The stock price has doubled in half a year, with the commercialization of ASCENTAGE-B (06855) APG-2575 imminent, and an expected increase in valuation.

After experiencing a bull market from mid-September to early October this year, the Hong Kong stock innovative drug sector entered a month-long correction period, with the Hong Kong stock innovative drug index (931787) falling from a high of 940.84 points to 733.49 points at the close on November 15, a 22.04% drop. Against this backdrop, ASCENTAGE-B (06855) has recently shown some sideways volatility on the market, but has overall followed a path of significant upward movement against the market trend. It is observed that Ascentage Pharma, as a target that led the way in the September bull market of Hong Kong stocks innovative drugs, has seen its stock price rise by 33.65% since September 11. Looking at a longer timeline, after hitting a temporary bottom on April 19, Ascentage Pharma's stock price has steadily risen in a long bull market trend. From a low of 15.42 Hong Kong dollars to a high of 48.85 Hong Kong dollars on October 21, the cumulative increase in the interval reached as high as 216.80%. Although the Hong Kong stock innovative drug sector has been volatile this year, investors have still chosen to vote with their feet to help Ascentage Pharma's stock price achieve a doubling in the past six months. The reason lies in the continuous validation of the company's "investment certainty" under multiple favorable catalysts. It is understood that on November 17, Ascentage Pharma announced that the new drug application (NDA) for the company's core product Bcl-2 inhibitor APG-2575 (proposed Chinese generic name: Lisheng Kelapian) has been accepted by the National Medical Products Administration (NMPA) Drug Evaluation Center (CDE), and has been recommended for priority review, for treating relapsed or refractory (r/r) chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL). This is undoubtedly a key milestone for APG-2575 of Ascentage Pharma, indicating that commercialization of the product has officially entered the countdown. As the second core product expected to enter the international market after Idasanutlin, APG-2575 may drive Ascentage Pharma to a new level of scale growth after market entry, demonstrating the company's "innovative benchmark value". Innovation-driven behind investment certainty Since receiving FDA approval for clinical trials of new drugs in January 2018, APG-2575 has been widely watched by the global industry and market. Looking back at the development process of APG-2575, Ascentage Pharma has steadily progressed in the research and commercialization process of APG-2575 since 2018, and has continuously achieved important milestones. Last August, APG-2575 received FDA approval to conduct a global Phase III clinical study for the treatment of previously treated CLL/SLL patients. This is another important milestone after the key Phase II clinical study for treating R/R CLL/SLL patients approved by CDE in December 2021. Prior to this, APG-2575 has made multiple international appearances and received full endorsements from authoritative institutions at home and abroad. It is understood that APG-2575 has previously received 5 orphan drug designations from the FDA, for the treatment of Waldenstrom's macroglobulinemia (WM), chronic lymphocytic leukemia (CLL), multiple myeloma (MM), acute myeloid leukemia (AML), and follicular lymphoma (FL). In terms of international conference participation, in 2021, the results of a Phase I study involving 36 American blood cancer patients with APG-2575 were selected for oral presentation at the ASCO annual meeting; in the same year, data from a Phase I clinical trial in China were selected for oral presentation at the ASH annual meeting; at the EHA and ASCO conferences in 2022, Ascentage Pharma announced the results of Phase Ib and Phase II clinical trials of APG-2575 in Chinese R/R CLL/SLL patients; in addition, the results of multiple combination therapies with APG-2575 were presented at the 2022 ASH annual meeting, the 2023 ASCO annual meeting, and the 2023 AACR annual meeting. At the ASCO annual meeting this year and the 2024 EHA annual meeting, Ascentage Pharma successively announced studies on APG-2575 in indications such as AML, R/R MM or R/R AL. At the upcoming 2024 ASH annual meeting in December this year, APG-2575 will continue to present clinical progress in areas such as R/R CLL/SLL, MM, and myelodysplastic syndrome (MDS), with data from the MM study selected for oral presentation. From the latest research progress, it is currently conducting multiple Phase III clinical trials for APG-2575, including a global Phase III clinical trial with co-administration of BTKi for relapsed CLL/SLL patients (approved by the FDA); a global Phase III clinical trial with co-administration of acalabrutinib for first-line treatment of newly diagnosed CLL/SLL patients; a global Phase III clinical trial with co-administration of azacitidine (AZA) for first-line treatment of elderly or intolerant patients with newly diagnosed acute myeloid leukemia (AML); and a global Phase III clinical trial with co-administration of AZA for first-line treatment of high-risk patients with newly diagnosed myelodysplastic syndrome (MDS). With the exploration and approval of more indications in the future, APG-2575, this Chinese-origin, internationally leading drug, will bring new treatment options to global hematologic tumor patients. Expectation to unlock $2 billion in sales potential based on BIC properties It is easy to see that as the second global and first Chinese Bcl-2 inhibitor with clear efficacy and entering critical registration clinical stages, APG-2575 has been highly exposed at major international authoritative conferences since the beginning of Phase I clinical research, demonstrating broad treatment prospects in both hematologic tumors and solid tumors, and earning unanimous recognition from the global industry. The acceptance and recommendation for priority review of APG-2575's NDA in China this time is undoubtedly another major milestone for this drug. It is understood that CLL/SLL is the most common type of adult leukemia, accounting for a quarter of leukemia cases in Western countries, with over 100,000 new cases worldwide each year. Despite current first-line treatments such as immunotherapy, chemotherapy, and BTK inhibitors for initial treatmentThere is a significant response, but relapse and drug resistance are the main clinical challenges. There are still significant unmet clinical needs in the treatment of CLL/SLL, and new treatment options are urgently needed.Although the emergence of Bcl-2 inhibitors has brought further innovation to the treatment of CLL/SLL, the development of BCL-2 targets is high due to the large binding interface and transport issues across the mitochondrial membrane, making drug design for this target very difficult. BCL-2 target has been discovered for 40 years, and currently, the only approved Bcl-2 inhibitor globally is AbbVie's Venetoclax, fully demonstrating the difficulty and challenges in this field of research. Dr. Yang Dajun, Chairman and CEO of Ascentage Pharma, said: "Currently, there is only one approved Bcl-2 inhibitor globally, which fully illustrates the difficulty and challenges in drug development in this field. The founding team of Ascentage Pharma has more than 20 years of research and development history in the field of apoptosis, with a deep layout in targeting the Bcl-2 target." From a market perspective, the global hematologic malignancies drug market is expected to reach $40 billion by 2024, with a CAGR of 6% from 2024 to 2029. Taking Venetoclax, the only approved Bcl-2 inhibitor globally, as an example, there are currently over 250 ongoing global clinical trials, with sales reaching $2.29 billion in 2023, a 13.9% year-on-year increase, indicating the huge unmet demand for Bcl-2 inhibitors in the global market. Currently, the National Comprehensive Cancer Network (NCCN) guidelines in the United States have recommended Bcl-2 inhibitors as the first choice of treatment for CLL/SLL patients who have failed BTKi treatment. Foreign clinical treatments for CLL/SLL have entered a new era of "chemotherapy-free" and "fixed regimen". However, there is currently no approved Bcl-2 inhibitor in the domestic market. The acceptance of NDA for APG-2575 means that this drug is expected to become the first Bcl-2 inhibitor approved in the domestic CLL/SLL field, meeting the urgent clinical demand. As APG-2575 of Ascentage Pharma has received widespread attention, its key reason is that multiple clinical data have shown its safety advantages compared to Venetoclax. It also has broad prospects in the treatment of various hematologic malignancies, especially in CLL/SLL patients with the potential for monotherapy and combination therapy. For example, in the treatment of CLL/SLL indications, APG-2575 has shown efficacy in BTK-resistant patients who are ineffective with Venetoclax, with a 100% ORR when used in combination with BTKi for first-line CLL/SLL patients and a 98% ORR for R/R CLL/SLL patients. In terms of safety, the incidence of neutropenia and thrombocytopenia for APG-2575 is 30.3% and 13% respectively, significantly lower than Venetoclax (45% and 21%), with a lower risk of clinical tumor lysis syndrome. No DDI was observed in the use of APG-2575 with BTKi, and there were no dose-limiting toxicities. The combination therapy of APG-2575+BTKi shows great potential in CLL indications. Based on Venetoclax's market performance, it is expected that APG-2575's future sales could exceed $2 billion, gradually approaching Venetoclax's peak sales. Ascentage Pharma currently has two core products, Orvepitant and APG-2575, with billion-dollar molecular potential, as well as potential FIC/BIC products in development such as APG-115, APG-2449, APG-5918. With Orvepitant's global commercial value becoming more apparent, the commercialization stage and the huge global market potential of APG-2575 will undoubtedly become the next major catalyst for Ascentage Pharma's valuation growth.