CStone Pharmaceuticals Announces 2021 Interim Results

SUZHOU, China, Aug. 26, 2021 /PRNewswire/ -- CStone Pharmaceuticals (CStone, HKEX: 2616), a leading biopharmaceutical company focused on researching, developing and commercializing innovative immuno-oncology therapies and precision medicines, today announced 2021 financial results.

"In the first half of 2021, CStone Pharmaceuticals, as a full-fledged biopharmaceutical company, has accomplished numerous milestones," said Dr. Frank Jiang, Chairman and CEO of CStone. "We successfully launched two first-in-class (FIC) oncology precision products GAVRETO® and AYVAKIT®, achieving remarkable sales in the first half of 2021. We have also secured three industry-leading new product application (NDA) approvals that enabled our launches, and we submitted four NDAs, among which two are for FIC /potential best-in-class (BIC) products, sugemalimab and ivosedinib, which we soon expect to receive approvals. In the meantime, we are pushing forward with multiple registrational trials at full speed. All these efforts demonstrate CStone's strong research development and commercialization capabilities.

Furthermore, we have received acceptance of an investigational new drug (IND) filing for CS2006, (PD-L1×4-1BB×HSA tri-specific) in mainland China and will complete IND-enabling studies of CS5001 (ROR1 ADC) for global submission, establishing a solid foundation for advancing our Pipeline 2.0 strategy. On the business development front, we will continue to deepen our strategic partnership with Pfizer, co-developing loratinib in the Greater China region, which will further enrich our pipeline. At the same time, we are working closely with EQRx to accelerate NDA submission for sugemalimab in multiple countries. Additionally, CStone was recently included in the Hang Seng Composite Index, which making the company's shares eligible for trading via Hong Kong Stock Connect. This development enhances our access to capital markets as we pursue sustainable, long-term growth.

Moving forward, we will maximize commercial potential of our products by expanding their indications and increasing their accessibility and affordability. We will also expedite a full slate of our clinical development programs, strengthening our presence in other high-prevalence cancers alongside our growing lung cancer portfolio, and developing our early-stage assets. In 2022, we are expecting more than five NDAs to be filed, and one to two INDs to be submitted for the assets with FIC/BIC/first-wave potential and global rights, harnessing the full potential of our Pipeline 2.0 portfolio. Through the above strategic measures, we believe that we can realize our mission to provide breakthrough therapies to cancer patients for better and healthier lives."

Business Highlights

In the first half of 2021, CStone continued the tremendous momentum of the prior year, extending a  track record of performance as a full-fledged biopharmaceutical company. We delivered six- months of solid execution, maintaining – and where possible, expediting – an ambitious agenda across the business. We further demonstrated our superior clinical development capabilities, with several  programs reaching exciting  milestones, including three approvals that led to our first product launches. Our commercial team executed a flawless go-to-market strategy for our approved drugs, which achieved an exceptional sales ramp-up. Additionally, we advanced our pre-clinical efforts with progress on multiple first-in-class ("FIC")/best-in-class ("BIC")/first-wave ("FW") candidates in emerging therapeutic modalities and for which we hold global commercial rights. Our efforts have further distinguished our pipeline, which stands out for the distinctiveness of our molecules, balance across stages of development, growing indication coverage, and expanding mix of global and Greater China commercial rights. Altogether, CStone's performance during the Reporting Period underscores our ability to fully harness the fundamental drivers of our business and brings into clearer view the full commercial and clinical value of our evolving portfolio.

For the six months ended June 30, 2021 and as of the date of this announcement, significant progress has been made with respect to our product pipeline and business operations:

I.       Commercial Efforts Lead to Successful Product Launches

The first half of 2021 was the most commercially active period in our history. Through wide and deep engagement with stakeholders in the healthcare community, our growing commercial team set the stage for our first commercial launches, those of GAVRETO® (pralsetinib) and AYVAKIT® (avapritinib). They engaged healthcare providers, regulators, hospitals, pharmacies and payors,  among other groups in the healthcare community, to provide education on our products and expand the number of patients who can access them. As a result, we brought two precision  medicines to market with exceptional speed and achieved a rapid sales ramp-up.

Additionally, the commercial team continued their efforts to expand the accessibility of assets on the market to bolster sales while also supporting the broader pipeline of late-stage assets which are on track for commercialization and indication expansions.

Highlights and details on our first-half commercial activity follow below.

• Healthcare community engagement supports successful product launches
• Active engagement with healthcare community stakeholders expanded our coverage of the market to include over 400 hospitals across more than 130 cities, and deepened our ties to healthcare providers, pharmacies, patient groups and insurers. Our sales team is well on track to establish comprehensive coverage of the market in China for our drugs. They now cover hospitals that account for approximately 70-80% of relevant market of precision medicines. Additionally, they secured inclusion of our precision medicines in 20 of the major commercial and government insurance programs. Through this effort, we established a robust network to support our first two product launches and prepare the pathway for future launches.
• We launched two precision medicines, reaching a broad swath of patients from the very first day. We successfully launched AYVAKIT® (avapritinib) in mainland China and Taiwan, China in May 2021 and June 2021 respectively, achieving net sales of RMB33.6 million in the first half of 2021. In June 2021, we successfully launched GAVRETO® (pralsetinib) in mainland China, achieving net sales of RMB45.8 million in the first half of 2021.

• Strategic collaboration agreements support product distribution
• We established a strategic collaboration agreement with Sinopharm Group Co., Ltd ("Sinopharm"). This enabled us to broaden hospital and pharmacy distribution coverage across mainland China for both GAVRETO® (pralsetinib) and AYVAKIT® (avapritinib). Through the collaboration with China (Shanghai) Pilot Free Trade Zone Lin Gang Special Area ("Lin Gang"), we were also able to expedite the process for market entry by clearing customs and completing the port inspection processes within four days, which is significantly earlier than expected.
• We formed strategic collaboration agreements with three of the largest integrated healthcare service platforms in mainland China – Shanghai Meditrust Health Co., Ltd., Beijing Yuanxin Technology Group Co., Ltd., and Medbanks – to leverage each party's competitive advantages and utilize innovative healthcare payment programs to improve distribution and patient affordability of GAVRETO® (pralsetinib) and AYVAKIT® (avapritinib). These relationships will help to maximize distribution of these drugs and improve patient affordability.

• Commercial efforts expand market potential and launch readiness of late-stage assets
• We are closely collaborating with our partners Pfizer and EQRx to plan the commercialization of sugemalimab in mainland China, and the global launch (outside Greater China) of sugemalimab. Our work with Pfizer has put us on track to receive new drug application ("NDA") approval for sugemalimab in mainland China this year, specifically for stage IV non-small cell lung cancer ("NSCLC"). This progress brings us materially closer to full-scale commercial launch of this drug. With EQRx, we are setting the stage for broad distribution of sugemalimab in markets that are forecast to generate approximately US$30 billion in PD-(L)1 sales in 2026 for the treatment of NSCLC, gastric and esophageal cancers: the U.S., the U.K. and the European Union ("EU"), etc.
• We took several steps to prepare for the indication expansion of GAVRETO® (pralsetinib)  and AYVAKIT® (avapritinib), which will provide greater long- term sales growth potential. For  GAVRETO® (pralsetinib), we have submitted NDAs in mainland China for RET-mutant medullary thyroid cancer ("MTC") and RET fusion-positive thyroid cancer and have been granted priority review. We also expect to submit an NDA in mainland China for the first-line treatment of RET fusion-positive NSCLC in the second half of 2021. In addition, we expect to submit NDAs in Hong Kong and Taiwan, China in the second half of 2021 for the second-line treatment of RET fusion-positive NSCLC. For AYVAKIT® (avapritinib), we have submitted an NDA in Hong Kong  for PDGFRA D842V mutant gastrointestinal stromal tumor ("GIST"). Also, we are exploring possible routes to expedite registration in mainland China on the back of U.S. FDA approval for the treatment of adult patients with advanced systemic mastocytosis ("SM").
• We advanced the launch readiness of ivosidenib (IDH1 inhibitor) and expect to receive an NDA approval in the fourth quarter of 2021 or first quarter of 2022 for patients with relapsed or refractory acute myeloid leukemia ("R/R AML").

II.     Numerous Clinical Successes Support a Mature Pipeline

We made substantial progress during the first half of 2021 to establish a mature pipeline of late-stage FIC assets across various oncology therapeutic areas and indications, expanding our total potential addressable market. We secured three NDA approvals to support our pralsetinib and avapritinib launches. We submitted four NDA filings covering a third asset, ivosidenib, as well as  indication and geographic expansions for pralsetinib, avapritinib and sugemalimab. We also significantly stepped up the volume of planned readouts and presentations relative to prior years.

Of particular significance, we announced several positive developments with sugemalimab that demonstrate its broad applicability and safety as a treatment for both stage III and IV NSCLC, including in an "all-comers" setting, which can give it a unique and potentially enduring market niche.

Details follow below.

• Sugemalimab (CS1001, PD-L1 antibody)
• In May 2021, the phase III trial of sugemalimab in patients with stage III NSCLC as monotherapy in the maintenance setting following concurrent or sequential chemoradiotherapy met its primary endpoint. This innovative trial design reflects real-world clinical practices and  demonstrates sugemalimab's distinct ability to cover a much broader patient population among PD-(L)1 treatments. We submitted an NDA for this indication to the NMPA in August 2021.
• The final PFS analysis of the phase III trial for stage IV squamous and  non-squamous  NSCLC showed that sugemalimab combined with chemotherapy as first-line treatment contributed to prolonged PFS and encouraging overall survival. Our NDA for this indication was accepted by the NMPA in November 2020 and we expect to receive the NDA approval by the end of 2021. In addition, we are working closely with EQRx on regulatory discussions for new drug applications for the two indications of stage III and stage IV NSCLC in multiple countries, including the U.S.

• Pralsetinib (CS3009, RET inhibitor)
• On March 24, 2021, we received an NDA approval from the NMPA for the treatment of patients with RET fusion-positive NSCLC previously treated with platinum-based chemotherapy.
• In April 2021, the NMPA accepted the NDA with Priority Review Designation for the treatment of patients with advanced or metastatic RET-mutant MTC and RET fusion-positive thyroid cancer

• Avapritinib (CS3007, KIT/PDGFRA inhibitor)
• On March 31, 2021, we received an NDA approval from the NMPA for the treatment of adults with unresectable or metastatic GIST harboring a PDGFRA exon 18 mutation, including PDGFRA D842V mutations.
• On April  29, 2021, we received the NDA approval license from Taiwan Food and Drug Administration ("TFDA") through an accelerated approval pathway for adults with unresectable or metastatic GIST harboring a PDGFRA D842V mutations.
• In May 2021, we received the acceptance of the NDA from Hong Kong Department of  Health ("HK  DoH") for adults with unresectable or metastatic GIST harboring a PDGFRA D842V mutations. We expect a decision on the NDA in the second half of 2022.

• Ivosidenib (CS3010, IDH1 inhibitor)
• The registrational trial of ivosidenib in patients with relapsed or refractory acute myeloid leukemia ("R/R AML") with an isocitrate dehydrogenase 1 ("IDH1") mutation met the pre-specified endpoints. Ivosidenib is the first IDH1 inhibitor in China that has demonstrated efficacy and sustained remission in patients with R/R AML.
• In August 2021, the NMPA accepted the NDA for the treatment of adults with R/R AML with a susceptible IDH1 mutation and granted priority review. We expect to receive the NDA approval around the end of 2021 or the first quarter of 2022.
• In August 2021, our partner, Servier, released positive topline data from the global phase III study of ivosidenib in combination with azacitidine in patients with previously untreated IDH1  mutant acute myeloid leukemia. The study recently halted further enrollment due to compelling efficacy data. We expect to file an NDA for this indication with the NMPA in 2022.

III.    Strategic Relationships Advance Outlook for Late-Stage Assets and Bolster Development Pipeline

We continue to grow and deepen our relationships with key global strategic partners, Pfizer and EQRx.

With Pfizer, we are preparing sugemalimab for full-scale commercial launch for stage IV NSCLC in mainland China. We are partnering with them in discussions with regulators and working together closely to establish connections with and educate other important healthcare community  stakeholders. These efforts are intended to set the stage for broad and rapid market adoption and sales ramp-up of sugemalimab upon commercial launch.

In addition, we broadened our relationship with Pfizer in the first half of the year with the  agreement to co-develop Pfizer's late-stage oncology asset lorlatinib in second line c-ros oncogene 1 ("ROS1")-positive NSCLC in Greater China. This type of collaboration was envisioned in the original partnership that we announced last year. It is a significant development both clinically and  in terms of our relationship with Pfizer. The plan for lorlatinib is to assess if this agent can provide  benefits to the relapsed  ROS1-positive advanced NSCLC after crizotinib, which if positive would add a new therapeutic approach to our lung cancer line-up. This program also bolsters the foundation of our relationship with a global biopharmaceutical leader and sets us up for future collaboration with them.

With EQRx, we have initiated discussions with stakeholders in key global markets – the U.S., the U.K., and the EU – around the registration of sugemalimab for NSCLC indications. Relevant discussions are ongoing. We are collaborating with EQRx to explore the feasibility of extending the range of covered indications for this drug, including gastric cancer and esophageal cancer. In addition, we are working with EQRx to expand a phase III study of CS1003 in HCC in the U.S. and major EU markets.

IV.    Pipeline 2.0 Efforts Harness Full Potential of Next-Gen Candidates

We have begun to realize the benefits of the revamp of our research capabilities in order to advance our development of BIC and FIC assets with global commercial rights. We expect this effort to enhance our internal sources of innovation, generate a sustained supply of one to two investigational new drug ("IND") application(s) per year, and support development of a globally distinctive and differentiated pipeline.

We are maintaining our near-term Pipeline 2.0 focus on two emerging therapeutic modalities: antibody-drug conjugates ("ADC") and multi-specific biologics. In the first half of 2021, we made substantial progress advancing two such assets into the clinical stage this year:

• CS2006 (NM21-1480, PD-L1×4-1BB×HSA tri-specific molecule): The dose escalation is ongoing and includes sites in the U.S. and Taiwan, China. We have completed dose level 4 enrollment in the U.S. and dose level 5 enrollment is ongoing. We submitted an IND application to the NMPA and received the IND acceptance in July 2021.
• CS5001 (LCB71, ROR1 ADC): The IND-enabling activities are ongoing and are expected to be completed with an IND/CTA submitted in the U.S./Australia thereafter by the end of 2021.

In addition to CS2006 and CS5001, we are further developing additional FIC/BIC/FW assets for which we hold global commercial rights, including two multi-specific biologics and one ADC.

V.     Expanding Capital Markets Access

Due to the strong performance in our shares during the 12 months as of June 2021, our stock has been included in the Hang Seng Composite Index and it is expected to be included in the Hong Kong Stock Connect imminently. This development is significant in that it can foster greater trading in our shares, more efficient price discovery and additional liquidity for investors.

Financial Highlights

• For the six months ended June 30, 2021, our revenue reached RMB79.4 million, primarily attributable to sales of the Company's pharmaceutical products (avapritinib and pralsetinib). The revenue of avapritinib and pralsetinib reached RMB33.6 million and RMB45.8 million respectively.
• Excluding the share-based payment expenses, the research and development expenses, the administrative, selling and marketing expenses and the loss for the period were respectively RMB444.8 million, RMB214.3 million and RMB632.5 million.
• As of June 30, 2021, our time deposits and cash and cash equivalents were RMB2,447.2 million.

2021 Interim Results Presentation Information

The Company will host a live webcast for 2021 interim result presentation at 10am HKT, August 27th, 2021, please find the access information as below.

https://goldmansachs.zoom.us/webinar/register/WN_mn1nvi0iSGWRde3dRGFNPw

Meeting ID: 939 2219 3743
Passcode: 778867