"42% Plunge: Rumor Causes $9.5B Loss in Kangfang Bio's Market Value"

Due to a rumor that clinical study data did not meet expectations, the stock price of Cantab Biopharma plummeted, with a market value shrinking by 9.5 billion Hong Kong dollars. However, the company debunked the rumor at noon on the same day, stating that the drug AK112 involved in this incident has already received approval from the National Medical Products Administration for its marketing application.

Cantab Biopharma encounters a "flying disaster".

On the morning of May 24th, Cantab Biopharma's stock price suddenly "collapsed" at the opening, falling more than 42% at one point, with the market value evaporating by more than 18 billion yuan.

In terms of news, the American Society of Clinical Oncology (ASCO) annual meeting is about to be held, and many pharmaceutical companies have disclosed relevant clinical trial data. There are rumors that Cantab Biopharma's AK112 treatment for EGFR-TKI treated non-small cell lung cancer Chinese Phase III clinical data did not meet expectations.

However, in the afternoon, Cantab Biopharma debunked the rumor, stating that the data results of the Evoxolimab clinical study were excellent, and there was no claim of being lower than expected. Moreover, AK112-301 was accepted by the ASCO conference as an oral report and will be published globally on June 1st. At the same time, the indication corresponding to AK112-301 has already received approval from the National Medical Products Administration for its marketing application in May.

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It is understood that AK112 is the research and development code name for Cantab Biopharma's self-developed drug Evoxolimab, which is the world's first PD-1/VEGF bispecific antibody to enter Phase III clinical research. In 2022, Evoxolimab achieved "going abroad" at the highest price of 5 billion US dollars.

A rumor "collapsed" Cantab Biopharma.

A rumor that the clinical trial data of Cantab Biopharma's new drug did not meet expectations caused a sensation.

On May 24th, Cantab Biopharma's stock price plummeted at the opening, falling more than 42% at one point, setting a new low since October 2022, and also collapsing the Hong Kong stock market's biopharmaceutical sector, with the Hang Seng Pharmaceutical ETF falling by more than 3%.

The "culprit" that severely damaged Cantab Biopharma's vitality is the company's self-developed drug Evoxolimab, with the research and development code name AK112.It is reported that Innovus, independently developed by Cantab Antibody Limited, is the world's first PD-1/VEGF bispecific antibody to enter Phase III clinical research, with "dual targeting" capabilities, which can simultaneously block PD-1 and VEGF pathways, exerting immune effects and anti-angiogenic effects.

In terms of news, the American Society of Clinical Oncology (ASCO) Annual Meeting is approaching in 2024. There are reports that in the ASCO annual meeting abstract, Cantab Antibody Limited's AK112, EGFR-TKI treated non-small cell lung cancer China Phase III clinical data did not meet expectations.

In response to this, Cantab Antibody Limited quickly responded to the media at noon on the 24th, stating that the hazard ratio (HR) corresponding to the progression-free survival (PFS) of the AK112-301 study, which disclosed the treatment of EGFR-TKI (epidermal growth factor receptor tyrosine kinase inhibitor) treated EGFR-mutated non-small cell lung cancer at ASCO, reached 0.46. The data results were "very excellent". HR is the core data for assessing the excellence of clinical research results, and there is no claim of being lower than expected.

Moreover, the data of AK112-301 has been accepted as an oral report at the 2024 ASCO conference due to its excellent results, and according to the organizer's plan, it will be presented to the world on June 1st.

In addition, when the stock price plummeted, AK112 just received the news of being approved for marketing in China. According to Cantab Antibody Limited's disclosure, the company's Innovus monoclonal antibody injection液 Innovus has been approved by the National Medical Products Administration for marketing.

It is worth mentioning that Innovus is the world's first approved "tumor immunity + anti-angiogenesis" mechanism bispecific antibody new drug, and it is also the second independently developed bispecific antibody new drug approved for marketing in China.

Under the "combination punch" of refuting rumors and the drug being approved for marketing by the drug administration, Cantab Antibody Limited's decline narrowed, closing down 22.89%, reporting 37.05 Hong Kong dollars per share, with a current market value of 32.08 billion Hong Kong dollars, and the market value shrank by 9.5 billion Hong Kong dollars in one day.

The reason why it can have such a great impact on the stock price is that the market has high expectations for AK112. In September 2023, Innovus monoclonal antibody was included in the priority review variety by the National Medical Products Administration. In addition, Innovus attracted many pharmaceutical companies to throw out olive branches to it due to the eye-catching results of the Phase II clinical study disclosed at ASCO in 2022.

In December 2022, Cantab Antibody Limited granted Summit Therapeutics exclusive rights to develop and commercialize Innovus monoclonal antibody in the United States, Canada, Europe, and Japan with a cooperation plan of a $500 million upfront payment, a total transaction amount of up to $5 billion, and a low double-digit percentage of net sales提成.

What is the strength of Cantab Antibody Limited?In the Hong Kong stock market's biotech sector, where "technology makes the hero," Akeso Biopharma's strength is by no means inferior.

Information indicates that Akeso Biopharma, established in 2012, is primarily engaged in the research, development, production, and commercialization of innovative antibody drugs, focusing on meeting the unresolved medical needs in oncology, immunology, and other therapeutic areas globally.

Akeso Biopharma's financial report for 2023 shows that the company's total operating revenue reached a new high of 4.526 billion yuan, a year-on-year increase of 440%; the net profit attributable to the parent company was 2.028 billion yuan, achieving the first annual profit.

Specifically, Akeso Biopharma does not face the commercialization issues that plague many biopharmaceutical listed companies. By the end of 2023, Akeso Biopharma had successfully commercialized three self-developed innovative drug products, submitted six new drugs for NDA/sNDA, and all six of its self-developed FIC/BIC bispecific antibodies have entered the clinical stage.

In 2023, Akeso Biopharma's R&D expenditure was 1.254 billion yuan, with 4.042 billion yuan in cash on hand, and an asset-liability ratio of 50.78%.

Throughout 2023, the company's commercial performance reached new heights, with product sales reaching 1.631 billion yuan for the year, a year-on-year increase of 48%. Among them, the world's first approved tumor immunotherapy bispecific antibody, Akatuzumab (Cadonilimab, PD-1/CTLA-4 bispecific antibody), achieved product sales of 1.358 billion yuan in 2023, a year-on-year increase of 149%.

At the same time, Akeso Biopharma's confirmed technical licensing and cooperation income for 2023 was approximately 2.923 billion yuan, mainly the cooperation advance payment from the licensing of partial overseas market rights of Evoxolimab to Summit Therapeutics as mentioned earlier.

In addition, Akeso Biopharma has launched over 80 clinical studies on combination therapies based on Cadonilimab and Evoxolimab as cornerstone drugs, to expand the clinical application space of bispecific antibodies and explore the clinical value of first-in-class drugs.

In terms of market prospects, from an industry perspective, according to Frost & Sullivan data, it is expected that China's bispecific antibody market will reach 10.8 billion US dollars by 2030, with a compound annual growth rate (CAGR) of 54.3% from 2024 to 2030; it is expected that China's monoclonal antibody market size will reach 57.9 billion US dollars by 2030, with a CAGR of 16.7% from 2024 to 2030, with the bispecific antibody industry's growth rate higher than that of monoclonal antibodies.

A Star Innovative Drug Company Created by a Female Doctor Returning from AbroadData shows that in 2012, Dr. Xia Yu, a female doctorate returnee, joined forces with Zhang Peng, Wang Zhongmin, and Li Baiyong to establish Kangfang Bio in Zhongshan.

Currently, Xia Yu, Wang Zhongmin, and Li Baiyong each hold 104 million, 45.1993 million, and 53.6732 million shares of the company, accounting for 12.42%, 5.37%, and 6.38% of the company's total share capital, respectively.

At the beginning of its establishment, the company was relatively obscure until December 2015, when Kangfang Bio transferred an antibody drug project to the American company Merck for 200 million US dollars. Merck obtained the global exclusive development and sales rights for Kangfang's monoclonal antibody drug AK-107 in cancer immunotherapy, setting a precedent for domestic companies to export technology to international pharmaceutical giants, and the company thus "shot to fame."

Subsequently, Kangfang Bio entered a long research and development cycle, and it was not until 2018 that the company re-emerged in the public eye due to a series of products entering clinical trials. In April 2020, the company officially went public on the Hong Kong Stock Exchange, achieving an IPO financing of 2.313 billion yuan.

At that time, biopharmaceutical companies were favored by capital, and Kangfang Bio was no exception. Before the IPO, Kangfang Bio conducted a total of five rounds of financing, with a combined amount of nearly 3 billion yuan, attracting a host of well-known VC/PE and industry funds such as Shenzhen Venture Investment, Qianhai Mother Fund, Jianxin Capital, Gaotongjia, Zhengxingu Innovation Capital, Huiqiao Capital, OrbiMed, Boyu Capital, and also receiving dual support in terms of funds and technology from the Hong Kong blue-chip pharmaceutical stock - China Biologic Products.

After listing on the Hong Kong stock market, Kangfang Bio raised nearly 2.8 billion Hong Kong dollars through three rounds of financing. In January 2021, Kangfang Bio raised 1.188 billion Hong Kong dollars through a placement; in July 2022, Kangfang Bio completed a fundraising of 582 million Hong Kong dollars through a placement; in March 2024, the company disclosed a plan to raise 1.17 billion Hong Kong dollars through a placement.

Kangfang Bio's ability to raise a large amount of funds is inseparable from its excellent performance in the Hong Kong stock market. While other innovative drugs were halved or "ankle-cut," Kangfang Bio's stock price remained high. Before today's significant drop, its market value exceeded 40 billion, and even with a 23% drop today, its market value is still 32.1 billion.