CSTONE PHARMA-B(02616): Moving towards pipeline 2.0, ROR1 ADC has a lot of potential.

Jichishiyao is an innovative-driven biopharmaceutical company focusing on the research and development of anti-tumor drugs. As of February 2025, the company has successfully listed 4 innovative drugs and obtained approval for 16 new drug applications (NDA) and 9 indications. The current research and development pipeline includes a balanced configuration of 16 candidate drugs, including potential first-in-class or best-in-class antibody-drug conjugates (ADC), multispecific antibodies, as well as immunotherapy and precision treatment drugs. The company's main commercialized products, Suglelimab (PD-L1), Pratinib (RET), and Alvatinib (KIT/PDGFRA), have achieved commercialization. Key clinical projects in the pipeline 2.0, CS5001 and CS2009, have great potential and are expected to continue driving business growth. Pipeline 2.0: Setting sail again, leveraging the company's research and development advantages CS5001 (ROR1 ADC): CS5001 is a seed player in the company's current pipeline 2.0, showing good potential benefits in multiple hematologic indications and demonstrating good tumor inhibition activity in solid tumors as well. In addition, the competitor ROR1 ADC zilovertamab vedotin has shown impressive data (100% CR) in 1L DLBCL. Tianfeng believes that the company's CS5001 is expected to achieve good commercialization results with its differentiated design and global second clinical progress. CS2009 (PD-1/VEGF/CTLA-4 triple antibody): Pre-clinical data shows that crosslinking with VEGFA can significantly enhance the activity of anti-PD-1 and anti-CTLA4, with significantly better anti-tumor activity compared to potential competitors. On December 23, 2024, Jichishiyao announced that CS2009 has submitted a clinical trial application in Australia. Considering the potential shown by the PD-1, VEGF, and CTLA-4 targets in monotherapy and combination therapy, the good preclinical data of CS2009, and its broad applicability in various tumors, CS2009 is expected to be the next potential blockbuster drug after CS5001. Pipeline 1.0: Several potential varieties have entered the commercialization stage, and local production is expected to accelerate results Suglelimab: The second domestic and fourth domestically approved PD-L1 monoclonal antibody in China. As of February 2025, Suglelimab has been approved for five indications in mainland China, and commercialization rights have been granted to Pfizer in China, generating royalty income for Jichishiyao. The 1L NSCLC indication for Suglelimab was also approved in the EU and the UK in 2024. Revenues from overseas partners and milestones are expected to continue to increase the company's income. Pratinib & Alvatinib: Both drugs were introduced from Blueprint in 2018, with a good competitive landscape. However, due to incomplete local production, the costs are high. Considering the commercialization rights for Pratinib and Alvatinib granted to Shanghai Allist Pharmaceuticals Co., Ltd. and Jiangsu Hengrui Pharmaceuticals, the company is expected to improve drug accessibility through cost reduction strategies such as price reductions for medical insurance after completing local production, accelerating the production of the two products. Profit forecast Tianfeng expects the company's overall revenue for 2024-2026 to be 386/516/829 million yuan, with year-on-year growth rates of -16.68%, 33.59%, and 60.62%, respectively. Net profit attributable to shareholders of the listed company is expected to be -0.03/0.29/0.93 billion yuan, respectively. The company has entered the era of pipeline 2.0. Considering the excellent commercial potential of the subsequent ROR1 ADC and PD-1/VEGF/CTLA-4, as well as the accelerated commercialization of existing varieties, it is optimistic about the company's development. The company's market value is estimated using the DCF method, assuming a WACC of 7.29% and a perpetual growth rate of 0.5%, with a corresponding market value of 8.673 billion Hong Kong dollars and a target price of 6.75 Hong Kong dollars per share. Risk warning: Drug development risk, market competition risk, operational risk, subjective risk in calculating Hong Kong stock liquidity risk This article is from "Tianfeng", edited by GMTEight: Liu Xuan.