China Merchants Jinling International: Maintains AKESO "Buy" Rating with a Target Price of HKD 183

According to Zhitong Finance APP, Jiangyin International released a research report stating that it maintains a "Buy" rating for AKESO (09926) with a target price of HKD 183. So far, no approved drugs have achieved statistically significant overall survival (OS) benefits in this indication. The firm believes that achieving a hazard ratio (HR) of less than 0.8 for Ivosidenib and a clearly separated curve is indeed challenging. Regardless of whether HARMONi is approved, the latest data has once again highlighted the potential of Ivosidenib to grow into a cornerstone product for the next generation of immuno-oncology (I/O). The firm maintains its forecast of USD 16.5 billion peak sales for Ivosidenib after PoS adjustments.

Jiangyin International's main points are as follows:

Latest OS data from the HARMONi study shows an improving trend

The global Phase III HARMONi study of Ivosidenib (second-line EGFR) released its latest data at the WCLC conference: 1) After long-term follow-up, the OS HR improved to 0.78 (95% CI: 0.62-0.98), with a nominal P value of 0.0332 (previously reported OS HR of 0.79, 95% CI: 0.62-1.01, P=0.057). The survival benefit data for the North American population is notable, with median OS: NR vs. 14.0 months, HR=0.70. 2) The long-term follow-up PFS HR is 0.57, which is basically consistent with the previously reported 0.52, and the overall curve shows a similar trend. 3) The survival benefits for subjects with PD-L1 <1% and PD-L1 ≥1% are similar (PFS HR: 0.62 vs. 0.55), with almost all subgroups achieving statistical significance in PFS. The company's partner, Summit, will submit a BLA application for this indication to the FDA, with a declaration strategy expected to be determined in the coming weeks.

Uncertainty regarding HARMONi's overseas approval has decreased but still exists; focus on subsequent major indications

The firm believes that this data shows an improving trend compared to the last time, and the likelihood of approval in the United States has increased. However, the firm also believes that it is necessary to continue monitoring the following data trends and their potential impact on FDA decisions: 1) Long-term follow-up has observed OS benefit advantages in the treatment group for both North American and overall Western populations (HRs of 0.70/0.84 respectively), but statistical significance has not yet been reached; 2) The long-term follow-up PFS HR for the North American + European population is 0.67 (95% CI 0.45-1.00), which is clinically meaningful, but slightly lower than the 0.55 (95% CI 0.43-0.71) observed in the Asian population, and the firm recommends continued monitoring. Other key indications' overseas clinical progress is also worth continued attention, including: 1) HARMONi-3 (head-to-head K drug + chemotherapy for 1L NSCLC) and HARMONi-7 (head-to-head K drug monotherapy for 1L PD-L1 high-expressing NSCLC); 2) Summit plans to initiate more Phase III studies for additional indications, including lung cancer and other tumor types, in the coming months