Akeso (09926) Report Interpretation

Overview

This quick note assesses updated final PFS data from Akeso's China Phase 3 HARMONi-6 trial in first-line squamous NSCLC. J.P. Morgan flags a surprisingly weaker PFS hazard ratio but maintains that the median-PFS separation and earlier OS evidence support its Overweight view and HK$145 December 2026 target.

Core views

The updated ivonescimab label includes final progression-free-survival data from China Phase 3 HARMONi-6, which compared ivonescimab plus chemotherapy with tislelizumab plus chemotherapy in first-line squamous NSCLC. J.P. Morgan was surprised by the scale of the PFS hazard-ratio change: the final HR rose 20% to 0.72, with p=0.003, from 0.60 at interim analysis, where p was below 0.0001. The final analysis used 17.02 months of median follow-up, compared with 10.28 months at interim analysis. The report emphasizes that the absolute median-PFS lead remained broadly unchanged. Final median PFS was 12.48 months for the ivonescimab arm and 8.31 months for the tislelizumab arm, versus 11.14 and 6.90 months, respectively, at interim analysis. Thus, median PFS improved by a similar 1.34 months for ivonescimab and 1.41 months for tislelizumab, preserving an approximately four-month advantage for ivonescimab. J.P. Morgan notes that the tislelizumab control arm appeared to perform worse at interim and better at final analysis relative to the 7.6-month median PFS in RATIONALE-307, which may explain part of the HR difference. J.P. Morgan expects the updated PFS result to increase investor concern over the PFS and overall-survival readouts of the HARMONi-3 squamous cohort. However, it does not conclude that the HARMONi-6 OS case has deteriorated. The OS analysis presented at ASCO 2026 had more than 21 months of median follow-up, and the two OS curves continued to separate. On that basis, the report considers the OS analysis unlikely to have been affected by the PFS-HR worsening observed at month 17. Management told J.P. Morgan it remains confident in final HARMONi-6 OS. Management argued that final HRs are higher than interim HRs in many PD-1 Phase 3 trials, reiterated that the median-PFS gap was retained, and said the 21-month OS HR did not appear affected. Management did not say whether or when it would disclose final OS, did not explain why the final PFS analysis had not been published earlier, and did not clarify whether Akeso or the CDE drove the addition of final PFS data to the label. The broader investment thesis remains based on Akeso's commercial-stage biotechnology platform and bispecific-antibody position. J.P. Morgan expects AK104 expansion across large China indications to generate approximately RMB7 billion in China peak sales. It expects AK112 to benefit from NRDL inclusion, with more than RMB7 billion of China peak sales in NSCLC alone, while its PD-(L)1/VEGF positioning and efficacy profile versus Keytruda could support more than US$5 billion of ex-China peak sales. The December 2026 HK$145 target is based on a DCF that forecasts free cash flow through 2033, using a 3.0% terminal growth rate and 9.6% WACC.

Analysis framework

J.P. Morgan compares the final HARMONi-6 PFS data with the interim analysis and an external tislelizumab trial benchmark, focusing on both the hazard ratio and the change in median PFS for each treatment arm. It then assesses possible implications for OS using the previously presented 21-month follow-up and management commentary. The target price is derived from a discounted-cash-flow valuation of forecast free cash flow through 2033.

Methodology notes

• Industry Analysis

  Clinical-trial efficacy comparison using hazard ratios, median PFS, overall survival and cross-trial context

  The report compares interim and final HARMONi-6 efficacy data and uses the control arm's median PFS in RATIONALE-307 to discuss why the PFS hazard ratio changed.

• Valuation methodsDCF (Discounted Cash Flow)

  Discounted cash flow valuation

  J.P. Morgan forecasts Akeso free cash flow through 2033 and discounts it using a 9.6% WACC and 3.0% terminal growth rate to derive its HK$145 per-share target.

Asset mapping & comparison

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

• Akeso (09926.HK)

  Primary covered company; ivonescimab clinical data and AK104/AK112 commercialization are central to the investment thesis.

  Strengths

  Leadership in bispecific antibodies, sustained HARMONi-6 median-PFS advantage, and projected large-market sales opportunities for AK104 and AK112.

  Weaknesses

  The final HARMONi-6 PFS hazard ratio worsened to 0.72 from 0.60 at interim analysis.

  Comparison

  The report cites a 7.6-month median PFS for the tislelizumab arm in RATIONALE-307 as context for control-arm variability.

  Risks

  Pipeline development setbacks and AK104 or AK112 sales below J.P. Morgan expectations.

Key data

• Final HARMONi-6 PFS hazard ratio0.72; p=0.003Final analysis at 17.02 months median follow-up, versus 0.60 at interim analysis.
• Final median PFS12.48 months vs 8.31 monthsIvonescimab plus chemotherapy versus tislelizumab plus chemotherapy.
• Interim median PFS11.14 months vs 6.90 monthsAt 10.28 months median follow-up.
• HARMONi-6 OS follow-upMore than 21 monthsThe OS curves continued to separate, according to the report.
• DCF assumptions9.6% WACC; 3.0% terminal growth rateFree cash flow forecast through 2033.
• DCF per-share valueHK$145Equivalent to RMB131.7 per share in the valuation table.

Impact & implications

The report says the weaker final PFS HR may heighten market scrutiny of HARMONi-3 and survival readouts, but the sustained median-PFS gap and continued OS-curve separation leave its HARMONi-6 survival interpretation unchanged. Its valuation continues to rest on AK104 indication expansion and AK112 commercialization in China and overseas.

Risks

• Pipeline development setbacks could pressure the rating and price target.
• AK104 or AK112 sales could be below J.P. Morgan's expectations.

What to watch

• Final overall-survival disclosure for HARMONi-6, including its timing and results.
• PFS and OS readouts from the HARMONi-3 squamous cohort.
• Whether AK112 is included in the NRDL and subsequent sales momentum.