Core Insights - The focus of the pharmaceutical market at this year's ASCO was on two PD-1/VEGF bispecific antibody deals and the data readout of the PD-1/VEGF antibody from CanSino/Summit [1] - Merck (MSD) is actively adjusting its oncology pipeline and R&D strategy, emphasizing PD-1/VEGF bispecific antibodies and antibody-drug conjugates (ADCs) to address challenges from the impending patent expiration of its key product, Keytruda [1] - The company anticipates that its late-stage oncology pipeline could generate over $25 billion in commercial opportunities by the mid-2030s, with ADCs expected to contribute more than half of this revenue [1] PD-1/VEGF Bispecific Antibodies - Merck believes the biological mechanism of PD-1 and VEGF combination therapy has been validated, showing improvements in progression-free survival (PFS) across various indications [2] - The management noted that while there are clinically meaningful overall survival (OS) data, the statistical significance of OS benefits remains an "open question" [2] - Merck has secured global exclusive rights to the PD-1/VEGF bispecific antibody LM-299 (internal code MK-2010) through a partnership with LaNova Medicines, currently undergoing I/II clinical trials in China [2] - The choice to conduct early research in China is aimed at leveraging local clinical research infrastructure and collaborating with local partners for faster development [2] - The future success of MK-2010 hinges on demonstrating clear clinical benefits based on mature OS data [2] ADC Development - Merck views ADCs as a crucial component of its future oncology pipeline, claiming to be advancing "one of the industry's broadest ADC projects" [3] - The ADC Sacituzumab Tirumotecan (sac-TMT) is a core project developed in collaboration with Kura Oncology, showing potential in early clinical studies in China, particularly for EGFR-mutant NSCLC and triple-negative breast cancer (TNBC) patients [3] - Sac-TMT has been approved in China for treating TNBC and locally advanced or metastatic EGFR-mutant NSCLC, marking it as the first TROP2 ADC approved for lung cancer in China [3] - The FDA has granted breakthrough therapy designation for Sac-TMT for specific treated advanced or metastatic non-squamous NSCLC with EGFR mutations in the U.S. [3] - Merck's executives described Sac-TMT as a "just right" workhorse ADC during the ASCO 2025 investor event [3] Differentiation Strategy - The differentiation strategy for Sac-TMT includes a biweekly dosing regimen, manageable toxicity profiles, and development plans exploring its use in maintenance therapy [4] - Merck has planned 14 registrational studies for Sac-TMT, with several having the potential to become first-in-class [4] - Competitors in the TROP2 ADC space include Gilead's Trodelvy and AstraZeneca/Daiichi Sankyo's Datopotamab deruxtecan (Dato-DXd) [4] Future Oncology Plans and BD&MA - Merck's oncology development leverages the experience gained from Keytruda, categorizing its pipeline into three main types: immune-oncology drugs, precision-targeted drugs, and ADCs [5] - The company aims to address tumor types with suboptimal PD-(L)1 inhibition effects, such as small cell lung cancer, colorectal cancer, and hematological malignancies [5] - The combination of Keytruda with the KRAS G12C inhibitor MK-1084 has entered Phase III clinical trials [5] - In terms of business development and mergers & acquisitions (BD&MA), Merck's criteria focus on whether the target asset demonstrates an unambiguous promotable advantage and whether Merck can significantly drive market growth [5]

Core Viewpoint - The collaboration between 3SBio and Pfizer for the dual antibody PD-1/VEGF product SSGJ-707 marks a significant milestone in the biopharmaceutical industry, with a record-breaking upfront payment of $1.25 billion and potential total payments exceeding $6 billion, highlighting the growing interest and investment in innovative cancer therapies [1][3][4]. Group 1: Financial Aspects - The deal includes an upfront payment of $1.25 billion, making it the highest upfront payment for a domestic transaction in China to date [1]. - The total potential payments could reach $4.8 billion in milestone payments, bringing the total deal value to over $6 billion [1]. - 3SBio's stock price has surged over 200% since February, with a market capitalization increase of approximately HKD 30 billion [3]. Group 2: Product Development and Market Potential - SSGJ-707 has shown significant anti-tumor activity and safety in early clinical trials, positioning it as a potential best-in-class therapy [3][6]. - The product is currently undergoing four Phase II clinical studies targeting various cancers, with projected peak sales of approximately RMB 4 billion domestically and $4.5 billion in overseas markets [3][4]. - The product has received breakthrough therapy designation for treating PD-L1 positive non-small cell lung cancer (NSCLC) [4]. Group 3: Strategic Implications for Pfizer - Pfizer is actively seeking new products to bolster its portfolio, especially after a significant revenue drop in 2023 [5]. - The collaboration with 3SBio allows Pfizer to enhance its offerings in the PD-1/VEGF space, where it has previously engaged in clinical collaborations [6]. - The urgency for Pfizer to acquire new blockbuster products is underscored by its recent challenges in the GLP-1 drug development space [5].