Summary of Ascentage Pharma Conference Call Company Overview - **Company**: Ascentage Pharma - **Core Products**: Olverembatinib (APG-115), Fayankirin, APG-2,575 - **Industry**: Pharmaceutical/Biotechnology Key Points and Arguments Product Performance 1. **Olverembatinib (APG-115)**: - Sales doubled in the first half of 2024 after being included in the medical insurance coverage, with expectations to maintain the same growth rate in the second half [2][4][7] - Targeting chronic myeloid leukemia (CML) with significant market potential for future growth [2][4] 2. **Fayankirin**: - Currently undergoing POS D1 trials in China and Phase III registration trials in the U.S. [2][4] - Key data on 3-6 month MMR and 3 month CMR rates expected soon [2][4] 3. **APG-2,575**: - Launched in July 2024, it is the second BCL-2 inhibitor globally and the first for CLL in China [2][5] - Expected peak sales could exceed $4 billion, providing substantial growth potential [3][16] Financial Position 4. **Funding and Cash Reserves**: - Completed two rounds of financing through NASDAQ IPO and Hong Kong placement, currently holding approximately 3 billion RMB, sufficient to meet funding needs until 2027 [2][5] 5. **Collaboration with Takeda**: - A $100 million option payment and $75 million equity investment from Takeda, with potential future payments and royalties of 12%-19% [6] Market Dynamics 6. **Sales Performance in Hematology**: - Sales in the hematology sector have exceeded expectations due to the chronic disease management characteristics of the drugs, leading to sustained use by existing patients and an increase in new patients [9] - The company leverages the DOT (Duration of Therapy) effect to enhance sales [9] Clinical Development and Future Catalysts 7. **Clinical Trials and Pipeline**: - APG-2,575's daily dose escalation improves patient compliance and safety, with a faster onset of action compared to competitors [3][12] - The company is also advancing FAK inhibitor 2,449 into Phase III trials, with potential for commercial value through combination therapies [3][17] 8. **Comparative Advantage**: - APG-2,575 shows better safety and efficacy profiles compared to existing treatments like Venetoclax, with a lower rate of dose reduction and treatment interruption [13][16] Future Plans 9. **Upcoming Milestones**: - Plans to initiate the next U.S. registration clinical study and complete multiple Phase III clinical enrollments for APG-115 and APG-2,575 by 2026 [19] 10. **Expansion into New Areas**: - The company is exploring additional therapeutic areas, including apoptosis pathway inhibitors and anemia treatments, indicating a broadening of its research pipeline [17][18] Additional Important Insights - **Market Trends**: - BCL-2 inhibitors are gaining traction in hematological malignancies, with a focus on selective targeting to improve safety and efficacy [14][15] - **Strategic Positioning**: - The company’s strong cash position and ongoing clinical trials position it well for future growth and market expansion [5][19]

Core Viewpoint - The company is experiencing significant growth in sales of Orelabrutinib, with a projected revenue increase of 93% year-on-year to 217 million yuan in the first half of 2025, driven by effective hospital access and chronic disease management strategies [1] Group 1: Orelabrutinib Sales and Market Position - Orelabrutinib's sales are expected to continue growing due to its inclusion in the medical insurance directory, expanding the patient population eligible for reimbursement [1] - The number of hospitals administering Orelabrutinib increased by 47% year-on-year in the first half of 2025, with extended treatment duration for patients [1] - The long-term follow-up data from the 2022 ASH conference indicates a progression-free survival (PFS) rate of 88.6% at 48 months for Orelabrutinib in treating CML-CP, suggesting its potential for long-term management [1] Group 2: APG-2575 Development and Market Potential - APG-2575 is expected to be approved for domestic market launch in mid-2025, further solidifying the company's position in the hematological oncology sector [1] - APG-2575 is positioned as a potential second BCL-2 inhibitor globally, with a unique daily dose escalation design that allows for rapid achievement of therapeutic doses [1] - Early clinical data suggests that APG-2575 combined with azacitidine shows comparable efficacy to venetoclax while significantly improving safety profiles [1] Group 3: Future Pipeline and Clinical Trials - The company has a robust pipeline with multiple promising candidates, including APG-2449, which is undergoing Phase III trials for ALK-positive NSCLC [2] - APG-5918, an EED inhibitor for anemia-related indications, is in Phase I trials, with a unique mechanism that may provide a competitive edge in the market [4] - Upcoming milestones include the completion of several Phase III clinical trials for key products, which could lead to significant market expansions [5] Group 4: Financial Projections - Revenue projections for the company are estimated at 589 million yuan, 1.509 billion yuan, and 1.449 billion yuan for 2025-2027, reflecting a growth trajectory despite a projected decline in 2025 [6] - The company is transitioning from a biotech to a biopharma entity, with a focus on Orelabrutinib and the high-potential APG-2575 as core products [6]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative performance increase of over 15% compared to the benchmark index within the next 6 to 12 months [23]. Core Insights - The company is transitioning from a biotech to a biopharma entity, with a focus on its first commercialized product, Aorebatinib, and the promising APG-2575, which is expected to partially replace and surpass Venetoclax in the large MDS and MM markets [4][21]. - APG-2575 is positioned as a potential "Best-in-Class" BCL-2 inhibitor, with unique clinical data supporting its convenient dosing regimen and improved safety profile compared to existing treatments [14][18]. - The company has a robust pipeline with multiple promising candidates, including APG-2449 and various apoptosis pathway inhibitors, which are expected to enhance its market position and growth potential [15][18]. Summary by Sections Financial Forecasts and Valuation - The company is projected to achieve revenues of 589 million, 1.509 billion, and 1.449 billion yuan for the years 2025 to 2027, with growth rates of -40%, 156%, and -4% respectively [4][21]. - The net profit attributable to the parent company is expected to be -681 million, 196 million, and 156 million yuan for the same period, indicating a significant turnaround [4][21]. - Earnings per share (EPS) are forecasted to improve from -1.83 yuan in 2025 to 0.42 yuan in 2027 [4][21]. Product and Market Insights - Aorebatinib's sales are expected to continue growing, with a 93% year-on-year increase to 217 million yuan in the first half of 2025, driven by effective hospital access and chronic disease management strategies [7][11]. - APG-2575 is anticipated to receive regulatory approval in mid-2025, further solidifying the company's leadership in the domestic hematological oncology market [11][12]. - The report highlights the potential of APG-2575 to achieve rapid relief and improved safety in treating high-risk myelodysplastic syndromes (HR MDS) compared to existing therapies [14][18]. Pipeline and Future Developments - The company has several promising candidates in its pipeline, including APG-2449, which is undergoing Phase III trials for ALK-positive NSCLC, and various apoptosis inhibitors that are expected to provide competitive advantages in the oncology market [15][18]. - Upcoming milestones include the completion of several Phase III clinical trials for key products, which are expected to enhance the company's market presence and revenue potential [20].