Why did the Lung06 data exceed expectations?

  • The Chinese phase III Lung06 trial enrolled 455 previously untreated patients with locally advanced or metastatic non-squamous non-small-cell lung cancer whose PD-L1 expression was below 1%. It compared sac-TMT plus pembrolizumab with chemotherapy plus pembrolizumab.
  • At a median follow-up of 9.7 months, median progression-free survival as assessed by independent imaging was 15.0 months and 5.7 months, respectively, with a hazard ratio of 0.49. Based on recent market feedback, Morgan Stanley believes the benefit exceeded market expectations; however, the control group’s 5.7 months was slightly below the 6.2 months in the KN-189 trial.
  • Objective response rates in the two groups were 50.2% and 47.3% respectively, a small difference; median duration of response, however, was 13.6 months and 6.8 months. In other words, the main advantage lies not only in whether patients respond, but also in how long the response lasts.

What supports the case for replacing chemotherapy, and what are its limits?

  • The incidence of grade 3 or higher treatment-emergent adverse events was 47.6% in the sac-TMT combination group, lower than 60.6% in the chemotherapy combination group, with fewer hematologic events; the incidence of grade 3 or higher stomatitis was 2.2%. Morgan Stanley believes the safety profile further supports the regimen’s potential to replace chemotherapy.
  • The overall survival hazard ratio was 0.58, showing a favorable trend, but the data remain immature. Confidence intervals for hazard ratios in the female and never-smoker subgroups were wide; only 2%–3% of patients had brain metastases at baseline, and efficacy in this population remains a key question.
  • Kelun and its partner Merck are studying regimens combining sac-TMT with PD-1 and VEGF drugs. These are expected to provide clearer information for selecting first-line lung cancer combination regimens over the next 12–18 months.

What was the survival benefit in the other lung cancer trial?

  • The Chinese phase III Lung04 trial studied patients with locally advanced or metastatic non-squamous non-small-cell lung cancer with EGFR mutations who had received EGFR-targeted treatment. The final analysis showed median overall survival of 25.9 months in the sac-TMT group and 17.4 months in the chemotherapy group, with a hazard ratio for death of 0.69.
  • This hazard ratio was higher than the 0.60 reported in the earlier interim analysis, but Morgan Stanley believes the overall survival benefit was broadly maintained and the result was in line with expectations; no new safety signals emerged with longer follow-up.

How does the institution view sales potential and upcoming milestones?

  • Morgan Stanley forecasts global adjusted peak sales for sac-TMT of 8 billion dollars and unadjusted peak sales of 14 billion dollars. The bank rates Kelun Pharmaceutical Overweight, with a price target of 61 yuan; the report lists a closing price of 42.75 yuan on 23 October.
  • Upcoming milestones include initial overall survival data from Lung05 expected in the first half of 2027, as well as 2027 global phase III data for a first-line combination with osimertinib in EGFR-mutated lung cancer and for third-line treatment; the report also lists Merck’s TruFuse-005 data as scheduled for release on 26 October 2026.