Company reported 1H results and updated its R&D progress in PD-L1, Avapritinib and Ivosidenib
Maintain BUY and TP of HK$19.83 oncommercialisation prospect in 2020 and numerous late-stage clinical assets
Company reported 1H19loss
CStone reported 1H19 adjusted loss of RMB277mn, excluding the share-based payment expenses （RMB130mn） and the fair value change from the conversion of preferred shares （RMB756mn）。 Such loss was primarily due to the R&D expenses （RMB384mn）。
Keyrecent updates
Avapritinib （CS3007 or BLU-285） has been granted a priority review to a New Drug Application （NDA） on August 7 as a treatment for PDGFRα exon 18 mutant gastrointestinal stromal tumors （GIST） regardless of prior therapy, as well as 4L GIST. On ASCO 2019, the drug showed that the ORR for PDGFRa Exon 18 GIST and 4L GIST were 86% and 22%, respectively. We made a clinical data comparison for Avapritinib and Ripretinib from Deciphera （DCPH US, NR）. Meanwhile, an NDA for Ivosidenib （TIBSOVO） to treat r/r AML has been submitted to the Taiwan Food and Drug Administration （TFDA）， which is expected to be approved in late 2019 or early 2020. TIBSOVO’s patient enrolment for it first registration trial in China Mainland is expected to be completed by 2020. We also learned that the clinical trials of its PD-L1 （CS1001） in numerous indications were progressing well. Company had c.RMB3.3bn net cash at the end of June 2019, and guided c.USD190mn cash burn in 2019.
Maintain BUYand TP at HK$19.83
We estimate that Company should begin to generate RMB221mn sales in 2020 mainly from the launch of TIBSOVO. We maintain BUY rating and the rNPV-based TP at HK$19.83, supported by its commercialisation prospect in 2020 and numerous late-stage clinical assets.