Innovent reported robust FY25 results, achieving its first-ever full-year net profit of RMB834mn. Top-line growth was strong, with FY25 revenue reaching RMB13.0bn (+38% YoY) and product sales hitting RMB11.9bn (+45% YoY). While sintilimab sales grew steadily by 5% YoY to US$551mn, new launches— including mazdutide, PCSK9 mAb, and IGF-1R—fueled significant expansion, driving a 27% HoH product sales increase in 2H25. Profitability improved notably, with 2H25 product gross margin expanding to 86.2%. The FY25 selling expense ratio (vs product sales) declined to 48.0%, despite a 2H25 uptick (50.1%) to support non-oncology commercialization. R&D expenses remained flattish (-2% YoY) in FY25 but are projected to rise as global MRCTs (notably IBI363, PD-1/IL2) advance, in our view. Backed by a formidable RMB24.3bn cash reserve as of end-2025, Innovent is well-capitalized to execute its global ambitions. Given its strong pipeline innovation and global development potential, we maintain BUY rating for Innovent with a target price of HK$113.86.
Strategic partnerships accelerating global expansion. Innovent is advancing its transition into a fully integrated global biopharma through diverse partnerships. A landmark collaboration with Takeda for IBI363 establishes a strong foundation for global co-development and commercialization. Innovent also recently secured a US$350mn upfront payment in its seventh strategic R&D partnership with Eli Lilly for early-stage assets. In addition, IBI3009 (DLL3 ADC, out-licensed to Roche) is undergoing a global Ph1 trial for SCLC. Notably, IBI324 (VEGF/Ang2 bsAb, out-licensed to Ollin) demonstrated superior anatomic efficacy in a Ph1b head-to-head comparison with the market-leader Faricimab. Expected to enter Ph3 MRCTs in 2026, IBI324 is positioned to disrupt the ~US$15bn global retinal market. Innovent targets advancing at least five assets (including IBI363, IBI343, and IBI324) into global Ph3 MRCTs by 2030.
First-line IBI363 data readouts to be a crucial catalyst for the year. Innovent is executing a global Ph3 MRCT for IBI363 in IO-resistant sq- NSCLC, and recently initiated a Ph3 trial for 3L MSS CRC in China. For IOresistant nsq-NSCLC, the PoC study has been completed with a Ph3 MRCT in planning. Crucially, Ph1b/2 PoC studies for IBI363 in first-line NSCLC and CRC have cleared dose optimization and entered the randomized phase, with PoC data anticipated in 2026. Pending positive results, Innovent/Takeda plan to launch Ph3 MRCTs for both 1L indications. Additionally, IBI343 (CLDN18.2 ADC) has advanced to Ph3 for 3L+ GC and PDAC. Subject to favorable PoC data, Takeda intends to initiate Ph3 MRCTs for IBI343 in first-line GC and PDAC.
Expanding a next-generation obesity franchise. Beyond its lead asset mazdutide, Innovent is cultivating a comprehensive metabolic portfolio to address unmet needs in obesity, including daily and weekly oral GLP-1s, monthly PCSK9-GGG, amylin, etc. A key pipeline highlight is IBI3032, a daily oral GLP-1 that has dosed over 100 subjects across China and the US since 3Q25, with Ph1 clinical data expected in 2026. Early data indicates that IBI3032 achieves 5-10 times the drug exposure of orforglipron, driving an impressive 10% weight loss within just four weeks.
Maintain BUY. With the upside from the recent Eli Lilly deal, we revised our TP from HK$110.62 to HK$113.86 (WACC: 9.5%, terminal growth: 4.0%).