With a year-round revenue increase of 342%, ASCENTAGE-B accelerates global innovation and commercialization

In 2024, the Hong Kong stock market's pharmaceutical sector experienced a significant decline due to external factors. For instance, after a strong rebound at the end of September last year, the Hang Seng Healthcare Index (800804) recorded an annual decline of 18.93%, while the Hong Kong Innovative Drug Index (931787) fell by 10.80%. Against this backdrop, Ascentage Pharma-B (06855) saw its stock price increase by 66.48% throughout 2024, significantly outperforming the indices.

The reason lies in the multiple unexpected positive developments in 2024 for Ascentage Pharma, including product overseas expansion, innovative research and development, and secondary market financing, which further validated the company's "investment certainty."

According to the latest 2024 annual report, investors can clearly see that leveraging systematic advantages formed through global research and development, overseas registration, and BD commercialization, Ascentage Pharma has been able to continuously push its core product, Nilotinib®, into international markets. With strong commercialization expectations for the soon-to-be-listed APG-2575, a substantial net cash position is also anticipated, thereby propelling the company's innovative research and development to a new level and solidifying a robust foundation for future valuation increases.

Accelerating Global Commercialization, Continuously Exploring Core Product Potential

In 2024, despite a complex and changing external investment environment, Ascentage Pharma maintained a high growth trajectory. It has now demonstrated its strong endogenous growth capability and risk resistance to the market through solid performance.

From the latest disclosed 2024 annual report data, during the reporting period, Ascentage Pharma achieved revenue of RMB 981 million, a substantial year-on-year increase of 342%. Among them, Nilotinib® generated sales revenue of RMB 241 million during the period, a year-on-year growth of approximately 53%. Additionally, the company's cash flow continued to improve, remaining robust and ample. As of the end of December 2024, the company's cash balance was RMB 1.261 billion, a year-on-year increase of 15.3%.

According to Zhitong Finance APP, in November last year, the newly added indications for Nilotinib® successfully passed the simplified renewal procedure for the 2024 National Medical Insurance negotiation, successfully included in the new version of the National Medical Insurance Drug Catalog, and will be implemented starting January 1, 2025. Currently, all indications for the drug that have been launched are included in the National Medical Insurance Drug Catalog, indicating that the significant innovative strength of the drug has been continuously recognized by the authoritative domestic medical system. In recent years, most innovative drugs have seen strong volume growth after entering the medical insurance system, and Nilotinib® is no exception, continuously validating its performance.

In addition, the collaboration with Takeda Pharmaceutical is also a "highlight" for 2024. The two parties signed an exclusive option agreement for Nilotinib® (Orelabrutinib) with a total price of $1.3 billion, characterized by "high upfront payment, high milestones, and high royalties," setting a new record for domestic small molecule oncology drug BD transaction amounts.

Moreover, Takeda also invested $75 million to purchase company shares at a 25% premium, becoming an important industrial shareholder of Ascentage Pharma. Within a week of signing the agreement, Takeda completed the $75 million equity purchase and paid $100 million in option fees in less than three weeks. Takeda's active cooperation reflects the enormous global commercialization potential of Nilotinib® Ascentage Pharma is also leveraging its strong global innovation capabilities to explore broader indications for NAIK. Currently, NAIK has significant potential in the treatment of various hematological malignancies and solid tumors.

In the field of hematological tumors, the next major indication for NAIK is Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL). In March 2025, NAIK was included in the "Breakthrough Therapy" list for use in combination chemotherapy as a first-line treatment for newly diagnosed Ph+ ALL patients. This marks the third time the drug has been included in the breakthrough therapy category by the Center for Drug Evaluation (CDE).

Currently, in the Ph+ ALL indication area, NAIK is expected to become the first TKI drug approved for first-line treatment of Ph+ ALL in China, with strong market certainty. Referring to the related indication track record of Amgen's Blincyto, its global sales have exceeded $1 billion. With the active promotion by its partner Takeda, the global first-line treatment market for Ph+ ALL is also expected to bring considerable sales growth for NAIK in the future.

In the field of solid tumors, in 2024, based on its inclusion in the breakthrough therapy category by the CDE, NAIK's Phase III clinical study for treating SDH-deficient GIST patients has received CDE approval. Moreover, NAIK's related clinical progress in this area has been showcased at the ASCO annual meeting for two consecutive years. At last year's AACR annual meeting, NAIK again demonstrated excellent anti-tumor effects in the SDH-deficient tumor indication area.

Integrated Innovation Loop Continues to Improve, Valuation Growth Space Further Opens

For Ascentage Pharma, a cumulative stock price increase of over 60% in 2024 is clearly far from the upper limit. Driven by the "double billion-dollar molecule," the company's integrated innovation loop is continuously improving, paving the way for further valuation growth.

According to the financial report, in 2024, Ascentage Pharma confirmed R&D investment reached 947 million yuan, with strong revenue growth and considerable financing and cash flow expectations providing strong support for the company's innovative R&D. Under robust R&D, the company is currently conducting ten registration clinical trials, two of which have received FDA approval, solidifying the foundation for the company's exploration of the global differentiated innovative drug market.

In terms of the innovative R&D pipeline, Ascentage Pharma currently has two core products with billion-dollar molecule potential, Orelabrutinib and APG-2575, as well as potential FIC/BIC products under research such as APG-115, APG-2449, and APG-5918, with their related clinical progress published at multiple international authoritative academic conferences and journals. Additionally, the company has built a strong global intellectual property layout through 541 authorized patents worldwide, including 379 overseas authorized patents.

Taking Ascentage Pharma's core product in the apoptosis pipeline, the Bcl-2 inhibitor APG-2575, as an example, on November 17 last year, the New Drug Application (NDA) for APG-2575 was accepted by the National Medical Products Administration (NMPA) Drug Evaluation Center (CDE) and was included in the priority review process for the treatment of refractory or relapsed (r/r) chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) As the second in the world and the first in China to demonstrate clear efficacy and enter the critical registration clinical stage as a Bcl-2 inhibitor, APG-2575 has been highly exposed at major international authoritative conferences since the beginning of its Phase I clinical development, showcasing its broad therapeutic prospects in the treatment of various hematologic malignancies and solid tumors, and has received unanimous recognition from the global industry. Its acceptance of the NDA in China and recommendation for inclusion in the priority review process undoubtedly marks another significant milestone for the drug.

From a market perspective, the global market size for hematologic malignancy treatment drugs is expected to reach USD 40 billion in 2024, with a CAGR growth of 6% from 2024 to 2029. However, it has been 40 years since the discovery of the BCL-2 target, and currently, there is only one approved Bcl-2 inhibitor on the market, AbbVie's venetoclax, which has over 250 ongoing clinical trials globally, with projected sales of USD 2.583 billion in 2024, a year-on-year increase of 12.9%. This indicates the enormous unmet demand for Bcl-2 inhibitors in the global market.

The key reason for the widespread attention on Ascentage Pharma's APG-2575 lies in multiple clinical data validating its superior safety profile compared to venetoclax, as well as its broad therapeutic prospects in various hematologic malignancies, particularly its potential for monotherapy and combination therapy in CLL/SLL patients.

This also means that APG-2575, expected to be approved for market launch in 2025, is likely to accelerate its position as the second Bcl-2 inhibitor approved globally, entering the international competitive arena. Based on the market performance of venetoclax, APG-2575's future sales are expected to exceed USD 2 billion, with peak sales gradually aligning with those of venetoclax.

With its potential massive commercialization value, the successful market launch of APG-2575 will be a key factor for Ascentage Pharma to achieve sustained scale growth in the future and further pave the way for the gradual launch of other major products in the company's R&D pipeline.

Additionally, in the secondary market, Ascentage Pharma is set to successfully land on the U.S. stock market in 2024, raising approximately USD 126 million, further opening up international financing channels and gaining new funding support. Currently, U.S. stock market investments in biopharmaceuticals tend to favor "more certain companies," and Ascentage Pharma, holding multiple late-stage assets with significant FIC/BIC potential, clearly aligns with the high-value biopharmaceutical investment targets that are scarce in the U.S. market.

Conclusion

It is evident that with ample cash flow support, Ascentage Pharma is accelerating its leap towards becoming a leading international Biopharma through a continuously improving integrated innovation loop, competing systematically in various fields such as global R&D, overseas registration, and international commercialization.

Based on an optimistic assessment of Ascentage Pharma's future growth, several institutions have recently updated their research reports on the company, reiterating "buy" or "recommend" ratings. Among them, China International Capital Corporation maintains a "outperform industry" rating for Ascentage Pharma, stating that considering the company's APG-2449 has initiated registration clinical trials, and APG-2575's international registration clinical trials are continuously advancing, new indication spaces are expected to open up continuously. Coupled with the increased liquidity of innovative drugs in the Hong Kong stock market, the firm has raised the company's target price by 48.6% to HKD 55, indicating about a 50% upside potential from the current price