InnoCare Pharma Limited (9969) Earnings Call Transcript & Summary

Good morning, and good evening, global investors. Thank you for joining InnoCare Pharma 2024 Annual Results Earnings Call. This is the Ziyi Chen, China health care analyst at Goldman Sachs. Before we kick off the session, I would like to read out verbal disclaimer. This call is strictly for clients at Goldman Sachs and InnoCare Pharma only. And this conversation is not intended for the media and is off the record. Participants will be removed from the call if they cannot be properly identified. And this call is not for the purpose of sharing or receiving nonpublic information. Attendees are public and market participants who may not receive and should not request nonpublic or otherwise confidential information about issuers or securities or about the markets for securities. As usual, joining today's call, including Chair lady, Dr. Jasmine Cui; our CFO, Mr. Xin Fu; IRD, Ms. Bonnie Yuang; also Assistant Director of IR, Charles Zhou. Management is going to have a prepared remarks first. Then after that, we are going to have a Q&A session. If you have any questions, feel free to raise your hand or you can type a question into the Q&A box. Management team is going to be happy to answer your questions. Now without further ado, I'm going to turn the call to Jasmine to get started.

Sure. Thank you so much, Ziyi. And good morning, good evening, everyone. Thank you for attending InnoCare Pharma 2024 Results Earnings Call. InnoCare Pharma is a commercial-stage biotech company devoted to drug innovation, oncology and autoimmune diseases, two therapeutic areas with a great deal of unmet medical needs. So in 2024, we have made significant advancement in commercialization and also in a progression of our portfolio pipeline and the two engines that drives the rapid growth and the development of the company. In commercialization, orelabrutinib achieved over RMB 10 billion -- RMB 1 billion sales with 49.1% growth compared to that of 2023. Due to the increased revenue, the loss of the year decreased by 30%. Also, we have a very solid cash position of RMB 7.8 billion that enables the flexibility of the company development. In January of this year, we also completed IBD for ICP-B02 is CD3/CD20 antibody codeveloped with KeyMed. We partnered with Prolium. So in our pipeline progress, we also have a great deal of achievement. Orelabrutinib, first-line CLL, SLL, NDA was submitted in 2024 and other indications several NDAs outside of China also submitted for orelabrutinib. Our second drug, tafasitamab, the BLA in Mainland China for the treatment of r/r DLBCL also accepted last year under priority review, we anticipate approval this year. Our third drug, zurletrectinib, it's ICP-723, the registrational study was done last year and the NDA will be submitted in next Monday. Our first drug, Mesutoclax, ICP-248 in combo study with orelabrutinib entered in Phase III study for the first-line CLL, SLL, a fixed duration of treatment and the first patient achieved today actually. Additionally, orelabrutinib in autoimmune diseases, we also made quite a bit of progress. Globally, we get FDA's approval for the Phase III study of PPMS and SPMS, we are targeting first patient year, both by this year. In China, our registrational study for ITP, we are finishing patient enrollment this year and also the whole clinical side this year and positioning for NDA submission in next year, the first half. SLE, another autoimmune disease indication, we finished patient enrollment last year for the IIb study, and we anticipate data readout in the -- later this year. Our two TYK2 inhibitors, the first one, ICP-332, tofacitinib, and it's mainly TYK2 inhibitor with some JAK1 component and the Phase III study for atopic dermatitis in China was initiated late last year. And so far, we have enrolled more than 110 patients. We are finishing the patient enrollment this year. And the second TYK2 inhibitor, ICP-488 is allosteric towards TYK2 inhibitor. The Phase III clinical trials also initiated for psoriasis, and the first patient in also achieved this week. Next, we'll have our CFO, Mr. Xin Fu, to introduce our finance and also business numbers.

Okay. Thank you, Jasmine. Hello, everyone. Thank you for our 2024 earnings call. I'm very pleased to announce that in 2024, we delivered very strong financial performance, which underscore the successful execution of our strategy. You can see that in the left part, the drug sales achieved 49.7% growth in 2024, which is mainly driven our core products of orelabrutinib. In this year, orela remarked with RMB 1 billion sales with 49.1% growth compared with last year. This performance significantly exceeding our year beginning guidance, and this is mainly driven by rapid growth from new indication launch for MZL and effective the sales execution. In addition to the strong top line growth, we also have successfully narrowed down the net loss for the year by 29.9%, reducing from the RMB 646 million in 2023 to RMB 453 million in 2024. We achieved a significant improvement through operational leverage and the cost discipline even as we invest in our commercial capabilities and initiating multiple Phase III studies. Gross margin ratio, we continue to grow. You can see that our gross margin ratio increased from 82.6% in 2023 to 86.3% in 2024. We already consistently in the past 3 years, increased our gross -- increasing our gross margin, which better reflect the revenue quickly grow as well as manufacturing efficiency with the lower unit cost of orelabrutinib. R&D cost, we increased by 8.4% to RMB 814 million in 2024 as we step up investments in our pipeline. We allocated more resources to accelerate or prioritize clinical trials such as different Phase III study in autoimmune diseases and oncology. We also advanced technology platform notably establishing a cutting-edge PDC platform, which will be introduced by Jasmine later on. These investments are critical growth drivers that will unlock the great revenue potential by expanding our portfolio into new indications and therapeutic areas. Cash and related accounts is around RMB 7.8 billion, equivalent to USD 1.1 billion at the end of 2024. The annual net cash consumption is around RMB 524 million, equivalent to around USD 42 million, and compared with the cash balance, the robust cash position provides us strategic flexibility to speed up ongoing R&D, scale up commercialization and pursuing new opportunities. So in terms of commercialization, our commercial execution in 2024 is very strong, resulting in recorded 1 billion sales of orelabrutinib, which is also an important milestone for the company, and it also validates the growing demand of our innovative cancer therapies. The launch of MZL indication was a significant growth driver as orelabrutinib approved as the first and only BTK inhibitor for MZL in China, giving us the first mover advantage and exclusivity in meeting this high unmet needs in population. We also continue to see the solid growth in existing CLL and MCL indications as we broadened our product reach. We also made an important enhancement to our commercial structure and the strategy in 2024. Our new commercial leadership team implemented more data-driven and executable marketing strategy enable us to penetrate market more effectively and efficiently, which also reflects the rapid growth -- revenue growth as well as our spending ratio reduced from 55% in 2023 to 42% in 2024. So for the BD actually is very important and the forefront of our strategic priorities as we accelerate our path forward globalization. With a differentiated advantage, clinical stage pipeline as well as promising the early-stage candidates, we are uniquely positioned to address critical unmet medical needs in autoimmune diseases and oncology to serve the patient globally and partners. So at the beginning of the year in 2025, we launched a strategic collaboration with Prolium, which is founded by RTW to develop the -- development and also commercialization for CD20×CD3 antibody to making the global reach. Under the term, InnoCare and KeyMed will equally to enjoy the total payment up to USD 520 million, including different type of upfront near-term payments as well as different type of the milestones. We will also enjoy a minority shareholder of the Prolium as well as tiered the royalties in the future net sales. So thank you for this part for listening. And also, I will hand over back to Jasmine for the pipeline update.

Right. This is our innovative pipeline, including 50 innovative drugs in pre-IND, Phase I/II, Phase III and registration and approved stage. Actually, we are accelerating our portfolio towards the right, towards the value realization. In the next 3 years, we anticipated three to four large assets, actually, asset with a large indications approval in China in addition to orelabrutinib. Here, for hemato-oncology franchise, and we have a few -- listed here a few marketing and Phase III clinical product. As mentioned, orelabrutinib, we have approved -- got approval of r/r CLL, SLL in China, r/r MCL in China and Singapore and r/r MZL in China, we also submitted Singapore and also r/r MCL, we submitted to Australia and a few other countries. And the first-line treatment for CLL, SLL, just mentioned and we submitted NDA package and anticipated approval this year. And in addition, we're also conducting the first-line study, as global Phase III study for MCL and also MZL confirmatory study. Our second drug in the hemato-oncology space, CD19 antibody, tafasitamab and for r/r DLBCL, we get approval already in Hong Kong, Macau, Taiwan and in Mainland China, I just mentioned, we submitted the BLA last year and anticipate approval very soon anytime now. And also the confirmatory Phase III study is ongoing. So our third drug, we anticipate to have a really big impact to our commercial, Mesutoclax, BCL-2 inhibitor, ICP-248 and the first-line treatment for CLL, SLL. Phase III in combo with orelabrutinib for the fixed dose of a fixed duration therapy already started, first patient already happened this month. And also, we are applying for registrational trial for r/r MCL. Those are the patients failed BTK inhibitor treatment, and we plan a registrational trial in China as well as in global. And also, we are pursuing first-line AML clinical trial currently ongoing in China, Australia and a few countries. And this is a treatment hopefully will become registrational trial in the global of pursuing first-line registration. In addition to the three late-stage assets, we also have a few other assets in the Phase I, Phase II clinical space. Tafasitamab, as mentioned, and it has excellent efficacy. This is a bridge study result in China of 52 patients and showing good ORR, CR, DCR and et cetera. And the therapy tafasitamab plus that actually has very good efficacy in addition to expiring in duration of treatment, DOR and also the OS 33.5 months and it outperformed other MOAs and asset for the treatment of DLBCL. Our another asset, big asset, ICP-248, is a novel BCL-2 inhibitor with a lot of clinical advantage. As you all know, the only launched BCL-2 inhibitor, venetoclax and has a soft metabolic spot and therefore, generate major metabolite, M27. Actually, this is a lot M27 generated in the body within 24-hours observed 80% in the human body. M27, although it has no pharmacological activity, it's an inactive metabolite, but it has hematologic toxicity. And also has a pretty significant CYP inhibition, CYP2C8 and 2C9, as well as transporters and present a significant risk for the drug-drug interaction. Advantage of Mesutoclax, our BCL-2 inhibitor, eliminates the major metabolites, we don't have any major metabolites. And we have significant drug exposure, higher exposure in the body. And therefore, we have a very improved efficacy and reduced hematologic toxicity and significantly reduced the drug-drug interaction potential. Here shows our clinical results of the Phase II study for the first-line CLL, SLL in combo with orelabrutinib. This has 42 patients and showing a 100% ORR and also 53.4% CR and 46.2% MRD. Although the treatment was only about 12 weeks, very early stage, and we anticipated this will -- the efficacy will increase with treatment time. Also, we did not observe any TLS toxicity in the study. Based on this, comparing with ibrutinib plasma, a color plasma, this is showing a lot of advantage, although this study is still early stage or other studies is the efficacy result. So based on this result, and we get CDEs endorsement for initiation of Phase III study for the first-line treatment of combo therapy. Currently, we already have the first patient in. This trial is anticipated to finish patient enrollment this year. The table at the left bottom showing the Phase II results of a BCL-2 inhibitor 248 in the patient failed BTK inhibitor treatment. So in our study, 17 patients, we observed 70.5% ORR and 23.5% CR rate. Although, again, this is a short treatment length and where the study is ongoing, and we will read out more results later of the year. And this is better than venetoclax and in the same kind of a study. And in the same kind of study, and also better the pirtobrutinib, which is a reversible BTK inhibitor for the treatment of BTK failed MZL patient. In addition to this, based on this study, we are applying for registrational trials for BTK treated -- failed are MZL patients in China and global. And also just mentioned, we are conducting those escalation and those expansion study for the first-line AML indication. And hopefully, by end of the year, we will define the dose and efficacy of the study and deciding the Phase III clinical protocol. Next is our well positioned -- well-positioned autoimmune disease portfolio. In this space, we have multiple assets with large indications progressed to the Phase III clinical trials, and we have target -- we are targeting B-cell pathway as well as T-cell pathway. B-cell pathway, orelabrutinib, in addition to it is ability for the liquid cancer, and it has also great potential for the autoimmune disease. And shown here, we started the Phase III trials globally for PPMS, SPMS. In China, we are finishing the ITP Phase III registrational study and the positioning for NDA application in the coming year and SLE and also, we are finishing Phase IIb study and expecting the readout by later of this year. For T cell therapy, we have two TYK2 inhibitors as just mentioned, 332, we are pursuing three indications currently. Atopic dermatitis already started Phase III and already over 110 patients enrolled. We plan to finish patient enrollment this year and finish the study next year and the positioning for the NDA filing. And the second indication, vitiligo, we have initiated a Phase II/III study. And this year, we will finish the patient enrollment for the Phase II part and hope to get a result next -- the first half of next year. And also, we are -- we are applying global Phase II study for TA, new indication as a global study. And for our second TYK2 inhibitor, 488, our Phase III study for cirrhosis has initiated and the first patient in will start this month as well. So for orelabrutinib, as mentioned, it has enormous potential for treating autoimmune diseases. For MS patients globally, there are over 2.5 million patients, about half that and progress to SPMS, also PPMS about 15% and happening at the beginning. Orelabrutinib with high target selectivity, favorable PK and ability to cross blood-brain barrier. And we believe orelabrutinib offers a promising therapeutic option for treating PMS, and it has best-in-class potential. ITD globally each year, over 200,000 patients globally, and it is also very needed therapy. So we are anticipating again NDA filing in the coming year. This will be our first autoimmune disease indication get launched. SLE, so, with orelabrutinib, it is the globally first and only BTK inhibitor demonstrated efficacy in Phase II studies. Now the Phase IIb study, including about 200 patients and for the week treatment and we are finishing a study this year and get the data readout by fourth quarter this year. And SLE is a big disease, globally over 8 million patients per year. Here shows the Phase II results of our two differentiated TYK2 inhibitors that we believe has great potential in multiple indications. On the left side, showing the atopic dermatitis result, Phase II result we discussed before for tofacitinib, which is our 332, the TYK2 inhibitor with a little bit of JAK1 component. And comparing to other mechanisms, including selective JAK1 and pan-JAK1, JAK2, IL-4 and IL-13 antibodies, our component 332 demonstrated a superior, very good efficacy compared to these therapies and quick responsiveness in reducing itching. On the right-hand side, and it's our Phase II result 488 in psoriasis. Comparing to placebo control, both are 6-milligram and 9-milligram QD demonstrated significant increase of response of PASI 75 with 77.3% and 78.6% in the -- after the 3-month treatment. So for both TYK2 programs, which we already entered into Phase III clinical registrational trial and anticipate approval in the next 3 years. So we all know autoimmune disease has a lot of over 100 indications and over 500 million patients being affected. And also, the oral therapy is a preferred therapy for treatment of autoimmune diseases. We just introduced our 3 late-stage molecule, orelabrutinib, 332, and 488. It already covered 8 to 10 indications, as we've just mentioned, in dermatology, hematology, neurology, rheumatology. And while we are expanding the indications for our later-stage asset, we are also invent and discover new projects, new molecules for the treatment of additional indications in autoimmune disease such as nephrology and hard to treat such as gastroenterology like IBD. And right now, we have IL-17 small molecule modulator. And also, we have a Project 40, which is a cyclic peptide and the Project 42, 43, the small molecule candidates and also Project 44, which is a molecular group. And we will gradually release the Project information to you when they close to IND filing. Next is our solid tumor asset. Our solid tumor strategy as we introduced has a few. First is a precision medicine. We want to be really exact, treat the disease, benefit patients more, such as our zurletrectinib and it's a second-generation TRK inhibitor for TRK gene fusion abnormalities and et cetera. So right now, we finished the registrational trial, just mentioned the NDA will be submitted in the coming Monday. And also the combination of therapy to benefit more patients such as our first-in-class ICP-189 is a SHP2 inhibitor. Right now, we're in combo with furmonertinib, a third generation of EGR -- EGFR receptor for the treatment of non-small lung cancers. And we are very glad and happy to disclose our ADC platform, and this platform is devoted to treat target hard-to-treat cancers. Our first molecule from the platform is ICP-B794, and it is anti-B7-H3 ADC. In there, the B7-H3 antibody was invented in-house. And importantly, our innovative linker payload was invented and in-house with our in-house technology and the ADC molecule B794 demonstrated superior efficacy and safety window in animal models, we will show you later. And the IND filing is in process and IND submission will be in coming months in April. So this is our ADC design and advantage of our ADC platform. In there, I just mentioned on the left-hand side, the antibody is novel, invented in-house. And also in addition to the antibody, we have three other components. And one is the novel connector. In there, it is irreversible and also, it prevents thiol exchange and to stabilize the connection to the antibody. And in the middle, the hydrophilic linker, that allows high DAR, it's a value. And generally, you can get close to 8 of good value and also improves the stability of the linker. And on the right-hand side, we think is very important. We have effective payload in there. The payload is very potent, and it has very strong bystander effect. It means not at all one molecule, not at all one cell or one tumor cell, but to a lot of tumor cells, called bystander effect. And also, it has tumor-specific release. And it only is designed to release only in the tumor environment, not in the normal tissue and cell. And also lastly, also importantly, and once the payload is released, it has rapid clearance that can offer you a really good safety profile. So the safety window is pretty big. So over 200 of safety window for ADC platform. So here is -- two pieces of the data demonstrating the robust anti-tumor activity in animal models versus other platforms. On the left-hand side is CDX model. In there, we compared our molecule against competitors' molecule in the -- look at the antitumor activity. And so what will be is we use the same antibody and put the different connector linker payloads and from different competitors, different companies. And we see the B794 demonstrated the best excellent anti-tumor activity. On the right-hand side, showing large tumors, no matter the tumor initially is 700, 800 milliliters or even 1,000 milliliters, we also test 3,000 millimeters, not shown here. And B794 readily killed the tumors very quickly and completely and other platforms, as shown there, actually, some of them delays the tumor growth, but nevertheless, not kill the tumors completely. So we are really happy. And again, I mentioned, it has a very good safety window and the molecule will be -- the IND will be submitted in the middle of April, we hope to get into clinic in July, August timeframe and get a POC for the whole platform. We have a whole list of novel antibodies wait in the CMC stage for the proof-of-concept of the linker in the clinic, hopefully by end of the year. And the last molecule, Zurletrectinib, ICP-723, just mentioned the second generation of TRK inhibitor for the treatment of tumors with TRK gene abnormalities. So the NDA package will be submitted very soon. The drug demonstrated excellent efficacy and safety. The ORR is 85.5% and TFS above 3 years. And we are submitting the registrational package for adult and adolescence. And in the meanwhile, we are also conducting a registrational trial for pediatric patients and we targeted NDA submission later this year as well. Actually, TRK gene abnormalities happens in a lot of children. So we want to provide excellent medicine for pediatric treatment. And also, this inhibitor works efficacious in the first-generation TRK resistant patients. Finally is our key milestones in the coming 12 months. And first of all, commercial, as Fu Xin mentioned, this year, we will have regular growth and at least 30% of growth rate, and we hope we will get even better than that like last year. And also BD is our top priority this year, we strive to get more BD deals done and in hematology space, and we -- just to say this year, we will have two big approval, the first-line CLL, SLL in China. And also, of course, NDA approval in Singapore and a few other submissions in the overseas countries. And also the Phase III trials in combo with BCL-2 inhibitor 248 for the first-line CLL, SLL, we targeted to finish the patient enrollment this year. Tafasitamab is our second approved drug -- will be a second approved drug in Mainland China, and we anticipate the approval for r/r DLBCL any time. And for 248, BCL-2 inhibitor, just mentioned, the first-line combo therapy is a top priority of our study. And also, we are initiating a registration for BTK failed patients and treated with BCL-2 inhibitor, that's the purpose we develop this drug. And we are also completing AML dose escalation, hopefully for the expansion study to give us more confident to start the registrational trial, hopefully, a global trial. So we also have a lot of data readouts. Just mentioned our Phase II data in first line and Phase II data in r/r MCL. So those will be long treatment, and we hope to see the efficacy gradually increase with the longer treatment time. So autoimmune disease, and therefore, our priority this year finished ITP study and the positioning NDA submission next year and have the first patient in for PPMS, SPMS as well as we are eager to see the Phase IIb result for SLE. This is the first in class indication globally. And we want to see orelabrutinib will provide useful and small molecule oral therapy for the treatment of SLE, which is quite severe disease. And for our first TYK2 inhibitor, 332 just mentioned, we are completing the patient enrollment this year for atopic dermatitis. Also, we hope to complete patient enrollment for Phase II study vitiligo and also initiate the clinical study. This is actually the Phase II study, a global study for PA and as shown here. And for ICP-488, we also hope to finish patient enrollment for the Phase III registrational trial in cirrhosis. And 723, we just mentioned submitting NDA for adults and adolescence patients and also for pediatric patients. And for B794 ADC platform, we really like to get PoC, and this is a PoC not just for this molecule, it's for whole of our platform with the linker payload connector and et cetera. And 189, we are waiting for the data readout for the combo study with the EGFR inhibitor. So thank you for listening, and I will stop here and welcome your questions.

Thank you, Jasmine. I think this is very comprehensive, and there are a lot of catalysts going forward over the next 12 months. So now we're going to get into the question-and-answer sessions. Just to remind investors and analysts who are participating in the call, if you have any questions, feel free to raise your hand. We can connect you into the call to directly ask your questions or you can also type of questions into the Q&A box. We're happy to take your questions. I think, well, I'm going to ask a few questions first. I think, the first one is really on the ADC platform. This is the first time that you announced ADC platform, and talk about the first candidate, B7-H3 ADC. So tell us a little bit more about that, why you decided to get into the space, while a lot of the assets you have been working on is actually small molecules. And for an ADC platform, how InnoCare is going to be very differentiated compared to some other platforms we have seen global wide, particularly for the specific asset, we haven't seen a lot of B7-H3 ADCs in the market. Some of them are moving pretty fast into the pivotal studies in China and also globally. So how should we think about the positioning of your assets? What's going to be the key differential point here? And based on all the data you have seen in the preclinical setting, what kind of the clinical data we should be expecting over the next 12 months to 24 months?

Yes. Great. Thank you, Ziyi. And you are asking those questions. Actually, those are questions we have been discussing and thinking in the last couple of years. And so why we get into ADC space, right? So ADC has been really hard this couple of years in China. So for us, first of all, our mission is to conquer the cancers and autoimmune diseases. For cancers, actually, we have making a lot of progress in hematological cancer, like where our combination of therapy of BCL-2 inhibitor with our BTK inhibitor already reached fixed duration of treatment, basically after year you cure the cancer. So that's great. And also like orelabrutinib has really long PFS and a good effect in a number of indications in the lymphoma. And so with that, we are pretty happy. We think the liquid cancer really has great progress, whether how we can -- also for the solid cancer, especially hard to treat cancer, gastric cancer and digestive cancer, even reproductive cancer, et cetera, whether we can get a similar effect versus the liquid cancer. And what kind of a molecule, we can get that kind of effectiveness and also the good PFS and of course, OS as well. So, we think the ADC platform has a lot of strength, and it bringing the payload so-called toxic molecule into the cancer cells, it can have -- with the right antibody, you can bystander the effect and you can engineer into tumor-specific release that so improved so much compared to chemotherapy. And we know that payload should work in the tumors. And also, InnoCare has a lot of strength in small molecule. And we have been innovated a lot of good molecules in small molecule. We think in the ADC, actually, in addition to the antibody and the other part of the small molecule, the connector, the linker and the payload. And we should do better than other people since we are so -- have so much expertise in the small molecule. Indeed, we did a lot of optimization work in the connector, how we make it more stable. And also in the linker, actually, hydrophilic. Hydrophobic has been the problem for the linker and we really made it hydrophilic enable to have high DAR value and improve stability. And especially in the payload space, payload, what we can do to make it better. Of course, you need to be potent and you need to be safe. That's where we optimize the policy and also the fast clearance for the payload. And also, you had better to only cure tumor cells, not the normal cells. And therefore, we're engineering the component for tumor-specific release. And also it's effective in addition to potent, we have bystander effect. So basically, our platform, we think it has all the -- we can think advantaged component of the ADC. And actually, we also in the preclinical space, we compared our connector linker payload then with all other well-known competitors, competitors 1 to 3. So you use the same antibody, whether we can completely cure the cancer cells, and indeed, we have run many, many models, but shown here only two examples. And it shows -- really, indeed, it is the case. We see our ADCs really potent and also in the large tumor model, we think, it shows even better more differentiated efficacy and also with a good safety that we mentioned, that's important for the safety. Because of the property we just mentioned and it's safety really, really well. And so that's where we have a lot of confidence. You are absolutely right. B7-H3 is not a novel target, right? So we want to further compare our platform, which is the expiry pillar, the linker payload space. If we use a novel antibody, we do have normal antibodies ready. But if we use normal antibody, how do we know if the efficacy comes from the antibody or its linker? Everything is new, new. You don't know which it is, how to compare. So we use B7-H3 and primarily to evaluate the platform, our payload and linker, whether it's superior than others. So this is PoC, we progress in that really quickly. And we hope to get a PoC definitely within year. And hopefully, we're shooting for end of this year and to get clinical data. So as an ADC molecule, people always say, no matter you do preclinical, it's a clinical. We want to see in preclinical. We want to see how it behaves in the clinical, it is efficacy, and it is it is safety. If it is as well as result in the preclinical space, and we will quickly have 5 or 6 molecules ready to put this ADC molecule into it. And also our platform much beyond just this payload and the linker. And we also have other components. This we have tumor killing component and some other platform, we also have hard to potentiate the payload activity, keep the efficacy longer. So ADC sometimes -- the problem is actually a PFS not long enough. We also think a way to engineer a different molecule that can potentiate the PFS effect. And so this is only our first step. We have many others coming and once this PoC is achieved.

Got it. That's clear. And we're definitely looking forward to more data coming from ADC platform. Well, just a follow-up to that. When you talk about the payload, it's innovative. So I'm trying to understand a bit more about, what are those payloads? Are you going to disclose more or when it's going to be the right timing for you to disclose more about the payload? And particularly if we look at the payload, what category we're talking about here, it's tubulin inhibitors, it's top 1 or is any other type of payload we're talking about here?

Yes. I think the payload is -- it is again that, a class within the range you mentioned. And just modified to be -- just to make it to be more important, the effect like how to release it, not just the payload, also the linker next to it and which condition to release it. And I think this combo, a few new components in there. And we really hope this payload can overcome even the resistant mutations in the chemo patient after other treatment of ADC. So we're submitting IND within a month from now. And we should have more detail and to disclose that. Maybe our team, our research team will have a better way to say it than myself.

Got it. And well, my understanding is that you're actually using B7-H3 ADC to validate your linker payload strategy. And also the space still has some room to improve. For sure, I think this is something it's very new to InnoCare. So, we're going to wait for a bit more data. But the other thing we're curious about is the ICP-248 BCL-2. I think hematology still be one of the area of InnoCare strengths. So well, we have seen a lot of data in this space already. In 2024 ASH, there has been a couple of assets presenting their data, including BeiGene also presenting their sonrotoclax data, which have been so very, very good MRD data, right? If you remember, I think at a 48-week treatment, it's actually achieved about 91% of the MRD. Of course, as you just mentioned, the data you have seen is just for 12 weeks. And with longer time, it's going to be deepening. So how should we think about the China strategy and also the overseas strategy and particularly, now I think it's a bit of lagging behind versus some other peers, including BeiGene is one, including Ascentage is one. So how should we think about the positioning?

Great. That's another question. We have been always discussing about the strategy of development of 248. And you are right, we also sort of saw BeiGene's data, although not the details, but MRD has high number. Again, ours is at the beginning, and we hope with the time it will the potency is still improving the efficacy. So our strategy probably is slightly different. So what we are doing for giving orelabrutinib is a base for our lymphoma market. We are doing pretty well in there in China. And so we want to secure our first-line base for CLL, SLL treatment. And in addition to orelabrutinib that we are approaching the first-line this year. And so we think going to the global for the BTK inhibitor orela plus 248. And probably, the timing wise is not our favorite to us. So what we want is, in China, we hope to get -- we be to the first to get the first-line approval, and so as you know, in global and China, the trial design is slightly different, although the combo component, BDK plus BCL-2 part is similar. So we believe in China, we are -- since orelabrutinib globally, especially in U.S., we're a little bit late because the company started 5 years behind. And so we think in China, and we are trying to secure the first-line space, we still believe we have a good opportunity, a good chance to be first approved for the first-line CLL, SLL for our BCL-2 inhibitor. And for the global strategy, and this is something is our high priority try to be the first and also for the global and we are developing it for BTK inhibitor field lymphoma patients, such as MCL and others. So we are doing for sure in China and apply for the global. We think the global opportunity for orela, for 248, will be perhaps in the first-line AML treatment in their Venetoclax is not doing so well with the OS of 12 months, and due to the toxicity and also the drug interaction of patients treatment situation. And based on the limited data, we observed very good efficacy in the AML patient of our BCL-2 inhibitor, and if it progresses as we thought, and it has a good opportunity to compete globally for the first-line of AML. So basically, for first-line CLL, SLL, our major folks is launched China first, may get into other countries, I mean don't have to be in the U.S. now. And for other indications for BTK failed lymphoma and also first-line AML, we are competing for the global setting.

Got it. That's very clear. Now we have the question coming from UBS, Chen Chen.

So my first question is on pan-FGFR. So previously, this asset delivered exciting results in the Phase II trial in China. And I know it's running a Phase II basket trial in the U.S. So what's the progress right now? And have you decided like which indication we are going to target first?

Yes. Thank you, Chen Chen. And with FGFR inhibitor, the pan-FGFR, we indeed progressed in cholangiocarcinoma and in the registrational trial. And primarily actually in China, -- and the data looks pretty good. But later on with the landscape change of cholangiocarcinoma, with the combo therapy with PD1, PD-L1, et cetera, we think the competition, the single drug, and it's very hard to win the competition. It is not our top priority. Additionally, the first-line treatment now there are so many different therapies developed within the confirmatory first-line, and we were doing the second-line single arm and will be really hard to finish, to get sufficient patient quickly. So we deprioritized the product. The trial is still open and that's not our top of priority now.

I understand. Thanks, Jasmine. And my second question is, I also want to follow up the time line for orelabrutinib's Phase III in SLE. So are we going to initiate the Phase III trial this year?

That's a very good question. And we are finishing actually the IIb study. It's a pretty good size of study, it is around 200 patients. And also as for the 8-week treatment closer to a year. And this year, we are getting the Phase IIb data. And in Phase III, remember, we did a 3-month study and demonstrated actually pretty strong efficacy, pretty strong signal and it works. And the Phase IIb is much longer and much bigger study. And this study -- and somehow, it's very close to Phase III design. And originally, we tried to get this as a conditional registrational trial, but we still -- we will see the results. We're still talking to CDE, but the regulatory standard is very high now for all the registrational trial. So we will see. And once we see the result, and we will decide whether the data is good enough to start Phase III. And so we should look at the results in the fourth quarter. I believe the possibility to start Phase III this year is pretty high.

I see, that's very helpful. We also look forward to the Phase IIb data.

Well, I think, I'm going to follow up with some other questions regarding orelabrutinib. What's going to be the guidance for this year, 2025, I think last year has been doing very well and getting to the RMB 1 billion target, and particularly fourth quarter has been also very strong. It's still driven by MZL or some other new things we are working on in terms of sales and the marketing? And also, could you tell us about what kind of target you will be looking at in 2025?

Yes. So thank you for the question. Yes, we think that, first of all, the MZL sale of the driver will be continuing in 2025, because the first thing that we adjusted a full commercial year in 2024. So internally, we see the data. The MZL, the sales contribution actually starting with the beginning of last year with around 10%, at the end of the year is 30%. But looking at the market potential, actually, -- we think that is -- based on the fiscal guidance, that is 10% of NHL, the second largest indication. And also, we are the only one BTK inhibitor to address this market. So number wise, it should be also big potential, at least equal to the CLL and MCL. So we think in this year in 2025, we still -- the MZL will still have -- will still grow. We foresee that the -- at the end of 2025, internally, the MZL contribution will be around 50%. That will be -- means high growth for MZL. Secondly, for the existing -- for the CLL, MCL, we will also have to some expansion to low-tier cities, have more hospital coverage, we're also to expand a little bit about our first-line the sales team to ensure we have got more market share for the BTK inhibitor for the hematology concerns. So we think in this year, we will continue to grow. And also the -- currently we foresee 30% at least is our growth rate guidance, where we see -- we also think that the next -- in the 2026, we also will have good momentum because we see that the first-line CLL will be approved around the middle of this year.

Got it. And what about for the next one, tafasitamab, which has filed the NDA in China back in mid of last year. And -- so what is your expectation for approval this year? It's going to be before mid of the year or even it's going to be before May 30, which can make the drug eligible for this year and not on negotiation? What's going to be your expectation?

Yes. So for the tafasitamab, yes, we submitted for NDA last year, in the middle of last year. So we foresee that will be approved around for the -- by the end of second quarter for this year. Well, for the biology, the products, we will leverage for the insights global, supply capabilities. So this will be important products. Typically, for those kind of important products, well, we have one quarter preparation work after the formal approval for the logistic things such as for the customer, for the clearance, for the testing. So normally, we foresee that this year will be only one quarter for the sales. Well, this year, for the tafa, the commercial objective, I think, it is -- this is very important for us to be prepared for next year full year sales. And also, this will be second hematology product in our pipeline will be diverse our portfolios. So we foresee that in the tafa, the efficacy is very strong, the OS data is around 3 years, will provide unique benefit for the patient, for DLBCL patient. I think we're starting with the private market first. And then we're looking for the policy for this year to further determine our strategy for these products.

Got it. Well, I think the commercial path has been very clear. And well, lastly, I also touch on another key assets in the pipeline, which is ICP-488, which just presented data -- Phase II data on cirrhosis at the recent AAD 2025. So it was a really good data, particularly if we compare to Bristol to first-in-class assets. But also in the conference, we saw another domestic player, right, Alumis. They also presented their Phase II data in psoriasis. The D25 30% and frankly speaking, the PASI 90 data is 75% and is very, very impressive. And also PASI 100 is getting to a mid-double-digit number, right? So compared to ICP-488, 9 milligram, we are looking at PASI 90 at about 50%. Although in terms of the patient baseline, we do see ICP-488 their biologics experience patient has been higher. But how would you interpret the data difference? And do you think the competition with those new set of data going to becoming more intense in China? And also what's going to be the outlook for those assets to be licensed out?

Yes. Thank you, Ziyi. We also noticed -- you noticed data that show in PASI 90, PASI 100 really high. I think those are all currently the Phase II study. And generally, the Phase II study is the relatively smaller study or short study. And we do need to -- maybe the real comparison is still in the Phase III. And if the patient background, the disease severity and also previous usage of the drug, those are very important parameters affecting the efficacy, particularly in Phase II, is a smart number for patients. And few outliners were completely showing a difference of the data. So based on the allosteric TYK2 inhibitors, a few probably -- a few mark globally and all showing -- actually, our's is showing pretty good, the 77%, 78% of PASI 75 compared to deucravacitinib, so even they disclosed Phase II result of their compound. So for biologics, this is 77%, 78%. It's very close to IL-17 and other -- the large molecule in that range. So we don't know. Maybe I think the Phase III and with comparable patient background and comparable patient background use previous treatment of drugs, maybe that will give a better definite answer. So for 488, we definitely will develop rate. I think we will develop it rapidly. And we started the Phase III, and we targeted to finish the patient enrollment of this year and finished the clinical study next year. But of course, we are also pursuing new indications for this molecule and even first-in-class indications we are exploring. This is a pretty safe molecule. And so we are open to out-licensing the global right. But in China, we are still positioning commercialize it ourselves.

Got it. We have been running the call for more than an hour. So I think we haven't seen any of the pending questions in the line. And of course, if investors have any follow-up questions, feel free to send the questions to us or to the IR team of InnoCare. So lastly, I'm going to turn the call back to Jasmine for any closing remarks.

Okay. Thank you, Ziyi, and thank you, everyone, for staying with us too late in the east time zone and also early morning in the west time zone. So we really welcome your feedback and comments and looking forward to seeing you individually in the next 1 to 2 weeks during our road show. Again, thank you so much, Ziyi, and thank you, everyone. Bye.

Thank you. Have a good day.