SKB378 out-licensing to Windward, a candidate co-developed with Harbour Biomed. Kelun-Biotech and Harbour Biomed have successfully out- licensed global rights (excluding China and certain Asian markets) for their co- developed TSLP mAb SKB378 to Windward, a newly established biotech company. The deal is valued at up to US$970 mn plus royalties, including US$45mn in upfront and near-term payments, which will be paid in cash and equity interest in Windward’s parent company. Payments will be equally distributed between Kelun-Biotech and Harbour. SKB378 has the potential to treat immunological diseases, including asthma and COPD. Windward was founded by a seasoned team with a proven track record in drug discovery and development, including 15+ successful products, two IPOs, and two company sales. Concurrently, Windward has raised US$200mn in Series A financing, led by OrbiMed, Novo Holdings, Blue Owl Healthcare, and six other co- investors.
　　SKB378, a long-acting TSLP mAb. SKB378’s extended half-life allows dosing every six months, a significant improvement over the currently approved TSLP mAb, tezepelumab, which requires administration every four weeks. In Nov 2024, an IND for SKB378 was submitted to the CDE for the treatment of COPD. Its Ph1 trial in asthma in China was completed in 2023, with Ph2 trials in planning. Windward is preparing to initiate a Ph2 study in severe asthma, with initial readouts expected in 2026E, alongside additional trials for asthma and COPD.
　　Growing momentum in TSLP-targeted transactions. The TSLP-targeted therapy space continues to see active transactions. Notably, multiple deals have adopted the NewCo model. In 2024, three out of four transactions were structured under the NewCo, including partnerships between Biosion and Aclaris, Keymed and Belenos, as well as MSD and Uniquity Bio. Kelun- Biotech and Harbour’s US$970mn deal with Windward is comparable in scale to the US$940mn Biosion/Aclaris deal and the US$1.05bn Hengrui/Aiolos Bio transaction, even though SKB378 is at an earlier stage of development.
　　Expanding TSLP therapies following initial approval. Globally, the development of TSLP-targeted therapies is accelerating following the approval of tezepelumab (Amgen/AstraZeneca) in 2021 for asthma. Tezepelumab is also undergoing multiple Ph3 trials for severe asthma, chronic rhinosinusitis with nasal polyps (CRSwNP) and eosinophilic esophagitis (EoE), with Ph3 trials in COPD to start in 1H25. In 3Q24, Amgen reported global tezepelumab sales of US$337mn (+85% YoY). Other TSLP-targeted therapies include: CTTQ/Aclaris’ bosakitug, which entered Ph3 asthma trials in China in late 2024; Multiple Ph2 TSLP mAbs, including ecleralimab, CM326, and SHR-1905; Next-generation bsAbs, such as Pfizer’s TSLP/IL-13/IL-4 trispecific antibody (PF-07275315) in Ph2 for atopic dermatitis (AD), and Sanofi’s TSLP/IL-13 bsAb (lunsekimig) in Ph2 trials for asthma and CRSwNP.
　　Maintain BUY. We remain confident in SKB264’s sales target of RMB800- 1000mn in 2025E and anticipate potential approvals of SKB264 for 2L/3L EGFR-TKI resistant NSCLC this year. We revised our DCF-based TP from HK$243.38 to HK$227.88 (WACC: 10.16%, terminal growth rate: 3.0%).