Everest Medicines Limited (1952) Earnings Call Transcript & Summary

Good morning or good evening. Welcome to Everest Medicines 2025 Interim Financial Results Conference Call. Please be advised that today's conference call is being recorded. [Operator Instructions] Joining us today are Mr. Rogers Luo, our Executive Officer; Mr. Ian Woo, President and Chief Financial Officer; Mr. Rico Liang, our Chief Product Officer; Dr. Jennifer Yang, our Chief Scientific Officer; and Sandra Zeng, our Chief Medical Officer. Before we get started, I'd like to remind you that the speakers on this conference call may take statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the company or its officers with respect to the business operations and financial condition of the company, which can be identified by terminology such as will, expects, anticipates, future, intends, plans, believes, estimates, confidence and such similar statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The company or any of its affiliates, directors, officers, advisers or representatives have no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call, except as required by law. And now I will turn over the call to President and CFO, Ian Woo, to provide you with more details on our business update and the 2025 midyear results.

Thank you, operator. And let me first start by saying thank you for everyone for joining today's call. Our interim results presentation will begin with me providing an overview of the company's overall business performance since the beginning of 2025, including business achievements, financial results and full year performance guidance. Following that, Mr. Rogers Luo, our Chief Executive Officer; Mr. Rico Liang, our Chief Product Officer, will highlight the progress and future plans for our commercialized products. Next, Sandra Zeng, our Chief Medical Officer; and Jennifer Yang, our Chief Scientific Officer, will jointly present the latest developments in our R&D platform. Finally, Mr. Luo will conclude with a summary and outlook on the company's future development. We'll follow that up with a Q&A session. So looking at this slide, which is a snapshot of our major achievements in 2025, which I'm very proud to share with everybody. So first, on commercialization. Execution was exceedingly strong, and we rapidly advanced the development of a broad portfolio of innovative pipeline assets that we expect to have tremendous global value creation potential. Let me begin with NEFECON. We generated RMB 825 million of revenue between January and August. We achieved this very strong result in spite of a supply constraint that some of you may have heard of that was really rooted in both strong market demand and a delay in regulatory approval of a supplemental application for production scale-up designed to ensure supply stability. Since our supplemental application was approved by the CEE early in August and NEFECON's availability was fully restored across China, we've seen very robust uptick in sales this month. We will give 2025 full year and 2026 sales guidance in the next slide. With respect to reimbursement, NEFECON achieved NRDL coverage in 29 provinces so far, which is essentially all of the country. We also received full approvals in all licensed territories, including Greater China, Singapore and South Korea. Finally, NEFECON was recommended by China's first IgAN guideline as a first-line disease-modifying treatment. The next product in our autoimmune -- next is I'll talk about our autoimmune disease franchise. The -- for VELSIPITY, I think we're very happy with the progress of the NDA review. The nonclinical, clinical and statistical sections of the VELSIPITY's NDA application are complete. So we are into the final stretch of the NDA review process. Our base case remains early 2026 approval, but we are now hopeful that this time line can be accelerated. We have initiated prelaunch activities, including building up a commercial team and are advancing a project to localize manufacturing of VELSIPITY in Jiashan, China with trial production to begin in December of this year. We are thrilled to announce that VELSIPITY's multicenter Asia Phase III trial data has been accepted for publication in the Lancet Gastroenterology and Hepatology Journal. Additionally, VELSIPITY's maintenance data was presented at the European Crohn's and Colitis Organization Conference in February. VELSIPITY was also strongly recommended as a first-line therapy in the updated American College of Gastroenterology guidelines for the treatment of ulcerative colitis in adults. On the regulatory front, outside of Mainland China, we received NDA approvals for VELSIPITY in Hong Kong and have submitted NDAs in South Korea and Taiwan. For XERAVA in our anti-infective franchise, we're very pleased that the Chinese clinical breakpoints were accepted by the China's CDE and reflected in the product label. We are also working to localize production of this product and getting prepared for potential NRDL negotiations next year. Let me move on to our R&D platform. For civorebrutinib, also known as EVER001, we continue to disclose positive data from the ongoing Phase Ib/IIa trial. The March data cut was presented in the European Renal Association ERA meeting in June, and we will be disclosing the June data cut later today. We made significant progress in our proprietary mRNA in vivo CAR-T platform as we generated proof-of-concept B-cell depletion and safety data in nonhuman primates and completed clinical candidate selection. We expect to launch clinical development by the end of 2025. We have 3 programs in our mRNA cancer vaccines platform, and let me review these one by one. So first, EVM16, our personalized cancer vaccine. Our investigator-initiated clinical study is ongoing and dose escalation has been complete for the low and medium dose cohorts, and we're dose escalating into the high dose now. For EVM14, our tumor-associated antigen cancer vaccine, we received IND clearance in the U.S. with first patient enrollment scheduled for September. And our R&D in China has been accepted for review. We expect approval shortly. Lastly, for EVM15, our immune-modulatory cancer vaccine, we have completed preclinical POC and are advancing with our pre-IND work. Financially, we are in solid ground after completing a placement on August 1st, 2025, with net proceeds of approximately HKD 1.6 billion. We had RMB 1.6 billion, as of June 30, 2025. So we're -- so we have a strong balance sheet for the rest of the year and going into 2026. We also made a USD 30.9 million strategic investment into NASDAQ-listed I-Mab and are now the largest shareholder of the company with a 16.1% ownership stake. So on this slide, let me give you a snapshot of where we are financially. So in the first half of 2025, revenue was RMB 446 million, which grew 48% year-over-year. However, as discussed previously, first half revenue was artificially low due to NEFECON's supply constraints, which has been fully resolved. Consequently, you can see that we recorded RMB 520 million of NEFECON revenue in August alone in order to meet the pent-up market demand. Therefore, our revenue for -- from January to August is expected to be over RMB 960 million. Now these are unaudited numbers, but we wanted to give a picture of where we are from beginning of the year until now because of the supply constraints with NEFECON in the first half. So given the visibility we now have on 2025, we are prepared to give full year 2025 revenue guidance, and this is going to be RMB 1.6 billion to RMB 1.8 billion, of which RMB 1.2 billion to RMB 1.4 billion will be NEFECON sales. We believe that NEFECON may be the first ever non-oncology drug to achieve more than RMB 1 billion of sales in the first year of commercialization after NRDL inclusion. Gross margin on a cash basis remained strong at 76.4% for the first half of 2025. This is backing out noncash amortization of intangible assets as we have always done in the past. Due to the price reduction of NEFECON after NRDL inclusion, the gross margin was slightly lower compared to 2024. However, with cost reductions driven by increased production capacity and scale, we believe that the gross margin will restore to above 80% in the long run. Our non-IFRS net loss was approximately RMB 147 million. This is down 31% year-over-year. We have consistently provided non-IFRS disclosure, which backs out onetime items and noncash charges and believe that this is a better measure of the company's ongoing operations. Our cash balance of RMB 1.6 billion at the end of June 2025 now adds HKD 1.6 billion from our recent financing. Last but not least, we target to achieve operational profitability in the second half of 2025. We have previously guided to achieving this milestone in Q4, but now believe that we can do this earlier than expected. On this slide, there are a lot of numbers there, and I won't be going through everything. I think I would just highlight a few items that I did not touch upon on the previous slide. But I think the key takeaway here is that we have been able to grow revenue, while increasing operating leverage. So the G&A expense increased slightly to RMB 110.8 million, primarily associated with an increase in headcount needed to expand our launch efforts and develop new products. R&D expense decreased to RMB 195.2 million as we optimized spending to focus on core pipeline programs, which are in earlier stages of development and not as capital intensive. Distribution and selling expenses increased by RMB 114.4 million to RMB 314.7 million. This increase was primarily driven by broader marketing and sales efforts of NEFECON following its inclusion in the NRDL and its full approval across Asia regions, as well as expanded promotion of XERAVA. So with that, let me turn over to Rico Liang, our Chief Product Officer, to talk about commercial achievements.

Thanks, Ian. Yes. Now let's turn to the key driver of our revenue growth NEFECON. Following NRDL implementation this year, NEFECON generated RMB 825 million sales from January through August. Patient demand has been robust across China after NRDL implementation to the point that we experienced supply constraints in the certain regions in June and July. The approval of production scale up has already enabled us to increase supply quickly. In this month, more than [ 130, 000 ] bottles of NEFECON was delivered to the market across China. On the other hand, we have built a lean and highly efficient commercial model. In the second half of 2025, we will continue to expand the market coverage to 1,000 hospitals nationwide with more than 80% market potential, and we expect about 30,000 new IgAN patients will be treated with NEFECON. Altogether, this performance underscores both the significant unmet need in the IgAN market and average -- the ability to rapidly scale NEFECON into a leading renal function in China. Looking ahead, we see more drivers supporting sustained and accelerated growth for NEFECON in 2025 and 2026. As Ian discussed in earlier slides, we are going to get for RMB 1.2 billion to RMB 1.4 billion sales from NEFECON in this year, which is expected to further double to RMB 2.4 billion to RMB 2.6 billion in 2026. We believe this forecast is well supported and highly visible due to following drivers. First, huge market potential. China has an estimated 5 million IgAN patients with about 1 million confirmed by the renal biopsy and about 100,000 new confirmed cases each year. From second half this year, we will expand the coverage to 1,000 hospitals equivalent to more than 8,000 -- sorry, 80% of the market potential. Secondly, NEFECON remains the first and only IgAN therapy fully approved in China and includes NDRL, which secures exclusivity in this market. And the full approval for China NMPA in April expand treatment to all adult patients with primary IgAN at risk of progression without limitation of the per unit, substantially broadening the [indiscernible] population. On the other hand, we expect NEFECON to be included in the updated global KDIGO guidelines, as well as the first China IgAN guideline in the second half of this year. Also, our supplement application for the production expansion was approved, ensuring reliable and sufficient supply to meet robust market demand. Compared to NEFECON, we are developing Gd-IgA1 diagnostic tool. Gd-IgA1 is a biomarker highly correlated with the root cause and the progression of IgAN. With Gd-IgA1 [ normalization ], we could establish an integrated diagnosis and treatment ecosystem to improve compliance and treatment duration of NEFECON. We also aim to improve the detection rate of IgAN through noninvasive early screening. Our Gd-IgA1 has demonstrated up to 95% specificity compared to the golden standard renal biopsy and with low cost and faster results and delivery. With the pivotal trial enrollment complement, we expect regulatory approval in the second quarter of 2026. Also, I want to draw your attention to our antibacterial business. XERAVA continued to demonstrate steady growth in the first half of 2025. Revenue reached to RMB 143 million, up to 6% up year over-year with 37% in market sales growth. In China, antibiotic resistance is a major issue, but there are limited available treatment option prior to XERAVA [indiscernible] downside. Consequently, there is strong demand for new features and safe treatment option like XERAVA are very clear to position XERAVA for early use and continue increased penetration in the core hospitals. As we explore the second growth curve for XERAVA, we are actively advancing its local production to aim to participate in 2026 earlier negotiation. It may pave the way for substantial scale -- substantial sales growth in 2025 -- 2027. In addition to the XERAVA, we are building a strong and complementary antibacterial portfolio. XERAVA provides a broad spectrum coverage across the resistant bacteria, Cefepime-taniborbactam offers best-in-class inhibition of the both [indiscernible] and [ Eravacycline ] and EVER206, a novel polymyxin derivative significantly reduced the renal toxicity, which will estimate peak sales potential for RMB 1 billion to RMB 1.1 billion, positioning us as a leader in the multi-resistant infection treatment market. Yes. Thank you. Now I pass the mic to the Rogers.

Thanks, Rico. I'm going to talk about ulcerative colitis. Along our [indiscernible] portfolio, we are also advancing our autoimmune portfolio with a focus on ulcerative colitis, which we see holds [ CNY 14 billion ] market size and still growing. Both IgAN and UC have huge unmet medical needs with poor prognosis and limited effective treatment available. That's why we believe VELSIPITY has the potential to become next advanced [indiscernible] drug. Like IgAN. UC is a highly prevalence high-burden disease with both clinical and societal impact. Currently, we see 450,000 patients on treatment in China each year, which is expected to double to 900,000 by 2031. Patients [indiscernible] and over 40% relapse with 1 year, while quality of life is severely impaired with daily symptoms affecting both health and social functions. In long term, up to 30% require surgery and nearly 1 in 5 face colorectal cancer risk. This underscore the urgent need for therapies that deliver deep and durable disease control. Next slide. Mucosal healing is now recognized globally as the long-term treatment goal in UC. It's not only restore quality of life but has minimal impact on outcomes. Patients who achieved mucosal healing with the full first year after diagnosis reduced their recurrence risk by 50% and the risk of surgery by 66%. They also experienced significant low risk of developing into cancer, yet despite being a recognized standard, only about 24% of the patients actually achieved mucosal healing on the current therapy. This treatment gap highlights the urgent need for next-generation therapies capable of achieving the curable healing. Next slide. VELSIPITY is designed to go beyond symptom control to achieve potent deep healing, you can see from the page show in the slide. In the picture here, we see clearly that patients progress from severe mucosal inflammation and ulceration to full mucosal healing after 52 weeks of treatment with VELSIPITY. This case actually is from our Phase III trial. This kind of deep and durable response may help reduce relapses and lower long-term cancer risk, highlighting VELSIPITY's potential as a best-in-disease treatment. Next slide. Global guidelines recognize mucosal healing as a key treatment endpoint. During the maintenance period, VELSIPITY demonstrated robust rate of mucosal healing with nearly 52% of patients achieved deep mucosal healing when compared with the study results from other current treatment, whether it is a biologics or JAK inhibitor, VELSIPITY showed comparative rates, including 61% achieving endoscopic mucosal improvement higher than recently marketed products. This is important to note that they are not head-to-head studies, but VELSIPITY employs the most stringent evaluation criteria. And these data suggest VELSIPITY has strong potential to meet established treatment goals in UC. Next. As we discussed in early studies -- slides, VELSIPITY offer rapid onset of action and deep mucosal healing. From a safety perspective, VELSIPITY has a favorable profile showing no increased risk of serious infections compared with placebo. Most adverse events were mild to moderate and the discontinuation rate was low. This -- the convenience of once-daily oral pill with no titration required further support for patient compliance. Finally, VELSIPITY is strongly recommended by global medical guidelines, including the AGA and ACG as a first-line therapy. This clinical and safety advantage position VELSIPITY as a robust best-in-disease therapy for UC with peak sales expected to reach RMB 5 billion. On the operational side, VELSIPITY is on track for NDA approval in Mainland China in the first half of 2026. NDA approvals have been -- have already been secured in Hong Kong, Macau, Singapore, Taiwan and South Korea. Pre-commercial activities, including real-world studies and commercial team build-out are ongoing with the local production projects well underway. At Everest, our strategy is built around 3 complementary value-creating platforms that together form a differentiated and sustained growth engine. First, our commercial platform is already generating significant revenue growth led by 2 blockbusters, NEFECON and VELSIPITY, which address high need areas in renal and autoimmune disease, each with peak sales forecast of RMB 5 billion. This strong commercialization capabilities enable us to reinvest in in-house R&D platform to unlock long-term value creation. We are advancing a next-generation AI-enabled mRNA platform to develop a pipeline of therapeutic vaccines for autoimmune and cancer disease, including our in vivo CAR-T platform and our mRNA cancer vaccine platform that are powerful engine of internal innovation. Together, these platforms give Everest a unique balance of near-term revenue, midterm high growth and long-term transformational R&D potential. Next, I'll pass the microphone to our Chief Medical Officer, Sandra.

Thank you. Thank you, Rogers. So now I'm going to share with you the most updated data from the ongoing Phase Ib, Phase IIa study of EVER001 also civorebrutinib in primary membranous nephropathy. Civo is a reversible covalent BTK inhibitor that we are developing for autoimmune renal indication, the first one being the pMN. Civo selectively forms a reversible covalent bind with [indiscernible] in the BTK kinase domain. It differentiates from other BTK inhibitors currently marketed for other indications, which are either reversible covalent BTK inhibitors or noncovalent reversible BTK inhibitors. The covalent binding mechanism of civo ensures ongoing -- ensures strong BTK inhibition, while its reversibility and high selectivity presumably will lead to less off-target toxicity. As shown on the slide, the table at the bottom left side shows the IC50 of civo versus ibrutinib against a panel of Zanubrutinib. Compared to the ibrutinib, civo has similar potency against the BTK but has much better selectivity against off-target kinases such as EGFR, ITK and TEC family, which are thought to be associated with undesirable safety profile. Furthermore, as shown on the table at the bottom right side, even compared to the more selective BTK inhibitors such as Ibrutinib, Zanubrutinib, and Acalabrutinib, civo demonstrated superior selectivity. We also believe the relative fast off rate for civo combined with high selectivity may further benefit the safety profile of [ civorebrutinib ]. So now here is the most updated data from the ongoing EVER001 also civo, Phase Ib, Phase IIa study in pMN with cutoff date of June 12, 2025. Just want to refresh memory, the study is conducted in Chinese pMN patients with positive anti-PLA2R autoantibody. At two dose levels, the subject in Cohort 1 started with 100-migram QD for 4 weeks followed by 100 milligram BID for 32 weeks with a total of 36 weeks of treatment. The subject in Cohort 2 received 200-migramBID for a total of 36 weeks of treatment. So by the date of cutoff, total 31 subjects was in lows. So in Cohort 1, 11 subjects completed 42 weeks. In the Cohort 2, 16 subjects completed 36 week treatment and 9 subjects completed the 52 week treatment. As seen on the slide, the left graph represents the immunological response, while the right one represent the clinical response. As we shared previously, as early as 12 weeks, civo induced more than 6% reduction of anti-PLA2R autoantibody level in both cohorts. By week 24, the autoantibody reduction deepened, reached more than 93% in both cohorts. Here, I want to highlight that during the off-treatment follow-up period up to 52 weeks, the green zone shown on the slide, the anti-PLA2R autoantibody reduction remains. Following the immunological response, we observed a remarkable 24-hour proteinuria reduction during the treatment period in both cohorts, as shown on the right side. By week 36, the 24-hour proteinuria decreases by 67% in Cohort 1 and 80% in Cohort 2 compared to the baseline. Also, I want to highlight that further reduction was shown during the off-treatment follow-up period up to week 52. In addition, consistently with the immunological response rate, more rapid and deep reduction of 24-hour proteinuria was observed in Cohort 2. Next slide, please. So with the encouraging and exciting data from the Phase Ib and Phase IIa study in pMN, we are planning the pivotal studies -- pivotal trial for registration pathway, which is projected to be initiated in 2026. In addition, as we know, BTK is an essential component of B cell receptor signaling pathway. The inhibition of BTK is an attractive approach for the treatment of a wide variety of autoimmune disease that involves dysregulation of B cell function. Therefore, we are going to develop [ M001 ] in other autoimmune renal diseases besides pMN, such as IgAN, FSGS, MCD and so on. So a basket trial will be initiated in early 2026. With the potential of civo for multiple indications across autoimmune renal diseases, we project the peak sale of civo will reach RMB 10 billion globally. Now I'm going to pass to our Chief Scientific Officer, Jennifer.

All right. Thank you, Sandra. Now mRNA as a new class of drug revolutionalized the traditional drug discovery paradigm, shifting from screening-based approach to information design approach. By simply altering the nucleic acid sequence, different drugs can be produced very efficiently. mRNA drug has its own unique advantages. First of all, its modular design can greatly accelerate drug discovery speed. Second, the manufacturing is basically a universal platform based. Therefore, it can shorten production cycle and lower overall cost. Last but not least, it has the potential to be applicable across multiple therapeutic areas. Next one. Now at Everest, we have a fully integrated and clinically validated AI-enabled mRNA technology platform and have built end-to-end capabilities across the whole value chain of this platform from upstream protein or antigen design to our proprietary LNP delivery system and our in-house CMP process development and self-owned manufacturing facility can ensure high-quality production of DS/DP and different grade -- different size of the GMP material to support clinical trials as well as future commercialization. Built upon this platform, we've established a pipeline of mRNA products. Our pipeline is centered around 2 type of products. One is utilizing targeted delivery for in vivo mRNA CAR-T. The first program, EVM18 just generated impressive NHP POC data, and we already selected a clinical candidate and move towards clinical POC. Another part of our pipeline is centered around therapeutic cancer vaccine. We have 3 programs in this category. First one is EVM16, which is a personalized cancer vaccine program, which is in IT trial. And the second is a tumor-associated antigen cancer vaccine, EVM14. For this program, we just received U.S. IND approval early this year. And we anticipate that in fourth quarter of this year, we should receive China IND approval. And our immune-modulatory cancer vaccine program, EVM15, just finished preclinical proof of concept. we've selected a clinical candidate and will move towards IND-enabling studies. In the next few minutes or for the next few slides, I will give a brief update of progress made for each of these programs. First one is EVM18, our mRNA in vivo CAR-T. The left side graph sort of explains how mRNA in vivo CAR-T works. Basically, we have CAR encoding mRNA encapsulated in LNP. On the surface of this LNP, we conjugated a T cell targeting antibody. Once introduced in patient or in vivo, this TLNP will bind to T cells and CAR protein can be produced in T cell and expressed on the surface of T cells, therefore, transform a regular T into a CAR-T that can kill its target cells. We think in vivo CAR-T can address many of the challenges encountered with the autologous CAR-T. First of all, it's off-the-shelf so easily scalable and the production cost is very low. For the patient, there is no lymphodepletion needed, therefore, reduce the risk of infection. And the PK/PD is predictable and tunable because it's cell-free production, the quality can be better controlled. We all know there is a new modality called T-cell engager, TCE that's been very actively developed in both oncology as well as autoimmune disease. We believe that CAR-T versus TCE has advantage of CAR-T can really elicit very deep depletion of pathogenic B cells in tissue, therefore, allow the patient to achieve immune reset and reduce future recurrence risk. Next slide. Now currently, there are 2 technology platforms to enable in vivo CAR-T. One platform is viral vector based, represented by EsoBiotec and Interius. Their products just entered Phase I clinical trial. And very early or preliminary data from EsoBiotec provided clinical proof of concept of this approach, both in terms of efficacy as well as safety. And the other platform is mRNA LNP based. The frontrunner is Capstan. Because mRNA will not integrate into genome, therefore, this platform presumably offers better safety profile and especially suitable for disease like autoimmune indication. Our Everest EVM18 actually utilized a similar platform as Capstan. And we just finished a preclinical proof-of-concept study. Our nonhuman primate data actually is very comparable to what published by Capstan, both in terms of level of B-cell depletion as well as overall safety. Because of the great potential for this technology, we've seen BD activities being very active. Only this year, we've seen 3 high-profile BD. AstraZeneca announced acquisition of - EsoBiotec for $2.1 billion. And just last week, a Gilead subsidiary, Kite also announced acquisition of Interius. And in June this year, AbbVie announced the acquisition of Capstan. So these high-profile BD deals actually reflect the great potential for this approach. Next slide. For our EVM18 program, we would like to accelerate to provide clinical proof-of-concept data. So we are taking parallel approach while accelerating to clinical proof of concept by launching multiple IT studies, we are also conducting IND-enabling studies in preparation for IND submission. Next one. Now I'm going to switch gears to talk about programs in cancer vaccine pipeline. The first one is our personalized cancer vaccine program, EVM16, which has completed dose escalation for the low and mid-dose and we are now in the high-dose cohort. Overall, we see a favorable safety profile, and we also see robust immunogenicity even at very low exposure. Next one. Here is a case report for a patient with metastatic Stage IV non-small cell lung cancer, who have failed 3 lines of therapy when entered into our study. As you can see from the right side graph, even with vaccine monotherapy, we start to see good immunogenicity and the immunogenicity continued to increase with repeated dosing after cycle 5, we see very high immunogenicity in this patient. These data actually validated our self-developed neoantigen prediction algorithm, EVER-NEO-1. Next slide. The second program is a tumor-associated antigen vaccine, EVM14. There are certain advantages of the TAA cancer vaccine. First of all, it has good tumor specificity. Second, it has more T cell epitope. Therefore, we don't need to select patients based on HLA. This can really expand its reach. Compared to personalized cancer vaccine, it is off the shelf. Therefore, it's well suited for advanced disease and manufacturing cost is also quite low compared to [ PPD ]. For this program, we've obtained U.S. IND approval in March, and we anticipate China R&D approval in fourth quarter of this year. Next slide. Now our Phase I clinical design for this EVM14 is an intra-cohort staggered dose escalation design. This will enable us to quickly identify RP2D for both the mono as well as combo cohorts. Patients that will enter into this Phase I trial would be those with squamous non-small cell lung cancer, head and neck squamous cell carcinoma and esophageal squamous cell carcinoma. This is based on the high expression of at least 1 of the 5 TAAs encoded in this vaccine. And the primary endpoint for the study is safety and tolerability, but we will also explore other endpoints, including ORR, PFS and immunogenicity. Next one. As I said, we obtained U.S. IND approval and currently, U.S. site initiation is being launched, and we are on track to enroll first patients next 2 months. Towards this goal, our Jiashan manufacturing facility has successfully generated GMP batch and has been shipped to all the U.S. clinical sites. We are glad that many of the top cancer hospitals, including MD Anderson Cancer Center, Memorial Sloan Kettering Cancer Center, as well as Shanghai Chest Hospitals are all participating in this trial. Next one. We also have a highly innovative immune-modulatory cancer vaccine program in our pipeline, EVM15, targeting both PD-L1 and IDO. This vaccine actually has a dual mechanism of action. So it can kill 2 birds with one stone. I want to explain a little bit. If you focus on the left side of the figure, this vaccine can elicit direct tumor cell killing to kill those tumors that express PD-L1. At the same time, this vaccine can also change suppressive tumor microenvironment by revitalization of M1 macrophage as well as reducing suppressive Treg population in the microenvironment. So this dual mechanism of action gives advantages to this vaccine. Like I said, it can directly kill tumor cells, but at the same time, can reverse or change the suppressive TME into a more immune permissive TME. It will have strong synergistic effect with checkpoint inhibitors such as PD-1. Early this year, IO Biotech, who has an immune -modulatory vaccine targeting both PD-L1 and IDO just announced their Phase III clinical trial results. In this trial, they compared the vaccine plus KEYTRUDA versus KEYTRUDA mono in first line of metastatic melanoma patients. If you look at the median PFS in this trial, we can see the combination group achieved great benefit compared to KEYTRUDA mono group, especially for those patients with PD-L1 negative. If you focus on the bottom sort of figure, PD-L1 negative subgroup, the combo achieved a median PFS of 16.6 months versus KEYTRUDA mono is only 3.0 months PFS. Next one. IO Biotech vaccine utilized the traditional peptide technology, and we actually use mRNA LNP technology for the immune-modulatory vaccine. Preclinically, we can see that our vaccine can really break self-tolerance, elicit very strong immunogenicity in transgenic mouse. And it can also give very impressive antitumor efficacy. If you focus on the middle panel, 2 graphs, both prophylactic as well as therapeutic dosing can lead to significant antitumor activity. And the bottom graph is actually a survival curve. As expected, mice received vaccine actually have prolonged survival compared to [ PBS ] group. Now preclinically, we also provided evidence or data to support this dual mechanism of action for this vaccine. As shown on the right side, we can see that the group that received EVM14, there is increase of CD8 to Treg ratio as well as M1 to M2 macrophage ratio. Now both Treg and M2 macrophage contribute to the suppressive tumor microenvironment. Therefore, by lowering these 2 populations, we can turn the TME into a more immune permissive condition. This program just achieved preclinical POC and will move ahead to IND-enabling studies next year. With that, I'll hand over to Rogers to give summary.

Okay. Thank you. We recently announced a strategic equity investment of USD 30.9 million in NASDAQ listed I-Mab shares, increasing Everest's ownership to 16.1%. The 2 companies have complementary oncology platforms with I-Mab's differentiated 4-1BB platform and bispecific antibody pipeline, pairing well with Everest's existing mRNA cancer vaccine and in vivo CAR-T platform. Through collaboration, we have the potential to create future synergies in both global clinical development and commercial access in Asian markets. Additionally, we have impressed by givastomig data recently presented at the 2025 ESMO GI Conference, which demonstrated an ORR of 83% in combination with immunotherapies in a Phase Ib trial of first-line gastric cancers, and we look forward to the next key data readout in first quarter of 2026. As of August 28th, the latest closing price of I-Mab was USD 4.25, representing an increase of approximately 118% growth compared to the placement price of USD 1.95. Next slide. As we look ahead, our growth will be powered by 2 complementary engines, commercialization and in-house discovery. On the commercial side, we are entering an exciting phase with multiple near-term catalysts. NEFECON continues to expand -- continue to expand, supported by upcoming updates of global and China IgAN treatment guidelines, and we are preparing commercial launches across China, Taiwan and South Korea. VESIPITY is also moving rapidly towards market with NDA approvals expected across several regions, including Mainland China, Taiwan and South Korea. Local manufacturing projects in Jiashan is on track to complete trial run to support our NRDL negotiation plans in 2026. Meanwhile, XERAVA will advance its own localization projects, while initiating NRDL negotiations next year. At the same time, our in-house discovery platforms are beginning to deliver meaningful clinical and preclinical milestones. EVER001 will soon report important 1-year follow-up data, while our in vivo CAR-T platform is on track to launch clinical trial. For our mRNA cancer vaccine pipeline, EVM14 is advancing into U.S. and China clinical trials with initial readouts as early as the first half of next year and immune-modulatory program aiming to finish IND-enabling studies next year. Taken together, this dual engine strategy of commercial execution and discovery innovation positions us to both expand near-term revenues and unlock transformative long-term growth. Next. Now I would like to lay out our long-term vision of the company to become a leading global biopharma by 2030. The first is our commercial portfolio of blockbuster drugs, NEFECON and VELSIPITY. We believe that each of these products could grow to over RMB 5 billion in sales at peak. These are 2 key commercial pillars in the near term. They are also supported by the high potential portfolio consisting of XERAVA in our anti-infective segment, which we believe can contribute RMB 1.5 billion in peak sales and is nearly on the market. These commercial segments will also include [indiscernible] mechanism of action, which similarly has RMB 1.5 billion potential. We also believe we can derive significant value from civo, which recently reported strong results in pMN and can be studied across other autoimmune and renal conditions. Civo previously called as EVER001 is truly a pipeline in the product, and we believe it has the potential to deliver RMB 10 billion in peak sales globally across its different indications. We are also planning to leverage our R&D organization to in-licensing other development stage assets, which we believe could contribute another RMB 2 billion in sales over time. Finally, you have heard us speak enthusiastically about our 2 internally developed oncology platforms, which continue to grow and advance. Here, we are ongoing programs in in vivo CAR-T as well as mono mRNA cancer vaccine, which are either in IND or advancing into the clinic in the coming years. These are high-value programs with global rights that we could also partner to boost the overall growth of the company as we execute on our vision to become a leading global biopharma company. Thank you. Now let's start our Q&A session.

[Operator Instructions] The first question comes from Goldman Sachs, Linhai Zhao.

I'm Linhai from Goldman. Congrats on the very exciting results. I have 3 questions. One is for etrasimod and the third -- the second is for the EVER-001 and third, if given time permitting, I would like to know more about the messenger RNA. So for the first question, I noticed that we raised the peak sales for etrasimod to RMB 5 billion. I just want to understand a bit more about what gave us the confidence for the raise and what are the key assumptions underlying the current peak sales estimate? And given the product is expected to get approval in early '26, what have been the commercial preparations -- what's the overall commercial strategy for the assets, for example, like what patients would be our priority? And any thoughts on how do we increase the penetration in the longer term? That's the first question. I'll follow up later.

I take the first question. Thank you for your question. I think the potential of etrasimod is higher than we previously stated. There are several reasons. One is that -- the data is pretty strong. As I just mentioned, our Asian study Phase III data is already accepted by Lancet. You will see the data, especially on the mucosal healing rate as I presented in our slides, nearly to 62% in endoscopic healing and 52% of deep mucosal healing. It's very high numbers. And we compare -- if we compare with other currently widely used biologics or small molecules, I think we are at, I would say, potentially best in the disease treatment. Of course, as I mentioned before, this is not a head-to-head comparison, but we use -- if you're looking into the Phase III data, we use the most stringent criteria to evaluate the clinical outcome after 52 weeks treatment. This is number one. I think this market is previously is underdeveloped because the available choice is not as, as good as patients expecting in terms of efficacy, in terms of safety profile, JAK inhibitors have black box [indiscernible]. Biologics have, I would say, not inconvenient is infusion and also, they have kind of secondary value once you take a drug at second year and other considerations. So this market is underdeveloped. If you're only looking at how many patients treated and how many patients actually is diagnosed. So currently, nearly 0.5 million patients be treated. But if you're looking at the compliance rate, it's very low. So the conclusion is this market is underdeveloped. If you're taking this nearly 0.5 million patients being treated -- and times with their annual treatment cost is nearly, let's say, RMB 400,000 to RMB 50,000 per year as reimbursed, then you can clearly calculate the market potential. The market size is about RMB 15 billion to -- RMB 40 billion to RMB 50 billion. So if we -- let's say, if we take -- as the market is also growing year by year, right, in 5 years ago, go to 1 million patients, then you can clearly calculate -- if we only take about, let's say, 30% or 20% of those markets, then you can clearly figure out the peak sales can be RMB 5 billion. So I think that's the major reason. To the second part of your question, what's the preparation we are prepared. Actually, the most important thing is to get prepared for the market, prepare the market, the brand and our own sales team buildup starting from this year. There are some milestones. Number one is that most importantly, we are planning to get -- we're entering into NRDL negotiation next year. Before that, currently, we are building our field force team for next year. We are planning to hire about 120 to 150 sales reps on the ground with strong medical and marketing support, mostly working with KOLs on the guideline promotion. As you know, that etrasimod is strongly recommended by global guidelines. So we have a lot of things to do in China to convince the KOLs and as well as our physicians to support our positioning etrasimod as the first-line favorable choice over others, especially because of the deep mucosal healing, grades very high. And on the other side, medical market access is also important. Next year, we will have I would say, [indiscernible] programs to gain the experience patients for both patients and physicians to prepare the market. So basically, that's the preparation for next year. Of course, on the production side, we are now doing the tech transfer from Pfizer, build the production capacity in our Jiashan site, make sure once we get reimbursement in 2027, then we can have enough supply to our peak sales. So that's -- those are the things we are doing now for the preparation for addressable peak sales.

Very comprehensive and helpful answers. And my second question regarding the EVER001. I found that we have a more detailed clinical development plan for 2026 with a Phase II basket trial for 1Q, and also, the potential pivotal trial also planned in '26 in pMN. Just want to get your thoughts on how we are planning for the next steps, particularly given that I understand that we are still undergoing potential BD negotiations during the same time and how prepared are we to launch this 2026 trials and how convicted we are in terms of finding a partner to do the pivotal trial or versus we're doing it independently in-house.

[indiscernible] then Ian can add on.

Yes, sure. Thank you for the question. It's wonderful. As we just presented, yes, we indeed actually -- let me talk about the basket trial first. We are indeed in the design stage. And actually, we currently have IND with China CDE. So we may just do in current amendment of the IND of either the protocol amendment just add the basket trial to our current Phase Ib, Phase IIa studies and then could be -- should be smooth like [ other pathway ]. The study design is almost finalization. So after interaction with health authorities, we expect that the trial can be initiated in early next year. That's the basket trial. And then for the pivotal study, we're also in the finalization of the development plan stage. Our first step probably is we plan to do a global pivotal study. So our first step is just a regulatory interaction. First go to the U.S.A. with FDA. So we are planning to have the health authority interaction towards end of this year. Then we follow up with other health authorities like EMA or China CDE that's the plan. And then we -- so that's and simultaneously, probably we are in the CMC optimization stage, we are sort of correlated with our time line. So once the health authority interaction is done and then we can initiate the Phase III study. In terms of how to do the studies, I -- Ian probably can add more either partnership or in-house.