Core Insights - Amgen and Kyowa Kirin announced preliminary top-line results from the ASCEND study, which evaluates rocatinlimab, a T-cell rebalancing therapy targeting the OX40 receptor, for treating moderate to severe atopic dermatitis [1][2] Study Overview - The ASCEND study involves approximately 2,600 patients and assesses the long-term safety and efficacy of rocatinlimab administered at doses of 150 mg and 300 mg every four or eight weeks [2] - The primary endpoint focuses on the long-term safety of rocatinlimab, with a descriptive nature [3] - The study is part of the larger ROCKET Phase 3 clinical program, which includes eight studies aimed at establishing the safety and efficacy profile of rocatinlimab [8][7] Safety and Efficacy Findings - The most common treatment-emergent adverse events in adults included upper respiratory infections, aphthous ulcers, headache, influenza, cough, and rhinitis, with a low discontinuation rate due to adverse events [3][4] - The incidence of gastrointestinal ulceration events with rocatinlimab is less than 1 per 100 patient-years [4] - Secondary endpoints showed that patients who achieved a clinical response in previous trials reported continued therapeutic benefits after one year of treatment [5] Expert Commentary - Amgen's executive vice president highlighted the importance of understanding OX40 inhibition in addressing atopic dermatitis and emphasized the durability of rocatinlimab's response and long-term safety profile [6] - Kyowa Kirin's Chief Medical Officer noted that the results represent a significant milestone in understanding rocatinlimab's ongoing therapeutic benefits, with potential maintenance dosing every eight weeks [6] Future Plans - Amgen and Kyowa Kirin plan to present full results at an upcoming congress or in a peer-reviewed publication [6]

Core Viewpoint - The Chinese innovative drug sector is gaining global competitiveness, highlighted by significant business development (BD) deals and the promising clinical data of the drug SM17, which is expected to attract attention from major pharmaceutical companies [1][2][12]. Group 1: Market Dynamics - The market is actively seeking the next major BD deal, especially after the significant $6 billion BD deal between 3SBio and Pfizer, indicating a trend of increasing interest in Chinese innovative drugs [1]. - The total amount of outbound transactions for Chinese innovative drugs is projected to reach a record high by 2025, with $45.5 billion already achieved in 2025 alone [5][7]. - The frequency of BD transactions is driven by multinational pharmaceutical companies facing "patent cliffs," necessitating the acquisition of innovative drug pipelines to replenish their product lines [7][8]. Group 2: SM17 Drug Overview - SM17 is a first-in-class monoclonal antibody targeting the IL-25 receptor, showing promising results in clinical trials for moderate to severe atopic dermatitis (AD) [2][3]. - The drug demonstrated a 91.7% response rate in itch control and a 75% response rate in skin lesion improvement during phase 1b trials, significantly outperforming existing treatments [4]. - SM17's unique dual mechanism of action allows for rapid itch relief and effective inflammation reduction, setting it apart from current therapies [3][4]. Group 3: Clinical and Commercial Potential - The global AD patient population is substantial, with at least 230 million affected worldwide, including over 70 million in China, indicating a significant market opportunity for SM17 [2][4]. - SM17's safety profile is favorable, with no serious adverse events reported during the clinical trials, further enhancing its attractiveness for potential licensing deals [4][9]. - The drug has potential applications beyond AD, including asthma and other autoimmune diseases, which could broaden its commercial prospects [9][11]. Group 4: Company Strategy and Future Outlook - The company has established a robust pipeline of innovative drugs, focusing on monoclonal antibodies for various immune-related diseases, positioning itself for sustainable growth [11][12]. - The strategic emphasis on self-research and innovation, coupled with promising clinical data for SM17, is expected to attract significant investment and partnership opportunities [12].

Investment Rating - The report maintains a "Strong Buy" rating for the pharmaceutical sector, indicating a positive outlook for investment opportunities in this industry [2]. Core Insights - The pharmaceutical sector has shown a recovery in valuation, with the pharmaceutical and biological sector rising by 1.77%, outperforming the CSI 300 index by 0.18 percentage points. This places it 15th among 31 primary industry sectors [6][4]. - The report highlights that favorable policies are emerging for the pharmaceutical sector, suggesting a steady recovery in industry sentiment. It recommends focusing on high-quality targets in the formulation sector and biotech companies with efficient management and strong product pipelines [4][24]. Summary by Sections 1. Pharmaceutical Sector Performance - The pharmaceutical sector's performance includes a 1.77% increase, with sub-sectors such as pharmaceutical commerce rising by 6.44% and traditional Chinese medicine II by 2.63% [6][4]. - Notable stock performances include: - **Top Gainers**: - Pharmaceutical commerce: Seer Medical (+34.47%), Lao Bai Xing (+22.47%) [17]. - Chemical pharmaceuticals: Jincheng Pharmaceutical (+42.43%), Kangzhi Pharmaceutical (+20.50%) [13]. - **Top Losers**: - Chemical pharmaceuticals: Shuangcheng Pharmaceutical (-16.56%), Haichuang Pharmaceutical (-12.21%) [11]. 2. Key Company Recommendations - The report recommends focusing on companies such as: - Aosaikang, which is advancing in the development of domestic CLDN18.2 targeted drugs [4]. - Cloudtop New Medicine-B, which is expected to see significant sales growth from its major product [4]. - Dizhe Pharmaceutical, which is poised for market expansion with its core products [4]. - Renfu Pharmaceutical, recognized as a leader in anesthesia [4]. 3. Industry News Highlights - Recent approvals include: - The approval of the fourth indication for the PD-1 inhibitor by Zhengda Tianqing/Kangfang Biotech for treating recurrent or metastatic nasopharyngeal carcinoma [24][25]. - Roche's PI3Kα inhibitor, Inavolisib, has been approved for use in combination therapy for hormone receptor-positive, HER2-negative breast cancer [26][27]. - The first domestic solid tumor cell therapy, Aikelong, is set for priority review for preventing postoperative recurrence of liver cancer [29][30]. 4. Market Trends - The report notes a positive trend in the pharmaceutical sector, with a focus on innovative therapies and domestic drug development, indicating a robust growth potential in both domestic and international markets [4][24].