Goldman Sachs: Review CSTONE PHARMA-B (02616) ESMO data, maintain "Buy" rating and raise target price to 7.05 Hong Kong dollars.

Goldman Sachs released a research report commenting on the preliminary Phase 1 study data of CS2009 (PD-1/VEGF/CTLA-4 triple-specific antibody) announced by CSTONE PHARMA-B (02616) at the ESMO 2025 conference. The data shows that it has good safety and early signs of tumor response in various types of tumors. The bank believes that these early results are positive evidence to support further research on this asset. The bank will focus on longer follow-up data updates from Phase 1, as well as data from ongoing Phase 2 trials that may be announced in 2026, to further determine the potential differentiation advantage of CS2009, especially in non-small cell lung cancer. Goldman Sachs' main points are as follows: CS2009 shows good tolerability CSTONE PHARMA-B released the latest Phase 1 dose escalation data for CS2009, which was administered to 72 patients (mainly Caucasian/Asian populations, accounting for 54%/43%) at six dose levels (1/3/10/20/30/45 mg/kg). The bank noted that CS2009 showed good tolerability during the dose escalation. For comparison, in the HARMONi-2 trial, ivonescimab (PD-1/VEGF dual antibody) as monotherapy showed a TRAE of 29% and irAE of 7%, with VEGF-related AEs (hypertension/proteinuria/bleeding) of 5.1%/3.1%/1%, respectively. The bank also pointed out that patients in the higher dose group had fewer adverse reactions, possibly because the observation period for the high dose group was shorter (only 1 month for the 6th dose level, while the overall median observation period for all patients was 1.9 months), and some potential adverse reactions (such as irAE, which may take 4-8 weeks to appear) have not been fully exposed. Competitive potential in IO-treated NSCLC Among 49 patients who had at least one tumor assessment, partial responses were observed in seven patients who had undergone multiple-line treatments, involving five types of tumors (NSCLC, ovarian cancer, triple-negative breast cancer, non-clear cell renal cell carcinoma, and soft tissue sarcoma), indicating that CS2009 has preliminary pan-cancer potential. Of particular note, in 12 patients who had undergone IO treatment, half of whom had also received anti-angiogenic therapy, CS2009 showed a 25% objective response rate and 83% disease control rate in NSCLC patients. The bank believes that this is positive evidence to support further research in the NSCLC field. For comparison, the data presented at WCLC 2025 for the IO-treated NSCLC (N=47) with a combination of canenelinab (PD-1/CTLA-4 dual antibody) and prolixanab (VEGFR2 monoclonal antibody) showed an ORR/DCR of 13%/96%; and the data for BNT327 (PD-L1/VEGF-A dual antibody) in NSCLC treated with IO and platinum-based chemotherapy (N=8) showed an ORR/DCR of 12.5%/62.5%. The bank is optimistic about the preliminary ORR signal, but more data is needed to determine the potential differentiation advantage of CS2009 in terms of efficacy, given the small sample size and short follow-up time. RP3D selected from 20/30mg dose, aiming to initiate Phase 3 trial by the end of 2026 Based on the Phase 1 data, the management stated that they will determine the recommended Phase 3 dose from 20mg/kg and 30mg/kg through a randomized controlled trial in NSCLC, with the goal of finalizing the dose in mid-2026 and initiating a global Phase 3 trial by the end of 2026 (with the priority indication being CS2009 in combination with chemotherapy for first-line NSCLC treatment). The management also mentioned that over 30 clinical centers have been initiated for the recently launched Phase 2 trial in Australia and China, patient enrollment has begun, and they expect to enroll patients in first-line NSCLC soon, with the goal of sharing preliminary Phase 2 data by 2026. The bank maintains a "buy" rating for CSTONE PHARMA-B (02616) and has adjusted its earnings forecast for 2025-2027 from RMB -0.21/0.7/0.09 to RMB -0.22/1.07/0.01 to reflect the enhanced view of CS2009 (success probability increased from 30% to 49%) and updated forecasts, including combining data from the first half of 2025 financial report and fine-tuning recent expenditure forecasts. The bank revised its 12-month target price based on a risk-adjusted DCF model to HK$7.05 (previously HK$6.25).