The PD-1/IL-2 dual antibody showed potential for next-generation IO therapy: IBI363 (PD-1/IL-2α-Bias double antibody) treatment of solid tumors showed that ORR reached 17.3%/17.6% in all patients with solid tumors (N=300) and patients treated with IO (N=204), respectively, and the efficacy and dose correlation was obvious, with an ORR of 46.7% in the 3mg/kg Q3W dose group (N=15). IBI363 achieved significantly better curative effects than existing IO drugs in cold tumors/IO-treated hot tumors: 1) The extremity and mucosal subtypes in melanoma were cold tumors, and patients treated with IO obtained 42.9%/18.2% ORR and 71.4%/81.8% DCR in this trial; 2) There were few effective treatments for MSS colorectal cancer. Among them, patients with liver metastases (70%) had almost no response to IO therapy, and IBI363 obtained 12.7 at 0.6-1mg/kg Q2W % ORR, ORR of patients with and without liver metastases was 13.2%/12.0%; 3) At 3 mg/kg, ORR in IO-treated squamous NSCLC reached 100% (N=6). With a markedly differentiated molecular design (α-bias IL-2 only activates on PD-1 positive tumor-specific T cells), IBI363 has superior safety, a wider treatment window, and more promising multidrug use opportunities compared to other IL-2 targeted drugs. The dose of 3 mg/kg Q3W is close to the dosage of approved PD-1 single-target drugs. Follow-up companies will further accumulate 3mg/kg data on key indications and launch global PoC clinical trials after determining RP2D.

Two CLDN18.2 molecular pancreatic cancer preliminary data are excellent: At this ASCO conference, the company announced preliminary data for two CLDN18.2 drug candidates. Among them, the world's first CLDN18.2/CD3 dual antibody IBI389 and CLDN18.2 ADC IBI343 obtained 40%/30% ORR in ≥2L CLDN18.2 positive pancreatic cancer, respectively. IBI343 also recently obtained FDA fast track certification for this indication.

Reiterating the purchase: The recent intensive publication of clinical data on the company's next-generation pipeline further validates the company's differentiated layout advantages on key tracks such as next-generation IO and ADC. We believe that although these assets are still in early clinical development, phase I data on difficult to treat major cancers is already quite excellent, and if subsequent trials can maintain/approach this efficacy, the global market space will be extremely impressive. We maintain the company's purchase rating and target price of HK$48.0. Key catalysts for the oncology pipeline over the next 12 months include: 1) approval of new products/indications, including ROS1, KRAS G12C, and Cindiri+furoquintinib 2L EMC indications; 2) PoC data updates: IBI363 3mg/kg dose, and more data on pancreatic cancer from the CLDN 18.2 pipeline. In addition, weight loss data for 6mg of mast peptides (phase III GLORY-1 trial) will be announced at the ADA conference on June 23, local time.