Core view: *Unless otherwise specified, the currency used in this report is RMB
Two SKB264 studies have appeared at ASCO and have the potential to become BICs. The company issued an announcement announcing that it will announce two SKB264 (sAC-TMT) research results at the 2024 ASCO conference: (1) TNBC: patients received SKB264 (n=130) and chemotherapy (n=133) respectively, 26% received anti-PD- (L) 1 treatment at baseline, and 48% received third-line chemotherapy or above. Mid-term analysis data showed that mPFs were 5.7 vs 2.3 months (5.8 vs 1.9 months in patients with TROP2 H score > 200); MoS NRvS9.4 months; ORR was 43.8% vs. 12.8%; (2) NSCLC: SKB264 (5 mg/kg) combined with A167 (cohort 1A: 1200 mg, cohort 1B: 900 mg) first-line treatment for NSCLC without driver gene mutations, 40 and 63 participants were enrolled in cohort 1A median follow-up for 14 months, ORR was 48.6%, DCR was 94.6%, and mPFs was 15.4 months; median follow-up of 6.9 months for cohort 1B, ORR was 77.6%, DCR was 100%, and the 6-month PFS rate was 84.6%. Looking at ORR, non-squamous patients were 72.7%, 84% squamous, and 63.2%, 81.3%, and 87% of patients with PD-L1 TPS < 1%, 1%-49%, and above 50%, respectively.
SKB264 is progressing smoothly in global clinical practice. According to the Clinicaltrial, MSD has initiated 9 global multi-center phase III clinical trials for SKB264, including NSCLC, TNBC, endometrial cancer, HR+/HER2-BC, gastric cancer, etc. On the domestic side, according to the company's 2023 annual report, SKB264 terminal treatment TNBC has been accepted by the CDE and included in priority review and approval; there are also 4 Phase III projects under study, including 1L PD-L1 positive NSCLC, 1L TNBC, 2L HR+/HER2-BC, and EGFR mutant NSCLC where TKI failed treatment (Source: Clinical Trial Registration Platform).
Profit forecasting and investment advice. The company's revenue for 2024-2026 is estimated at 1,245, 1,181, and 2,208 billion yuan. The company's ADC platform is globally competitive, and the SKB264 has the potential to become a global single product. Using the DCF valuation method, a reasonable value of HK$190.94 per share (HKD/CNY = 0.91) was obtained, and the “buy” rating was maintained.
Risk warning. Risk of R&D failure, product sales falling short of expectations, market competition exceeding expectations, etc.