clinical trials and its potential for global expansion could further enhance the company's oncology portfolio [2][29] - The company's focus on operational efficiency and commercialization capabilities is expected to drive sustained growth [6][8]

Clinical Study Results - The primary endpoint of the 12-week induction period was met in a Phase 2 clinical study of picankibart (IBI112) for treating moderately to severely active ulcerative colitis (UC) in Chinese subjects [1] - The study enrolled 150 subjects randomized to receive placebo, picankibart 200 mg, or picankibart 600 mg during the induction period [2] - Clinical remission rates at week 12 were 20.0% for the 200 mg group and 14.0% for the 600 mg group, significantly higher than the 2.0% in the placebo group (p < 0.05) [3] - Clinical response rates were 54.0% for the 200 mg group and 68.0% for the 600 mg group, significantly higher than the 22.0% in the placebo group (p < 0.001) [3] - The maintenance period is ongoing, with continued increases in clinical remission, response, and other efficacy measures compared to the induction period [4] Picankibart (IBI112) Development - Picankibart is a recombinant anti-IL-23p19 antibody injection developed by Innovent [1] - It has shown potential for treating psoriasis, ulcerative colitis, and other autoimmune diseases [7] - Multiple clinical studies are underway, including Phase 3 studies for plaque psoriasis and Phase 2 studies for UC [7] - The NMPA accepted the first NDA for picankibart for treating moderate to severe plaque psoriasis in September 2024 [8] Ulcerative Colitis Market - UC is a chronic inflammatory disease with increasing prevalence in China, currently at 11.6/100,000 [6] - Current treatments include traditional immunosuppressants and biologics, but there are unmet needs due to adverse reactions and loss of response [6] - No IL-23p19 targeted drugs are approved for UC treatment in China, representing a significant market opportunity [6] Innovent Biologics Overview - Innovent is a leading biopharmaceutical company founded in 2011, focusing on oncology, autoimmune, cardiovascular, metabolic, and ophthalmology diseases [9] - The company has launched 11 products, with 5 NDAs under regulatory review and 3 assets in Phase III or pivotal trials [9] - Innovent has partnerships with over 30 global healthcare companies, including Eli Lilly, Sanofi, and Incyte [9]

Investment Rating - The report assigns a "Buy" rating for the company with a 6-month outlook [1] Core Viewpoints - The company's 2024 interim report met expectations with strong product sales growth and multi-sector breakthroughs [1] - Total revenue for 2024H1 reached 3.95 billion yuan, a 46.3% year-on-year increase [1] - Product revenue grew to 3.81 billion yuan, up 55.1% year-on-year [1] - The company demonstrated significant sales efficiency improvements with multiple quarters of high growth [1] Financial Performance - Gross margin improved to 84.1%, up 1.8 percentage points [1] - Sales and marketing expense ratio decreased to 48.6%, down 5.9 percentage points [1] - Management expense ratio reduced to 5.2%, down 4.9 percentage points [1] Pipeline Development - The company made significant progress in weight loss, oncology (ADC, next-gen IO), autoimmune, and ophthalmology fields [1] - Masdutide is expected to become the first domestic GLP-1 dual-target weight loss drug, with NDA submissions in 2024 [1] - IBI343 (CLDN18.2 ADC) and IBI363 (PD-1/IL-2α-bias) showed promising early data in oncology [1] - Picankibart (IL-23p19) is expected to submit NDA in H2 2024 for psoriasis treatment [1] - IBI311 (IGF-1R) is under NDA review, while IBI302 (VEGF/C) 8mg is in Phase III trials [1] Revenue Projections - 2024 revenue forecast increased from 7.225 billion yuan to 7.970 billion yuan [1] - 2025 revenue forecast raised from 9.193 billion yuan to 10.235 billion yuan [1] - 2026 revenue is projected to reach 13.143 billion yuan [1] Profit Projections - 2024 net loss forecast adjusted from -766 million yuan to -756 million yuan [1] - 2025 net profit forecast changed from -170 million yuan to 89 million yuan [1] - 2026 net profit is projected to be 1.003 billion yuan [1]

Core Viewpoint - Innovent Biologics and Jiangsu Aosaikang Pharmaceutical have entered a strategic collaboration for limertinib, a third-generation EGFR TKI for lung cancer treatment, with Innovent obtaining exclusive commercialization rights in mainland China [1][2][4]. Company Overview - Innovent Biologics is a leading biopharmaceutical company founded in 2011, focusing on developing high-quality medicines for various diseases, including oncology [8]. - Jiangsu Aosaikang Pharmaceutical Co. Ltd. specializes in innovative research and development in oncology and other therapeutic areas, with a strong emphasis on small-molecule targeted drugs and biologics [10][11]. Product Details - Limertinib is an orally administered, third-generation EGFR TKI, currently under review by China's National Drug Administration for two indications related to NSCLC [2][6]. - The drug targets adult patients with specific EGFR mutations, which are prevalent in the Chinese population, addressing a significant medical need [5][6]. Clinical Trial Results - A Phase 3 clinical trial comparing limertinib to gefitinib met its primary endpoint, with results expected to be presented at future academic conferences [3][7]. Strategic Collaboration - Under the agreement, Innovent will receive a commercialization service fee based on net sales, while ASK Pharm will handle production and supply, along with receiving milestone payments [2][4]. - Both companies aim to leverage their strengths to enhance the accessibility and effectiveness of lung cancer treatments in China [4][11].

Financial Performance - Revenue from customer contracts for the six months ended June 30, 2024, was RMB 3,952,291 thousand, a 46.4% increase from RMB 2,701,532 thousand in the same period of 2023[7]. - Gross profit for the same period was RMB 3,274,740 thousand, compared to RMB 2,196,917 thousand in 2023, reflecting a significant growth[7]. - For the six months ended June 30, 2024, total revenue was RMB 3,952.3 million, an increase of 46.3% compared to RMB 2,701.5 million for the same period in 2023[8]. - Product revenue reached RMB 3,811.4 million, reflecting a 55.1% growth from RMB 2,457.5 million in the prior year, driven by strong performance of Daborhu (Sintilimab Injection) and other products[8]. - The net loss for the period was RMB 392.6 million, an increase of RMB 253.5 million from RMB 139.1 million in the prior year, primarily due to reduced non-cash foreign exchange gains[8]. - The company reported a loss before tax of RMB 392,585 thousand for the six months ended June 30, 2024, compared to a loss of RMB 256,109 thousand in the prior year[7]. - The company reported a net loss attributable to shareholders for the six months ended June 30, 2024, was RMB 392,620, compared to a loss of RMB 139,149 in the same period last year, reflecting a significant increase in losses[145]. Research and Development - Research and development expenses increased to RMB 1,399,432 thousand, up from RMB 922,817 thousand, indicating a focus on innovation and product development[7]. - R&D expenses amounted to RMB 1,399.4 million, compared to RMB 922.8 million in the same period last year, indicating a strategic focus on advancing late-stage assets and early pipeline projects[8]. - The total number of high-value products in the pipeline has reached 36, with 11 products already approved for market[4]. - The company has 3 products under review by NMPA and 4 new drug molecules in Phase 3 or pivotal clinical studies[4]. - The company is focusing on developing new indications for its existing drugs, including treatments for high uric acid levels and obesity-related metabolic diseases[21]. - The company is advancing multiple clinical trials, including IBI363 for NSCLC and IBI389 for PDAC, with results expected to be reported at major conferences in 2024[33]. Cost Management - Administrative and other expenses decreased to RMB 319,801 thousand from RMB 368,388 thousand, showing improved cost management[7]. - Sales and marketing expenses rose to RMB 1,879,356 thousand, compared to RMB 1,347,414 thousand in the previous year, reflecting increased efforts in market expansion[7]. - Sales and marketing expenses were RMB 1,879.4 million, accounting for 47.6% of total revenue, down from 49.9% in the previous year, reflecting improved commercialization efficiency[8]. - Adjusted administrative and other expenses decreased to RMB 205.5 million from RMB 272.9 million year-over-year, reflecting a reduction of approximately 24.6%[51]. Product Pipeline and Approvals - The company expanded its commercial product portfolio to 11 products, including the approval of China's first KRAS G12C inhibitor, Daborhu (Fluorouracil Tablets)[11]. - Six NDAs are under review by NMPA, including IBI344 and IBI362, targeting various cancer treatments and metabolic disorders[11]. - The company plans to expand its product portfolio to 12 products by the end of 2024, including two targeted therapies for NSCLC expected to be approved in the second half of the year[18]. - The company has 11 products on the market, with three undergoing NDA review, four in phase III or pivotal clinical trials, and 18 molecules in early clinical stages[23]. Financial Health - As of June 30, 2024, the company had cash and cash equivalents of approximately RMB 10.112 billion, indicating strong financial health[20]. - The company's total current assets as of June 30, 2024, were RMB 11,048.7 million, down from RMB 13,427.9 million at the end of 2023, a decrease of approximately 17.7%[53]. - The total liabilities decreased to RMB 7,869.3 million as of June 30, 2024, from RMB 8,099.8 million at the end of 2023, a reduction of about 2.8%[53]. - The company had cash and cash equivalents of RMB 10,112.3 million as of June 30, 2024, compared to RMB 10,969.6 million at the end of 2023, indicating a decrease of approximately 7.8%[54]. Corporate Governance - The audit committee consists of four independent non-executive directors, with Ms. Xu Yiyin as the chair[118]. - The company has complied with all applicable corporate governance code provisions as of June 30, 2024[119]. - The company has established a nomination committee, remuneration committee, and strategic committee in addition to the audit committee[118]. - The company will continue to regularly review and monitor its corporate governance practices to ensure compliance[120]. Market Strategy - The company aims to continue expanding its product pipeline and enhancing its integrated biopharmaceutical platform to meet global quality standards[3]. - Future outlook includes ongoing clinical trials and potential new product launches to address significant disease areas such as oncology and autoimmune disorders[3]. - The company is committed to sustainable growth and global innovation strategies, aiming for long-term development in the biopharmaceutical industry[18]. - The company plans to gradually use the remaining portion of the net proceeds over the next 24 months based on market conditions and business needs[117].

Core Viewpoint - Innovent Biologics has received acceptance for the New Drug Application (NDA) of picankibart injection, an IL-23p19 antibody, for treating moderate to severe plaque psoriasis in China, marking a significant milestone for the company and the treatment landscape in the region [1][2][3]. Company Overview - Innovent Biologics is a leading biopharmaceutical company founded in 2011, focusing on developing high-quality medicines for various diseases, including oncology, autoimmune, cardiovascular, and metabolic conditions [7]. - The company has launched 11 products and has multiple assets in various stages of clinical trials, including 3 new drug applications under regulatory review [7]. Product Details - Picankibart (IBI112) is a monoclonal antibody that targets the IL-23p19 subunit, showing over 80% of subjects achieving PASI 90 after 16 weeks in a Phase 3 clinical trial [1][6]. - The drug offers the longest maintenance dosing interval in its class, administered once every 12 weeks, which enhances patient convenience and quality of life [1][2]. Clinical Study Insights - The NDA acceptance is based on positive results from the CLEAR-1 Phase 3 clinical study, which met all primary and key secondary endpoints, demonstrating significant skin lesion clearance and quality of life improvement compared to placebo [2][3]. - The safety profile of picankibart was favorable, with no new safety signals reported during the trial [2]. Market Context - Psoriasis is a chronic, recurrent inflammatory disease affecting a significant portion of the population, with approximately 80% to 90% of patients having plaque psoriasis, and nearly 30% of these cases classified as moderate to severe [4]. - The global prevalence of psoriasis is notable, with over 7 million patients in China alone, highlighting the potential market for effective treatments like picankibart [4]. Future Directions - Innovent plans to continue its communication with regulatory authorities during the NDA review process and aims to validate more clinical value of picankibart through additional studies [3][6]. - The company is also expanding its innovative portfolio in other therapeutic areas, including ophthalmology and cardiovascular diseases, to address unmet medical needs [3][7].

Core Insights - Innovent Biologics presented clinical data for IBI363, a first-in-class PD1/IL-2α-bias bispecific antibody fusion protein, combined with bevacizumab for advanced colorectal cancer at the 2024 ESMO Congress [1][6] - The combination therapy demonstrated promising anti-tumor efficacy and a manageable safety profile in patients with advanced colorectal cancer [2][3] Group 1: Clinical Study Results - A total of 35 subjects were treated with IBI363 and bevacizumab, showing a 21.9% overall response rate (ORR) and a 65.6% disease control rate (DCR) [2][3] - The median duration of response (DoR) was 8.1 months, with a median progression-free survival (PFS) of 4.1 months [3] - Among subjects with liver metastases, the ORR was 11.8%, while those without had an ORR of 33.3% [3] Group 2: Efficacy in Different Patient Populations - In patients who had received prior immunotherapy, the ORR was 25.0%, compared to 20.8% in immunotherapy-naïve patients [4] - For patients with KRAS/NRAS exon 2/3/4 mutations, the ORR was 21.4%, while those without such mutations had an ORR of 30.0% [4] Group 3: Safety Profile - The most common treatment-related adverse events included arthralgia, thyroid disorders, and rash, with a total incidence of grade 3 or higher adverse events at 22.9% [2] - Immune-related adverse events of grade 3 or higher occurred in 5.7% of subjects, indicating a safety profile similar to IBI363 monotherapy [2][6] Group 4: Future Development and Potential - Ongoing studies are exploring IBI363 in other malignancies and combination regimens for advanced colorectal cancer, with updates expected at future academic conferences [5] - The combination of IBI363 and bevacizumab is seen as having significant potential for treating non-MSI-H/dMMR advanced colorectal cancer, a population with limited response to current immunotherapies [6][7]

Core Viewpoint - Innovent Biologics has announced positive Phase 3 clinical trial results for mazdutide, a dual agonist for GLP-1R and GCGR, showing superior efficacy in glycemic control and weight loss compared to dulaglutide in Chinese adults with type 2 diabetes [1][2][3]. Group 1: Clinical Trial Results - The DREAMS-2 trial involved 731 Chinese participants with type 2 diabetes, demonstrating that mazdutide 4 mg and 6 mg achieved mean reductions in HbA1c of 1.69% and 1.73%, respectively, compared to 1.36% for dulaglutide [2][3]. - At week 28, 71.2% and 74.2% of participants on mazdutide achieved HbA1c <7.0%, while 62.1% achieved this with dulaglutide [3]. - Participants on mazdutide experienced significant weight reductions of 9.24% and 7.13% for the 4 mg and 6 mg doses, respectively, compared to 2.86% for dulaglutide [4]. Group 2: Cardiometabolic Benefits - Mazdutide treatment led to improvements in multiple cardiometabolic risk factors, including fasting glucose, blood pressure, lipids, and liver enzymes, with results generally superior to dulaglutide [5]. - The treatment also showed a favorable safety profile, with low rates of treatment-emergent adverse events (TEAEs) leading to discontinuation and no new safety signals reported [6]. Group 3: Regulatory Status and Market Potential - Mazdutide is currently under review for two New Drug Applications (NDAs) in China: one for chronic weight management and another for glycemic control in type 2 diabetes [10]. - The company has multiple ongoing Phase 3 studies for mazdutide, indicating a strong pipeline and potential for significant market impact in diabetes treatment [10][11]. Group 4: Industry Context - The prevalence of diabetes in China is projected to reach 174 million by 2045, highlighting the urgent need for effective treatments [8]. - GLP-1 receptor agonists, including mazdutide, are becoming increasingly important in the management of type 2 diabetes, offering comprehensive benefits beyond glucose control [7].