Tianfeng: Maintain a "buy" rating on CSTONE PHARMA-B (02616) as three anti-cancer drugs show good efficacy and safety signals at ESMO.

Tianfeng's research report stated that it maintains a "buy" rating for CSTONE PHARMA-B (02616) and believes that the CS2009 (PD-1/VEGF/CTLA-4 triple antibody) has shown preliminary effectiveness data and good safety data at ESMO, with more effectiveness signals discovered with prolonged follow-up, highlighting the potential for clinical and commercialization of the triple antibody in the future. The company is expected to have total revenues of 123 million / 829 million / 1.125 billion yuan in 2025-2027, with year-on-year growth rates of -68.25% / 575.37% / 35.81%; net profits attributable to shareholders of listed companies are expected to be -213 million / 93 million / 307 million yuan, maintaining the previous forecast unchanged. Key points raised by Tianfeng: Event In 2025, CSTONE PHARMA presented preliminary data from Phase I clinical studies of CS2009 (PD-1/VEGF/CTLA-4 triple-specific antibody) at the ESMO annual meeting for the first time. As of October 19, 72.2% of the 72 late-stage solid tumor patients were still under treatment. Over 51% of patients had received frontline immunotherapy, with a median follow-up period of only 1.9 months. Triple antibody design shows excellent synergistic effects The multi-target synergistic action between the PD-1, CTLA-4, and VEGFA arms can enhance the anti-tumor activity of CS2009 in the TME, while effectively avoiding interference with peripheral CTLA-4 single-positive T cells, significantly broadening its therapeutic window. (1) In the TME, CS2009 binds to PD-1 and CTLA-4 immune checkpoints on the surface of double-positive tumor-infiltrating lymphocytes through an affinity-driven synergistic dual-target binding mechanism. This dual-target action enhances the affinity of CS2009 to the checkpoints, significantly improving its checkpoint inhibitory activity, effectively reactivating the immune function of TILs. (2) In the periphery, the low affinity of CS2009's CTLA-4 arm does not block the interaction between CTLA4/CD80, allowing peripheral CTLA4 single-positive T cells to avoid over-activation, reducing systemic toxicity. In addition, the crosslinking of CS2009 with VEGFA dimers in the TME significantly enhances its affinity to PD-1 and CTLA-4 on T cells' surface. Good safety profile, preliminary showing better signals CS2009 demonstrated good safety at the ESMO conference: with a rate of grade 3 or higher TRAE of only 13.9%, grade 3 or higher irAE of 4.2%, and no occurrence of grade 4 or 5 TRAE. Within a relatively short follow-up period, CS2009 showed significantly lower rates of 3 TRAE and treatment-discontinuing TRAE than other IO double antibodies and combination therapies, lower rates of any grade and 3 irAE, and VEGF-related TRAE rates than other IO double antibodies and combination therapies, reflecting the advantage of CS2009 in terms of safety. Short follow-up period shows preliminary good and improving anti-tumor activity Anti-tumor activity was observed in all dose groups and showed a dose-dependent trend; with a median follow-up time of only about 2 months, the ORR was 12.2% (6/49), and DCR was 71.4% (35/49). By dose group, ORR was 10% (2/20) for 1-10mg, 5.9% (1/17) for 20mg, 22.2% (2/9) for 30mg, and 33.3% (1/3) for 45mg; a patient with IO-treated NSCLC showed improvement from SD to PR after the ESMO conference. Compared horizontally, even with a significantly shorter follow-up period (median of about 2 months) and a higher inclusion rate of IO-treated patients (over 50%), CS2009 showed positive ORR and a high DCR of 71% compared to other double antibody molecules. Global multicenter Phase I/II clinical trials of CS2009 have already begun, with Phase III trials expected to start in 2026 The Phase II study of CS2009 has already enrolled the first patient in Australia, and more data are expected to be released at the ASCO conference in Q2 2026. Phase III registration clinical protocols include 1LNSCLC (AGA negative, PD-L1 TPS >= 1%), first-line squamous and non-squamous NSCLC (AGA negative, combined with platinum-based chemotherapy), IO-treated late-stage/metastatic NSCLC (second-line and above, combined with chemotherapy or ADC), as well as other first-line solid tumor indications, combined with standardized chemotherapy regimens, set to commence in 2026.