Akeso announced the excellent clinical data of AK112 vs. Keytruda in 1L PD-L1+ NSCLC at 2024 WCLC meeting on 8 September, with mPFS in AK112 group of 11.14 months vs. 5.82 months of Keytruda and achieving PFS HR of 0.51, beating market expectation. The safety profile of anti-VEGF drugs is always a key concern in clinical usage while AK112 showcased manageable safety profile with 29.4% Grade ≥3 TRAE in ivonescimab arm vs. 15.6% in pembrolizumab arm. The outstanding clinical data of AK112 in PD-L1 NSCLC not only enhances the market confidence in AK112 development as a first line treatment, but also provides an option to chemo-intolerant patients. Lift TP to HK$72 and reiterate BUY.
Key Factors for Rating
Efficacy: On 8 September, Akeso announced its interim analysis results of HARMONi-2 (AK112-303), a head-to-head trial of AK112 (ivonescimab, PD- 1/VEGF) vs. pembrolizumab in 1L PD-L1+ NSCLC, achieving PFS HR of 0.51 (95% CI: 0.38, 0.69). The mPFS of ivonescimab group was 11.14 months vs. 5.82 months of pembrolizumab group, significantly beating market expectation. ORR was 50% with ivonescimab arm vs. 38.5% of pembrolizumab arm. OS data was not yet mature at the time of the data cut-off.
By subgroups analysis, ivonescimab showed consistent, meaningful improvement in PFS vs. pembrolizumab in patients with both low and high PD-L1 and both squamous and non-squamous advanced NSCLC: (i) for PD-L1 TPS≥50%, PFS HR was 0.46 and for PD-L1 TPS 1-49%, PFS HR was 0.54; (ii) for sqNCLC, PFS HR was 0.48 and for nsqNSCLC, PFS was HR 0.54.
Safety: Notably, ivonescimab showcased manageable safety profile, with 29.4% Grade ≥3 TRAE in ivonescimab arm vs. 15.6% in pembrolizumab arm. There were 3 patients (1.5%) and 1 patient (0.5%) experiencing TRAE leading to discontinuation and death in ivonescimab arm vs. 6 patients (3.0%) and 2 patients (1.0%) in pembrolizumab arm. Ivonescimab exhibited similar immune-related adverse events (irAEs) to that of pembrolizumab. Grade ≥3 irAE occurred in 7.1% of patients receiving ivonescimab vs. 8.0% of patients receiving pembrolizumab. The safety profile of anti-VEGF drugs is always a key concern in clinical usage, especially for squamous cell carcinoma patients. For examples, in LEAP-007 trial, the Grade 3-5 TRAE occurred in57.9% of lenvatinib+ pembrolizumab patients, and 27.5% and 5.2% of patients were experiencing TRAE leading to discontinuation and death, respectively. In HARMONi-2 trial, we see tolerable possible VEGF-rated adverse event. Among the sqNSCLC in the ivonescimab group (n=90), 72.2% were central-type NSCLC patients, who used to be prohibited to use traditional anti-VEGF treatment, while in HARMONi-2 trial, no significant increase in the risk of bleeding was observed in the ivonescimab group vs. the control group. Grade ≥3 adverse events that were possibly VEGF- related in the ivonescimab arm were 10.2%, all of which were classified as Grade 3. Grade 3 hemorrhage events were observed in 2 patients in the ivonescimab arm (both were of non-squamous histology) compared to 1 patient in the pembrolizumab arm.
Indication development in China and overseas market: the sNDA of ivonescimab mono in 1L PD-L1+ NSCLC currently is under CDE review, and is expected to be approved in 1H25. Based on the results of HARMONi-2, Summit therapeutics (SMMT US, NR) intents to initiate HARMONi-7 in overseas in 1H25, which compares ivonescimab mono to pembrolizumab mono in PD-L1 high expression NSCLC (PD-L1 TPS > 50%). In China, Akeso has initiated ivonescimab + chemo vs. tislelizumab +chemo in 1L sqNSLC, and expects to complete patient enrolment in 3Q24. Furthermore, 3 phase III trials of AK112 will be initiated in 2H24, including +chemo vs. durvalumab in 1L BTC, +ligufalimab (AK117, CD47) vs. pembrolizumab in 1L PD-L1+ HNSCC, and + chemo vs. chemo in 1L PDAC. AK112 is the only drug globally that has initiated head-to-head trials vs. tislelizumab, pembrolizumab and durvalumab, aiming to be the next generation IO drug vs. PD-(L)1i.
Key Risks for Rating
i) Failure of regulatory filing; ii) slower-than-expected sales ramp-up of new drugs; and iii) failure of major clinical trials.
Valuation
The significantly prolonged PFS of AK112 in PD-L1+ NSCLC not only enhances the market confidence in AK112 development as a first line treatment, but also provides an option to chemo-intolerant patients, such as elders. Hence, we increase the POS of AK112 in 1L sqNSCLC vs tislelizumab and the revenue contribution of AK112 in the long term. Lift TP to HK$72 and reiterate BUY.