Bernstein: China’s innovative drugs gain global clinical validation: Kelun and Hansoh report strong data, while Innovent’s first-line lung cancer treatment remains under scrutiny

Why are global clinical data more important than licensing deals?

Bernstein believes investors have long discounted drugs supported only by Chinese clinical data. Beyond securing licensing deals, international expansion requires proof that efficacy seen in China can be sustained in patients globally. Several studies presented at ESMO provided preliminary evidence on this point.
The firm believes leading companies’ fundamentals improved after the conference, but the relevant stocks have given back almost all of their gains for the year. It speculates that capital flows and geopolitical concerns were major drivers of the share price declines, making valuations more attractive in its view.

In the global phase III TroFuse-005 study of Kelun-Biotech’s sac-TMT in previously treated advanced endometrial cancer, median overall survival was 19.0 months versus 12.1 months in the control group, with a hazard ratio for death of 0.68. Bernstein sees this as the drug’s first global phase III success.
In the Chinese phase III OptiTROP-Lung06 study in harder-to-treat PD-L1-negative advanced non-squamous non-small-cell lung cancer, first-line sac-TMT plus pembrolizumab achieved median progression-free survival of 15 months, versus 5.7 months for chemotherapy plus pembrolizumab in the control group. Overall survival data remain immature, with a favorable trend.
Bernstein believes sac-TMT may have advantages over competing drug Datroway in survival, safety and a development strategy covering a broader patient population, particularly as interstitial lung disease rates have remained low across multiple trials. Merck plans to conduct more global phase III studies in first-line lung cancer and is considering combining it with MK-2010.

In the 5.8 mg/kg dose group of the global BEHOLD-1 study of Hansoh Pharmaceutical’s HS-20089 in platinum-resistant ovarian cancer, the objective response rate among 45 patients was 62%, median duration of response was 12.2 months, and median progression-free survival was 11.1 months.
Bernstein noted that the global study maintained the high response rate seen in the earlier Chinese study, with longer response duration and progression-free survival; a higher dose and fewer prior treatments among patients may have contributed. This remains an early-stage study, and efficacy needs to be confirmed in a phase III trial.

In a phase III study conducted in China and Japan, IBI343 achieved median progression-free survival of 5.5 months versus 2.9 months for chemotherapy in third-line or later treatment of CLDN18.2-positive, HER2-negative gastric or gastroesophageal junction cancer. Median overall survival was 9.9 and 7.4 months, respectively, with statistically significant improvements in both measures.
In first-line lung cancer, the confirmed response rate in the 3→1.5 mg/kg dose group receiving IBI363 plus chemotherapy rose to 86.4%, but median progression-free survival had not yet been reached. Across the study, as treatment duration lengthened, the incidence of grade 3 or higher treatment-emergent adverse events rose from 81.3% disclosed at ASCO to 85.0% at ESMO, while the proportion discontinuing treatment because of IBI363-related adverse events rose from 6.3% to 10.0%.
Bernstein’s estimate of 4 billion dollars in peak sales for IBI363 comes mainly from the later-line immunotherapy-resistant indication; it sees meaningful first-line market penetration as additional upside.

In a Chinese phase III trial of Akeso’s ivonescimab plus chemotherapy as first-line treatment for biliary tract cancer, median overall survival was 14.9 months versus 12.1 months for durvalumab plus chemotherapy in the control group. However, rates of grade 3 or higher treatment-emergent adverse events were also higher, at 82.0% and 72.3%, respectively.
Bernstein rates Hansoh Pharmaceutical, Innovent Biologics and Kelun-Biotech outperform, and rates Akeso and Zai Lab market perform.