Summary of Corning Jereh Conference Call Company Overview - **Company**: Corning Jereh - **Key Products**: KN026, GSK003, KN035, GSKN016, GSKN027, GSKN0,333, and others - **Industry**: Oncology, specifically focusing on Antibody-Drug Conjugates (ADCs) Core Insights and Arguments - **KN026 Approval and Market Potential**: Expected approval in July 2026 for second-line and above HER2-positive gastric cancer, with peak sales anticipated to exceed 3 billion RMB [2][3] - **GSK003 Development**: A HER2 bispecific ADC using glycosylation site-specific conjugation technology, showing better efficacy and safety than existing single-target ADCs like TDM1. Expected to report second-line HER2-positive breast cancer data in 2026, with peak sales projected over 2.5 billion RMB [2][3] - **Technological Platforms**: Corning Jereh has two key platforms: glycosylation site-specific conjugation, which is more efficient than Synaffix, and a subcutaneous administration platform that enhances patient compliance [6][8] - **ADC Market Growth**: The ADC market has seen rapid growth, with over 10 billion USD in business development transactions globally last year, and total sales exceeding 12 billion USD, a 36% year-on-year increase [7][8] Clinical Data and Efficacy - **KN026 Clinical Performance**: In trials for HER2-positive gastric cancer, KN026 demonstrated mPFS and MOS superior to existing therapies, with an HR value below 0.3, indicating a significant reduction in disease progression and mortality risk [10][11] - **GSK003 in Ovarian Cancer**: Showed high ORR in platinum-resistant ovarian cancer, with low adverse reaction rates, indicating its potential as a significant treatment option [12] - **GSKN016 Development**: A dual-target ADC that is currently in the pipeline, expected to show promising safety and efficacy data in upcoming trials [15] Financial Outlook and Investment Recommendations - **Revenue Projections**: KN026's domestic sales peak is expected to exceed 3 billion RMB, while GSK003 is projected to reach 2.6 billion RMB. The company achieved profitability in 2024, primarily due to licensing fees from GSKN003 and sales of KN035 [6][19] - **Investment Rating**: The target price is set at 14.3 HKD, with a buy rating reflecting a 27% upside potential from the current closing price [19] Additional Noteworthy Points - **Pipeline Innovations**: The company is developing several innovative dual antibodies and combination formulations, which are at various clinical stages and may capture significant market share [8][9] - **Regulatory Milestones**: Key regulatory events are anticipated in 2026, including the approval of KN026 and GSK003, which could significantly enhance market potential [9][16] - **Emerging Products**: Other products like GSKN0,333 and GSKN027 are also in development, focusing on enhancing treatment efficacy and patient compliance [14][18]

Group 1 - The company is a pioneer in antibody technology in China, focusing on the research, production, and commercialization of innovative biopharmaceuticals for oncology, with a core technology platform that includes self-developed bispecific antibodies and ADC technology [2] - The global first PD-L1 subcutaneous injection KN035 was approved for market in November 2021, with expected sales and royalties of 130 million, 128 million, and 125 million yuan for 2025, 2026, and 2027 respectively [2] - The self-developed HER2 bispecific antibody KN026 has shown strong positive efficacy in treating 2L+ HER2-positive gastric cancer, with its application for market approval expected to be accepted by NMPA in September 2025, and anticipated approval in the second half of 2026 [2] Group 2 - JSKN003, a self-developed HER2 bispecific antibody ADC, is advancing in clinical trials for multiple indications in China, showing superior efficacy and safety compared to Enhertu, with data readout expected in 2027 [3] - The company plans to submit an NDA for 2L HER2-positive breast cancer in 2026 and will initiate a Phase III trial for HER2-positive metastatic colorectal cancer in October 2025, with projected sales of 0.05 million, 0.57 million, and 1.08 million yuan for 2027, 2028, and 2029 respectively [3] Group 3 - The company has established a diversified bispecific antibody ADC product matrix through its proprietary glycosylation site-specific conjugation technology platform and differentiated target layout strategy [4] - JSKN016 is the world's first TROP2/HER3 bispecific antibody ADC, currently enrolling over 400 patients for indications in lung and breast cancer, indicating a broad market potential [4] - JSKN022, a first-in-class targeted PD-L1/ITGB6 bispecific antibody ADC, initiated its first patient dosing in October, while JSKN027, which has a triple mechanism of action, is expected to file for IND soon [4]

Group 1 - The core viewpoint of the report is that the company, Corning Jereh Pharmaceutical-B (09966), is projected to experience a significant decline in revenue in 2025, followed by a recovery in the subsequent years, with expected revenues of 4.43 billion, 4.86 billion, and 5.50 billion in 2025, 2026, and 2027 respectively, reflecting a year-on-year change of -30.87%, +9.78%, and +13.22% [1] - The company is recognized as a pioneer in domestic antibody technology, with its HER2 bispecific antibody expected to receive approval soon, focusing on the research, production, and commercialization of innovative biopharmaceuticals in the oncology field [1] - The company’s self-developed PD-L1 subcutaneous injection KN035 was approved for market in November 2021, with projected sales and royalties of 1.3 billion, 1.28 billion, and 1.25 billion for the years 2025, 2026, and 2027 respectively [1] Group 2 - JSKN003, a self-developed HER2 bispecific antibody ADC, is advancing through clinical trials in China, showing superior efficacy and safety compared to Enhertu in platinum-resistant ovarian cancer, with data readout expected in 2027 and NDA submission planned for 2026 for 2L HER2-positive breast cancer [2] - The company is leveraging its proprietary glycosylation site-specific conjugation technology platform and a differentiated target layout strategy to build a diverse product matrix of bispecific antibody ADCs, including JSKN016, the world's first TROP2/HER3 bispecific antibody ADC, which has enrolled over 400 patients in lung and breast cancer indications [3] - JSKN022, a first-in-class targeted PD-L1/ITGB6 bispecific antibody ADC, has initiated patient dosing, while JSKN027, which possesses cytotoxic, anti-angiogenic, and immune-regulatory mechanisms, is expected to file for IND soon [3]

Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company is moving towards a harvest period with multiple licensing collaborations validating its platform value [1]. - The company achieved its first profit in 2024, driven by significant licensing income and a strong focus on R&D [6][22]. - The company has a robust pipeline of HER2-targeted products, with key candidates in late-stage clinical trials [6][25]. Summary by Sections 1. Technical Innovation as a Driver - The company focuses on antibody-drug conjugates (ADC) and bispecific antibodies, leveraging core technologies for differentiated cancer immunotherapy [11]. - The management team has extensive experience in research and development, ensuring innovation and operational efficiency [11][19]. - The company has secured multiple high-value licensing agreements, enhancing its platform and pipeline value [19][20]. 2. HER2-targeted Product Strategy - The company has three HER2-targeted products, including KN026 (HER2 bispecific antibody) and JSKN003 (HER2 bispecific ADC), positioned for various cancer indications [25][30]. - KN026 is expected to submit a domestic application for 2L+ HER2-positive gastric cancer by 2025, with promising clinical data [30][34]. - JSKN003 has a commercial collaboration with a partner, with a total transaction value of 30.8 billion RMB [39]. 3. JSKN016 (TROP2/HER3 ADC) Development - JSKN016 is being explored for both monotherapy and combination treatments, targeting high-expression TROP2 and HER3 in various tumors [7][25]. - The drug is in clinical phase 2, focusing on unmet needs in triple-negative breast cancer and EGFR-TKI resistant non-small cell lung cancer [7][25]. 4. Financial Performance and Projections - The company achieved a revenue of 6.4 billion RMB in 2024, a year-on-year increase of 192.6%, with a profit of 1.66 billion RMB [22][23]. - The R&D expenditure for 2024 was maintained at 4.04 billion RMB, ensuring continued investment in clinical development [22][24]. - Revenue projections for 2025-2027 are estimated at 4.58 billion RMB, 4.90 billion RMB, and 3.98 billion RMB respectively [6][25].