ABBISKO-B (02256) Mid-Year Report Observation: MNC Continues to "Place Orders," Accelerating the Realization of Innovative Platform Value

In the second half of this year, the Hong Kong stock market's innovative drug sector has undergone a significant valuation recovery. Since hitting a temporary low in early June, the sector index (931787) has rebounded by over 38%. Behind the improving market sentiment is a subtle shift in the logic of fundinginvestors are now focusing on more certain value realization factors, such as continued business development (BD) and revenue recognition from collaborations. In this context, ABBISKO-B (02256), which achieved a major BD and received confirmation of milestone revenue from collaborations in the first half of this year, has undoubtedly become a noteworthy case to examine. Currently, Ho Yu is disclosing its mid-year performance for 2026, allowing investors to view the value transition of a biotech company from "selling pipelines" to "selling platforms" through this interim report. The core product has begun to ramp up globally, revealing its cash flow "blood-generating" capability. The most certain value realization for Ho Yu in the first half of the year stems from its core product, Bei Jie Mai (Pimigratin Hydrochloride Capsules), which achieved a significant BD and successfully gained market approval. This innovative drug for treating tenosynovial giant cell tumor (TGCT) is moving from the expectation of being a "billion-dollar molecule" to tangible global commercialization. At the end of 2023, Ho Yu reached a "high upfront, high milestone, high royalty" BD deal with Merck, with potential total payments of up to $606 million, plus a double-digit net sales share. To date, Ho Yu has accumulated nearly $170 million in upfront and milestone payments from this transaction. In March, Bei Jie Mai received its first prescription in China, allowing Ho Yu to start recognizing revenue from sales. In the first half of the year, it recorded a milestone payment of 92 million yuan for the first prescription in China and confirmed 1.1 million yuan in sales revenue. This indicates that this flagship product has officially entered a self-sustaining stage, beginning to contribute stable recurring cash flow for Ho Yu. Meanwhile, the global registration pace of Bei Jie Mai is also accelerating. In January 2026, the U.S. FDA officially accepted the NDA application for this product; in June of the same year, Health Canada approved its marketing through priority review. This flagship product, which Ho Yu and Merck have high hopes for, is gradually realizing its commercial potential. MNCs collectively bet: from "single project licensing" to "platform-level collaboration." If the success of Pimigratin is a victory for a single pipeline, then Ho Yu's recent collaborations with Eli Lilly and AstraZeneca reveal a deeper logicthe continuous generation of innovative assets and new drug development capabilities has begun to become an important direction for MNC collaboration partners to bet on. Most notably, Ho Yu's renewed partnership with Eli Lilly. On June 24 of this year, Ho Yu announced a new round of strategic research and development collaboration and licensing agreement with Eli Lilly, further upgrading their cooperation following their global collaboration and exclusive licensing deal in 2022. This collaboration, unlike the common single project licensing, represents a "platform-level" value output: Ho Yu will leverage its AI-driven early drug discovery platform and innovative R&D system to be responsible for drug discovery and early development for designated target programs by Eli Lilly; Eli Lilly will leverage its global R&D and development capacity advantages to promote the subsequent clinical development and global layout of candidate projects. According to the agreement, Ho Yu will receive up to $1.9 billion in upfront and milestone payments, along with tiered revenue sharing based on net sales of the products. In July, AstraZeneca also chose to partner with Ho Yu to jointly advance clinical research on the oral PD-L1 inhibitor Lumipodlin (ABSK043) in combination with Osimertinib for the treatment of specific EGFR mutation non-small cell lung cancer (NSCLC). AstraZeneca chose ABSK043 for its potential better safety profile as an oral small molecule PD-L1 inhibitor in combination therapyaddressing the safety concerns such as the high incidence of interstitial lung disease in EGFR-TKI combined immunotherapy. From Merck to Eli Lilly and then to AstraZeneca, the successive recognition by these top MNCs confirms a fact: the quality of Ho Yu's innovative assets and its continuous output ability have already secured a place in the high-value-added division of the global pharmaceutical industry. Its AI-driven drug discovery system is becoming a core asset that MNCs are willing to pay a premium for. Pipeline formation: not only "star products," but also "future stars." Of course, the underlying support for platform value ultimately remains a solid pipeline. In addition to the commercialized Pimigratin, Ho Yu's subsequent pipeline also boasts considerable highlights. Ho Yu has established over 20 differentiated innovative R&D pipelines with global competitiveness, several of which have the potential to be "best-in-class" or "first-in-class." Take Ho Yu's second "billion-dollar molecule," Ipagotin (ABSK011), for example. As an FGFR4 inhibitor, it targets liver cancer patients with approximately 30% FGF19 overexpression and currently holds a leading position in the global FGFR4 arena. In 2025, the single-agent registration clinical trial for this product will be initiated in China, and the first patient in the U.S. for the global multicenter Phase I trial expansion has received treatment in February of this year. Simultaneously, the Phase II clinical trial of Ipagotin combined with standard therapy (Tislelizumab + Bevacizumab biosimilar) completed its first patient treatment in March this year, directly targeting the broad first-line market for HCC. Another noteworthy rising star is ABSK061. At this year's ASCO annual meeting, Ho Yu presented preliminary Phase II data on ABSK061 combined with their oral PD-L1 inhibitor Lumipodlin (ABSK043) in FGFR2-positive advanced gastric/gastroesophageal junction cancer: in first-line patients, the objective response rate (ORR) reached an impressive 90%. At the same time, the clinical trial of ABSK061 targeting achondroplasia (ACH) is also progressing, having received FDA recognition as a rare pediatric disease and orphan drug designation. While the core pipeline continues to advance, the company is also continuously enriching its early-stage innovative asset reserves. Projects such as the KRAS G12D inhibitor ABSK141, pan-KRAS inhibitor ABSK211, PRMT5-MTA synergistic inhibitor ABSK131, and CDK4/2 inhibitor ABSK191, along with brain-penetrable CDK4 inhibitor ABSK192, have all made progress at different stages. From the already commercialized core products to innovative pipelines in critical clinical stages and ongoing reserves of early projects, Ho Yu is forming a gradient of innovative asset combinations. For innovative drug companies, this continuously iterative R&D pipeline means that future growth does not rely on a single product, but rather is established on the ability to continuously generate innovative assets. Summary Recently, against the backdrop of marginal pressure on U.S. dollar credit and enhanced allocation momentum for Hong Kong stocks, the innovative drug sector in Hong Kong has shown a clear high-efficiency effect. At this critical window where capital in the innovative drug sector resonates with industry trends, the quality of innovation value realization will determine the sector's next direction, and companies with genuinely robust innovative value release are likely to stand out. Looking at Ho Yu's performance in the first half of 2026, a clear developmental path is forming: core asset value realization MNC cooperation continuously validating multi-tier pipeline relay advancement new-generation innovative asset reserves. The sustained operation of this innovation system still requires stable financial support. In the first half of 2026, Ho Yu's R&D investment reached 246 million yuan, a year-on-year increase of 7.98%; as of the end of the reporting period, the company's cash and bank balance reached 2.379 billion yuan, a year-on-year increase of 17.38%. Considering the accelerated release of value from Ho Yu's "billion-dollar molecule" commercialization pipeline, global innovative collaborations entering a new phase, and a solidly improving fundamental and cash flow performance, the configuration value becomes increasingly apparent. As market sentiment warms and sector trends reverse, the company is expected to demonstrate considerable upward elasticity to market investors going forward.