CICC: Maintains "Outperform" rating on AKESO (09926) with a target price of 90 Hong Kong dollars.

CICC released a research report stating that they are maintaining their "outperform industry" rating on AKESO (09926) with a target price of 90 Hong Kong dollars. They are also maintaining their profit forecasts for 2025 and 2026. On February 24th, the company's partner Summit announced a clinical trial collaboration agreement with Pfizer to explore the combined treatment potential of AK112 and Pfizer's various ADC drugs in solid tumors. Key points from CICC's report include: - International recognition of the value of AK112, exploring the potential of combination therapy with ADCs. - Pfizer will be responsible for conducting the clinical trials under the collaboration agreement, with Summit providing AK112 for use in the trials. Pfizer will also provide multiple vedotin ADC drugs, and both parties will oversee the clinical trials together. The series of clinical trials is expected to start in the middle of this year. - Pfizer, being one of the global leaders in ADCs, has a strong R&D capability in ADCs after acquiring Seagen. They currently have 6 approved ADC products, the most among global companies, and have a pipeline of ADCs in development. Previous studies have shown that combining ADCs with IO drugs can bring more significant clinical benefits, laying a theoretical foundation for AK112's combination with ADCs. CICC believes that this collaboration reflects Pfizer's high recognition of AK112's value and is an important step in the internationalization of AK112. The report also suggests monitoring the data releases and sales progress of AK112 from both Kangfang and Summit internationally and domestically. Some highlights from Kangfang and Summit for 2025-26 include: 1) Summit's global multicenter clinical trial (HARMONi) of AK112 combined with chemotherapy for treating advanced nsq-NSCLC patients after third-generation EGFR-TKI treatment has completed patient enrollment, with top-line data expected to be released in the middle of this year. 2) Kangfang's phase III clinical study (HARMONi-6/AK112-306) comparing AK112 combined with chemotherapy to Ramucirumab monotherapy in first-line sq-NSCLC treatment completed patient enrollment on February 25th, with further data releases to be monitored. 3) Kangfang's phase III clinical trial (HARMONi-2/AK112-303) comparing AK112 to K drug in first-line NSCLC treatment showed positive PFS results in 2024, with upcoming updates on overall survival to be monitored. 4) On the sales front, AK104 and AK112 have been successfully included in medical insurance, with medical insurance pricing to take effect in January 2025. CICC holds an optimistic view on the future sales volume of AK104 and AK112. Additionally, Kangfang and Summit are expected to launch more clinical trials beyond lung cancer to further expand the application range of AK112. Risk warnings include clinical data not meeting expectations and delays in pipeline progress.