Co. reported its core asset CS1001 (anti-PD-L1 mAb) has met PFS primary endpoint of a ph3 study for both 1L sq- and nsq-NSCLC
Co. and its partner Blueprint also made solid clinical and regulatory progress for pralsetinib and avapritinib in major markets
We think CStone is still a laggard play in biotech space. Maintain BUY and rNPV-based TP unchanged at HKD19.83
CS1001 eyeson first NDAfiling to NMPA in 4Q20E
The CS1001-302 ph3 study (n=c.500) is a unique cost-saving 2-in-1 trials which included both treatment-naive sq- and nsq-NSCLC patients, comparing with peer’s general design of two separate trials. Co. flagged that its unique trial design shortened the clinical time and minimized the sample size and costs. Interim analysis shows that CS1001 plus chemo improved mPFS versus chemo alone (7.8 vs. 4.9mo, HR 0.50), with consistent well-tolerated safety profile. We think CS1001-302’s data in 1L NSCLC are comparable to those of major peers. Co. will present full data at an upcoming academic conference and plans to submit its first NDA of CS1001 to NMPA in 4Q20E. We think the positive results further underscore Co.’s strong clinical capability and should promote it to re-rate back to its peers’ valuation range, thanks to its cost-effective clinical strategy in large indications.
Licencing portfoliosees positive regulatory progress
Co. recently reported the registrational study of pralsetinib (RETi) in Chinese RET+ NSCLC patients achieved the expected efficacy and safety results. Co. plans to submit a NDA to NMPA in the near future. In addition, Blueprint also filed two sNDA of pralsetinib to FDA for advanced or metastatic RET+ medullary thyroid cancer (MTC) and RET+ thyroid cancers. We think these positive progress of pralsetinib along with its early NDA acceptance of avapritinib will further enhance Co’s presence in novel oncology space.
Still a laggard play, despite recent stock rally
Co. expects 1 NDA approval (ivosidenib) and 5 NDA submissions for three core assets (PD-L1, avapritinib and pralsetinib) in 2020E. Co. is at the forefront of transformation from a clinical-stage biotech to a multi-product commercial-stage biotech. We believe that Co. deserves a further re-rating towards its PD-1/L1 peers with similar clinical progress. We maintain BUY rating with TP unchanged at HKD19.83 on CStone’s leading clinical stage I/O backbone candidates, extensively experienced in-house clinical team, and strong BD capabilities.