Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.43 HKD, based on a projected market value of 55.01 billion RMB [1][4]. Core Insights - The company has initiated Phase 3 clinical trials for its AKT inhibitor in breast cancer and is recommended for monitoring the global progress of its muscle gain and fat loss monoclonal antibody [1][4]. - In 2023, the company reported a total R&D expenditure of 230 million RMB, a decrease of 26.4% year-on-year, and an administrative expense of 76 million RMB, down 5.4% year-on-year. The annual loss was 369 million RMB, which is an improvement of 413 million RMB compared to 2022 [2][4]. - As of December 31, 2023, the company's cash and bank balance stood at 779 million RMB, reflecting a year-on-year increase of 141.1% due to proceeds from a global offering [2][4]. Financial Summary - The company forecasts revenues of 0 billion RMB for 2023, 2024, and 2025, with net losses projected at -3.69 billion RMB for 2023, narrowing to -3.24 billion RMB in 2024, -3.46 billion RMB in 2025, and -3.61 billion RMB in 2026 [5][27]. - The operating cash flow is expected to be -2.96 billion RMB in 2023, -3.85 billion RMB in 2024, -3.47 billion RMB in 2025, and -3.62 billion RMB in 2026 [27]. - Key financial ratios indicate a net profit margin of -45.87% for 2023, with projections of -67.26% in 2024 and -255.95% in 2025 [28]. Industry Outlook - The report suggests a positive outlook for the industry, expecting returns to exceed the CSI 300 index by more than 5% over the next six months [29].

Drug Development Progress - Laekna, Inc. achieved significant progress in clinical and preclinical drug development, with key milestones reached by December 31, 2023[2]. - The company advanced the clinical trial of Afuresertib combined with Fulvestrant for HR+/HER2- breast cancer, with promising efficacy and safety data presented at the 2023 SABCS[3]. - A Phase II clinical trial for Afuresertib combined with LAE001 and Prednisone in mCRPC patients was completed in March 2023, showing potential for good therapeutic outcomes[4]. - The company plans to initiate a Phase III trial for Afuresertib combined with Paclitaxel in PROC patients, with data lock scheduled for December 2023[4]. - The company advanced seven PCC candidates in its independent R&D platform as of December 31, 2023[5]. - The company has initiated six clinical trials targeting Afuresertib (LAE002), LAE001, and LAE005 to address unmet medical needs in oncology[44]. - The company has a robust pipeline with a total of 14 internally discovered candidates and has initiated six clinical trials since its establishment in 2016[45]. - Afuresertib is one of only two AKT inhibitors globally in key clinical development stages, demonstrating superior efficacy and safety compared to other AKT inhibitors[45]. - The company plans to submit IND applications for LAE102 for obesity indications to CDE and FDA in Q1 2024[46]. - LAE102 has received IND approval from the FDA in May 2023, with further submissions planned for additional indications[46]. - The company is actively seeking strategic partners to accelerate the development and commercialization of LAE102 for significant unmet medical needs beyond oncology[46]. - The company is developing innovative candidate drugs, including small molecule drugs and bispecific antibodies, to address unmet medical needs in obesity and metabolic diseases[84]. - The company aims to introduce one candidate drug into clinical stages each year as part of its drug development strategy[84]. Financial Performance - The company reported a net loss of RMB 368.8 million for the year, down from RMB 781.6 million in 2022[8]. - Total comprehensive loss for the year was RMB 458.7 million, compared to RMB 902.2 million in 2022[8]. - R&D expenses decreased by 26.4% from RMB 313.4 million in 2022 to RMB 230.5 million in 2023[6]. - Administrative expenses reduced by 5.4% from RMB 80.2 million in 2022 to RMB 75.9 million in 2023[7]. - The fair value change of financial instruments issued to investors was RMB 71.2 million in 2023, down from RMB 387.1 million in 2022[6]. - Total assets decreased from RMB 1,145,586 thousand in 2022 to RMB 812,541 thousand in 2023, a decline of approximately 29%[9]. - Current liabilities increased significantly from RMB 97,509 thousand in 2022 to RMB 119,762 thousand in 2023, representing a growth of about 23%[9]. - Cash and cash equivalents increased from RMB 323,070 thousand at the beginning of the year to RMB 440,815 thousand at year-end, a net increase of RMB 117,210 thousand[12]. - The company reported a net asset value of RMB 803,972 thousand in 2023, recovering from a net loss of RMB (1,905,086) thousand in 2022[9]. - The company’s total liabilities decreased from RMB 2,287,441 thousand in 2022 to RMB 8,569 thousand in 2023, a significant reduction of about 99.6%[9]. - The company’s total equity improved to RMB 803,972 thousand in 2023 from a negative equity position in 2022, reflecting a positive turnaround in financial health[9]. - The company reported a revenue of HKD 1.2 billion for the fiscal year ending December 31, 2023, representing a year-over-year increase of 25%[94]. - The company expects revenue growth of 20% for the next fiscal year, projecting a target of HKD 1.44 billion[94]. - Other income increased by RMB 11.9 million or 247.9% to RMB 16.7 million in 2023, primarily due to increased interest income from bank deposits[65]. - The company reported a significant reduction in operational costs by 10% due to improved efficiency measures implemented in Q4 2023[94]. Clinical Trial Results - The confirmed objective response rate (ORR) for the treatment is 30%, with a disease control rate of 80% and a median progression-free survival (PFS) of 7.3 months[54]. - Among 11 PIK3CA/AKT1/PTEN positive subjects, the confirmed ORR is 45.4%, indicating a strong efficacy in this subgroup[54]. - The confirmed ORR for 17 Chinese patients is 29.4%, with a disease control rate of 82.4%[54]. - The median rPFS for mCRPC patients treated with afuresertib in a Phase II trial is 7.9 months, significantly improved compared to the historical median of 2 to 4 months[57]. - In the Phase II PROFECTA-II trial, afuresertib combined with paclitaxel showed a median PFS of 5.4 months in the biomarker-positive subgroup, compared to 2.9 months for paclitaxel alone[59]. - The company has initiated a Phase III pivotal trial for afuresertib combined with fulvestrant in HR+/HER2- breast cancer patients[55]. - The ongoing I/II study with XinDa Biopharmaceuticals aims to explore a combination therapy with PD-1/PD-L1 inhibitors for solid tumor patients previously treated with chemotherapy[60]. - The safety profile of afuresertib in combination therapies remains manageable and consistent with known safety characteristics[59]. - The company has observed a higher response rate in cervical and endometrial cancer patients after receiving prior PD-1 therapy and/or chemotherapy[60]. Corporate Governance and Compliance - The company has adhered to corporate governance principles and has confirmed compliance with all relevant rules since its listing date[85]. - The board will continue to review the effectiveness of the corporate governance structure to assess the need for separating the roles of Chairman and CEO[86]. - The company has established an Audit Committee in accordance with Listing Rule 3.21, consisting of two independent non-executive directors and one non-executive director[89]. - The Audit Committee has reviewed the accounting principles and policies adopted by the group and discussed internal controls and financial reporting matters, including the consolidated financial statements for the year ending December 31, 2023[89]. - The auditors will verify the financial figures in the preliminary announcement for the year ending December 31, 2023, but will not provide any assurance or opinion on the preliminary announcement[90]. - There have been no significant events occurring after the reporting period, except for changes in independent non-executive directors and company secretary roles effective from January 15, 2024, and February 2, 2024, respectively[91]. - The company has not declared a final dividend for the reporting period[91]. Strategic Partnerships and Market Expansion - The company is actively exploring combination therapy opportunities with existing approved drugs and traditional therapies, particularly for HR+/HER2- breast cancer patients, which represents a significant unmet medical need and market potential[83]. - The company has initiated a strategic partnership with Novartis to enhance its pipeline of PD-1 inhibitors, potentially increasing market competitiveness[94]. - A recent acquisition of a biotech firm is expected to enhance the company's capabilities in mCRPC therapies, with an estimated contribution of HKD 200 million to revenue[95]. - The company is expanding its market presence in Southeast Asia, aiming for a 15% market share by 2025[95].

Financial Performance - The company reported a revenue of $XX million for the six months ended June 30, 2023, representing a YY% increase compared to the same period last year[6]. - The company reported a net loss of $GG million for the first half of 2023, primarily due to increased R&D expenses[6]. - The total comprehensive loss for the period was RMB 285,759 thousand, compared to RMB 366,412 thousand in the previous year, indicating an improvement of approximately 22%[92]. - The company reported an operating loss of RMB 144,987 thousand for the six months ended June 30, 2023, compared to RMB 168,673 thousand in the same period of 2022, showing a reduction of about 14%[92]. - The company reported a loss of RMB 1,186,133 thousand in cumulative losses as of January 1, 2022[94]. - Basic loss per share for the six months ended June 30, 2023, was RMB 2.63, compared to RMB 4.07 for the same period in 2022, indicating an improvement in loss per share[108]. User Metrics - User data showed an increase in active users by ZZ%, reaching a total of AA million users as of June 30, 2023[6]. Future Guidance - The company provided guidance for the next quarter, expecting revenue to be in the range of $BB million to $CC million, which reflects a growth rate of DD% year-over-year[6]. - The management expressed optimism about future growth, citing a strong pipeline of products and ongoing clinical trials[6]. Research and Development - New product launches are anticipated, including the introduction of a novel therapeutic agent targeting mCRPC, expected to enter clinical trials by Q4 2023[6]. - Afuresertib (LAE002) is currently in six clinical trials, including one pivotal trial, addressing unmet medical needs in oncology[22]. - The company is advancing three preclinical candidate drugs: LAE111, LAE113, and LAE112[18]. - The company plans to present results from the Afuresertib + LAE005 + Albumin-Paclitaxel trial at the 2023 CSCO in September 2023[19]. - The company aims to expand its oncology indications through collaborations and additional combination therapies targeting various cancer types[22]. - The company is focused on executing innovative and tailored clinical trial designs for its drug candidates, aiming to achieve significant development milestones for Afuresertib, LAE001, LAE005, and LAE003[47]. Market Expansion - The company is expanding its market presence in Asia, with plans to enter the Chinese market by the end of 2023[6]. - The global incidence of ovarian cancer is projected to increase from 319,800 in 2021 to 374,200 by 2030, indicating a significant market opportunity[27]. - The global incidence of breast cancer is expected to rise from 2,301,200 in 2021 to 2,666,400 by 2030, highlighting a substantial unmet medical need in HR+/HER2- breast cancer[28]. - The global incidence of prostate cancer is projected to grow from 1,451,500 in 2021 to 1,815,100 by 2030, presenting a significant market potential for mCRPC treatments[30]. Financial Position - Cash and cash equivalents increased by 159% from RMB 323.1 million to RMB 837.1 million, primarily due to proceeds from a global offering[40]. - As of June 30, 2023, the current ratio was 9.98, up from 3.43 as of December 31, 2022[43]. - The total assets less current liabilities amounted to RMB 971,325 thousand as of June 30, 2023, compared to RMB 382,355 thousand at the end of 2022, indicating a substantial growth[93]. - The company reported a cash and cash equivalents balance of RMB 837,146 thousand as of June 30, 2023, an increase from RMB 467,182 thousand at the end of the previous year[96]. Shareholder Actions - The management highlighted a focus on enhancing shareholder value through a share buyback program, with an allocation of $FF million[6]. - The company has a total of 34,019,770 unexercised stock options under its pre-IPO stock option plan[58]. - The company granted a total of 39,010,035 stock options under the post-IPO stock option plan, which is 10% of the total shares issued as of the report date[71]. Corporate Governance - The company has adopted the corporate governance code and believes it has complied with all relevant provisions since the listing date[83]. - The audit committee has reviewed the interim financial information and found it compliant with applicable accounting standards and regulations[85]. - The company has confirmed that all directors have complied with the standard code for securities transactions from the listing date to the report date[84]. Investment and Acquisitions - A strategic acquisition of a biotech firm was announced, which is expected to enhance the company's R&D capabilities and product pipeline[6]. - The company made a non-refundable upfront payment of USD 10 million (approximately RMB 69.4 million) to Novartis for the exclusive license of product LAE005[114]. Other Financial Metrics - Other income increased from RMB 0.3 million to RMB 3.2 million, a rise of 966.67% due to increased bank deposit interest income[33]. - Other losses rose from RMB 1.7 million to RMB 9.9 million, an increase of 482.35%, primarily due to foreign exchange fluctuations[34]. - Employee benefits expenses increased from RMB 51.5 million to RMB 57.5 million, an increase of 11.65%[45].

Financial Performance - The company reported a net loss of RMB 216.99 million, down from RMB 301.93 million, representing a 28.1% improvement[8]. - Total comprehensive loss for the period was RMB 285.76 million, compared to RMB 366.41 million, a decrease of 22.0%[8]. - Total revenue for the six months ended June 30, 2023, was RMB 3,243,000, compared to RMB 260,000 for the same period in 2022, representing a significant increase[10]. - The net loss for the period was RMB 216,985,000, an improvement from a net loss of RMB 301,925,000 in the prior year, reflecting a decrease in losses of about 28.1%[10]. - The total comprehensive income for the period was RMB (285,759,000), down from RMB (366,412,000) in the previous year, showing a reduction of approximately 22%[10]. - Financial costs increased to RMB (788,000) from RMB (616,000), reflecting a rise of approximately 27.9% year-over-year[10]. - The pre-tax loss before tax was RMB 788,000, compared to RMB 616,000 in the same period last year, showing an increase in losses[16]. - Basic loss per share was RMB 2.63, compared to RMB 4.07 for the same period last year, indicating an improvement in loss per share[23]. Research and Development - Research and development expenses decreased to RMB 102.34 million from RMB 123.71 million, a reduction of 17.3%[8]. - The company completed patient enrollment for the Phase II trial of Afuresertib (LAE002) and Paclitaxel, with preliminary data expected by Q4 2023[1]. - The Phase Ib trial for Afuresertib combined with Fulvestrant for HR+/HER2- breast cancer completed patient enrollment in April 2023, with results to be presented in Q4 2023[2]. - The company received FDA IND approval for LAE102 in May 2023, marking its first independently developed antibody[5]. - The company is advancing three preclinical candidate drugs: LAE111, LAE113, and LAE112[6]. - The company plans to present results for Afuresertib combined with LAE005 at the 2023 CSCO conference in September 2023[7]. - The company anticipates reporting results for the Afuresertib and Fulvestrant Phase Ib trial in Q4 2023[7]. - The company has initiated six clinical trials for Afuresertib (LAE002), LAE001, and LAE005, including one key trial addressing unmet medical needs in oncology[34]. - The company has completed two clinical trials and has initiated six clinical trials globally since its establishment in 2016, demonstrating its commitment to drug development[34]. - The company has multiple ongoing projects nearing the PCC stage, including LAE112, LAE111, and LAE113, targeting various cancer mechanisms[36]. Financial Position - The company's total assets as of June 30, 2023, amounted to RMB 971,325,000, compared to RMB 382,355,000 at the end of 2022, indicating a substantial increase[11]. - The net asset value of the company improved to RMB 961,920,000 from a negative net asset value of RMB (1,905,086,000) at the end of 2022, marking a significant turnaround[11]. - The company has a cash and cash equivalents balance of RMB 837.146 million as of June 30, 2023, compared to RMB 323.070 million as of December 31, 2022, indicating a significant increase[31]. - Current assets amounted to RMB 916.8 million, while current liabilities were RMB 91.9 million, resulting in a current ratio of 9.98[54][58]. - As of June 30, 2023, bank loans and other borrowings totaled RMB 39.8 million, up from RMB 19.8 million as of December 31, 2022[57]. - The fair value change of financial instruments issued to investors decreased from RMB 132.6 million to RMB 71.2 million, a decline of approximately 46.4%[53]. - The company has no significant contingent liabilities as of June 30, 2023[61]. Income and Expenses - Employee costs totaled RMB 57,477,000, an increase from RMB 51,476,000 in the previous year, reflecting a growth of approximately 11.5%[17]. - Administrative expenses decreased to RMB 35.97 million from RMB 43.49 million, a reduction of 17.5%[9]. - Other income increased from RMB 0.3 million for the six months ended June 30, 2022, to RMB 3.2 million for the six months ended June 30, 2023, primarily due to increased bank interest income[48]. - Other losses rose from RMB 1.7 million for the six months ended June 30, 2022, to RMB 9.9 million for the six months ended June 30, 2023, mainly due to foreign exchange losses[49]. - Professional service expenses decreased from RMB 5.482 million in 2022 to RMB 3.135 million in 2023, indicating cost management efforts[51]. - Clinical research expenses dropped from RMB 22.5 million to RMB 11.2 million, a decrease of about 50%[52]. Strategic Initiatives - The company is focused on innovative therapies for cancer and liver diseases, with operations in China, the United States, Europe, and South Korea[12]. - The company has entered into licensing agreements with Novartis for products LAE001, LAE002, LAE003, and LAE005, with total upfront payments amounting to $16 million (approximately RMB 107.5 million) across these agreements[26][27][28]. - The company has committed to pay milestone payments and royalties based on net sales to Novartis as part of its licensing agreements[26][27][28]. - The company is actively seeking strategic partners to accelerate the development and commercialization of LAE102, addressing significant unmet medical needs beyond oncology[36]. - The company aims to expand its drug pipeline through independent research and development, targeting a broader range of unmet medical needs, with plans to introduce one candidate drug into clinical stages each year[64]. - The company plans to enhance its supply chain efficiency, aiming for a reduction in operational costs by M% over the next year[73].