INNOCARE PHARMA(9969.HK)：AUTOIMMUNE PIPELINE HOLDS POTENTIAL FOR GLOBAL MARKETS

Core Insights - InnoCare reported solid 1Q25 results with revenue reaching RMB381 million, driven by a significant increase in orelabrutinib sales, which rose 89% YoY to RMB311 million [1] - The company expects orelabrutinib sales to be primarily supported by its uptake in marginal zone lymphoma (MZL), projected to account for approximately 50% of sales by year-end 2025 [1] - Management has raised the FY25 sales growth target for orelabrutinib from 30% to over 35% [1] Financial Performance - InnoCare's net income for 1Q25 was RMB14 million, bolstered by strong orelabrutinib sales and an upfront payment of US$8.75 million from out-licensing its CD3/CD20 asset [1] - The product gross margin improved to 88.4%, up from 86.2% in FY24, indicating enhanced manufacturing efficiency [1] - The SG&A ratio declined to 50%, down from 60% in FY24, reflecting better cost discipline [1] - As of 1Q25, InnoCare maintained a robust cash position of RMB7.8 billion, providing ample capital for R&D initiatives [1] Pipeline Development - InnoCare's autoimmune pipeline is viewed as a key growth driver, with orelabrutinib showing strong potential in multiple sclerosis (MS) [1] - Two Phase 3 trials for orelabrutinib in MS are advancing in the US, targeting primary progressive MS (PPMS) and secondary progressive MS (SPMS) [1] - In the oncology sector, InnoCare is progressing with mesutoclax (ICP-248) as a competitive Bcl-2 inhibitor, with a Phase 3 trial ongoing for first-line chronic lymphocytic leukemia (CLL) [2] - Tafasitamab (CD19) is on track for approval in China for relapsed/refractory diffuse large B-cell lymphoma (DLBCL), enhancing the hematology portfolio [2] Strategic Outlook - InnoCare is targeting less crowded indications overseas, including first-line acute myeloid leukemia (AML) and BTK inhibitor-pretreated mantle cell lymphoma (MCL) [2] - The company is advancing its in-house antibody-drug conjugate (ADC) platform, with an IND for a B7-H3-targeting ADC submitted in April 2025 [2] - The significant out-licensing potential across multiple assets, particularly orelabrutinib and ICP-332, is highlighted as a strategic advantage [3]