2025-10-09 02:39Summary of InnoCare Pharma (9969.HK) Conference Call Company Overview - Company: InnoCare Pharma (9969.HK) - Partner: Zenas BioPharma (ZBIO) - Focus: Global development of Orela (orelabrutinib) for multiple sclerosis (MS) and other non-oncology diseases Key Points Licensing Agreement with Zenas - InnoCare announced a licensing deal with Zenas for three assets, including: - Ex-China/Southeast Asia rights for orelabrutinib in MS and non-oncology diseases - Global rights for a preclinical oral brain-penetrant TYK2 inhibitor - A preclinical oral IL-17AA/AF inhibitor - Financial terms include: - Upfront cash payments of US$100 million - 7 million new shares of Zenas upon achieving a milestone in early 2026 (valued at approximately US$145 million at US$20.85/share) - Development/regulatory/commercial milestone payments of up to US$1.4 billion - Tiered royalties on net sales [1][2][4] Clinical Development and Market Potential - Zenas is currently completing a phase 2 study on RMS for its core asset obexelimab but faces challenges in moving to phase 3 due to recruitment difficulties and financial constraints. - There is a higher chance for Zenas to prioritize Orela's phase 3 studies for PPMS and SPMS due to significant unmet medical needs, with a total addressable market (TAM) estimated at US$12 billion for PPMS and SPMS [4][5]. - Orela is noted for its best-in-class potential with high selectivity, CNS penetration, and low IC90, indicating high potency [4]. Execution and Recruitment Track Record - Zenas has demonstrated effective patient recruitment, completing enrollment of 93 patients in about 9 months for its phase 2 study, comparable to Roche's fenebrutinib study [4]. Financial Considerations - Zenas has a cash balance of US$305 million as of September, with a US$120 million raise and US$100 million payment due in 2025/2026 for the deal. - Additional funding may be required over the next three years to support ongoing and upcoming studies, including Orela's two phase 3 studies with a combined enrollment of approximately 1700 patients [5]. Preclinical Assets - Zenas plans to start phase 1 on ZB021 (oral IL-17A/F inhibitor) in 2026, with preclinical data showing high potency. - ZB022, a brain-penetrant TYK2 inhibitor, is also in development, awaiting further data to validate its potential for neuroinflammatory and neurodegenerative diseases [6]. Earnings Forecast and Valuation Changes - Earnings forecasts for 2025E/2026E/2027E have been revised up by Rmb116 million/Rmb204 million/Rmb204 million due to the licensing deal. - The price target for InnoCare's H-Share has changed to HK$22.89 (previously HK$20.59), and for the A-Share to Rmb44.10 (previously Rmb39.66) [7][10]. Risks and Challenges - Key risks include R&D challenges for clinical assets, lack of a proven commercialization track record, pricing uncertainties, potential entry of generic ibrutinib in 2027 in China, and below-expected progress in global expansion [10]. Competitive Landscape - The competitive landscape for drugs targeting SPMS/PPMS includes Roche's Ocrevus and Sanofi's tolebrutinib, with limited competition for Orela in these indications [9]. Conclusion - The partnership with Zenas is seen as a strategic move for InnoCare to enhance the development of Orela in MS, with significant financial backing and market potential. However, careful monitoring of financial health and competitive dynamics will be essential for future success [1][4][10].