Accelerating transition to global biopharma

Acceleratingtransition toglobalbiopharma Target PriceHK$113.86(Previous TPHK$110.62)Up/Downside33.2%Current PriceHK$85.50 Innovent reported robust FY25 results, achieving its first-ever full-yearnetprofitofRMB834mn.Top-line growth was strong,with FY25 revenue reachingRMB13.0bn (+38% YoY) and product sales hitting RMB11.9bn (+45% YoY).Whilesintilimab sales grew steadily by 5% YoY to US$551mn, new launches—including mazdutide, PCSK9 mAb, and IGF-1R—fueled significant expansion,driving a 27% HoH product sales increase in 2H25.Profitability improvednotably, with 2H25productgross marginexpanding to 86.2%. The FY25 sellingexpense ratio(vs product sales)declined to 48.0%, despite a2H25 uptick(50.1%) to support non-oncology commercialization. R&D expenses remainedflattish (-2% YoY)inFY25but areprojected to riseasglobal MRCTs (notablyIBI363, PD-1/IL2) advance, in our view.Backed by a formidable RMB24.3bncash reserve as ofend-2025, Innovent is well-capitalized to execute its globalambitions. Given its strong pipeline innovation and global development potential,we maintain BUY ratingfor Innovent with a target price ofHK$113.86. China Healthcare Jill WU, CFA(852) 39000842jillwu@cmbi.com.hk Andy WANG(852) 3657 6288andywang@cmbi.com.hk Stock Data Strategicpartnerships accelerating global expansion.Innovent isadvancing its transition into a fully integrated global biopharma throughdiverse partnerships. A landmark collaboration with Takeda for IBI363establishesa strong foundation for global co-development andcommercialization. Innoventalso recently secured a US$350mn upfrontpayment in its seventh strategic R&Dpartnershipwith Eli Lilly for early-stageassets.In addition,IBI3009(DLL3 ADC,out-licensed to Roche)isundergoing a global Ph1 trial for SCLC. Notably, IBI324 (VEGF/Ang2bsAb,out-licensed to Ollin) demonstrated superior anatomic efficacy in aPh1bhead-to-head comparison with the market-leader Faricimab. Expected toenter Ph3 MRCTs in 2026, IBI324 is positioned to disrupt the ~US$15bnglobalretinal market.Innovent targets advancing at least five assets(including IBI363, IBI343, and IBI324) into global Ph3 MRCTs by 2030. Source: FactSet First-line IBI363datareadouts to bea crucial catalyst for the year.Innovent is executing a global Ph3 MRCT for IBI363 in IO-resistant sq-NSCLC, and recently initiated a Ph3 trial for 3L MSS CRC in China. For IO-resistant nsq-NSCLC,the PoC study has been completed withaPh3 MRCTin planning. Crucially, Ph1b/2 PoC studiesfor IBI363 in first-line NSCLC andCRC have cleared dose optimization and entered the randomized phase,withPoCdataanticipatedin2026.Pendingpositiveresults,Innovent/Takeda plan to launch Ph3 MRCTs for both 1L indications.Additionally, IBI343 (CLDN18.2 ADC) has advanced to Ph3 for 3L+GC andPDAC. Subject to favorable PoC data, Takeda intends to initiate Ph3MRCTs for IBI343 in first-line GC and PDAC. Source: FactSet Expanding anext-generationobesityfranchise.Beyond its lead assetmazdutide, Innovent is cultivating a comprehensive metabolic portfolio toaddress unmet needs in obesity, includingdaily and weekly oral GLP-1s,monthly PCSK9-GGG, amylin,etc. A key pipeline highlight is IBI3032, adaily oral GLP-1 that has dosed over 100 subjects across China andthe USsince 3Q25, with Ph1 clinical data expected in 2026. Early data indicatesthat IBI3032 achieves 5-10 times the drug exposure of orforglipron, drivingan impressive 10% weight loss within just four weeks. Maintain BUY.Withtheupside from therecent Eli Lilly deal,we revised ourTP from HK$110.62to HK$113.86(WACC: 9.5%, terminal growth:4.0%).Earnings Summary Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or inpart, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report3 business days after the date of issue of this report; (3) serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not ra