In 1H25, Akeso reported product sales of RMB1.4bn (+49% YoY), achieving 43% of our prior full-year estimate, largely in line with our expectations. The NRDL inclusions of 2L+ cervical cancer for AK104 and 2L+ EGFRm NSCLC for AK112 have contributed to the sales growth. Looking ahead to 2026, we anticipate additional NRDL inclusions for AK104 in 1L gastric cancer and 1L cervical cancer, and for AK112 in 1L PD-L1+ NSCLC, which should further accelerate product sales growth. Operationally, Akeso demonstrated improved cost efficiency in 1H25, with selling and R&D expenses as a percentage of product sales shrinking to 48% and 52%, respectively (from 51% and 58% in FY24). The Company reported an attributable net loss of RMB570mn in 1H25 (vs RMB239mn in 1H24), while maintaining a solid cash position as of 1H25 of RMB7.1bn.
AK112 achieves OS significance in China HARMONi-A study, with global results upcoming. In the final analysis of the China HARMONi-A Ph3 trial, Akeso announced AK112 achieved statistically significant OS benefit in 2L+ EGFRm NSCLC, following prior interim updates showing OS HRs of 0.80 (0.59-1.08) at 52% data maturity and 0.72 (0.48-1.09) at 30% maturity. Detailed results are expected to be presented at an upcoming conference. With 276 patients from the China trial included in the global HARMONi study, Summit previously reported an OS HR of 0.79 (0.62-1.01; p=0.057) of the study, missing statistical significance, which is required for a US BLA submission. Summit expects to release detailed data of the global HARMONi trial in the coming WCLC next month (link). With the China trial now positive for OS, we think the likelihood of the global trial achieving significance has improved, although we continue to view the primary value of AK112 in NSCLC overseas to lie in the frontline setting. Additionally, AK112 has met the PFS endpoint in a head-to-head 1L sqNSCLC trial versus tislelizumab + chemo, with full data expected to be disclosed shortly, potentially at ESMO meeting in October.
AK104 advances toward global development. Akeso is accelerating the global development of AK104, beyond 1L/2L+ CC and 1L GC. In China, AK104 is currently in multiple Ph3 trials for 2L and perioperative GC, multiple lines of HCC (adjuvant and mid-stage treatment), and NSCLC (1L PD-L1- and consolidation therapy). Notably, Akeso will start a global Ph2 registrational trial of AK104 + lenvatinib for IO-resistant 2L HCC, marking a significant step in the asset’s global expansion. Akeso is also exploring AK104 in combo with AK112 in NSCLC, with encouraging preliminary results according to the mgmt. Furthermore, Akeso is further diversifying its pipeline with early-stage ADC programs, including HER3 ADC and Trop2/Nectin4 ADC currently in Ph1 trials. The Company plans to evaluate combinations of AK104 or AK112 with these ADCs.
Maintain BUY. With key data readouts expected at the upcoming WCLC and ESMO conferences, we look forward to further evidence supporting the translatability of Akeso’s China clinical results to global settings as well as AK112’s superiority over the current SoC. We also see the partnership potential for AK104. We raise our DCF-based TP from HK$108.03 to HK$182.12 (WACC: 8.37%, terminal growth rate: 4.5%).