HARMONi OS update is positive, but unlikely to fundamentally change the investment case for Akeso

Overview

This report discusses the OS update from the global phase 3 HARMONi trial disclosed by Summit on July 22. The trial evaluates ivonescimab plus chemotherapy versus chemotherapy in second-line and later EGFR-mutant non-squamous NSCLC, and supports the FDA BLA filing, with a PDUFA date of November 14, 2026. J.P. Morgan believes the updated data are directionally positive, the safety profile remains clean, and there are no new safety signals, but because the analysis is ad hoc, it cannot serve as decisive evidence of formal statistical significance.

Core views

The core view is that the HARMONi OS update provides incremental support to sentiment and regulatory review, but is unlikely to fundamentally change the investment framework. The prespecified primary OS analysis did not reach statistical significance, with HR at 0.79 and p=0.057; PFS clearly met the bar, with HR at 0.52 and p<0.00001. This time, the OS HR for Western patients improved to 0.76 and showed convergence between Eastern and Western populations, helping address market concerns over geographic differences. The report maintains an Overweight rating on Akeso and continues to favor the commercialization and global potential of AK104 and AK112.

Analysis framework

The report is structured around clinical data updates, implications for regulatory review, read-through from HARMONi-3, DCF valuation, and risk assessment. The clinical section focuses on comparing OS HR trends across the ITT population, Western patients, and China HARMONi-A results; the investment section evaluates this event in the context of BLA review, key HARMONi-3 readouts, and the company's long-term pipeline value.

Methodology notes

• Valuation methodsDCF

  Discounted cash flow valuation

  The HK$162 target price is based on DCF valuation, forecasting Akeso's free cash flow through 2034 and using a 9.6% WACC and a 3.0% terminal growth rate.

• Clinical statisticsHR and PFS/OS analysis

  Hazard ratio and survival endpoint assessment

  The report focuses on the trend of OS HR declining as follow-up lengthens, and distinguishes between prespecified statistical analyses and ad hoc analyses; the latter can support trend assessment but cannot be equated with formal statistical significance evidence.

• Regulatory catalystBLA / PDUFA event analysis

  New drug regulatory review milestones

  HARMONi data support the FDA BLA, with a PDUFA date of November 14, 2026; the report believes the OS update helps the review package but is not decisive new evidence.

Asset mapping & comparison

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

• Akeso (9926.HK)

  Covered company and core equity target

  Strengths

  A leader in the bispecific antibody space, with both AK104 and AK112 having significant commercialization potential; the target price implies substantial upside versus the current price.

  Weaknesses

  The share price has already performed strongly, and the new data are more supportive of sentiment than a decisive fundamental change in the near term.

  Comparison

  The report believes AK112 holds a leading position in PD-(L)1/VEGF and has competitive efficacy characteristics relative to Keytruda.

  Risks

  Pipeline development may underperform expectations, and AK104 or AK112 sales may come in below expectations.

• AK112 / ivonescimab

  Core clinical and commercialization driver asset

  Strengths

  OS HR improved for Western patients in HARMONi, with ITT and geographic subgroup results becoming more consistent; no new safety signals.

  Weaknesses

  This update is an ad hoc analysis and cannot serve as a formal statistical significance conclusion.

  Comparison

  The report compares its OS benefit trend to the pattern seen with PD-1 mAbs, where improvement continues as follow-up lengthens.

  Risks

  If HARMONi-3 fails to replicate strong efficacy in a predominantly Western first-line NSCLC population, global expectations will be affected.

• AK104

  Commercialization and indication expansion asset

  Strengths

  The report expects expansion into multiple large-market indications in China could generate peak sales of around RMB 7 billion.

  Weaknesses

  Growth depends on indication expansion and commercialization execution.

  Comparison

  Together with AK112, it forms an important part of Akeso's long-term value.

  Risks

  Sales may fall short of expectations or indication expansion may not progress smoothly.

Key data

• RatingOverweightJ.P. Morgan maintains an Overweight rating on Akeso (9926.HK).
• Target priceHK$162.00The target price is for December 2026 and is based on DCF valuation.
• Current share priceHK$98.90Price as of July 22, 2026.
• Implied upsideApproximately 63.8%Calculated based on the HK$162.00 target price and the HK$98.90 current price.
• HARMONi prespecified OS resultHR 0.79, p=0.057The prespecified primary OS analysis did not reach statistical significance.
• HARMONi PFS resultHR 0.52, p<0.00001PFS clearly met the bar.
• Latest OS HR in Western patients0.76Ad hoc OS analysis with a June 2026 data cutoff.
• OS HR trend in the ITT population0.79 / 0.78 / 0.76Corresponding to the April 2025, September 2025, and June 2026 analyses, respectively.
• OS HR trend in Western patients0.98 / 0.84 / 0.76Corresponding to the April 2025, September 2025, and June 2026 analyses, respectively.
• Assessment of HARMONi-3 statistical thresholdInterim OS HR likely needs to reach around 0.72The report believes this is a high bar, but expects final OS to meet it.
• WACC9.6%DCF valuation assumption.
• Terminal growth rate3.0%DCF valuation assumption.
• AK104 peak sales forecast in ChinaApproximately RMB 7 billionFrom the investment thesis section.
• AK112 peak sales forecast in China NSCLCMore than RMB 8 billionThe report believes NRDL inclusion will unlock sales momentum.
• AK112 peak sales forecast outside ChinaMore than US$6 billionThe report believes its leading position in PD-(L)1/VEGF and competitive efficacy versus Keytruda support overseas sales potential.

Impact & implications

For Akeso, this OS update strengthens the efficacy-consistency narrative for ivonescimab in Western patients and provides incremental support for the BLA review, but due to the lack of a formal p-value and prespecified statistical testing status, it is difficult on its own to materially raise fundamental expectations. For investors, the more important variable remains whether HARMONi-3 can replicate the strong China data in a predominantly Western first-line NSCLC population, especially final PFS and interim OS for the squamous cohort in 2H26.

Risks

• The latest HARMONi OS update is an ad hoc analysis and cannot confirm formal statistical significance.
• The bar for statistical significance in interim OS for HARMONi-3 is high, with the report estimating HR needs to be around 0.72.
• Pipeline development could face setbacks.
• AK104 or AK112 sales could come in below J.P. Morgan expectations.
• If a predominantly Western patient population cannot replicate the strong China efficacy data, expectations for AK112's overseas value may come under pressure.
• Regulatory review outcomes remain uncertain, especially the PDUFA decision on November 14, 2026.

What to watch

• Final PFS for the HARMONi-3 squamous cohort in 2H26.
• Interim OS for the HARMONi-3 squamous cohort in 2H26.
• The FDA's PDUFA decision on November 14, 2026 for the BLA in 2L EGFR-mutant NSCLC.
• PFS for the HARMONi-3 non-squamous cohort in 1H27.
• Whether OS HR continues to improve with longer follow-up, and whether efficacy consistency between Eastern and Western patients is further reinforced.
• Commercial sales delivery of AK104 and AK112.