是　　NRDL inclusion to fuel FY25 growth. Akeso’s FY24 results reflected strong cost controls despite a revenue shortfall. The Company reported total revenue of RMB2.1bn, including RMB2.0bn from product sales, representing a 25% YoY increase. Operating efficiency continued to improve, with SG&A-to- product sales ratio reduced to 61% from 69% in FY23 and R&D expenses down 5% YoY to RMB1.2bn. Akeso reported a net loss of RMB500mn and an EBITDA loss of RMB225mn. As of end-2024, the Company held a solid cash balance of RMB7.3bn, which is sufficient to support ongoing R&D and future commercial expansion. Looking ahead, we expect product sales to surge by 60% YoY to RMB3.3bn in FY25, mainly driven by the inclusion of AK104 and AK112 in the NRDL earlier this year.
　　Key Ph3 readouts to define value of AK112 as a next-generation IO. AK112 is emerging as a key value driver for Akeso, with pivotal clinical data positioning it as a next-generation IO therapy. The drug has demonstrated a meaningful PFS benefit in a China head-to-head Ph3 trial versus Keytruda in first-line PD-L1-positive NSCLC. Although the Company has not disclosed the timeline for the OS data release from this trial, it remains a key catalyst that could further validate AK112’s clinical advantage. In parallel, attention is turning to Summit’s global Ph3 trial of AK112 plus chemo versus chemo alone in EGFR-TKI-resistant NSCLC patients, with data expected in mid-2025. The China cohort of this trial previously reported an mPFS of 7.1 vs 4.8 months (HR=0.46) and an mOS of 17.1 vs 14.5 months (HR=0.80, 0.59-1.08) at 52% data maturity. Given that the OS is at the statistical threshold, and considering the availability of other novel therapies post-progression, such as J&J’s EGFR/cMet bsAb (approved) and Daiichi/MSD’s HER3-DXd (BLA filed), we will closely watch the global OS data to assess AK112’s potential positioning in this evolving treatment landscape.
　　Expanding AK112’s footprint with first-line trials and next-gen ADC combinations. Akeso is actively expanding the clinical scope of AK112, with a Ph3 trial in IO-resistant NSCLC planned in China for 2025. Beyond NSCLC, the Company is pursuing a broad first-line strategy with AK112, including ongoing Ph3 trials in TNBC, MSS CRC, BTC, HNSCC, and pancreatic cancer. Looking ahead, PD(L)-1/VEGF and ADC combinations could be revolutionary for oncology treatments. Summit has entered a clinical collaboration with Pfizer to evaluate AK112 in combination with Pfizer’s ADCs. Meanwhile, Akeso is advancing its own innovative ADC pipeline, including HER3-targeting AK138D1, now in clinical studies, and the Trop2/Nectin4 BsAb-ADC AK146D1, which is expected to enter Ph1 trials in 1H25. We believe AK112- based combinations with ADCs has potential to cover multiple tumor types.
　　Maintain BUY. As PD-(L)1/VEGF therapies have been a hot area in global BD transactions, we are increasingly positive on AK112’s potential as a next- generation IO therapy. We raise our sales projections for AK112 and raise our TP from HK$58.97 to HK$102.61 given AK112’s potential as a next-generation IO therapy (WACC: 9.17%, terminal growth rate: 3.0%).