Ascentage just announced on 18 Jun that it has submitted an NDA to NMPA for HQP-1351 for treatment of r/r CP/AP-CML with T315I mutation, which is the first NDA of 3rd generation BCR-ABL inhibitor in China. We raise our TP to HK$61.1 and maintain BUY rating to reflect the Company’s excellent execution regardless COVID-19 pandemic the year.
- HQP-1351 submitted NDA in China. After being granted ODD for CML by the US FDA one month ago, HQP-1351 submitted NDA to NMPA for r/r CP/AP-CML with T315Im. As the first 3rd generation BCR-ABL inhibitor in China, HQP-1351 showed comparable efficacy to and improved safety profile than ponatinib in phase I study. The submitted NDA is based on two pivotal phase II trials (NCT03883100 and NCT03883087), which have finished patient enrollment in Sep 2019. Such NDA submission is in line with our expectation, and we forecast HQP-1351 to launch in China in 2021E.
In the US, In July 2019, HQP1351 obtained clearance from FDA to enter into Phase Ib clinical study. In May 2020, HQP1351 was granted ODD and Fast Track Designation by FDA.
- APG-2575 exhibits large potential in NHL. APG-2575 is initiating four phase Ib/II trials in the US and China, including a Phase Ib/II trial for r/r CLL/SLL (first patient enrolled in Mar 2020) in US, a Phase Ib/II trial for WM in US; a Phase Ib trial for r/r AML in China and a Phase Ib/II trial for r/r CLL/SLL in China. Previously, Phase I study of APG-2575 has shown a promising efficacy in enrolled patients, of which six out of eight CLL patients achieved hematological CR. In addition, no DLTs (dose limiting toxicities) and no TLS (tumor lysis syndrome) was observed with the MTD (maximum tolerable dose) not reached at 20-800mg dose levels so far.
- Strong in-house R&D capability in apoptosis pathways and abundant combo potential. Ascentage has a pipeline of eight clinical stage small molecule candidates, conducting 30+ phase I or II clinical trials in China, US and Australia. HQP1351 is expected to market in China 2021E. APG-2575 has entered into Phase Ib/II trials in both China and the US. Recent clinical data of Venetoclax (Bcl-2 inhibitor) + Ibrutinib (BTK inhibitor) for CLL implied promising outlook of this combination therapy. Worldwide, APG-2575 is the second Bcl-2 inhibitor entered into clinical stage.
- Reiterate BUY with TP raised to HK$61.1. We raised HQP-1351’s PoS (probability of success) for risk-adjusted revenue to reflect the positive impact of its NDA submission. We raised our price target to HK$61.1 based on an 8-year DCF valuation (WACC: 10.98%, terminal growth 3.0%).
