Core Viewpoint - Kangfang Biopharma presented the final overall survival (OS) results of the HARMONi-A study at the 2025 SITC, demonstrating a statistically significant benefit of Ivonescimab in patients with EGFR TKI-resistant non-small cell lung cancer (NSCLC) [1][2][4] Summary by Sections Event - Kangfang Biopharma released the final OS results of the HARMONi-A study, showing a median follow-up of 32.5 months with an OS of 16.8 months for the Ivonescimab group compared to 14.1 months for the control group, achieving an OS hazard ratio (HR) of 0.74 (P=0.019) [1][2] Analysis - The overall data met expectations, with the OS benefit reaching statistical significance. The HARMONi-A study is the first to achieve both progression-free survival (PFS) and OS benefits in this indication, with previous analyses also showing significant PFS results [1][4] - The OS benefit was consistent across subgroups, including patients with and without brain metastases and those with specific EGFR mutations [3] Clinical Development - The HARMONi-A study is the first Phase III trial to show significant clinical benefits in both PFS and OS for EGFR TKI-resistant NSCLC, highlighting the breakthrough potential of Ivonescimab [4] - Global clinical trials for Ivonescimab are accelerating, with new studies initiated for various cancers, including colorectal cancer and NSCLC [5][6] Future Milestones - Upcoming milestones include the submission of a Biologics License Application (BLA) for Ivonescimab in late 2025, along with updates on ongoing clinical trials and new indications [7][8][9] Financial Projections - The company forecasts revenues of 34.42 billion, 51.49 billion, and 76.28 billion for 2025, 2026, and 2027, respectively, with corresponding growth rates of 62.04%, 49.62%, and 48.14% [9]

Core Viewpoint - CITIC Securities reports that Kangfang Biopharma (09926) has multiple products and indications in its pipeline that are expected to be approved for market entry, indicating a strong long-term sustainable development capability [1] Group 1: Pipeline and Product Development - Kangfang Biopharma's research pipeline is expanding, with a rich reserve of early-stage products [1] - The approval of Iwosimab for market entry contributes to the company's sales growth, while the sales revenue from its products is increasing year by year [1] - The company is rated as "Buy" due to the excellent efficacy of its innovative drug products and the broad market potential [1] Group 2: Clinical Trial Results - At the 2025 SITC, Kangfang Biopharma presented the final overall survival (OS) results of the HARMONi-A trial, showing a median follow-up time of 32.5 months, with an OS hazard ratio (OSHR) of 0.74 (0.58-0.95) (P=0.019) for the Iwosimab treatment group compared to the control group [1] - This trial is noted as the first to achieve clinically meaningful and statistically significant benefits in both progression-free survival (PFS) and OS for an immunotherapy in patients with EGFR TKI-pretreated non-small cell lung cancer (NSCLC) [1] Group 3: Future Focus Areas - Future attention can be directed towards the final OS results update for Iwosimab in the domestic HARMONi-2 trial and the submission of the BLA application in the U.S. [2] - Ongoing global clinical trials for AK104 targeting first-line gastric cancer, second-line IO-resistant hepatocellular carcinoma, and PD-L1 negative NSCLC are also noteworthy [2] - The advancement of AK132 (Claudin18.2/CD47), AK137 (CD73/LAG3) into Phase II clinical trials, and the IND application for AK150 (ILT2/ILT4/CSF1R) are significant developments [2]

Investment Rating - The report maintains an "Outperform" rating for the company [2][11]. Core Insights - The company reported a revenue of RMB 2.13 billion in 2024, a decrease of 53.1%, primarily due to a reduction in licensing revenue, while commercial sales revenue increased by 24.9% to RMB 2.00 billion [3][16]. - The company has effectively managed costs, with a significant decline in expense ratios, leading to a narrowed operating net loss of RMB 660 million, down 16.7% year-over-year [4][18]. - The clinical pipeline is advancing steadily, with key programs such as Cadonilimab and Ivonescimab making progress in various clinical trials [5][19]. Financial Performance - Revenue projections for 2025-2027 are RMB 3.41 billion, RMB 5.45 billion, and RMB 7.31 billion, reflecting year-over-year growth of 60% and 34% in subsequent years [11][34]. - The company is expected to turn a profit in 2025, achieving a net profit of RMB 50 million [11][34]. - The gross profit margin is projected to remain high, with estimates of 92.3% in 2025 and 92.9% in 2027 [15]. Clinical Pipeline Progress - Cadonilimab is involved in multiple clinical trials, including adjuvant treatment for hepatocellular carcinoma and combination therapies for non-small cell lung cancer [5][19]. - Ivonescimab is also progressing in various trials, including first-line treatments for biliary tract cancer and head and neck squamous cell carcinoma [20][23]. - The company has several NDA/sNDA approvals expected in 2025, which could significantly impact revenue and market position [9][25]. Cost Management - The company has demonstrated excellent cost management, with R&D expenses decreasing by 5.3% due to the transition of certain clinical research services to in-house execution [4][18]. - Selling expenses grew at a lower rate than commercial sales revenue, resulting in a decline in the selling expense ratio by 5.5 percentage points [4][18]. Valuation - The target price has been adjusted to HKD 96.6 per share based on a DCF model, reflecting a WACC of 10.0% and a perpetual growth rate of 3.0% [11][34].