Key Takeaways:
SKB BIO (06990.HK) said its Phase III study of sacituzumab tirumotecan plus Keytruda met the primary endpoint in first-line PD-L1-negative non-small cell lung cancer, sending shares up 6.8%.
"The positive results represent a key step for sac-TMT in first-line NSCLC treatment research," Goldman Sachs analysts said in a note. The broker maintained its buy rating and raised the price target to HKD582.95 from HKD561.40, implying about 9% upside from Wednesday's close.
Goldman increased the probability of success for the OptiTROP-Lung06 trial to 90% from 81% and lifted its 2027 and 2028 earnings per share forecasts for SKB BIO to 7.51 yuan and 14.46 yuan, respectively. The firm also raised the success probability for the overseas first-line NSCLC PD-L1 tumor proportion score below 50% indication to 63% from 54%.
The trial win strengthens SKB BIO's standing as a potential global ADC player, according to Goldman. Non-small cell lung cancer represents one of the largest oncology markets, with more than 2 million new cases diagnosed globally each year. PD-L1-negative patients, who account for about 30% of cases, have limited immunotherapy options compared with those whose tumors express the biomarker.
The OptiTROP-Lung06 study evaluated sac-TMT, a TROP2-targeting antibody-drug conjugate also known as SKB264/MK-2870, in combination with Merck's anti-PD-1 therapy Keytruda. The drug is designed to deliver a chemotherapy payload directly to cancer cells expressing the TROP2 protein, which is overexpressed in multiple tumor types including breast, lung and gastric cancers.
SKB BIO shares rose 6.8% to HKD532 on Wednesday, with short selling accounting for 16% of turnover. The stock has gained roughly 40% year to date, outperforming the Hang Seng Index. The company, a subsidiary of Kelun Group, is developing a pipeline of ADC candidates targeting various solid tumors.
The TROP2-directed ADC space has drawn significant interest from major drugmakers. Gilead Sciences markets Trodelvy for breast and bladder cancers, while AstraZeneca and Daiichi Sankyo are developing datopotamab deruxtecan for lung and breast cancers. Sac-TMT's combination with Keytruda could differentiate it in the first-line NSCLC setting if the data show a meaningful survival benefit.
The positive readout strengthens SKB BIO's competitive standing in the first-line NSCLC market, where approved immunotherapies have shown limited efficacy in PD-L1-negative patients. Investors will watch for detailed efficacy and safety data at an upcoming medical conference, as well as regulatory filings in China and the US that could determine the commercial timeline for the combination therapy.
This article is for informational purposes only and does not constitute investment advice.
