Key Takeaways:
Nomura raised SKB BIO's price target to HKD544.42, citing Phase III data showing its TROP-2 ADC cut lung cancer progression risk by 65 percent.
"The dataset is highly encouraging and marks the first ADC to demonstrate PFS improvement in a Phase III trial targeting PD-L1-positive NSCLC patients," Nomura analysts said in a report published Monday.
The OptiTROP-Lung05 trial evaluated sac-TMT (sacituzumab tirumotecan) plus Merck's Keytruda (pembrolizumab) against Keytruda alone in first-line PD-L1-positive non-small cell lung cancer. The combination achieved a hazard ratio of 0.35 for progression-free survival and 0.55 for overall survival. Nomura noted that other regimens typically show an HR of around 0.50, making this result a notably high benchmark that could reshape the competitive environment.
The revision reflects improved sales prospects for sac-TMT in both China and overseas markets, with Nomura raising its terminal growth rate assumption to 4.5 percent from 4 percent. The broker maintained its Buy rating and kept its weighted average cost of capital unchanged at 10.8 percent. SKB BIO shares fell 2.4 percent on Monday to around HKD474, implying about 15 percent upside to the new target.
The results will be presented at the upcoming 2026 American Society of Clinical Oncology Annual Meeting. The data also builds on the previously announced TROUSE-05 trial results, which Nomura incorporated into its revised revenue forecasts.
Merck licensed rights to sac-TMT outside China four years ago in a deal valued at up to $1.4 billion. The drug is also being evaluated across multiple tumor types, with Merck recently reporting positive data in endometrial cancer.
The data positions sac-TMT as a potential first-line standard-of-care in PD-L1-positive NSCLC, a market dominated by Keytruda. Investors will watch for regulatory filings in China and further Phase III readouts from Merck's extensive development program.
This article is for informational purposes only and does not constitute investment advice.
