Excellent long-term efficacy data for supivisumab and CMG901

Recently, the company announced long-term observation data for two core products: 1) 52-week data for treating moderate to severe AD with spiqibimab, EASI-75 and IGA 0/1 reached 92.5/ 67.2%; 2) CMG901 treated 2L+ GC with a PFS/OS of 4.8/11.8, and an ORR of 48% at 2.2 mg/kg. We are optimistic about the market potential of the two products: 1) The 52-week curative effect of sipcibalimab is not superior to JAK1 inhibitors and dupriumab, ahead of domestic competitors with the same target, and pioneered blue ocean markets such as SAR; 2) CMG901 has once again verified the potential of BIC, making it one of the fastest progressing CLDN 18.2 ADCs in the world. We expect an EPS of $3.06/(3.33)/(1.71) for 24-26, and a DCF-based target price of HK$55.36 (WACC: 11.4%, sustainable growth rate of 2.5%). Maintain a “buy” rating.

Sputibimab: The efficacy of treating AD for 52 weeks or surpassed the JAK1 inhibitor spochibimab in adults treated moderate to severe AD, and the 52-week EASI-75 and IGA 0/1 compliance rate was 92.5/ 67.2%; after 16 weeks of placebo, they crossed to 36 weeks of treatment with spiquivisumab, and EASI-75 and IGA 0/1 reached 88.7/ 64.2%. In non-head-to-head comparison, there are obvious advantages in efficacy with supibalizumab: 1) EASI-75 and IGA 0/1 were 65.2/ 36.0% at 52 weeks of treatment with dupriumab Q2W, and 64.1/ 40.0% of EASI-75 and IGA 0/1 under QW; 2) 50.8/69.0% of easi-75 in the 52 mg and 30 mg groups, and 33.5/ 45.2% of IGA 0/1; 3) 200mg abucitinib for 52 weeks of EASI -75 and IGA0/1 were 65.1/ 54.1%. Furthermore, supivisumab was safe. The 52-week data was consistent for 16 weeks, and there were no new safety signals.

CMG901: OS showed BIC potential, leading the CLDN 18.2 positive gastric cancer treatment. CMG 901 treated 2L and above CLDN 18.2 positive GC had an ORR/DCR of 35/ 70%, of which the ORR at 2.2 mg/kg dose was 48%.

The PFS/OS in all 93 patients with GC/GEJ was 4.8/11.8 months. In a non-head-to-head comparison, the ORR of CMG901 at a dose of 2.2 mg/kg was superior to the same target ADC competitor (31-47%). Compared with the same target CAR-T (CT041 was 9.7 months) and monoclonal antibodies (zolbetuximab was 5.6 months), the OS of CMG901 was superior. Furthermore, the incidence of CMG901 grade 3 and above TRAE is 55%, and overall safety is manageable.

Approval is imminent, and CMG901 progress is leading the world. We expect that the first indication of septicimab will be approved in adults with severe AD during the year, while accelerating the development of multiple blue ocean markets: 1) the SAR NDA was accepted at the end of April; 2) crSWnP was included in priority approval in May, and we expect to submit an NDA in 3Q24; 3) Phase III clinical trials for PN will be approved by the CDE at the end of April. The registered clinical trial of CMG901 has been FPI. It is currently the only CLDN 18.2 ADC that has initiated phase III clinical trials in the US and Europe. In addition, AstraZeneca has explored a combination plan to treat 1L GC and PDAC in phase II clinical trials.

Risk warning: 1) The drug has not achieved the expected positive clinical results; 2) Drug commercialization uncertainty.