Goldman Sachs: Review of CSTONE PHARMA-B (02616) ESMO three anti-cancer data given "buy" rating, target price raised to HK$7.05.

Goldman Sachs releases a research report commenting on CSTONE PHARMA-B (02616) preliminary phase 1 study data of CS2009 (PD-1/VEGF/CTLA-4 triple-specific antibody) disclosed at the ESMO2025 conference. The data shows good safety profile and early signals of tumor response in multiple tumor types. The firm believes that these early results are positive evidence supporting further study of this asset, and will focus on longer follow-up phase 1 data updates, as well as data from ongoing phase 2 trials that may be disclosed in 2026, to further determine the potential differentiation advantage of CS2009, especially in non-small cell lung cancer. Goldman Sachs' key points are as follows: CS2009 demonstrates good tolerability CSTONE Pharma disclosed the latest phase 1 dose escalation data for CS2009, which was administered to 72 patients at six dose levels (1/3/10/20/30/45 mg/kg). The firm noted that CS2009 demonstrated good tolerability during the dose escalation phase. As a reference, in the HARMONi-2 trial, the PD-1/VEGF dual antibody ivonescimab as a monotherapy showed a grade 3 or higher treatment-related adverse events (TRAE) of 29%, grade 3 or higher immune-related adverse events (irAE) of 7%, and VEGF-related adverse events (hypertension/proteinuria/bleeding) of 5.1%/3.1%/1%. The firm also pointed out that fewer adverse reactions were observed in the higher dose group, possibly due to the shorter observation time for the high dose group (only 1 month at the 6th dose level, while the overall median observation period for all patients was 1.9 months), with some potential adverse reactions (such as irAE which may take 4-8 weeks to occur) not fully revealed. Competitive potential in IO-treated NSCLC Among the 49 patients who underwent at least one tumor assessment, partial responses were observed in seven patients who had received multiple lines of treatment, involving five tumor types (NSCLC, ovarian cancer, triple-negative breast cancer, non-clear cell renal cell carcinoma, and soft tissue sarcoma), indicating the preliminary pan-tumor potential of CS2009. Of particular note, in 12 patients with no prior history of anti-angiogenic targeted therapy in IO-treated NSCLC, CS2009 showed a 25% objective response rate and an 83% disease control rate, which the firm believes is positive evidence supporting further study in the field of NSCLC. As a reference, the data presented at WCLC2025 for IO-treated NSCLC (N=47) using the combination of the PD-1/CTLA-4 dual antibody cardunilimab and the VEGFR2 monoclonal antibody proloximab showed an ORR/DCR of 13%/96%; and the data for BNT327 (PD-L1/VEGF-A dual antibody) in IO and platinum-based chemotherapy-treated NSCLC (N=8) showed an ORR/DCR of 12.5%/62.5%. The firm is positive about the preliminary ORR signal, but more data is needed to assess 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 end of 2026 Based on the phase 1 data, management indicated 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 determining the dose by mid-2026 and initiating a global phase 3 trial (priority indication for CS2009 in combination with chemotherapy for first-line NSCLC treatment) by the end of 2026. Regarding the recently initiated phase 2 trial in Australia/China, management stated that over 30 clinical centers have been activated, patient enrollment has begun, and they expect to enroll patients in first-line NSCLC soon, with the goal of sharing preliminary phase 2 data in 2026. Goldman Sachs maintains a "buy" rating on CSTONE PHARMA (02616), adjusting the earnings forecasts for 2025-2027 from RMB-0.21/0.7/0.09 yuan to RMB-0.22/1.07/0.01 yuan to reflect the strengthened view on CS2009 (success probability increased from 30% to 49%) and updated forecasts, including adjustments based on the first half of 2025 financial data and recent expenditure forecasts. The firm revised the 12-month target price based on the risk-adjusted DCF model to HKD 7.05 (previously HKD 6.25).