AKESO(HK:09926)2024-09-17 03:39Investment Rating - The report assigns a "Buy" rating to the company 康方生物 (9926 HK) with a target price of HKD 77.00, indicating a potential upside of 38.0% from the current price of HKD 55.80 [2][13]. Core Insights - The report highlights that the clinical data for the drug 依沃西 (Ivonescimab) in head-to-head trials against K drug exceeded market expectations, positioning it as a potential cornerstone in immuno-oncology [1][2]. - The report anticipates that 依沃西 will receive approval for treating 1L PD-L1+ NSCLC in China in the first half of 2025, with a global Phase III trial (HARMONi-7) set to commence soon [2]. Summary by Sections Clinical Data - The Phase III trial data for 依沃西 showed a progression-free survival (PFS) hazard ratio of 0.51, with median PFS of 11.14 months for the 依沃西 group compared to 5.82 months for the K drug group [1]. - The 9-month PFS rates were 56% for 依沃西 versus 40% for the K drug, with significant improvements across various subgroups [1]. Safety Profile - The safety profile of 依沃西 was validated, showing a lower incidence of severe treatment-related adverse events (TRAE) compared to the K drug [1]. - The incidence of grade 3 or higher TRAE was 29.4% for 依沃西 versus 15.6% for the K drug, with a discontinuation rate due to TRAE of only 1.5% [1][7]. Financial Projections - Revenue projections for 康方生物 are set at RMB 2,692 million for 2024, with a significant increase to RMB 4,342 million in 2025 and RMB 5,989 million in 2026 [4][11]. - The net profit is expected to improve from a loss of RMB 302 million in 2024 to a profit of RMB 683 million in 2025 and RMB 1,664 million in 2026 [4][11]. Valuation Model - The discounted cash flow (DCF) model estimates the equity value of 康方生物 at RMB 60,609 million, translating to a per-share value of HKD 77.00 [12][14].