InnoCare Pharma Limited (9969) Earnings Call Transcript & Summary

Good morning, and good evening to our global investors. Thank you for joining InnoCare Pharma 2026 Interim Results. This is [ Li Chen Feng ] from China Healthcare from Goldman Sachs. With us today is InnoCare's management team, including Dr. Jasmine Cui, the Chairlady and CEO; Dr. Xiangyang Chen, the CTO; Mr. Xin Fu, CFO; Dr. Renbin Zhao, Senior VP of Clinical Development; Dr. Carrie Zhou, VP of Medical Research; Dr. Jason Zhang, VP of Translational Research; and Ms. Bonnie Yuan, Senior Director of IR. Before we kick off the session, I would like to highlight that this call is strictly for clients of Goldman Sachs and InnoCare 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 or otherwise confidential information. Attendees are public side market participants who may not receive and should not request nonpublic or otherwise confidential information about issuers or securities or about the market securities. InnoCare just put out the results a couple of hours ago. And today, we're going to have the management team to discuss the business updates and first half results. After the prepared remarks, you do get a chance to ask questions. [Operator Instructions] Now without further ado, I'm going to turn the call to the management team to get started.

Good morning, good evening. Thank you all for attending InnoCare Pharma's 2026 First Half Year Earnings Call. InnoCare is a commercial-stage drug innovation company. Our vision is to become a global pharmaceutical leader dedicated to developing and delivering innovative therapies for patients worldwide. Our drug innovation efforts focus primarily on 2 therapeutic areas with significant unmet medical needs, oncology and autoimmune diseases. Here are the key business and financial highlights for the first half of '26. In the first half of '26, we delivered strong financial performance while making significant progress across our diversified innovative portfolio. On the financial side, total revenue reached RMB 1.14 billion, representing 55.5% year-over-year growth. Drug sales reached RMB 918 million, up 43.2% year-over-year, reflecting continued strong commercial momentum. Net profit reached RMB 240 million, demonstrating sustained profitability and continued earnings growth. At the end of June this year, we maintained a solid cash position of approximately RMB 8.4 billion, providing ample resources to support ongoing R&D and globalization. On the R&D front, we made broad-based progress across our pipeline. We obtained NDA approval for orelabrutinib in r/r MCL in Australia and submitted 2 additional NDAs for orelabrutinib in ITP and zurletrectinib in NTRK-positive pediatric patients. Two Phase III studies met primary endpoints for soficitinib in atopic dermatitis and fadeucravacitinib in psoriasis. We also initiated 3 new Phase III studies, including orelabrutinib in SLE, sonrotoclax plus orelabrutinib in r/r MCL, and sonrotoclax plus AZA versus venetoclax plus AZA in first-line AML. In addition, we achieved 2 important proof-of-concept milestones with soficitinib in vitiligo, achieving its primary endpoint, and our B7-H3 ADC program, showing promising preliminary efficacy. Finally, we have filed 4 INDs this year with 3 already advancing into clinical development. Turning to our oncology portfolio. We continue to strengthen both hematology/oncology and solid tumor franchises with multiple commercial products and key clinical milestones. In hematology/oncology, orelabrutinib continues to expand its commercial and global potential. In China, the first-line CLL/SLL indication was approved and included in the NRDL. In overseas, orelabrutinib was approved in r/r MCL in Australia following its previous approval in Singapore for r/r MCL and MZL. Tafasitamab is entering its first full year of commercial sales in China for r/r DLBCL, further strengthening our commercial portfolio. Sonrotoclax continues to advance across multiple hematological malignancies. In Phase III registrational study with orelabrutinib for first-line CLL/SLL, fixed-duration treatment is progressing well, with completion expected in the first half of 2027. We have also initiated the Phase III study in r/r MCL, received breakthrough therapy designation for r/r MZL, and are initiating Phase III head-to-head study of sonrotoclax plus AZA versus venetoclax plus AZA in elderly and unfit patients with newly diagnosed AML. The global Phase II study in MDS is ongoing, with promising preliminary results. In solid tumors, zurletrectinib has established a commercial foundation in NTRK-positive tumors, with pediatric expansion progressing through priority review of its NDA. Our next-generation ADC portfolio is also progressing rapidly. ICP-B794, our B7-H3 ADC, is in Phase I dose escalation with promising preliminary results, while ICP-B208, our CDH17 ADC, has entered the Phase I dose escalation. We are also pleased to introduce a new bispecific ADC project, ICP-B381, a PSMA/STEAP1 ADC with potential applications in prostate cancer. The China IND was submitted and accepted in August, with the U.S. IND filing expected in September. Together, these programs are expanding our oncology portfolio from established commercial products into multiple differentiated next-generation assets, supporting our rapid and continued growth across hematological and solid tumors. Turning to our autoimmune disease portfolio, we are advancing a broad and increasingly differentiated pipeline toward commercialization while building the next wave of innovative assets with first-in-class potential. On the later stage side, orelabrutinib continues to expand across multiple autoimmune indications. The NDA for ITP was accepted in the first half of this year, while the Phase III registrational study in SLE is ongoing following promising Phase II-B results. We are also advancing global Phase III PPMS and SPMS in collaboration with Zenas BioPharma. soficitinib, our TYK2 JAK1 inhibitor, continues to advance across a broad 5-indication portfolio. In atopic dermatitis, the Phase III study met its primary endpoints, with NDA submission planned following the safety follow-up. In vitiligo, the Phase II study met its primary endpoint and is advancing into Phase III. Meanwhile, the Phase II study are progressing in PN, CSU, and psoriasis, with data readouts expected by later this year for the last 2 indications. fadeucravacitinib, our allosteric TYK2 inhibitor, has also reached an important milestone this year. The Phase III registrational study in psoriasis met its primary endpoints, with Phase II study in CLE and Sjögren's syndrome ongoing. Beyond our later-stage portfolio, we are building a new generation of differentiated autoimmune disease assets. ICP-054 is an oral IL-17 inhibitor designed to provide a differentiated alternative to injectable biologics. Its ex-Greater China and South Asia rights has been partnered with Zenas, and the Phase I completion is expected by end of this year. ICP-538 is a potentially first-in-class VAV1 molecular glue degrader targeting a novel immune regulatory pathway. Its Phase I study is expected to complete by end of this year as well. Overall, our autoimmune disease portfolio is progressing on 2 fronts, advancing multiple later-stage products toward commercialization, while building a differentiated next wave of innovative assets with significant long-term potentials. This slide presents our robust and innovative pipeline, spanning from preclinical through Phase I, II, III, and registrational stages. Currently, we have more than 10 Phase III registrational studies ongoing in China and in global. Over the next 2 to 3 years, multiple major products and large indications are expected to reach regulatory milestones, further expanding patient access and creating value for our investors. Now, I invite our CFO, Xin Fu, to share more details of our financial and commercial performance.

Thanks, Jasmine. Hello, everyone, and thank you for joining us today. In the first half of 2026, InnoCare delivered a very strong financial performance and continued to beat our expectations. The total revenue achieved RMB 1.137 billion, representing a 55.5% increase year-over-year. This robust growth demonstrated our commercial execution capabilities, diversified approved product portfolio, and expanding global footprint. The drug sales remain our primary revenue source, reaching RMB 918 million. This accounts for about 80.7% of total revenue, representing a 43.2% year-over-year growth. This growth was fueled by the indication expansion of orelabrutinib for the first-line CLL/SLL, the new launch of tafasitamab and zurletrectinib, and then strengthen our commercial platform, which underscore our transition into a diversified multi-product biopharma company. In the first half of 2026, we maintained our profitability trajectory. Net profit turned to RMB 240 million, compared to a loss of RMB 36 million in the same period of last year. The diluted earning per share for the first half of 2026 reached RMB 0.14. This performance reflects our strong top-line growth, combined with disciplined cost management. With further growth in drug sales and the realization of BD-related milestone revenue in the second half of this year, we expect to maintain profitability for the full year of 2026, and the EPS will be higher than the first half of 2026. We continue to invest meaningfully in our future. R&D expenses reached RMB 497 million, with 10.5% year-over-year growth. This investment focus on advancing late-stage clinical programs and building next-generation platforms, such as ADC and molecular glue technologies. Our cash position remains very strong. As of June 30, 2026, cash and related accounts totaling around $1.2 billion. Additionally, we achieved a positive operating cash flow in the first half of 2026. This strong liquidity provides the flexibility to accelerate clinical development and invest in a competitive pipeline. Regarding the commercialization, entering into 2026, we already have 3 commercialized products. With the new indication approval of orelabrutinib and the launch of tafasitamab, we have strengthened our leadership in hematology/oncology. We now cover 4 major indications, CLL and SLL, MCL, MZL, and DLBCL. The orelabrutinib and tafasitamab are recommended in the CSCO guideline for 8 indications. Zurletrectinib, a next-generation TRK inhibitor, represents InnoCare's first approved therapy in solid tumor, offering patients durable, deep responses and a favorable safety profile. Our commercial platform has scaled effectively. A dedicated team of around 500 professionals now cover more than 1,500 hospitals across China. Driven by the continued growth of orelabrutinib and the full commercialization of tafasitamab and zurletrectinib, we are confident 2026 drug sales growth exceeding 35%. In summary, InnoCare delivered a strong financial performance in the first half of this year with high revenue growth, sustained profitability, and a robust cash position. With that, I will hand over to Dr. Zhao for the introduction of progress for the hematology/oncology pipeline.

Thank you, Xin. I'm going to give an update on the field of hematology/oncology. We currently have several products, including 3 that have been launched or in the late-stage Phase III clinical development. As mentioned earlier, orelabrutinib has already approved for 4 indications that have been launched in China. Some of them have been approved or submitted for NDA on the global market. Additionally, we have some Phase III indications expanding in China and globally. Tafasitamab has also been approved for launch last year. And BCL-2 inhibitor, mesutoclax has 6 indications undergoing clinical research expansion in China and globally, and we will discuss in more detail later. Tafasitamab was approved for marketing in Mainland China last year in addition to previously approved in Hong Kong, Taiwan, and Macau. Tafasitamab is potentially the best treatment option for diffuse large B-cell lymphoma in Greater China area. Tafasitamab in combination with lenalidomide shows outstanding clinical efficacy, especially for DOR and OS. Compared to the other mechanisms, its efficacy is 3x to 4x longer because of tafasitamab and combination has triple mechanisms of action, inhibiting B cells, macrophages, and NK cells. This year marks tafasitamab's first full year of commercial launch, and we look forward to bringing benefits to more DLBCL patients in China. mesutoclax is a novel BCL-2 inhibitor with many clinical advantages compared to approved BCL-2 inhibitor, venetoclax. Venetoclax has some clinical shortcomings primarily due to a metabolic hotspot in its molecular design and produces major metabolite M27. Within 24 hours, the AOC of M27 is equivalent to 80% of that of venetoclax. M27 has no pharmacological activity, but exhibits hematological toxicities. Both M27 and venetoclax inhibit enzymes and transporters, increasing the drug-drug interaction and posing a significant risk for combination therapies and committed use of medication in clinical settings. The molecule design for mesutoclax effectively eliminates the metabolite hotspot and therefore, avoid the major metabolite, resulting in a higher exposure while reducing the hematological toxicity and drug interactions, thus demonstrating an excellent efficacy and safety profile in clinical practice. As a result, mesutoclax achieved much higher exposure than venetoclax. At 125 milligram, mesutoclax has 3x more exposure compared to venetoclax at 400 milligram. So this slide represents the key clinical data of mesutoclax-based regimens across multiple B-cell malignancies covering frontline CLL/SLL, BTK inhibitor treated relapsed/refractory MCL, newly updated results of mesutoclax plus orelabrutinib in the relapsed/refractory MCL and relapsed/refractory MZL. In the frontline CLL/SLL, mesutoclax in combination with orelabrutinib yields robust efficacy with 100% ORR, 57% CR rate, and a very deep MRD negative rate of 65%. This regimen shows clear advantages over ibrutinib or upadacitinib plus venetoclax in combination. For the BTK inhibitor-treated relapse refractory MCL, mesutoclax monotherapy achieves 84% of ORR and 36% CR rate, demonstrating superior efficacy versus venetoclax and pirtobrutinib in this heavily pretreated patient population. We have also obtained encouraging new clinical results for mesutoclax plus orelabrutinib in 2 relapse refractory lymphoma indications. In the r/r MZL, the combination delivers 100% ORR and 50% CR rate in evaluable patients. Based on these promising data, it has secured a breakthrough designation from CDE for patients with prior treatment of more than 1 line, and the Phase III IND application has been submitted. In relapse refractory MCL, mesutoclax plus orelabrutinib shows outstanding anti-tumor activity with 100% ORR and 100% CR rate in evaluable patients. Meanwhile, its Phase III study for relapse refractory MCL has been approved for initiation in China. Collectively, these multiple indication data validate the broad best-in-class potential of mesutoclax plus orelabrutinib, supported by solid clinical outcomes and continuous late-stage pipeline advancement. Beyond lymphoma, mesutoclax also demonstrated compelling strengths in AML and MDS. In the treatment of AML, we observed very good data with a composite CR rate of 81.8% for mesutoclax, which is much better than venetoclax, sonrotoclax, and bisacodyl, especially with the MRD negative rate at 86.5% of all the responders. Not only in terms of the efficacy, but the safety advantages are even greater with an SAE rate of only 20.5%, while the other BCL-2 inhibitors range from 40% to over 80%. It also achieved 6 months OS rate of 90.5%, delivering a significant clinical advantage over the other BCL-2 inhibitors. In addition, MDS represents a high potential indication with a very large market space. We know the VERONA study, the Phase III trial of venetoclax failed in MDS, and so far, no BCL-2 inhibitor has been approved for this indication. Our mesutoclax in combination with AZA shows impressive preliminary MDS clinical data with 100% ORR, 40% CR rate, and 60% of marrow CR rate. We maintain a strong confidence in its MDS potential, and the preliminary data has been unveiled in this year's ASCO conference. Overall, mesutoclax exhibits robust and differentiated efficacy across lymphoma, AML, and MDS, highlighting its broad clinical value and promising pipeline prospects. Here we show the pivotal Phase III trial in the treatment-naive unfit AML. This is a randomized multiple center study comparing mesutoclax plus azacitidine versus the standard of care AZA-VEN combination. It involves treatment-naive AML patients unfit for intensive chemotherapy. The experimental arm uses continuous mesutoclax at 125 milligram QD, and the control arm uses venetoclax at 400 milligram QD after the 5-week dose escalation. Both arms have a combination with azacitidine. The treatment is given in 28-day cycles until disease progression or intolerable toxicity. This primary endpoint is OS, and the key secondary endpoints include composite CR rate and the MRD negative rate. In summary, mesutoclax has enormous market potential with a combined market space of over $20 billion for treating lymphoma to treating leukemia. We believe mesutoclax will be a potential blockbuster asset with the market potential of billions or tens of billions of dollars, and we will advance clinical research with our best effort to expedite its approval and market launch. Now, I will hand it over to our Vice President of Medical Affairs, Carrie Zhou, to share the progress in autoimmune disease.

For autoimmune pipeline, we are very delighted to see that our pipeline has reached multiple key milestones. Orelabrutinib, ITP NDA, has been accepted. SLE now in the registration Phase III. PPMS, SPMS, also in the Phase III. soficitinib, ICP-332, succeeding on atopic dermatitis Phase III and the vitiligo Phase II. Currently expanding into more indications, including prurigo nodularis, urticaria, and psoriasis. fadeucravacitinib, ICP-488, is a psoriasis Phase III with CLE and Sjögren's syndrome Phase II initiated. On the early stage front, we have ICP-538, the first VAV1 degrader in China and the second globally. ICP-054, our oral IL-17A inhibitor, now in the Phase I with a global partner, Shionogi, already in place. Collectively, we have built a highly differentiated and competitive autoimmune pipeline. Orelabrutinib, our thing as the pan-JAK/BTK inhibitor, is now in the Phase III for PPMS and SPMS, which represent over 40% of all MS and more than $12 billion commercial opportunity. In ITP, we have the NDA accepted in China, addressing 200,000 new patients globally each year. In SLE, we are the first BTK to show the Phase II efficacy, now in the Phase III for 8 million patients worldwide. ITP affects 300,000 chronic patients in China, with 60,000 new cases added every year. Despite the available therapies, most patients continue to struggle with relapse and poor quality of life. Patients urgently need a durable, safe, and convenient oral option. That is exactly where orelabrutinib fits in. It directly tackles the root cause of normal BCL activation and autoantibody production. We are offering a well-tolerated once-daily pill designed for long-term use. We are making real progress. Our NDA has been submitted and accepted by CDE, a critical regulatory milestone. We are firmly on track to become the next growth driver. SLE is a severe autoimmune disease affecting 8 million people globally, 1 million in China, mostly young women facing years of multiple organ damage. Currently, SLE treatment, including corticosteroid or the immunosuppressant or the biologics, face unmet needs like toxicity, relapse, non-response in many patients, and the inconvenience of injection. Orelabrutinib is a highly selective oral BTK inhibitor, inhibits abnormal B-cell activation and autoantibody production with oral convenience, while advancing Phase III trials with a goal to become the first oral BTK inhibitor approved for SLE globally. The global biologics market for SLE already exceeds $3 billion and with an oral accessible alternatives, that opportunity is backed to expand dramatically. We have 2 TYK2 inhibitors, 2 distinct strategy. soficitinib is important, the TH1 model that achieves a strong TYK2 inhibition with some JAK1 suppression. This profile delivers robust cyanogenic, anti-inflammation efficacy across the key pathogenetic pathways, translating into meaningful clinical benefits while sparing the JAK2 ensure favorable safety profile. In parallel, fadeucravacitinib offers ultra selectively from JH2 banding with more than 10,000 folds selectivity over JAK family members, providing cleaner mechanism for chronic use. Together, these 2 compound afford a broad oral TYK2 portfolio designed to address major autoimmune indications. AD affects millions of patients, yet current treatment are slow to take effect and many patients experience inadequate response or even no response at all. Our Phase II data for soficitinib tells a different story. You can see just a 4 weeks treatment will achieve the outstanding EASI 75 improvement, numerically exceeding published results for multiple approved drugs at their 12 or 16 data endpoint. Patients experience rapid itch relief as early as day 2 with deep and sustained reduction. Our Phase III AD trial run by the double-blind placebo control with a 16 weeks double-blind period and 36 maintenance. At week 16, we met both the co-primary endpoint, EASI 75 or the IGA 0/1. The maintenance phase is still running and we look forward to seeing the full data. Vitiligo is more than a skin condition. It carries a profound emotional and social burden for many patients. Yet treatment options remain extremely limited. Our Phase II study of soficitinib in vitiligo was a random, double-blind, placebo-controlled trial. The primary endpoint change in F-VASI from baseline week 24 was successfully made with positive efficacy. We are now advancing the program towards a Phase III development. This is a result of a Phase II vitiligo study. soficitinib achieved a 38.8% of F-VASI improvement from baseline week 24, with an 18 mg QD, and a 41.2% with 120 mg QD, the highest percentage among all the Phase II studies of the JAK1 or the JAK3 inhibitors. We are now preparing our end of Phase II submission to CDE. soficitinib, a dual TYK2 JAK1 inhibitor, is delivering compelling data across the inflammatory skin disease. In AD, Phase III met all primary endpoints, and we are filing in the first half of next year. With AD market set to grow up from RMB 18 billion to RMB 30 billion by 2030. Vitiligo Phase II was positive. Phase III now underway targeting a RMB 3 billion market. Psoriasis read-out are imminent. We are also progressing hidradenitis suppurativa in the global Phase II. With multiple catalysts ahead, regulatory filings, clinical readouts, and expanding indications, this asset is positioned to capture a significant share from a combined addressable market approaching RMB 100 billion. In Phase II trial of fadeucravacitinib for psoriasis at week 12, the 9 mg QD group achieved a PASI 75 response rate significantly superior to placebo. The P value is less than 0.001. Responses increased over time, supporting the drug's potent efficacy. This encouraging Phase II data firmly support advanced fadeucravacitinib into the Phase III development. In the Phase III trial for psoriasis, qualified patients were randomized to 2:1 to receive 9 mg once daily or the placebo for 16 weeks, followed by the 36 weeks maintenance. The co-primary endpoint, PASI 75 or sPGA 0/1 at week 16 were met with robust efficacy, marking a key milestone. fadeucravacitinib leverages strong efficacy and safety profile, unlocking broader market potential. In psoriasis, Phase III met all primary endpoints, targeting a share for RMB 58 billion psoriasis market, which affect 240 million patients worldwide. For CLE and Sjögren's syndrome, ongoing Phase II trials address high unmet needs with a combined market opportunity exceeding RMB 13 billion. Beyond this, our broad platform extend to multiple indications representing a total addressable market of over RMB 115 billion. Next, we are delighted to welcome Dr. Xiangyang Chen, who will formally introduce our early-stage autoimmune pipeline.

Thank you. In addition to the late-stage molecules, I will introduce 2 early-stage clinical programs for autoimmune disease. One is VAV1. VAV1 is a pivotal scaffolding protein and signaling molecule downstream of T and B cell receptors. Targeting VAV1 enables modulation of T and B cell functions, offering a new approach of treating autoimmune disorders, including some hard-to-treat indications. Previously, VAV1 was considered undruggable due to lack of small molecule binding pockets. Here we developed ICP-538, a potent and selective VAV1 molecular degrader, which is currently in Phase I clinical trial. This slide highlights some preclinical data. The left figure shows dose-dependent degradation of VAV1 protein with a single-digit nanomolar IC50. The degradation is rapid and deep, as shown in the middle figure. On the right, the compound demonstrate dose-dependent efficacy in the CIA model, making the molecule as a promising candidate for further evaluation. Another one is IL-17. IL-17 is a well-validated autoimmune disease target, clinically proven by market antibody drugs such as COSENTYX from Novartis with a broad range of approved indication as shown on the right panel. Inhibition of IL-17 and receptor interactions can effectively shut down downstream inflammatory signaling. A small molecule IL-17 inhibitor, ICP-054 binds specifically to the IL-17 dimer interface, causing steroid interference to binding of dimer by IL-17 receptors. ICP-054 was potent in biochemical and functional assays, has excellent PK property and was dose-dependently efficacious in the in vivo radio CIA model. The molecule is currently under Phase I clinical development. Over years, we have built a diversified autoimmune disease pipeline, including clinical-stage molecules, oral protein, and also others listed here. In pre-clinical access with multiple modalities, small molecules, biologics, the greatest. Our pipeline provides comprehensive coverage of indications in multiple disease areas: dermatology, hematology, neurology, rheumatology, with potential expansion into neurology with unmet medical needs. Next, I turn hand over to Dr. Jason Zhang.

Thanks, Xiangyang. I will introduce our updates of our innovative solid tumor assets. First, in solid tumors, our first innovative commercial product, zurletrectinib, which is the second-generation TRK inhibitor, was already approved in December last year for the treatment of adult and adolescent solid tumor patients with NTRK gene fusion. The clinical efficacy data are very outstanding with an ORR of 89.1% and a long duration of response. In addition, zurletrectinib has also demonstrated ability to overcome resistance to further generation TRK inhibitor in clinical. The NDA for pediatric patients was submitted Q2 this year, and the IRC assessed ORR was 100%, with 10% of CR and 90% of PR, which is particularly remarkable for the pediatric patients with solid tumor. Our ADC platform is one of the key strategic pillars of our efforts in biologics for the treatment of solid tumors. We have developed a differentiated ADC platform by optimizing the 3 key components of ADC, including irreversible connector, hydrophilic linker, and potent payload. The irreversible connector prevents the nonspecific payload exchange. The hydrophilic linker allows high DAR value and improve the stability. The highly potent payload is selectively released within tumors and shows strong bystander effect. A unique property of our ADC payload is a high clearance rate, which helps reduce the systemic toxicity by rapidly eliminating the payload from the system. The CDH17 ADC is our second ADC moving into the clinical development. CDH17 is a highly promising target for many gastrointestinal cancers. In normal tissues, CDH17 is hidden in the tight junction and largely inaccessible. However, in tumor cells, the CDH17 is exposed, making it an attractive therapeutic target. The CDH17 ADC has broad potential across many GI cancers, including colorectal, gastric, and pancreatic cancers. In the preclinical tumor models with both high and low CDH17 expression, our CDH17 ADC shows superior efficacy than 1 of the leading competitors, and the advantage is even more significant in low-expression tumors. The Phase I study of the CDH17 ADC ICP-B208 is ongoing for the treatment of GI cancers. We have applied our innovative ADC platform into the design of the bispecific ADC. The STEAP1 PSMA ADC is our first bispecific ADC moving into clinical development. By dual targeting of both PSMA and STEAP1, the bispecific ADC has the potential to enhance the activity when both antigens are presented and achieve good efficacy even at low target expression and overcome the drug resistance mediated by loss of either antigen. In preclinical studies, our bispecific ADC ICP-B381 demonstrated robust and dose-dependent in vivo antitumor activity. In the in vivo tumor models with low expression of both antigens, ICP-B381 showed superior efficacy compared with the leading competitor, which is in the Phase I study. So in summary, the key advantage of our ADC platform includes a high DAR value, a wide therapeutic windows, and the ability to eradicate large tumors and overcome resistance. We are advancing the clinical development of our ADC pipelines rapidly. For the B7-H3 ADC, we have completed 5 dose cohorts of the dose escalation study. No DLT observed so far. We are initiating the dose level 6. We have finished the first dose level of CDH17 ADC and moving into the second dose level. The IND of the STEAP1 PSMA bispecific ADC has been submitted to FDA. The U.S. IND filing is expected in the next month, so I will hand over to Jasmine.

Sure. Thank you. Finally, let me briefly walk you through our key upcoming events and the milestones. Looking ahead, we expect multiple important clinical and regulatory milestones across our hematology, autoimmune disease, and the solid cancer portfolio, further advancing our products toward the commercialization and the global development. In hematology/oncology, key milestones includes the data readout and NDA submission for the Phase III orelabrutinib plus mesutoclax study in first-line CLL/SLL with a fixed duration regimen, and also the completion and NDA submission of the registrational study in BTK inhibitor-treated MCL. We also expect further progress of mesutoclax across multiple indications, including Phase III initiation in r/r MCL and r/r MZL, and Phase III initiation mesutoclax plus AZA versus venetoclax plus AZA in first-line AML, and the completion of global Phase II study MDS, and then advancing to Phase III. In autoimmune disease, we expect multiple milestones across our portfolio. This includes ITP NDA approval for orelabrutinib and a further advancement of SLE Phase III study and the global PPMS SPMS studies with Zenas. For soficitinib, key milestones including NDA submission in atopic dermatitis, Phase III initiation in vitiligo, data readouts in, and potentially Phase III initiation in CSU and psoriasis, and the completion of the global Phase II study in PN. For fadeucravacitinib, we expect further progress in psoriasis, CLE, and Sjögren's syndrome, together with the exploration of additional indications. We also expect the Phase I completion data readout for ICP-538, our VAV1 molecular glue degrader, and ICP-054, our oral IL-17 inhibitor. In solid tumors, we expect development milestones across our ADC portfolio, including completion of dose expansion and establishment of recommended dose for ICP-B794, dose escalation data readout and expansion for ICP-B208, and IND approval and the first patient in both China and in the U.S. for ICP-B381, our PSMA STEAP1 ADC. On the financial side, we expect to sustain profit positive performance throughout 2026, further demonstrating the strength and the sustainability of our commercial growth. Overall, we expect the coming period to be marked by multiple clinical and regulatory catalysts across our diversified portfolio. With that, this concludes our presentation. Thank you very much for your time and continued support to InnoCare Pharma. We would now be happy to take your questions.

Thank you, Jasmine, and thank you management team. This is already more like a mini R&D day, a very comprehensive pipeline update. Now we are going to get into the Q&A session. Any questions, feel free to raise your hand or type your questions into the Q&A box. I am going to start with 2 questions, then I am going to be turning to those who raised their hands. The first question is really about the sales performance, right? In the same quarter in the first half, it has been very strong, and we are still giving the guidance of full year 35%. One thing I am trying to understand a bit more, in the first half, what percentage of the sales growth is contributed by the new products, which is tafasitamab, which is zurletrectinib, instead of only orelabrutinib is driving the growth? That is number 1. Number 2 is, of course, InnoCare has been very strong in oncology, particularly hematology and immunology, right? We already built a very strong pipeline. Now, with the ADC platform, we see more assets getting to clinics. Now, we already have 1 at Phase I. We have a CDH17, PSMA STEAP1 bispecific also getting to clinical trials very soon. How would you balance the resource allocation among solid tumor, hematology, and also the immunology? That is my second broad question.

Let me answer your questions about the financials. The first one is about the sales performance. At the year beginning, we said have the commercial goal, that the total commercial drug sales will exceeding 35%. We see the first half performance, we have very confident to achieve on that. Also, orelabrutinib, we said, have the more than 30% growth. Looking into the first half performance, actually, we beat both the target. Also, tafasitamab and zurletrectinib actually is the first year for the full year for the commercialization. Tafasitamab starting from the private market, and zurletrectinib actually is still not in the National Reimbursement Drug List. So the value point of view, actually, for sure, orelabrutinib actually is contributing the most from the value point of view, is definitely more than 30% growth. From the growth number, because there's no base for tafasitamab and zurletrectinib in the last year, actually, even that is very small numbers, but the growth rate is very high. This is the first question. We also continue to see that orelabrutinib will continue to grow, especially for this year. We have proved for the first-line CLL, and also successfully included in the National Reimbursement Drug List starting from the year beginning, which already is significant to enlarge the addressable patient pool. Also, orelabrutinib maintain the advantage for the only 1 BTK to treat MCL patients. Now with our commercial footprint expanding, we have more deeper penetration. So we are very confident. Also the first half year, 43% growth. So we are very confident to beat the 35% full year growth rate. For our research allocation, I would say the 3 franchise in a different stage, and our hematology/oncology liquid cancer is our leading franchise, and we already have 2 commercial products, orelabrutinib, tafasitamab. We see actually, mesutoclax with huge potential, particularly in combo with orelabrutinib and with others. So we definitely will put bigger effort and a lot of research money will go into the franchise, especially in the clinical trials. So we categorize our hematology/oncology as from 10 to 100. For autoimmune disease, and we have 3 Phase III product, later stage product, and a number of early stage product, but we don't have a commercial product yet. With ITP's approval, we officially entering into commercial of autoimmune disease. It's also very important for us. But I would categorize this as 1 to 10 stage. So we still try to get approval and try to do well in our commercialization. For solid tumor, except zurletrectinib, and it's a relatively smaller indication. Our other products are still early stage and still in the POC stage. I would say that is from 0 to 1 and for our solid cancer. With this, all 3 franchise are important for patients, for us as well, and for market size. Since it's in a different stage, so we invest into our products, our portfolios in a dynamic way. But at this moment, at the clinical trial, hematology is our most important, followed by autoimmune disease. Solid cancer, we establish a lot of proof of concept for our new product, still not in Phase III yet. In terms of dollar spending, money spending, probably is less.

Next question is coming from UBS, David Guo.

Many congratulations to the management for the very strong first half result. I basically have 2 questions here. The first one is still regarding the sales. It looks that we maintained the guidance of 35% year-on-year growth. May we kindly see any of the reasons behind of this reiteration of the guidance? Also if there's any opportunities, for example, in Q3, to see the potential to raise this guidance. My second question is on the mesutoclax, as we're nearly approaching the registrational trials for the MCL and the first line CLL data readout and potential NDA submission. Do we have more colors about the timeline of these milestones? Also if we could have more colors on the potential hematology pipeline major data readouts in the second half, for example, in the ASH or ESMO.

Let me answer your first question about the guidance. We have a beat for the guidance, both for the orelabrutinib alone and also the overall commercial. We see that several factors we will continue to consider. Firstly, that we still have a very good penetration for the CLL, and still need some time because we've just built up the team in the first half of this year and still need some time to build up the connection with hospital, get drug into the hospital listing. We see that there's acceleration in the rural area, so we will see the situation and to monitor our quarter 3 performance and then to, if possible, we can raise the full year guidance with the quarter 3 result.

I'm going to answer the second question regarding sonrotoclax. For the lymphoma indications in the first line, CLL/SLL, our Phase III study, with sonrotoclax in combination with orelabrutinib, we have already completed the enrollment early this year. Now we're looking at the data readout at the first half of 2027. For the relapsed/refractory mantle cell lymphoma post-BTK treatment, that was a single-arm Phase II study. We're very close to complete the enrollment very soon. We are also expecting the data readout early next year for registration. As for the near-term data release, we have submitted abstracts for ASH this year, both for the AML and MDS Phase II data. We're going to have more update by then.

[Operator Instructions] I actually got a couple more questions here. Number 1 is really trying to understand the different indication progress for orelabrutinib. The first one is the ITP, because you already filed the NDA, but, from my understanding, this is as a supplemental NDA. The pharmacology part and CMC part, manufacturing part is pretty much already been cleared and now regulators are going to really be focusing on the clinical data. Then, what's going to be the current status of review, and when we should be expecting the new indication going to get approved for orelabrutinib? And also for orelabrutinib and SLE. My understanding is that the first patient dosed was back in April, right? We understand there has been a lot of different drugs competing for lupus indication in China. In the past 4-5 months, we're trying to understand a bit more about the patient enrollment progress, and is it difficult or it's relatively easy to get a patient enrolled in your studies? Lastly, on orelabrutinib, we try to get more sense from you guys on Zenas' part, which is for 2 MS indications. Phase III are ongoing, right? The PPMS we started first, fourth quarter last year, and the first quarter this year, SPMS has been initiated for the Phase III studies. How's the progress of the patient enrollment, and when we're going to potentially see the first set of data coming out?

So, for ITP, actually, we anticipate the approval. You are right. Actually, the CMC clinical farm is pretty much similar as the other indications. We are only looking at the clinical data approval, so we anticipate it by first half of next year. I think the data submitted are due ASH, and the Phase III data, we should see that by end of the year. That is for ITP. SLE is progressing pretty well. Yes, from first patient year until now, it is about 4 or 5 months, 4 months, and we already enrolled a pretty good number of patients. I think, as you know, there are a lot of SLE patients, and the problem is we follow the CDE's close guidance about the patient enrollment, and we need to really enroll the patient with unmet medical needs and those ones with severe diseases. Also, we keep our glucocorticoid reduced, and we follow a lot of tough standards. So we are pushing very hard, and we hope to finish. This is a large study, more than 400 patients. We are going to push very hard to finish it. With regard to PPMS, SPMS with Zenas, yes, they are doing pretty well. Actually, I met with Lonnie Moulder, actually, early this month, and pretty happy with their progress. They already dosed. PPMS enrollment is ongoing. SPMS, through a lot of change, the sponsorship from us to them, they get registered in Europe, and they get the screening patient very aggressively and get the first patient in and get our milestone. So they are going pretty well. For these 2 indications, actually, you need to finish the patient enrollment. It may take about a year and a half or 2 years, and then they wait for the data readout. So we need to wait for about 3 years to know the clinical data.