Goldman Sachs has released a research report reiterating a Buy rating on CSTONE PHARMA-B (02616) with a 12-month target price of HK$9.44, based on a risk-adjusted discounted cash flow model.

Core Investment Rationale

The report highlights positive Phase I/II data for CS2009, a PD-1/VEGF/CTLA-4 trispecific antibody, presented at the ongoing ASCO meeting. The data demonstrated a mature safety profile and encouraging early efficacy in non-small cell lung cancer and other solid tumors, alongside plans for initial Phase III multi-regional clinical trials in priority indications. The bank views these updated results as strengthening the evidence for the drug's design feasibility and differentiated therapeutic potential, laying the groundwork for Phase III studies.

It is anticipated that the global regulatory pathway for CS2009 will remain clear despite the strong overall survival benefit shown by iovinesimab in the Phase III HARMONi-6 trial. Goldman Sachs maintains a positive outlook on the overall drug profile of CS2009, emphasizing that execution is critical as the company aims to initiate the first Phase III MRCTs and secure a business development deal by the end of 2026.

Safety Profile and Efficacy in Cold Tumors

Updated Phase I safety data for CS2009 in later-line treatment, with extended follow-up from the 2025 ESMO conference, showed continued tolerability. The incidence of Grade ≥3 treatment-related adverse events was 24.6%, with Grade ≥3 immune-related adverse events at 12.7% and Grade ≥3 VEGF-related adverse events at 5.1%. CTLA-4 related toxicities were reportedly well-managed.

The bank reaffirms that CS2009 is generally well-tolerated and expects a similar safety profile in later-stage trials. Beyond safety, Phase I data maintained differentiated responses in cold tumors, which are typically insensitive to existing PD-(L)1 therapies. Encouraging objective response rates were observed, including 66.7% in 1L metastatic colorectal cancer with chemotherapy, supporting its selection as a priority for Phase III trials. ORRs of 25% in 2L+ pMMR/MSS colorectal cancer, 33.3% in 2L+ soft tissue sarcoma, and 33.3% in 2L+ non-clear cell renal cell carcinoma further confirm CS2009's broad therapeutic potential beyond NSCLC.

Promising Phase II NSCLC Data and Phase III Plans

Management outlined an updated roadmap for initiating Phase III MRCTs in a set of priority trials. A Type B meeting with the FDA on trial design and CMC readiness is planned for Q4 2026, with the first two Phase III trials expected to commence by year-end 2026 and two more in Q1 2027.

These plans are supported by recent Phase II data for CS2009, which includes an 81.3% ORR as monotherapy in 1L PD-L1 positive NSCLC, remaining competitive compared to PD-1/VEGF bispecific antibodies and pembrolizumab. A 75% ORR was observed in 1L PD-L1 negative/low squamous NSCLC with chemotherapy, showing an early efficacy trend. Additionally, a 66.7% ORR was seen in 2/3L immunotherapy and chemotherapy-treated NSCLC with docetaxel, indicating encouraging improvement over current standard of care and supporting the planned Phase III trial in 2L AGA-negative NSCLC.

Regulatory Pathway Outlook

The report notes significant stock price volatility for CStone, including a sharp 32% correction on June 1st, which it attributes primarily to the unexpectedly strong OS hazard ratio for iovinesimab in the HARMONi-6 trial. This has sparked discussion about the remaining room for OS improvement and whether iovinesimab would be required as a positive control.

Management indicated that CS2009's first planned Phase III MRCT will be in 1L NSCLC, making the ongoing Phase III HARMONi-3 trial for iovinesimab a more relevant comparator. It is expected that the OS HR from HARMONi-3 will be greater than that from HARMONi-6. Regardless of the HARMONi-3 readout, the bank expects CS2009's regulatory path in AGA-negative NSCLC to remain clear. This is because CS2009 is scheduled to enter pivotal trials in Q4 2026 to Q1 2027, ahead of the earliest potential approval for iovinesimab in 1L NSCLC, which is estimated for H1 2028. Furthermore, other Phase III PD-1/VEGF drugs have primary completion dates in 2029 or later.