Goldman Sachs: Comments on CSTONE PHARMA-B's three-antibody ESMO data, maintains "Buy" rating and raises target price to HKD 7.05

According to the Zhitong Finance APP, Goldman Sachs released a research report commenting on CSTONE PHARMA-B (02616) regarding the preliminary phase 1 study data of CS2009 (PD-1/VEGF/CTLA-4 trispecific antibody) recently announced at the ESMO 2025 conference. The data shows good safety and early tumor response signals observed in various tumor types. The firm believes these early results provide positive evidence supporting further research on this asset, and it will focus on updates of phase 1 data with longer follow-up time, as well as data from ongoing phase 2 trials that may be announced in 2026, to further determine the potential differentiated advantages of CS2009, especially in non-small cell lung cancer (NSCLC). Goldman Sachs' main points are as follows: CS2009 demonstrates good tolerability CSTONE PHARMA announced the latest phase 1 dose escalation data for CS2009, which was administered to 72 patients (mainly Caucasian/Asian populations, accounting for 54%/43% respectively) at six dose levels (1/3/10/20/30/45 mg/kg). The firm noted that CS2009 exhibited good tolerability during the dose escalation. For background reference, in the HARMONi-2 trial, ivonescimab (PD-1/VEGF dual antibody) as monotherapy showed grade 3 or higher treatment-related adverse events (TRAE) at 29%, grade 3 or higher immune-related adverse events (irAE) at 7%, and VEGF-related adverse events (hypertension/proteinuria/hemorrhage) at 5.1%/3.1%/1%. The firm also pointed out that the higher dose patient groups experienced fewer adverse reactions, which may be due to the shorter observation time for patients in the high-dose group (the sixth dose level was only 1 month, while the overall median observation period for all patients was 1.9 months), and some potential adverse reactions (such as irAE which may take 4-8 weeks to appear) have not been fully exposed. Competitive potential in IO-treated NSCLC Among 49 patients who had at least one tumor assessment, partial responses were observed in seven patients who had undergone multiple lines of treatment, involving five tumor types (NSCLC, ovarian cancer, triple-negative breast cancer, non-clear cell renal cell carcinoma, soft tissue sarcoma), suggesting that CS2009 has preliminary pan-cancer potential. Notably, in 12 IO-treated NSCLC patients with no history of anti-angiogenic targeted therapy, CS2009 showed a 25% objective response rate and an 83% disease control rate, which the firm believes is positive evidence supporting further research in the NSCLC field. For background reference, data presented at WCLC 2025 for the combination of cadonilimab (PD-1/CTLA-4 dual antibody) and prolizumab (VEGFR2 antibody) in IO-treated NSCLC (N=47) showed an ORR/DCR of 13%/96%; while BNT327 (PD-L1/VEGF-A dual antibody) in IO and platinum-based chemotherapy-treated NSCLC (N=8) showed an ORR/DCR of 12.5%/62.5%. The firm holds a positive attitude towards the preliminary ORR signal, but given the small sample size and short follow-up time, more data is needed to assess the potential differentiated advantages of CS2009 in efficacy RP3D selects 20/30mg dosage, aiming to initiate Phase 3 trials by the end of 2026 Based on Phase 1 data, management stated that they will determine the recommended Phase 3 dosage from 20mg/kg and 30mg/kg through a randomized controlled trial conducted in NSCLC, with the goal of finalizing the dosage by mid-2026 and initiating global Phase 3 trials by the end of 2026 (with the priority indication being CS2009 in combination with chemotherapy for first-line NSCLC treatment). For the recently launched Phase 2 trial (Australia/China), management indicated that over 30 clinical centers have started, patient enrollment has begun, and they expect to enroll patients in first-line NSCLC soon, aiming to share preliminary Phase 2 data by 2026. The firm has given a "Buy" rating to CSTONE PHARMA (02616) and adjusted the earnings per share forecasts for 2025-2027 from RMB -0.21/-0.7/0.09 to RMB -0.22/1.07/0.01, reflecting an enhanced view on CS2009 (success probability increased from 30% to 49%) and updated forecasts, including adjustments based on the first half of 2025 financial report data and recent expenditure predictions. The firm revised the 12-month target price based on a risk-adjusted DCF model to HKD 7.05 (previously HKD 6.25)