Ivonescimab's Phase III Biliary Tract Cancer Study Succeeds, Validating Its Expansion Potential Beyond Lung Cancer for the First Time

Overview

The report focuses on the positive interim results from the Phase III HARMONi-GI1 study of Akeso's ivonescimab in first-line biliary tract cancer. Morgan Stanley believes this is not merely an individual clinical event, but also the first Phase III evidence that ivonescimab may expand from lung cancer into other solid tumors; however, full efficacy, safety and subgroup data have not yet been disclosed.

Core views

HARMONi-GI1 is a Phase III study conducted in China that enrolled 682 patients with first-line biliary tract cancer and compared ivonescimab plus gemcitabine/cisplatin (GemCis) with durvalumab plus GemCis. Top-line results announced by Akeso showed positive overall survival (OS) at the interim analysis, as well as positive progression-free survival (PFS) and objective response rate (ORR). Morgan Stanley emphasizes that this is ivonescimab's first Phase III success outside non-small cell lung cancer and, according to the report, the first result to demonstrate superior OS versus standard PD-(L)1 plus GemCis therapy in first-line biliary tract cancer. The report views the result as an efficacy breakthrough that cleared a high bar. There are more than 200,000 new cases of biliary tract cancer worldwide annually, including more than 50,000 in China. The disease comprises multiple subtypes with different biological characteristics and geographic distributions. Most patients have inoperable disease at diagnosis and often face treatment complications such as immunosuppression, biliary obstruction and infection. GemCis was the standard chemotherapy for many years, after which immune checkpoint inhibitors plus GemCis became the standard regimen. However, the report notes that their OS benefit is only approximately 1.5 to 2 months, with OS of around 13 months under standard therapy. For reference, in TOPAZ-1, median OS was 12.9 months with durvalumab plus GemCis versus 11.3 months in the control group, with an HR of 0.76; in KEYNOTE-966, median OS was 12.7 months with pembrolizumab plus GemCis versus 10.9 months in the control group, with an HR of 0.83. The report therefore interprets ivonescimab's superior OS in this highly heterogeneous and markedly immunosuppressive cancer as having substantial clinical significance. Earlier data provided directional support for the Phase III results. A single-arm Phase II study in China enrolled 30 patients, with ivonescimab plus GemCis achieving an ORR of 66.7%, median PFS of 8.5 months and median OS of 16.8 months. However, the current Phase III announcement did not disclose the HR, median OS and PFS, data maturity, safety, patient baseline characteristics or subgroup results. Morgan Stanley therefore considers the top-line results positive but believes full data are still needed to assess the magnitude and robustness of efficacy, consistency across different biliary tract cancer subtypes and the value of global development. Strategically, the report believes this success preliminarily establishes ivonescimab's pan-tumor potential, allowing its product footprint to expand from lung cancer into gastrointestinal and other solid tumors. Akeso management estimates a global opportunity of approximately US$1-2bn for the biliary tract cancer indication, although existing sales data for durvalumab and pembrolizumab do not separately disclose their contributions from biliary tract cancer. Late-stage studies of ivonescimab in biliary tract cancer, colorectal cancer, urothelial carcinoma and head and neck squamous cell carcinoma are underway or planned in China and the European Union. A US Phase II/III study led by NCI/ECOG is also planned. It is expected to enroll 336 patients and compare ivonescimab plus GemCis with durvalumab or pembrolizumab plus GemCis, with an anticipated start in January 2027. In addition to biliary tract cancer, two important lung cancer catalysts are expected in the second half of 2026: final PFS and interim OS data from the HARMONi-3 study in first-line squamous non-small cell lung cancer, and the November 14, 2026 PDUFA date for second-line EGFR mutation-positive non-small cell lung cancer. The report also focuses on whether the global development of cadonilimab and the collaboration with Summit Therapeutics can further unlock the value of ivonescimab's global indication expansion. Financial forecasts reflect the company's path from losses to profitability. Morgan Stanley expects net revenue to increase from Rmb3,056mn in 2025 to Rmb4,735mn in 2026, Rmb5,834mn in 2027 and Rmb8,206mn in 2028. EBITDA is expected to improve from -Rmb642mn in 2025 to Rmb321mn in 2026, and then rise to Rmb902mn in 2027 and Rmb2,190mn in 2028. ModelWare net profit is expected to improve from -Rmb788mn in 2025 to Rmb13mn in 2026, followed by Rmb457mn and Rmb1,396mn; corresponding EPS is projected at -Rmb1.27, Rmb0.01, Rmb0.51 and Rmb1.56, respectively. The report uses a DCF-based valuation with an 8.9% WACC and a 3% perpetual growth rate, deriving a target price of HK$212.00. This implies 138% upside from the reference share price of HK$88.90 and supports an Overweight rating. Key downside risks include share loss due to the rapid launch of competing products, changes in the global competitive landscape, and pipeline delays or R&D failures.

Analysis framework

The report first assesses whether the HARMONi-GI1 top-line results clear the existing treatment bar in first-line biliary tract cancer. It then uses disease heterogeneity, the limited OS benefit of standard therapy and the TOPAZ-1 and KEYNOTE-966 results as comparative context, while using previous Phase II data to examine consistency. It subsequently maps the clinical event to ivonescimab's pan-tumor development, global market opportunity and subsequent R&D catalysts, before deriving the target price using Morgan Stanley ModelWare financial forecasts and DCF assumptions.

Methodology notes

• Valuation MethodologyDCF

  Base-Case Discounted Cash Flow Valuation

  The report discounts the company's future cash flows to present value using an 8.9% weighted average cost of capital and a 3% perpetual growth rate, deriving a target price of HK$212.00.

• Event-Driven Strategy and Behavioral FinanceEvent-driven analysis

  Clinical Top-Line Data Event Analysis

  The report treats the positive interim OS, PFS and ORR results from HARMONi-GI1 as the core event and assesses their impact on ivonescimab's clinical value, pan-tumor development and global commercial opportunity, while clearly noting that full data have not yet been released.

Asset mapping & comparison

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

• Akeso, Inc. (9926.HK)

  The positive Phase III HARMONi-GI1 results for ivonescimab directly reinforce the pan-tumor development rationale for the company's core pipeline and support the global opportunity in the biliary tract cancer indication.

  Strengths

  Ivonescimab achieved its first Phase III success outside non-small cell lung cancer; the company is also conducting or planning late-stage studies in biliary tract cancer, colorectal cancer, urothelial carcinoma and head and neck squamous cell carcinoma.

  Weaknesses

  The Phase III HR, median survival, data maturity, safety, patient baseline characteristics and subgroup results have not yet been disclosed, and the current assessment is primarily based on top-line results.

  Comparison

  The report compares the results with existing Phase III data for durvalumab and pembrolizumab plus GemCis and believes the superior OS result cleared a high bar given the limited OS benefit of existing immunotherapy combinations.

  Risks

  Rapid launches of competing products could result in share loss, the global competitive landscape could change, and the pipeline faces risks of delays or R&D failures.

Key data

• HARMONi-GI1 Sample Sizen=682China Phase III study comparing ivonescimab plus GemCis with durvalumab plus GemCis
• HARMONi-GI1 Interim ResultsPositive OS, PFS and ORRHR, medians, data maturity and safety have not yet been disclosed
• China Phase II ORR66.7%Single-arm Phase II study, n=30
• China Phase II Median PFS8.5 monthsIvonescimab plus GemCis
• China Phase II Median OS16.8 monthsIvonescimab plus GemCis
• Biliary Tract Cancer IncidenceMore than 200,000 cases globally and more than 50,000 cases in ChinaAnnual incidence reported in the report
• Management-Estimated Global OpportunityApproximately US$1-2bnBiliary tract cancer indication
• TOPAZ-1 Median OS12.9 months vs. 11.3 months, HR 0.76Durvalumab plus GemCis versus placebo plus GemCis
• KEYNOTE-966 Median OS12.7 months vs. 10.9 months, HR 0.83Pembrolizumab plus GemCis versus placebo plus GemCis
• 2025-2028 Net Revenue ForecastsRmb3,056mn, Rmb4,735mn, Rmb5,834mn, Rmb8,206mn2026 to 2028 are Morgan Stanley forecasts
• 2025-2028 EBITDA Forecasts-Rmb642mn, Rmb321mn, Rmb902mn, Rmb2,190mnExpected to turn positive in 2026
• DCF ParametersWACC 8.9%, perpetual growth rate 3%Base-case valuation assumptions
• Target Price and UpsideHK$212.00, 138%Reference share price of HK$88.90

Impact & implications

Morgan Stanley believes HARMONi-GI1's superior OS result increases confidence in ivonescimab's ability to expand beyond lung cancer indications and supports its global development in biliary tract cancer and other solid tumors. Its commercial and valuation impact will still depend on the magnitude of efficacy and safety in the full Phase III data, consistency across subgroups, progress in overseas trials, regulatory outcomes and the competitive landscape.

Risks

• Rapid launches of competing products could lead to market share loss.
• Changes in the global competitive landscape could weaken ivonescimab's commercial opportunity.
• Clinical pipeline programs may be delayed or fail in development.

What to watch

• Await disclosure of HARMONi-GI1's HR, median OS and PFS, data maturity, safety, patient baseline characteristics and subgroup analyses.
• Monitor whether additional data can further validate and clarify ivonescimab's global market opportunity.
• Monitor final PFS and interim OS data from HARMONi-3 in the second half of 2026.
• Monitor the November 14, 2026 PDUFA catalyst for the second-line EGFR mutation-positive non-small cell lung cancer indication.
• Monitor whether the 336-patient US Phase II/III biliary tract cancer study led by NCI/ECOG begins as expected in January 2027.
• Monitor the progress of cadonilimab's global development and whether the collaboration with Summit Therapeutics can unlock the value of ivonescimab's global indication expansion.