Summary of Innovent Biologics (1801.HK) Conference Call Company Overview - **Company**: Innovent Biologics (1801.HK) - **Industry**: China Pharma, Biotech & Medtech Key Points Takeda Partnership - Innovent Biologics announced an **US$11 billion** deal with Takeda, highlighting Takeda's commitment as a partner for IBI363 and IBI343 [5] - The collaboration reflects a **US$50 billion+** global total addressable market (TAM) as outlined in Takeda's Q2 2025 results [5] - The clinical development plan (CDP) will focus on **NSCLC (Non-Small Cell Lung Cancer)** and **CRC (Colorectal Cancer)**, with five global Phase 3 trials planned [5] - Innovent will lead exploratory trials in China for other indications to guide global trials [5] - Innovent has a strong cash position, with **US$1.3 billion** in cash as of June 30, 2025, to support a **40/60** split on global R&D costs, estimated at **US$1.5-2 billion** for the first five global Phase 3 trials [5] Near-term Growth Drivers - **CVM (Cardiovascular Metabolism)** assets are identified as the primary growth drivers towards a target of **RMB 20 billion** by 2027 [5] - Key contributors include: - **Mazdutide**: Participating in the Double 11 online promotion with encouraging initial orders [5] - **Tafolecimab (PCSK9)**: Experienced a quick ramp-up post-NRDL coverage, with market growth observed at **20+%** [6] - **IBI311 (IGF-1R)**: Good initial adoption expected to increase with potential NRDL coverage in 2026 [6] IBI363 Catalyst - Multiple data readouts for IBI363 are planned in 2026, including: - Phase 1/2 POC data for **1L NSCLC** and **1L CRC** in **2H26**, considered a key catalyst [6] - Novel ADC pipeline readouts, including IBI3001, IBI3005, and IBI3020 [6] - Phase 1 data for an oral small-molecule GLP-1 and autoimmune readouts [6] Financial Outlook and Risks - The 12-month price target is set at **HK$103.22**, with a current price of **HK$90.20**, indicating an upside of **14.4%** [7] - Key financial metrics include: - Market cap: **HK$146.3 billion / US$18.8 billion** - Revenue projections for 2025E: **RMB 12,694.9 million** [7] - EPS projections for 2025E: **RMB 0.54** [7] - Risks include: - Intensifying competition in the PD-1/L1 market in China - Uncertain approval timelines for key candidates - Potential restrictions on off-label use due to safety issues - Failure of R&D projects [6] Valuation Metrics - **P/E Ratio**: Projected to be **30.3x** in 2026E [7] - **P/B Ratio**: Expected to be **7.5x** in 2026E [7] - **Free Cash Flow Yield**: Projected at **2.7%** in 2026E [7] Additional Insights - The management emphasized the importance of maintaining a competitive edge through innovative product designs and strategic partnerships [5][6] - The focus on market share gain in 2026 is prioritized over reducing sales expense ratios [6] This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of Innovent Biologics' strategic direction, financial outlook, and market positioning.

Summary of Innovent Biologics Conference Call Company Overview - **Company**: Innovent Biologics (1801.HK) - **Industry**: Biopharmaceuticals, focusing on immuno-oncology and metabolic diseases Key Financial Performance - **2Q25 Product Revenue**: Exceeded Rmb2.7 billion, representing a **35% year-over-year increase** and a **13% quarter-over-quarter increase** from Rmb2.4 billion in 1Q25 [1] - **Tyvyt Sales**: Reported at US$137 million in 2Q25, a **19% year-over-year increase**, but largely flat compared to previous quarters [1] - **New Product Launches**: Five new products launched in 2025, contributing to a **186% year-over-year increase** in sales from the new product portfolio, excluding Tyvyt and biosimilars [1] Market Position and Strategy - **Mazdutide**: Recently approved and launched, positioned favorably in the obesity market, especially amid NOVO's destocking in China [2] - **Pricing Advantage**: Mazdutide priced at approximately Rmb2,920 per month, offering a discount compared to competitors like Zepbound [2] - **Sales Growth Drivers**: Continued momentum expected in 1H25, driven by strong uptake in tafolecimab post NRDL inclusion and the anticipated sales uptake of mazdutide [1][2] Competitive Landscape - **NOVO's Ozempic Sales**: Experienced a **37% year-over-year decline** in 2Q25 due to destocking, creating an opportunity for mazdutide to capture market share [2] - **Market Dynamics**: The obesity market in China is seen as expanding due to limited competition and NOVO's passive strategy, which benefits Innovent's proactive promotion of mazdutide [2] Financial Projections and Valuation - **2025 Revenue Forecast**: Full-year product sales projected at Rmb11.7 billion, a **42% year-over-year increase** [1] - **Target Price**: Updated DCF-based 12-month target price set at HK$98.23, reflecting a **7.5% upside** from the current price of HK$91.40 [7][15] - **Earnings Estimates**: Adjusted EPS estimates for 2025-2027 reflect slight downward revisions due to near-term sales growth adjustments [7] Risks and Considerations - **Key Risks**: 1. Intensifying competition in the PD-1/L1 market in China [7][13] 2. Uncertain approval timelines for key candidates [7][13] 3. Potential restrictions on off-label use due to safety issues [7][13] 4. Risks associated with R&D project failures [7][13] Conclusion - Innovent Biologics is positioned to leverage its strong product pipeline and market dynamics to drive growth, particularly with the launch of mazdutide. The company is viewed as undervalued relative to its potential, with a favorable outlook for continued revenue growth in the coming years.