Shanghai Henlius Biotech, Inc. (2E8.F) Earnings Call Transcript & Summary

Good afternoon. This is Yang Huang, China healthcare analyst at JPMorgan. Welcome to the -- I believe, if I'm not mistaken, this is the last session of today. And thank you for continuing to stay here and join the session. And we have Henlius to give us the latest update and Dr. Jason Zhu, the CEO and Executive Director of Henlius will do the honor of presentation. Dr. Zhu?

So good afternoon. Thank you, everyone, for your attention. I understand it's the last presentation, but I think -- I hope it is the last but it is not the least. Thank you very much. So Henlius is actually the public company listing in Hong Kong. So we are a biopharma company. So far, we have 4 products approved by the U.S. FDA. We have 7 products approved by the China NMPA. We have 4 products approved by the EU EMA countries. So we got a 30-plus ongoing clinical trials. We got a 50-plus early-stage assets. We actually got a global staff, 4,000 staff, global employee. And also, we have the manufacturing facility with 80,000 liters based in China. So, so far, our products actually benefit more than 950,000 patients globally. So Henlius, we have 5 core global competency. First of all, we have in-house clinical operation team that is across the world, in China, U.S., Australia, Japan. And also, we're covering 1,000 clinical research centers spread across 20 countries. We have R&D capabilities, 50-plus early-stage molecules, 70% of them aim to be best-in-class. 15% of them are first-in-class to be aimed, including ADC, IO, multi [ antibodies ] peptide small molecule inhibitors as well. So we have the regulatory affairs in-house as well. So that's why as of today, we have done 66 NDA approval approved globally. We -- just last year, we got a 4 BLA approved by FDA. We got 164 IND approved globally. And also in terms of manufacturing, so far, we have manufactured more than 1,150 commercial GMP batch, GMP certified by multiple regulatory authority, which is including FDA, EMA as well as NMPA from China. Also, we got a global commercialization team, 1,600 oncology commercialization team professional in China, 20 overseas sales partners, products are sold in more than 60 countries and regions. So let's look at our late-stage clinical pipeline. Serplulimab is obviously -- we aim to be the best-in-class, particularly around the lung cancer area. So we firstly got this product approved in the year 2022 in China with the indication small cell lung cancer. And also later on, we got a couple of indication approved in China, including esophageal cancer, including non-small cell lung cancer. Last year, February, we got these small cell lung cancer approved in the EU countries and also later launched in U.K., India and some Southeast Asia countries. So this approval is actually based on ASTRUM-005 study, as you can see in the right hand. The ASTRUM-005 studies in terms of the hazard ratio is 0.6. And also for the 4 years OS rate, our 4 years also OS rate is 21.9 months versus the standard of care, 7.2. If you look at the [ PS ] assets, their 4 years OS rate is 13 months. So there is a strong comparison in that. So after that, we actually kicked off a couple of very innovative design study, so-called very brave design studies. That is around a Phase II study, we call ASTRUM-015 in the first-line MSS, mCRC, metastatic CRC patients. So that design, we actually got a very good result. The PFS, you can see, it is an add-on standard of care design. We do the Serplulimab add-on the bevacizumab add on the chemo. The PFS is 16.8 months comparing to the standard of care, which used to be 10 to 11 months. So that design actually enable us to move further. So we launched global Phase III studies, mainly focused on Asia, Japan, Southeast Asia and China. So far, this study has completed recruitment, 600 patients completed recruitment, and we are waiting for the result next year in terms of the OS. And also Phase III registration trial we've done in the perioperative treatment of gastric cancer, which met the primary endpoint and granted breakthrough designation and also priority review from China NMPA. That is the world's first perioperative regimen for gastric cancer to replace the adjuvant chemotherapy. That means the patient doesn't have to be suffering from any of the chemo in the adjuvant therapy for those gastric cancer patients. The second asset, currently, we are running the global Phase III covering U.S., China, Japan, Europe, Latin America. And that asset is talking about HLX22, which is a novel epitope HER2 mAb. And that asset, we are trying to succeed and comparing to KEYNOTE-811. As you can see, that is a dual epitope strategy. That strategy enabled us to boost HER2 internalization by 40% to 80%. That internalization enhancement enable us to have a much lower safety concern, especially talk about ILD, especially talk about diarrhea, Grade 3 diarrhea. As you can see, we actually compare our Phase II study to the rest of the study, KEYNOTE-811 HERIZON studies. So KEYNOTE-811, they actually provide a patient with PFS around 10 months as a median. And also HERIZON, which is discussed recently this year in the Phase III design is 12.4 months. Our PFS is not reachable at the moment, but I think it's definitely more than 20 months plus. So this data disclosure enable us to move to the global Phase III, which is currently ongoing. And the global Phase III is actually a randomized controlled study with 600 patients trying to be recruited. So the design is actually HLX22 plus the standard of care versus KEYNOTE-811. That means we want to beat KEYTRUDA in this particular population. And so far, I think that the doctor, the leading PI from different countries like Japan, like Latin America, like the U.S., they also pretty much want to join this study. One of the reasons is because they understand the safety profile for the HLX22 is way better than the rest of the peers. So they are very confident to move ahead. So far, we completed about 40% of the patient recruitment as a target already. So HLX43 is the PD-L1 ADC, as you can see, we have so far recruited 500 patients already and mainly in the solid tumor. It's not mainly, it's 100% in the solid tumor for sure. And more than 60% of the patients with the non-small cell lung cancer. As you can calculate, it's about 300 patients already recruited in the non-small cell lung cancer area. And the right hand, the waterfall plot you can see is based on the RP2D cohort we pick up. So for the squamous non-small cell lung cancer for anything more than later line than third line, all of those patients has received the chemotherapy refractory. And also all of those patients received the IO therapy as well. The squamous is at 2.0 mg/kg. The ORR is more than 33%. And also for the docetaxel failed patients, we have achieved an ORR 38.5% as well. For the non-squamous non-small cell lung cancer, which basically is covering 2 parts, 2 category. One is the EGFR mutation and the other one is the EGFR wild type. So for the EGFR wild-type patients, you can see we have achieved the ORR rate of 47.4%, which is the best in disease potential. And also, we have dosed a patient in cervical cancer, 2 milligram, 2.5 milligram, 3 milligram. It shows a very, very consistent dose dependency efficacy model. So in the 3.0 milligram, the efficacy has reached 70% as ORR, which is quite significant. And also for the SOG is the same thing. We have observed a very consistent dose dependency from 2, 2.5, 3.0. So the 3.0 cohort, we have observed ORR at 61.5%. So as that, I think we want to perceive HLX43 PD-L1 ADC as a high potential pipeline in acute best-in-class best-in-disease. So this year, I think, is a critical year for Henlius. I think we're going to kick off a couple of Phase III, global Phase III trials in non-small cell lung cancer in the first line and the second line. So the first line is for the non-AGA patient. The second line is for both for the non-squamous non-AGA second line and also for the squamous second line. We're going to kick off the global Phase III. As you can see, we also have the data generated from the ESCC last year, and we have the data generated from the CC last year as well. And this year, I think we're going to have the data readout for the MPC, for the GC and hopefully for the TNBC as well. So HLX07, which is the novel EGFR mAb. So this 07, the reason why I want to present here is because we do see a huge potential in the treatment of the squamous non-small cell lung cancer. We pick up a very small sample size, which is 27 patients. However, the median PFS is really encouraging, which is reaching at 17.4 months. That's comparing to the KEYNOTE-407 or HARMONi-6, we have a very good confidence. So over the next 12 months, I think we're going to kick off the Phase II/III multinational studies versus standard of care. Also, the first patient in is going to be planned this quarter this year. So this is the clinical milestone we're going to expect in this year. First of all, for the Serplulimab, for the regulatory approval part, we're going to have accelerated approval for perioperative GC from China as a new indication in addition to the current 4 approved indication already. And we're going to expect approval for non-squamous non-small cell lung cancer as well as the squamous non-small cell lung cancer in the EU countries. And we're going to file our BLA for the U.S. for the extensive stage small cell lung cancer first line. We're going to file the BLA for the U.S. for the limited-stage small cell lung cancer this year as well. And also for the study progress, we have extensive stage small cell lung cancer Japan bridging studies. Also the enrollment is going to be complete this year and the primary endpoint is going to be readout this year as well. For HLX22, other than the current ongoing global Phase III GC studies, I think we're going to have the data readout for the HER2 low breast cancer China-only studies Phase II. That is a design on the add-on design. That means we actually do the combination with the T-DXd, and we're going to see if we can better improve in terms of the efficacy, in terms of the safety part preliminary. So for the HLX43, I think this year, for the study initiation, we're going to have a global pivotal Phase III study for second-line non-squamous EGFR wild type, for the third-line non-squamous non-small cell lung cancer, also for the second-line squamous non-small cell lung cancer. And also study initiation, we got 2 POC studies to be initiated, which is the HR-positive breast cancer as well as the TNBC. Data publication, ASCO is supposed to be a big piece for us, ESCC and also ASCO is going to be the non-small cell lung cancer as well as the MPC. The ESMO is going to be the data readout for the CC later on data as well as the ovarian cancer. So data readout combination, we're going to have the combination data readout for the preliminary POC data driven from HLX43 plus the Serplulimab and plus the HLX07 in the non-small cell lung cancer, in the small cell lung cancer as well as the metastatic CRC patients. So HLX07, which is our EGFR mAb, we're going to kick off the CSCC pivotal studies, which is going to enable us to launch the first indication in a very quick way. And also, we kick off the first-line squamous non-small cell lung cancer Phase II/III MRCT trials this year. So coming back to the research stage, what is our strategy? I think we still want to focus on pretty much on the next-generation IO. So what's going to happen? How do we improve the clinical response to those immuno checkpoint resistance disease. So we got 7 assets waiting there and also Hanjugate ADC platform, which we want to provide a larger therapeutic window, also overcome potential drug resistance. And also, we want to have a combination of the toxin with multiple MOA. That means a dual payload or even multiple payload in one asset. And also immune cell engager, I think the T cell engagement as well as the macrophage engagement -- macrophage cell engagement is something we want to do and deep diving. Of course, we already have a couple of the assets in the clinical stage already, which I'm going to show you, but I think we still want to focus on that. So we're going to have more than 5 assets in this area, immune cell engager. And also, Henlius is pretty much spending money buying the GPU, doing the AI technology, just trying to have de novo generative power by the generative AI. And also, we want to have the multiparametric toxicity prediction for efficient screen. So these kind of things we are doing in a very intensive manner. So looking back to what's happening in the clinical stage already. That means last year, we did quite a few IND. So the PD-L1 VEGF is nothing new. We just want to make sure we have that. So currently it is actually in the Phase I stage, we have that. And HLX97, which is KAT6A/B inhibitor. So I think we view that as a broader oncology asset. That means including multiple oncology area, breast cancer, CRPC, non-small cell lung cancer. But our effort is trying to see how we mitigate those hematological side effects by the designing comparing to the current leading compound in the industry. So I think we have done a couple of preclinical model, seems to be confident moving ahead. So T-cell engager, we want -- we already have one asset in the clinical stage currently in the dose escalation, which is DLL3, dual-epitope trispecific assets. The reason why we want to introduce CD28 is because we firmly believe the T cell exhaustion is the issue in the immunotherapy field. So the CD28 definitely is trying to provide a longer persistence of the activated T cell via the secondary T cell co-stimulative T cell signaling stage. And also by doing that, you can see T cell infiltration -- the T cell infiltrating the lymphocyte is actually getting much more in the red bar comparing to the blue bar, which is the leading compound in the industry. So that's the strategy. I think we are very confident. So as of today, we're actually doing the dose escalation in the confident way. And HLX316, which is the first-in-class, we're doing the anti-B7-H3 sialidase strategy. I think that's the first-in-class. Let's see what's going to happen. So 3902 is another T cell engager, which we do as a STEAP1/CD3/CD28. And again, I think we still believe CD28 as a co-stimulation signal not only produce a more rapid and antitumor effect, but also maintains the T cell activation for a much longer persistent period of the time. And that's the way to prevent T cell exhaustion. That's the way really to predict some long survival treatment methodology for the patients. So again, I think we have observed a very, very exciting signal in the preclinical stage and then superior antitumor activity increased the T cell infiltration as well as the persistence in the TME over the benchmark leading compound. And also, we have seen the more sustained cytotoxicity than the benchmark in the right low hand, you can see we are more sustainable, we are more persistent. Again, the 48 is something we call c-MET EGFR ADC because we firmly believe amivantamab, I think they are a very good compound, but we actually want to do an upgrade version. So we want to still retain the EGFR cMET functionality. And in the same time, we have a lowered our strategy in this asset. And also, we want to have a better, much stronger bystander factor. That's why we introduced our new linker payload strategy, which is called ALPA003. And we firmly believe we need the bispecific antibody to do their job. In the same time, we also need a very low strategy to allow a very strong bystander effect payload to penetrate into the different tumor tissue. And also, we have seen a very significant efficacious model, the data comparing to our benchmark compound. Again, you can see this HLX48 reached HNSTD at 60 milligram kilo is a very, very safe signal. So HLX49, which is the best-in-class -- we want to be the best-in-class HER2, HER2 novel biparotopic ADC. One of the reasons because of HLX22. Again, this is the preclinical pipeline, which we here -- it's not really the preclinical because some of the blue flag are already in the clinical and the yellow flag to be in the clinic within the next 6 months. So I think that's something we can expect this year. So strong growth trend in the next 5 years for Henlius. For all those light blue bar, that means Henlius starts our business in the biosimilar piece, but biosimilar actually gave us a very, very strong capability in terms of global clinical operation capability, global regulatory affairs capability, global manufacturing capability. And it starts from that, we actually moved to the new area, which is the innovative compound. So as of year 2024, we have $0.7 billion revenue -- sales generated. And last year, 2025, because we're a public company, we cannot disclose at the moment, but definitely double-digit growth is expected for sure in terms of the compound value. But over the next 5 years, I think you guys are going to see -- we're going to have another 10 biosimilar compound launched in the U.S., EU and China market, and we're going to have another 5 innovative compound launched in the global market as well. So again, Henlius 2030 version, as a global biopharma company, we're going to have more than 20 products launched globally and more than 15 compounds in the U.S. and EU region. And the portfolio expansion, we are going to have more ADCs, bispecific, TCEs advancing to the market and also broader footprint across oncology, autoimmune, metabolic and CNS. Overseas revenue expected to exceed the domestic contribution for sure. Thank you very much. Welcome any question.

[indiscernible] how much money do you need to push forward all these programs?

You're right. I think that's one of the reasons I think we are definitely done a couple of strategy in terms of how we carry on this R&D development. First thing, we can definitely leverage our sales revenue, hugely generated from the global sales, especially from the biosimilar part to sponsor the trials for the innovative compound. That's one channel. The second channel is definitely we are considering to have some of the licensing partnership discussion this year for a couple of assets. And also, we are open to have some of the new co-discussion to carry on this development. Thank you.

Thank you.