Co. announced FDA has placed ph2 study of orelabrutinib in MS on partial clinical hold over a limited number of liver injury cases
We learned that patients for this ph2 study have been nearly fully recruited and most pts remain in treatment; Sanofi’s tolebrutinib offers some confidence for potential of removal halt
We maintain BUY w/ unchanged SOTP TP of HKD31.2, given orelabrutinib’s uptrend outlook and Co.’ s multiple catalysts ahead
　　Ph2 Orelabrutinib trial placed on partial hold by US FDA
　　The FDA action was on a limited number of drug-induced liver injury cases that have been observed with orelabrutinib in MS ph2 study and other studies in non-MS autoimmune diseases. Notably, the rise in laboratory values used for tracking liver injury was found to be reversible following discontinuation of the treatment in all cases. As a result, new global enrolment has been suspended and participants in the U.S. who have been on orelabrutinib for ≤70 days will be discontinued. But, study participants who have completed >70 days in the study will be permitted to continue receiving orelabrutinib. Co. said it will closely cooperate with the FDA to solve the issue, including the implementation of more sound safety monitoring measures.
　　Clinical risks of orelabrutinib in MS still manageable
　　We reckon this partial hold is manageable for orelabrutinib in the MS study, given 1) the ph2 study has completed ~90% of patients enrolment, and vast majority of the enrolled pts (over 80%) would not be affected by this partial clinical hold; 2) Sanofi’s tolebrutinib in relapsing MS ph3 trials (GEMINI I and GEMINI II) has resumed full enrolment (Aug 8th) in 1-2 months after FDA’s placed the partial clincial suspension (Jun 30th) for the same safety concerns. Sanofi also confirmed in its 3Q conf. call that tolebrutinib RMS studies are on track to reach an expected readout in 2H23. We thus reckon limited overall impacts from this enrolment halt and expect Co. to address this partial hold in the U.S. in 2023E.
　　Maintain BUY, SOTP-based TP unchanged at HKD31.2
　　Major Orelabrutinib catalysts include: 1) NDA approval for r/r WM and MZL in China in 1H23E; 2) NDA submission to FDA for r/r MCL by 23E; 3) Enrolment completion for SLE ph2b study in 1H23E. Meanwhile, Co. expects the latest tafasitamab (ICP-B04) approval in HK could empower its broad use in the Greater Bay Area. Co. also is advancing ICP-192 and ICP-723 into registrational trial in China. We maintain our SOTP-based TP at HKD31.2. Maintain BUY. Investment risks: clinical delay/failure, lower-than-expected sales, regulatory risks, NRDL-driven price cut risk.