ASCO 2026 abstracts reinforce positive expectations for China's innovative drug sector, with Kelun Biotech target price raised

Overview

This report is BofA's summary of key conference takeaways for China healthcare from the first batch of regular abstracts at ASCO 2026, with a focus on Kelun Biotech and Innovent. The core conclusion is positive: Kelun Biotech received upward revisions to valuation and revenue forecasts thanks to late-stage data read-through from sac-TMT in NSCLC, TNBC, and endometrial cancer; Innovent's IBI363 demonstrated encouraging efficacy and survival signals in 1L and 2L NSCLC, supporting the maintenance of a Buy rating.

Core views

For Kelun Biotech, sac-TMT significantly improved PFS in the OptiTROP-Lung05 study in 1L PD-L1+ NSCLC, and the OS trend was also positive; A400 also showed high ORR and long mPFS in RET fusion-positive NSCLC. BofA therefore raised the probability of success for multiple indications and its 2027E/2028E revenue forecasts, and raised the target price to HK$581.0. For Innovent, IBI363 combined with PDC showed strong preliminary efficacy in PD-L1-negative or low-expression 1L NSCLC, while long-term follow-up also showed survival benefit and a long-tail effect in IO-resistant NSCLC patients, so the target price and Buy rating were maintained.

Analysis framework

The report uses a combination of conference abstract interpretation, clinical endpoint comparison, pipeline probability-of-success adjustment, and DCF valuation. The analysis focuses on PFS, OS, ORR, DCR, safety, regulatory progress, indication read-through, and the impact on revenue forecasts and target prices.

Methodology notes

• Clinical data interpretationOncology clinical endpoint analysis

  Use PFS, OS, ORR, DCR, and TEAE to assess drug efficacy and safety

  The report uses the key clinical endpoints in the ASCO abstracts to judge the competitiveness of sac-TMT, A400, and IBI363, and maps data quality to investment judgment.

• Pipeline valuationPoS probability-of-success adjustment

  Adjust the probability of commercial success for indications based on clinical readouts

  BofA raised the PoS for Kelun Biotech-related indications from 75% to 85%, and raised the PoS for global 1L PD-L1+ NSCLC and TNBC from 70% to 75%.

• Valuation methodDCF valuation

  Derive target price using a discounted cash flow model

  Innovent's target price of HK$116.8 is based on a DCF model assuming a WACC of 9.6% and a perpetual growth rate of 4%; Kelun Biotech's target price of HK$581.0 is based on a 10-year DCF assuming a WACC of 9.3%, a perpetual growth rate of 4.0%, and a beta of 0.75.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kelun Biotech (XSKBF)

  Directly covered name, target price raised and Buy maintained

  Strengths

  sac-TMT delivered multiple positive clinical readouts in NSCLC, TNBC, and endometrial cancer-related indications; A400 showed high ORR and long mPFS in RET fusion-positive NSCLC; on the regulatory side, the sNDA was accepted for priority review by the NMPA.

  Weaknesses

  Some OS data are still immature, and commercialization delivery still depends on subsequent registration, pricing, and sales ramp-up.

  Comparison

  Compared with prior forecasts, the report raises PoS, revenue forecasts, and target price, reflecting improved clinical certainty.

  Risks

  China-U.S. geopolitics affecting license-out partnerships, late-stage clinical failure, and competing products delivering significantly better clinical results than the company's products.

• Innovent (IVBXF)

  Directly covered name, target price and Buy maintained

  Strengths

  IBI363 showed high ORR/DCR in 1L PD-L1-negative or low-expression NSCLC, and long-term follow-up in 2L IO-resistant NSCLC showed survival benefit and a long-tail effect.

  Weaknesses

  The 1L study is still in the dose-optimization and subsequent randomized-study stage, and efficacy requires validation with more mature, larger-sample, and head-to-head data.

  Comparison

  The HK$116.8 target price is maintained, with the positive view continuously supported by IBI363 data.

  Risks

  PD-1 and biosimilar commercialization below expectations, setbacks in late-stage asset clinical development, and pricing pressure from competing products included in the NRDL.

• sac-TMT

  Kelun Biotech core pipeline asset, driving the target price increase

  Strengths

  Significantly improved PFS in 1L PD-L1+ NSCLC, reached the primary PFS endpoint in 1L TNBC, and Merck's global TroFuse-005 reached the primary OS and PFS endpoints in 2L endometrial cancer.

  Weaknesses

  Cross-region and cross-indication commercial value still requires confirmation through regulatory approval and progress in global development.

  Comparison

  Positive readouts across multiple indications increased the report's confidence in the value of global development and read-through.

  Risks

  Failure in indication expansion, competing ADCs with better efficacy or safety, and external disruption to collaborative development.

• IBI363

  Innovent key immuno-oncology pipeline

  Strengths

  Showed encouraging efficacy in high-unmet-need NSCLC populations, and the 3→1.5 mg/kg regimen balances efficacy with treatment continuity.

  Weaknesses

  Data are still relatively early-stage at present, and future randomized h2h studies are needed to validate any advantage versus Keytruda plus chemotherapy.

  Comparison

  If subsequent randomized stages succeed, it may strengthen Innovent's differentiation in the NSCLC treatment landscape.

  Risks

  Subsequent randomized studies fail to replicate early signals, safety or tolerability issues, and rapid iteration of competing treatment regimens.

Key data

• ASCO 2026 conference dates2026-05-29 to 2026-06-02The conference is scheduled to be held in Chicago, U.S., and the report summarizes the first batch of regular abstracts.
• PFS results for sac-TMT in 1L PD-L1+ NSCLCHR 0.35; mPFS not reached vs 5.7 monthsChina phase III OptiTROP-Lung05 study, comparing sac-TMT plus Keytruda versus Keytruda monotherapy.
• OS trend for sac-TMT in 1L PD-L1+ NSCLCHR 0.55OS data are not yet mature, but the direction is positive.
• Efficacy of A400 in RET fusion-positive NSCLCConfirmed ORR 87.1%; mPFS 27.5 monthsFrom the pretreated cohort of the pivotal phase II study.
• Change in Kelun Biotech revenue forecasts2027E raised 1.7%; 2028E raised 2.3%Driven by late-stage sac-TMT data and PoS upgrades.
• Kelun Biotech target priceHK$581.0, previously HK$523.3Buy rating maintained.
• ORR/DCR for IBI363 combined with PDC in 1L NSCLC86.4% / 100%The 3→1.5 mg/kg regimen was used in PD-L1-negative or low-expression NSCLC patients.
• IBI363 safetyG3+ TEAEs of 65.2%Lower in the 3→1.5 mg/kg group than in other dose groups; the report considers safety and tolerability relatively good.
• OS for IBI363 in 2L IO-resistant squamous NSCLCMedian OS 18.2 months; 24-month OS rate 47.8%From long-term follow-up of the 3 mg/kg group in the PoC study.
• Innovent target priceHK$116.8Buy rating maintained.

Impact & implications

The report has positive implications for China's innovative drug sector, especially ADC, immuno-oncology, and NSCLC-related pipelines. Kelun Biotech's sac-TMT data not only support the advancement of indications in China, but also provide positive read-through for global 1L PD-L1+ NSCLC and TNBC; if subsequent randomized studies confirm efficacy, Innovent's IBI363 could strengthen its competitive position in high-unmet-need NSCLC populations.

Risks

• Kelun Biotech faces the risk that China-U.S. geopolitical tensions could affect license-out partnerships.
• Kelun Biotech faces the risk of late-stage clinical trial failure or competing products producing significantly better clinical results.
• Innovent faces the risk of PD-1 and biosimilar commercialization coming in below expectations.
• Innovent faces setbacks in late-stage asset clinical development, as well as pricing pressure from competing products included in the NRDL.
• BofA Securities disclosed that it may have business relationships with covered issuers, and investors should be aware of potential conflicts of interest.

What to watch

• Kelun Biotech's regulatory progress for sac-TMT after NMPA priority review in China.
• Subsequent full data and registration pathways for sac-TMT in global 1L PD-L1+ NSCLC, TNBC, and 2L endometrial cancer.
• Further follow-up and commercial positioning of A400 in RET fusion-positive NSCLC.
• Innovent IBI363 phase II randomized dose study, as well as head-to-head results of IBI363 plus chemotherapy versus Keytruda plus chemotherapy.
• Whether long-term OS data for IBI363 in IO-resistant squamous NSCLC and wild-type adenocarcinoma smokers continue to maintain the long-tail effect.