With topline data readout for a major product candidate combined with sector beta tailwinds, is LONGBIO-B (01779) poised to stabilize its share price?

Title context: With topline data readout for a major product candidate combined with sector beta tailwinds, is LONGBIO-B (01779) poised to stabilize its share price? Text: Recently, coinciding with the window of the Federal Reserve's interest rate meeting, although the overall market does not have the conditions for a systemic reversal, because it is currently at the intersection of the ESMO annual meeting and the intensive disclosure of Q3 financial reports, the Hong Kong innovative drug sector is still expected to usher in structural opportunities after overselling. Driven by the sector beta, LONGBIO-B (01779) also welcomed a long-awaited single-day surge. After short-selling momentum decays, when will a stabilization trend emerge? The single-day share price surge on October 28 is undoubtedly of positive short-term significance for Tianchen Biotech. Since its inclusion in the Stock Connect this year, under the dual influence of market liquidity and fluctuations in the Hong Kong innovative drug sector, Tianchen Biotech's share price volatility has increased significantly. In recent months, as the Hong Kong innovative drug sector has once again entered a correction period, the sector's PE (TTM) has returned to 28-30x, at an extremely low historical percentile of 15%-25%, lower not only than A-share innovative drugs (40-50x) but also than the US biotechnology sector, leaving ample valuation safety margin. Under this influence, since September 24, although several of its oscillators have entered historical oversold territory, Tianchen Biotech's share price has also developed an increasingly strong need for a short-term technical rebound. Recently, the "ignition" of the sector beta has given Tianchen Biotech's share price a tendency toward stabilization. On October 28, Hong Kong innovative drug and CXO sectors repaired collectively, the innovative drug purity index strengthened intraday, and the corresponding ETF saw a single-day net inflow of approximately RMB100 million within the correction range. It was observed that Tianchen Biotech's share price opened higher on the morning of that day, with the intraday gain stretching to more than 9% within 10 minutes of the open. Although the subsequent gain retreated noticeably, with the share price gain after the afternoon session even once pulling back to less than 1%, a strong late-session rally before the 606 final close brought its share price back to HK$60.95, with the gain settling at 7.59%. Although Tianchen Biotech's share price fell again the next day after the October 28 surge, the positive significance of the single-day rise lies in confirming the trend of "decaying short-selling momentum." From a technical perspective, in the nearly one-month market performance prior to this, Tianchen Biotech displayed a typical short-dominated market on the floor, with a complete bearish moving average alignment, continuous OBV outflow, and extremely shrunken volume, and even on October 16 there was a clear volume expansion and an extreme upper shadow, showing notably depressed market sentiment. However, on October 28-29, thanks to the sector beta, Tianchen Biotech regained the 5-day moving average with a closing price of HK$60.95, and its intraday share price rose from the low, showing a long-awaited stabilizing signal. In terms of momentum indicators, although the MACD lines remain below the zero axis, the MACD histogram has shown continuous convergence over the past 5 trading days; on the RSI indicator, its RSI6 has fallen from 27.11 to 23.66, indicating that Tianchen Biotech's share price may be recovering from extreme oversold conditions, and the signal of "weakening downward momentum" has begun to appear. At present, Tianchen Biotech's share price surge on October 28 has shifted the previously short-dominated market pattern back to a bull-bear tug-of-war. If the company's share price can subsequently stabilize above the 5-day moving average while recovering its intraday high of HK$63.35 on October 28 and further digesting the pressure from the intraday spike-and-retreat on October 28, Tianchen Biotech's share price is expected to technically confirm a new round of share price repair and rebound. Topline data readout, but does the market value commercialization delivery more? On October 21, Tianchen Biotech issued an announcement declaring the topline data readout of its self-developed C5+C3b bispecific antibody fusion protein LP-005 in a China multicenter Phase II clinical trial for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). It is understood that this study used a multicenter, randomized, open-label design, with three dose groups of 900 mg, 1200 mg, and 1500 mg, administered by intravenous infusion once every 4 weeks (Q4W), for a total treatment course of 48 weeks; the primary endpoints were the change from baseline in serum lactate dehydrogenase (LDH) after 12 weeks of dosing, and the proportion of patients at 24 weeks who did not require transfusion and whose hemoglobin (Hb) increased by 2 g/dL from baseline. A total of 30 PNH patients were enrolled, and 27 completed 24 weeks of treatment. The study showed that in this trial, the 1200 mg and 1500 mg dose groups both achieved a 100% 12-week hemolysis control rate (LDH<1.5ULN), demonstrating significant efficacy not inferior to first-tier drugs; all three dose groups achieved a 100% transfusion avoidance rate and no breakthrough hemolysis; and in the 1500 mg group, 85.7% (6/7) of patients achieved an Hb increase of 2 g/dL at 24 weeks without transfusion. In terms of safety, no treatment-related serious adverse events (SAEs) were reported in this study. LP-005 overall demonstrated good safety and tolerability characteristics. In this regard, Sinolink issued a research report noting that, in a non-head-to-head comparison, the clinical data of LP-005 presented by Tianchen Biotech this time were basically comparable to the APPOINT-PNH study (92%/63%) of Novartis's iptacopan, the benchmark of the "proximal oral monotherapy" route in the PNH indication, and LP-005 also has the convenience advantage of Q4W intravenous administration. The report believes that competition in complement drugs is extending from single-target blockade to multi-node intervention, and LP-005's C3b/C5 dual-target layout has differentiated potential. At present, LP-005 is being expanded into complement-mediated kidney disease and periodontitis, and Phase II trials in lupus nephritis, anti-glomerular basement membrane nephritis, thrombotic microangiopathy, and others have already been initiated, with data expected to be read out successively. Based on the above reasons, although Sinolink did not provide a target price in this research report, it maintained its "Buy" rating on Tianchen Biotech. On the other hand, the market has in fact long priced in the competitive landscape of the complement sector. Sinolink noted in its report that Jasper's KP104 is also a bispecific complement molecule, and if year-end IgA nephropathy data are positive, it may draw market attention to bispecific complement molecules. In other words, if competitor data are stronger, this may to some extent weaken expectations for the subsequent scarcity of LP-005. Judging from the secondary market performance after October 21, market participants evidently have not yet traded on the positive impact brought by LP-005's topline data. This may be because this round of sector beta coincided with the intersection window of the conclusion of the ESMO annual meeting and the intensive disclosure of third-quarter reports, and the launch of the innovative drug sector was mainly supported by the dual drivers of event catalysts and performance verification. That is to say, investors' core pricing of innovative drug targets remains focused on commercialization delivery. For Tianchen Biotech, the commercialization pace of its LP-003 anti-IgE antibody is the company's core pricing anchor at the current stage. It is understood that on August 20 this year, the CDE website showed that the marketing application for LP-003 injection independently developed by Tianchen Biotech was officially accepted, with the declared indication being seasonal allergic rhinitis (SAR). This is also Tianchen Biotech's first Class 1 innovative biologic drug sprinting toward commercialization. As an anti-IgE antibody with a novel sequence design, LP-003 mainly binds with high affinity to free IgE in blood and tissues, blocking its binding to the high-affinity receptor FcRI, thereby cutting off the IgE-mediated allergic cascade at the source. Its CSU Phase II head-to-head data being superior to omalizumab further strengthens the logic that LP-003 has differentiated potential. From a market perspective, allergic rhinitis is a non-infectious chronic inflammation of the nasal mucosa, and the patient base in China has exceeded 246 million. Although intranasal corticosteroids and second-generation antihistamines are first-line standard treatments, about 60% of moderate-to-severe patients still face poor efficacy, so there is a huge unmet clinical need. If approved smoothly, LP-003 will become the world's first marketed innovative anti-IgE antibody drug in the more than 20 years since omalizumab was approved, directly tapping into China's huge allergy treatment market. Recent institutional views have also emphasized that LP-003 has BIC potential and stated that the company's revenue elasticity after 2027 will come from LP-003 commercialization. Therefore, the BLA review progress of LP-003 and its subsequent commercialization delivery may be the important catalysts that could short-term drive Tianchen Biotech's share price from stabilization and repair toward a reversal.