In-licensing a small molecule CD73 inhibitor. On 17 May 2021, Antengene announced to enter into a worldwide license agreement with Calithera （CALA US, NR） for the development of CB-708 （ATG-037）， an oral bioavailable small molecule inhibitor of CD73. According to the agreement, Calithera will receive an upfront payment and potential development, regulatory and sales milestones of up to US$255mn. Additionally, Calithera is eligible to receive tiered royalties within the range of single to low double-digits. Antengene will lead the development and commercialization of CD73 inhibitor CB-708 （ATG- 037） worldwide. Although ATG-037 is still in preclinical phase, Calithera has completed the GLP toxicology studies of ATG-037. We expect ATG-037 to start clinical trials by end-2021E, with the potential to become a first-in-class oral CD73 inhibitor worldwide.
　　Smooth progress of clinical-stage assets. Antengene has established a robust and highly differentiated pipeline of 13 innovative assets, including two late-stage assets ATG-010 and ATG-008 in-licensed from Karyopharm and Celgene, respectively. For ATG-010 （selinexor, XPO1 inhibitor）： As of 31 Dec 2020, Antengene had submitted NDAs for ATG-010 in 4 APAC markets （Australia, Singapore, Hong Kong and South Korea）。 In Jan 2021, the Company submitted an NDA to the NMPA of selinexor for r/r-MM, which was subsequently granted priority review by the NMPA. Meanwhile, Antengene received the NMPA approval to initiate a Phase II/III clinical trial of selinexor in combination with rituximab, gemcitabine dexamethasone cisplatin （R-GDP） in r/r-DLBCL in Jan 2021. We expect ATG-010 to obtain NDA approvals from the NMPA for MM and DLBCL by 1Q22E. For ATG-017 （ERK 1/2 inhibitor）： Phase 1 study in Australia has entered into efficacious dose stage and preliminary data readout is expected available by end-2021E. For ATG-101 （PDL1 / 4-1BB BsAb）： We expect IND submission in Australia in 3Q21E, followed by the submissions in China and the US. For ATG-016 （Eltanexor, XPO1 inhibitor）： It has obtained IND approval of a Phase I/II study in high-risk MDS and advanced solid tumor from the NMPA.
　　Maintain BUY. Considering the early R&D stage of ATG-037, we refrain from assigning value to this asset. That said, we remain positive on Antengene’s long-term growth outlook, given its rich innovative pipelines. Maintain BUY with unchanged DCF-based TP of HK$27.97 （WACC: 11.1%, terminal growth rate: 2.0%）。
　　Risks: Delays in clinical development activities; Failure in clinical trials.