InnoCare reported 9M26 revenue of RMB2.10bn (+88.2% YoY). During the period, drug sales contributed RMB1.45bn (+41.5% YoY), representing 73% of our full-year forecast and aligning with our expectations. Such growth was driven by continued volume expansion of orelabrutinib, incremental contributions from tafasitamab and zurletrectinib, as well as subsequent milestone payments from Zenas. In 3Q26 alone, revenue reached RMB962mn, including drug sales of RMB531mn (+38.6% YoY, +13.8% QoQ). The 9M26 net profit was RMB648mn, compared with a RMB72mn loss last year, while operating cash flow turned positive at RMB220mn. R&D expenses increased 16.1% YoY to RMB785mn in 9M26. Selling expenses vs product sales ratio declined to 29.2% from 37.7%. Management reiterated its guidance for full-year product sales growth of 35% YoY and bottom-line profitability. We maintain BUY with a TP of HK$18.90.
Mesutoclax remains the lead pipeline asset, with AML/MDS opening new opportunities. Mesutoclax’s commercialization timeline has become clearer: the Ph3 trial of mesutoclax plus orelabrutinib as a fixed-duration regimen in 1L CLL/SLL remains on track for completion in 1H27, with an NDA submission expected in 2027; and the registrational study in BTKi-pretreated MCL is expected to support an NDA filing in 1H27. Ph3 trials of mesutoclax plus orelabrutinib in r/r MCL and r/r MZL are ongoing. In 1L unfit AML, the China Ph3 comparing mesutoclax plus azacitidine with venetoclax plus azacitidine is ongoing, and may take ~3 years to complete. For fit patients with 1L AML, management plans to await data from the ongoing US study, with data targeted for 2027 before potentially initiating a global trial, which would evaluate mesutoclax monotherapy against standard “7+3” chemotherapy. We view AML/MDS as meaningful longer-term optionality beyond the core NHL franchise for mesutoclax. In the near term, mesutoclax’s initial global Ph2 MDS data will be presented at ASH 2026 in Dec.
ICP-332 and ICP-488 continue to advance towards commercialization in autoimmune diseases. ICP-332’s registrational Ph3 in atopic dermatitis (AD) met its primary endpoint of Week-16 EASI-75, alongside strong EASI-90 and EASI-100 results; safety follow-up is ongoing and an NDA submission is expected in 1H27. Ph2 data in chronic spontaneous urticaria (CSU) and psoriasis remain scheduled for end-2026. In prurigo nodularis (PN), enrollment in the global study is expected to complete soon, followed by a six-month observation period and potential results in 2027; positive data could support further global development and provide an entry point for ICP-332 into overseas markets. The vitiligo programme is also advancing into Ph3. Meanwhile, ICP-488’s Ph3 in psoriasis has met its primary endpoint and is undergoing safety follow-up. Together, these assets offer multiple near-term data catalysts and a potential second commercial growth engine beyond oncology.
Maintain BUY. The recent strategic licence agreement with Eli Lilly covering up to five innovative target programmes provides external validation of InnoCare’s discovery capabilities. Pricing in the impact of US$100mn in upfront and near-term milestone payments and potential US$3.3bn in milestone payment, we revise our DCF-based TP from HK$18.31 to HK$18.90 (WACC: 10.73%, terminal growth: 2.0%, unchanged).