On 22 Jun 2020, Ascentage announced it has entered a clinical collaboration with AstraZeneca (AZN US, NR) to carry out a global multicenter clinical trial to evaluate the combination of APG-2575 with CALQUENCE® (acalabrutinib, a BTK inhibitor) for r/r CLL/SLL. We lifted TP to HK$70.7 and maintain BUY.
- APG-2575 collaboration with AstraZeneca’s acalabrutinib for r/r CLL/SLL. Ascentage announced a clinical collaboration with Acerta Pharma, the hematology research and development center of excellence of AstraZeneca, in a clinical trial evaluating the combination of APG-2575 (Bcl2 inhibitor) and acalabrutinib (BTK inhibitor) for r/r CLL/SLL. This trial is a global, multicenter, open-label Phase Ib/II dose-escalation and dose-expansion study to assess the safety and anticancer activity of APG-2575 with or without acalabrutinib. The study was already initiated in the US with the dosing of first patient, and planned to expand in Europe, and Australia.
- The excellent results of venetoclax + ibrutinib combination implies promising outlook of Bcl-2+BTK combination. In ASCO 2018, a Phase II trial (CAPTIVATE, NCT02910583) showed excellent results of venetoclax +ibrutinib in 1L CLL/SLL with 100% ORR and 77% of MRD(-) response in peripheral blood after six cycles. Results were updated in ASH 2019 with undetectable MRD rates of 75% and 72% in the peripheral blood and bone marrow, respectively. As the second Bcl-2 inhibitor entered into clinical stage globally, APG-2575 + acalabrutinib also has large potential, in our view.
- APG-2575 has good preliminary data and multiple trials ongoing. APG-2575 is under 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. 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.
- Lift TP to HK$70.7 and maintain BUY. We raised APG-2575’s PoS (probability of success) for risk-adjusted revenue starting to generate from 2023E to reflect the positive impact of this collaboration. Given that the clinical cooperation with AstraZeneca indicates faster clinical execution and higher chances of success for APG-2575, we lifted TP to HK$70.7 based on an 8-year DCF valuation (WACC: 10.98%, terminal growth of 3.0%).
