J.P. Morgan: China biotech ESMO catalysts can validate domestic innovation; top picks SKB BIO (06990) and INNOVENT BIO (01801)

J.P. Morgan released a research report stating that ahead of the European Society for Medical Oncology (ESMO) annual meeting, the bank previewed key updates from multiple Chinese biotech and pharmaceutical companies within its coverage, believing that several catalysts could drive Chinese biotech stocks and further validate China's original innovation strength in bispecific antibodies, ADCs, and targeted oncology. The more than 20 Chinese biotech stocks covered by the bank fell 4.4% last week, underperforming the Hang Seng Index which rose 1.8%. Within the biotech sector, the bank's top picks remain SKB BIO (06990) and INNOVENT BIO (01801), believing both have rich catalyst paths into ESMO and beyond; the bank also turned more positive on AKESO (09926) after Astrazeneca PLC Sponsored ADR (AZN.US) invested US$2 billion in AKESO's U.S. partner Summit (SMMT.US). The bank noted that INSILICO's (03696) early Phase I asset readouts can serve as relevant data points for its AI-driven drug discovery (AIDD) platform, while late-stage assets from Jiangsu Hengrui Pharmaceuticals (01276) and HANSOH PHARMA (03692) remain the focus for investors watching mid-term growth momentum. ESMO abstract papers are expected to be released on October 18 at 6 PM ET, posters are expected to go live on October 23, and the ESMO conference will be held from October 23 to 27. Kelun-Biotech's sac-TMT has two key Phase III catalysts, including the global Phase III TroFuse-005 in endometrial cancer and the China Phase III OptiTROP-Lung06 in first-line PD-L1-negative non-squamous non-small cell lung cancer. Investor focus is on whether the data can further validate sac-TMT's cross-tumor activity, support its global registration strategy, and strengthen confidence in its ADC platform and partnership with Merck & Co., Inc. INNOVENT BIO's most important catalyst is the China registrational Phase III G-HOPE-001 data for CLDN18.2 ADC IBI343 (arcotatug tavetecan) in third-line gastric cancer, which will be presented as a late-breaking oral presentation; the bank also focuses on updates for IBI363 in first-line gastric/gastroesophageal junction adenocarcinoma and first-line non-small cell lung cancer, as well as other ADC readouts. AKESO's focus is the HARMONi-GI1 Phase III data for ivonescimab in first-line advanced biliary tract cancer, compared against durvalumab plus chemotherapy; the bank estimates the overall survival hazard ratio could reach 0.6 or below, and if confirmed, this would be the best overall survival hazard ratio data achieved by ivonescimab in a China Phase III study. The bank also noted that INSILICO's AI-designed pan-TEAD inhibitor ISM6331 will be presented as a rapid oral presentation, with focus on safety, dose escalation, and early efficacy signals. Jiangsu Hengrui Pharmaceuticals' updates cover programs including KRAS G12D, HER2 ADC, and HER3 ADC, including HRS-4642, SHR-A1811, and SHR-A2009, and are expected to attract investor attention on whether they can support mid-term growth and global expansion. For HANSOH PHARMA, the Phase III Ris-Rez (HS-20093) osteosarcoma data remains a key late-stage catalyst, along with other ADC updates including HS-20122. The bank has an "Overweight" rating on all the above companies.