CStone Pharmaceuticals Reports 2023 Annual Results and Business Updates

• Total revenue for 2023 was RMB463.8 million, with commercial revenue of RMB 368.1 million
• Healthy financial position with cash reserves of RMB 1,026.7 million as of December 31, 2023 and net loss narrowed by 57% from the past year
• CStone established strategic collaborations with multiple companies to maximize commercialization efficiency and product value. Manufacturing localization of AYVAKIT^® (avapritinib) and GAVRETO^® (pralsetinib) proceed smoothly in China, expecting significant reduction of drug cost. Moving forward, the Company will strategically priorities research and development
• CS5001 (ROR1 ADC), a blockbuster product from CStone's Pipeline 2.0, is making rapid progress in a global multi-center clinical trial and has become the first ROR1 ADC demonstrating clinical anti-tumor activity in solid tumors. Additionally, various first-in-class ADCs and multi-specific antibodies further strengthen the early pipeline
• Five new drug application (NDA) approvals were obtained, including three for sugemalimab in treatment of first-line gastric/gastroesophageal junction adenocarcinoma, first-line esophageal squamous cell carcinoma, and relapsed or refractory extranodal natural killer/T-cell lymphoma, as well as two for pralsetinib in treatment of first-line NSCLC
• Two marketing authorisation applications (MAAs) of sugemalimab in UK and EU are currently under active review. CStone has already completed the Good Clinical Practice (GCP) inspection conducted by the European Medicines Agency (EMA), expecting approvals of both applications in 2024

SUZHOU, China, March 27, 2024 /PRNewswire/ -- CStone Pharmaceuticals ("CStone", HKEX: 2616), a leading biopharmaceutical company focused on research, development, and commercialization of innovative immuno-oncology therapies and precision medicines, today reported 2023 annual results and recent business updates.

"2023 was a year of opportunities and challenges for CStone Pharmaceuticals. We have made plenty breakthrough progresses in commercial cooperation, product pipelines, and clinical development." said Dr. Jason Yang, CEO and President of R&D of CStone.

"In 2023, we proactively built and expanded strategic collaborations with multiple companies, including reaching an exclusive agreement with Allist Pharmaceuticals to commercialize the RET inhibitor GAVRETO^® (pralsetinib) in Mainland China and entering into a strategic collaboration and exclusive licensing agreement with 3SBio Inc for nofazinlimab (anti-PD-1 antibody) in Mainland China. In addition, we have made steady progress regarding manufacturing localization of AYVAKIT^® (avapritinib) and GAVRETO^® (pralsetinib) in China, expecting foreseeable cost reduction and increased supply flexibility which will enhance the impact and competitiveness of both products in Chinese market. Moving forward, we will continue to bring our own strengths into business, strategically prioritizing the research and development of innovative drugs to meet the unmet needs of patients and the market, therefore elevating the long-term value of the company.

From the aspect of CStone Pipeline 2.0, the blockbuster product – CS5001 (ROR1 ADC) is making rapid progress in clinical stage. The dose escalation and expansion of its global multi-regional clinical trial is conducted simultaneously in the United States, Australia and China. Supported by current data, CS5001 exhibits manageable safety, excellent linker stability, and promising anti-tumor activity in various advanced, heavily pre-treated solid tumors and lymphomas; CS5001 has also become the first ROR1 ADC demonstrating clinical anti-tumor activity in solid tumors. We will present detailed clinical data of CS5001 at upcoming international academic conferences.

In addition, our early-stage pipeline has been strengthened by multiple in-house developed ADCs and multi-specific antibodies with novel targets and first-in-class potential. CS2009, a tri-specific antibody targeting PD-1, CTLA-4, and VEGFa, is expected to be IND ready by the end of 2024. Two other innovative ADCs are also proceeding towards preclinical candidate nomination within this year.

Last but not least, we have achieved tremendous success in clinical development and registration. Recently, the fifth indication of sugemalimab (anti-PD-L1) – in combination with chemotherapy as a first-line treatment for gastric/gastroesophageal junction adenocarcinoma has been approved by the NMPA of China, which represents the world's first anti-PD-L1 therapy approved for this indication. Additionally, two MAAs of sugemalimab are currently under review by the health authorities in UK and EU and proceeding smoothly. CStone has already completed the Good Clinical Practice (GCP) inspection conducted by the European Medicines Agency (EMA) in early 2024. We expect to receive approvals of both applications in the second half of 2024, marking a significant step for CStone to enter the global market.

Looking ahead, CStone will steadfastly adhere to a R&D strategy guided by clinical value, enriching our pipeline and accelerating R&D through innovative channels. We will also continuously deepen strategic collaborations to promote company commercialization and product pipeline. We look forward to entering the international markets, bringing more innovative medicines to patients worldwide, and continually creating greater long-term value for our partners and investors."

Business highlights

For the year ended December 31, 2023, and as of the date of this announcement, significant progress has been made with respect to our product pipeline and business operations. A shortlist of our achievements over this period includes:

– RMB463.8 million in total revenue, including RMB368.1 million in commercial revenue which is composed of RMB336.7 million in sales of our precision medicines and RMB31.4 million in royalty income of sugemalimab. RMB199.5 million in other gains and loss, which was primarily due to net gain of RMB179.5 million related to the transfer of license for the ivosidenib business to Les Laboratoires Servier ("Servier")

– Five new drug application ("NDA") approvals obtained for pralsetinib and sugemalimab: for pralsetinib, first-line treatment of rearranged during transfection ("RET") fusion-positive non-small cell lung cancer ("NSCLC") in mainland China which leads to a broader coverage of pralsetinib in both first-line and second-line NSCLC; RET fusion-positive NSCLC, RET- mutant medullary thyroid cancer ("MTC") & RET fusion-positive thyroid cancer ("TC") in Taiwan, China. For sugemalimab, monotherapy for relapsed or refractory ("R/R") extranodal natural killer/T-cell lymphoma ("ENKTL") in mainland China; in combination with chemotherapy for first-line esophageal squamous cell carcinoma ("ESCC") in mainland China and in combination with chemotherapy for first-line gastric adenocarcinoma/gastroesophageal junction adenocarcinoma ("GC/GEJ") in mainland China

– Two NDAs currently under review: sugemalimab in combination with chemotherapy for first- line stage IV NSCLC in the United Kingdom ("U.K.") and sugemalimab in combination with chemotherapy for first-line stage IV NSCLC in the European Union ("E.U."). The Good Clinical Practice ("GCP") inspections from the European Medicines Agency (the "EMA") for first-line stage IV NSCLC have been completed at two study centers and at Contract Research Organization ("CRO")

– Global multi-regional clinical trial of CS5001 making rapid progress: the first-in-human ("FIH") global study of CS5001, a receptor tyrosine kinase-like orphan receptor 1 ("ROR1") antibody-drug conjugate ("ADC"), being conducted in the United States of America ("U.S."), Australia and China; CS5001 appears well tolerated and safe and has demonstrated promising antitumor activities in both solid tumor and lymphoma. CS5001 is so far the first ROR1 ADC which demonstrates clinical anti-tumor activity in solid tumor

– Other key clinical programs proceeding smoothly: the pivotal study of lorlatinib for c-ros oncogene 1 ("ROS1")-positive advanced NSCLC in mainland China met the primary endpoint; the global phase III trial of nofazinlimab in combination with LENVIMA® (lenvatinib) in first-line unresectable or metastatic hepatocellular carcinoma ("HCC") is ongoing with continued follow-up

– Ten data presentations/publications at/in global academic conferences/top-tier medical journals, such as the American Society of Clinical Oncology ("ASCO") Annual Meeting, European Society for Medical Oncology ("ESMO") Congress, ESMO World Congress on Gastrointestinal Cancer ("ESMO GI Congress"), Journal of Clinical Oncology, Nature Medicine, Nature Cancer, etc.

– Over ten discovery projects in progress, including multi-specifics, ADCs, and a proprietary cell penetrating therapeutic ("CPT") platform for drugging intractable intracellular targets; Preclinical candidates ("PCCs") have been achieved by one multi-specific project and one ADC project

– Three commercial collaborations have been established to leverage multiple companies' strengths while enabling CStone to strategically focus on research and development going forward: a new partnership with 3SBio Inc. ("3SBio") in China for nofazinlimab to accelerate the Chemistry, Manufacturing and Controls ("CMC") development and commercialization of nofazinlimab; a new partnership with Allist Pharmaceuticals ("Allist") in China for GAVRETO® (pralsetinib) to significantly expand commercial support and improve overall profitability of the business; we transferred the Greater China & Singapore rights to TIBSOVO® (ivosidenib) to the global license holder Servier for up to US$50 million including US$44 million upfront to recoup the historical investments on this asset and monetize potential future cash flow

– The application of technology transfer for avapritinib is under review by the Center for Drug Evaluation ("CDE") of the National Medical Products Administration ("NMPA"). The technology transfer for pralsetinib, including manufacturing and clinical bio-equivalence ("BE") study, has been completed and the application dossier have been submitted to CDE. These will help to reduce costs and improve the long-term profitability of the products

I. Maximizing Commercial Value through Partnerships

Highlights and details on our commercial activities as of the date of this announcement are as follows:

• Commercial collaborations with multiple companies in China

In order to further improve the commercialization efficiency, we have established commercial collaborations with multiple companies during the year to leverage their strengths while enabling CStone to strategically focus on research and development going forward.

– In November 2023, we granted the exclusive commercial rights for GAVRETO® (pralsetinib), a RET inhibitor, to Allist in mainland China. This deal integrates GAVRETO® (pralsetinib) into Allist's highly synergistic lung cancer franchise and enables GAVRETO® (pralsetinib) to benefit from Allist's more mature commercial team and significantly broader market coverage, while concurrently allowing CStone to reduce operating costs associated with GAVRETO® (pralsetinib) commercialization thereby improving overall profitability.

– In December 2023, we transferred the exclusive rights to develop, manufacture and commercialize TIBSOVO^® (ivosidenib) in the Greater China region (including mainland China, Hong Kong, Macau and Taiwan) and Singapore to Servier and will receive up to US$50 million in exchange. The transaction will help to expand indication and improve accessibility of TIBSOVO^® (ivosidenib) for patients in Greater China and Singapore while monetizing potential future cash flow for CStone and recouping historical investment on the asset.

• Achieved successful launches of new indications

We expanded the indications for our in-market products and positioned them to become meaningful future contributors to our revenue.

– GAVRETO^® (pralsetinib): A new indication for the first-line treatment of patients with locally advanced or metastatic RET fusion-positive NSCLC was launched in mainland China.

– GAVRETO^® (pralsetinib): The indications for the treatment of patients with RET fusion-positive locally advanced or metastatic NSCLC, and advanced or metastatic RET-mutant MTC and RET fusion-positive TC were launched in Taiwan, China.

– CEJEMLY^® (sugemalimab): A new indication was successfully launched in mainland China for the first-line treatment of patients with unresectable locally advanced, recurrent, or metastatic ESCC in combination with fluorouracil and platinum-based chemotherapy.

– CEJEMLY^® (sugemalimab): A new indication was successfully launched in mainland China for the treatment of patients with R/R ENKTL as a monotherapy.

– CEJEMLY^® (sugemalimab): A new indication was successfully launched in mainland China in combination with chemotherapy for the first-line treatment of patients with locally advanced or metastatic GC/GEJC.

• Developing a range of approaches to promote accessibility and affordability of our drugs

– We have updated our pricing strategy for our in-market products. Specifically, AYVAKIT^® (avapritinib) has been added to the National Reimbursement Drug List for National Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance (2023) (the "NRDL") in China, for the treatment of adults with unresectable or metastatic gastrointestinal stromal tumor ("GIST") harboring the PDGFRA exon 18 mutation, including PDGFRA D842V mutations.

– The patient assistance program ("PAP") scheme for GAVRETO^® (pralsetinib) and TIBSOVO® (ivosidenib) were updated to lower the barrier for some patients with low affordability and improve price competitiveness.

• Established broad industry and academic awareness of our brand and scientific leadership

– GAVRETO^® (pralsetinib), AYVAKIT^® (avapritinib) and TIBSOVO^® (ivosidenib) were included in 21 of China's national guidelines for testing and treatment in multiple therapeutic areas, such as NSCLC, TC, GIST, systemic mastocytosis ("SM"), and acute myeloid leukemia ("AML"), etc. In particular, the 2023 Chinese Society of Clinical Oncology ("CSCO") NSCLC guideline, the 2022 CSCO GIST Guidelines, the 2022 Chinese Guideline for Diagnosis and Treatment of Systemic Mastocytosis in Adults, and the 2022 China Anti-Cancer Association ("CACA") Hematological Oncology Guideline, etc.

– We continued working with investigators in post-market clinical projects, such as investigator-initiated trials ("IIT") and real-world studies ("RWS"), to generate additional data in multiple cancer indications. For example, a multi-centered RWS evaluated the safety and efficacy of AYVAKIT^® (avapritinib) in Chinese patients with GIST; another IIT aims to study the efficacy and safety profile of AYVAKIT^® (avapritinib) for the treatment of R/R Core Binding Factor ("CBF")- AML with KIT D816 or N822 mutations.

• Collaborating with Pfizer on the commercialization of sugemalimab in China

– We are closely collaborating with our partner Pfizer on the commercialization of CEJEMLY® (sugemalimab) in mainland China.

– In 2023, CEJEMLY^® (sugemalimab) as a treatment of stage III NSCLC has been upgraded to a Level 1 recommendation in the 2023 CSCO NSCLC guideline and the 2023 CSCO Immunotherapy guideline. In addition, CEJEMLY® (sugemalimab) as a treatment of stage III NSCLC has also been included in the 2023 Chinese Medical Association clinical practice guideline in China.

II. Clinical Advancements across an Evolving Pipeline

Details are as follows:

• CS5001 (LCB71, ROR1 ADC)

– The global FIH study of this potential best-in-class ("BIC") ROR1 ADC has shown swift recruitment to the dose-escalation part in the U.S., Australia and China.

– On December 20, 2023, we reported preliminary findings from the early phase of the ongoing FIH study, at which time the safety evaluation of dose level 7 had been completed and efficacy evaluation was ongoing. CS5001 appears to be well tolerated and safe and has demonstrated promising antitumor activities in both solid tumor and lymphoma. CS5001 is so far the first ROR1 ADC which has reported clinical anti-tumor activity in solid tumor.

– As of the date of this announcement, we have escalated to dose level 9; no dose limiting toxicity ("DLT") was observed; and maximum tolerated dose ("MTD") has not been reached. In heavily pretreated patients with lymphoma or solid tumor who were enrolled regardless of ROR1 status, CS5001 has been well tolerated as the dose level increases; no grade 4-5 treatment-related adverse events were observed. The pharmacokinetics ("PK") profile of CS5001 was as expected and indicated excellent stability of the ADC. Encouraging antitumor activities were observed starting from dose level 5, including partial and complete responses in both advanced solid tumor (e.g. lung cancer and pancreatic cancer) and lymphoma (e.g. Hodgkin lymphoma and diffuse large B-cell lymphoma ("DLBCL")). We expect to determine the preliminary recommended phase 2 dose ("RP2D") of CS5001 in the first half of 2024 and plan to initiate a registrational phase Ib/II trial by the end of 2024. With more data being accumulated during dose escalation, multiple presentations at international academic conferences are being planned for in 2024, including ASCO, ESMO, American Society of Hematology Annual Meeting ("ASH"), etc.

– CS5001 has many distinctive features, including proprietary site-specific conjugation, tumor-cleavable linker, and prodrug technology. CS5001 demonstrated BIC potential in mantle cell lymphoma and triple negative breast cancer xenograft models compared to a benchmark ROR1 ADC with Monomethyl auristatin E ("MMAE") payload. In addition, CS5001 demonstrated a bystander effect in in vitro co-culture systems, suggesting that solid tumors with heterogeneous/ low expression of ROR1 may also benefit. In March 2023, we presented the translational data of CS5001 in an oral session at the 13th world ADC London conference ("World ADC London").

– In addition, we have identified a promising candidate ROR1 antibody clone for immuno-histochemistry ("IHC") to enable biomarker-driven patient selection based on tumor ROR1 expression, supporting precision medicine efforts in the future.

• Sugemalimab (CS1001, PD-L1 antibody), new indications under review and expanding to Europe and the U.K.

– Stage IV NSCLC:

• • For the markets outside of Greater China, the marketing authorization application ("MAA") for stage IV NSCLC indication is under review by the regulatory agencies in multiple countries and regions. In February 2023 and December 2022, the MAA filing for sugemalimab in combination with chemotherapy as the first-line treatment for patients with metastatic NSCLC was accepted by the EMA in the E.U. and the Medicines and Healthcare products Regulatory Agency ("MHRA") in the U.K. respectively. Currently, this indication is under review by both parties. In July 2023, we received the GCP inspection notification from EMA for this indication in the E.U. In October 2023, we received the Day-80 Request for Further Information ("RFI") from MHRA which did not contain any unsolvable questions. In December 2023, we received the Day-180 List of Outstanding Issues ("LoOI") from EMA which indicated that all questions had been properly addressed during previous rounds of communications. In February 2024, we completed GCP inspections from the EMA at two study centers and at CRO.
  • In June 2023, we announced that the results of Overall Survival ("OS") interim analysis in the registrational GEMSTONE-302 study in patients with stage IV NSCLC had been published in a world-renowned oncology journal Nature Cancer.

– GC/GEJC:

• • In March 2024, we received the NDA approval from the NMPA for the first- line treatment of patients with locally advanced or metastatic GC/GEJC (Combined Positive Score("CPS"))≥5).
  • In February 2023, we received the NDA acceptance from the NMPA for the first-line treatment of patients with locally advanced or metastatic GC/GEJC (CPS≥5).
  • In October 2023, the results of the pre-specified progression-free survival ("PFS") and OS final analyses in the GEMSTONE-303 study were accepted as a late-breaking abstract ("LBA") and showcased in an oral session at the ESMO Congress 2023. Sugemalimab in combination with chemotherapy demonstrated statistically significant and clinically meaningful improvement in PFS and OS compared with placebo plus chemotherapy.

– ESCC:

• • In December 2023, we received the NDA approval from the NMPA for the first-line treatment of patients with unresectable locally advanced, recurrent, or metastatic ESCC.
  • In April 2023, we received the NDA acceptance from the NMPA for the first-line treatment of patients with unresectable locally advanced, recurrent, or metastatic ESCC.
  • In January 2023, we announced that the GEMSTONE-304 study for the first- line treatment of unresectable locally advanced, recurrent, or metastatic ESCC had met its primary endpoints. Sugemalimab in combination with chemotherapy demonstrated a statistically significant and clinically meaningful improvement in PFS and OS compared with placebo in combination with chemotherapy. We presented the detailed results at the ESMO GI Congress in June 2023.
  • In February 2024, the results of the PFS final analysis and the OS interim analysis in the registrational GEMSTONE-304 study were published in a top-tier medical journal – Nature Medicine.

– R/R ENKTL:

• • In October 2023, we received the NDA approval from the NMPA for the treatment of the patients with R/R ENKTL as a monotherapy.
  • In March 2023, we announced that the results of the registrational GEMSTONE-201 study in patients with R/R ENKTL were published in a top-tier oncology journal – Journal of Clinical Oncology.
  • In December 2023, we reached an agreement with the U.S. FDA in a Type B consultation regarding the registration pathway for R/R ENKTL indication.

– Nofazinlimab (CS1003, PD-1 antibody)

• In March 2024, we completed a prespecified interim analysis for the global phase III trial of nofazinlimab in combination with LENVIMA® (lenvatinib) for the first-line treatment of patients with unresectable or metastatic HCC; no new or unexpected safety signals were observed; independent Data Monitoring Committee ("iDMC") recommended a continued follow-up, without protocol modification, until the final assessment of OS.
  • In September 2023, we announced that the results of the FIH trial (CS1003- 101) of nofazinlimab in patients with advanced solid tumors had been published in a highly-cited journal, British Journal of Cancer.
• Pralsetinib (CS3009, RET inhibitor)
• In January 2023, we received the NDA approval from the Taiwan Food and Drug Administration ("TFDA") for the treatment of patients with RET fusion-positive locally advanced or metastatic NSCLC, and advanced or metastatic RET-mutant MTC and RET fusion-positive TC.
• In June 2023, we received the NDA approval from the NMPA for the first-line treatment of patients with RET fusion-positive locally advanced or metastatic NSCLC who have not been previously treated with systemic therapy.
• In June 2023, we published updated results from the phase I/II ARROW trial in Chinese patients with RET fusion-positive NSCLC in Cancer.
• Avapritinib (CS3007, KIT/PDGFRA inhibitor)
• In May 2023, our partner, Blueprint Medicines Corporation ("Blueprint Medicines"), received approval from the U.S. Food and Drug Administration ("FDA") for the treatment of adults with indolent systemic mastocytosis ("ISM") in the U.S..
• In December 2023, our partner, Blueprint Medicines, received approval from the EMA for the treatment of adult patients with ISM with moderate to severe symptoms inadequately controlled on symptomatic treatment. To date, avapritinib is the first and only approved therapy for patients with ISM in Europe.
• In June 2023, we presented new data of avapritinib in patients with advanced GIST at the ASCO Annual Meeting 2023.
• In November 2023, we announced that a post hoc data analysis of the global Phase 1 NAVIGATOR and Phase 1/2 China bridging (CS3007-101) studies of avapritinib in advanced GIST were published in a reputable oncology journal – Clinical Cancer Research.
• Ivosidenib (CS3010, IDH1 inhibitor)
• In December 2023, we received the acceptance from the NMPA to the supplemental submission for regular approval of ivosidenib as a treatment for R/R AML.
• In May 2023, we reached alignment with CDE on the regulatory pathway toward regular approval of ivosidenib as a treatment for R/R AML.
• In January 2023, we completed the China bridging study of ivosidenib in R/R AML patients.
• Lorlatinib (ALK/ROS-1 inhibitor)
• We are conducting a pivotal study in patients with ROS1-positive advanced NSCLC who have been previously treated with crizotinib and platinum-based chemotherapy. In June 2023, we completed the patient enrollment for this study. In February 2024, the pivotal study met the primary endpoint, and we are in discussion with the CDE and Pfizer regarding the pre-NDA/NDA in mainland China for ROS1-positive advanced NSCLC in 2024.

III. Building out Research Pipeline Leveraging Multiple Sources of Innovation

Precision medicines and immuno-oncology ("I/O") combinations remain our strategic focus. ADCs which deliver cytotoxic agents to tumors with precision, and multi-specific biologics which can create new biology and combinations represent two near-term modalities for early development.

We have made significant progress in the 2023 with several initiatives:

• First/Best-in-Class ("FIC/BIC") ADCs: Two FIC ADC programs are progressing toward PCC nomination. The first ADC project, CS5006, which targets a novel tumor- associated antigen expressed in multiple large tumor indications and identified using an in-house machine-learning bioinformatic algorithm, is expected to have the PCC nominee announced in the first half of 2024. In addition, the lead antibodies of the other FIC GPCR-x ADC, CS5005, have been selected. The conjugated lead molecules have demonstrated encouraging in vitro and in vivo efficacy. Investigational new drug applications ("INDs") with respect to these two FIC ADCs are expected to be filed in 2025. Moreover, CS5007, which is expected to be the BIC bispecific ADC together with its corresponding bispecific antibody CS2011, is progressing towards PCC nomination. CS5007 (CS2011) is targeting well validated targets with proven syngeneic effectiveness. The leading bispecific antibody candidate is expected to be nominated in the first half of 2024, and the PCC of this bispecific ADC is expected to be announced by the end of 2024.
• I/O multi-specifics: CS2009, which is a tri-specific molecule against PD-1, VEGFa and CTLA-4 target, is under cell line development, and the related IND is expected to be filed in 2024. This is a potential FIC next-generation I/O backbone that targets three critical immune-suppressive pathways in the tumor microenvironment and may deepen response of a PD-(L)1 based therapy in large tumor types including NSCLC and HCC.
• Cell penetrating therapeutic platform: Numerous well-known oncology targets are intracellular proteins deemed undruggable by current therapeutic approaches. We are developing a proprietary CPT platform against these otherwise intractable targets. Significant progress has been made in the development of this platform with broad therapeutic potential for oncology and beyond.

IV. Strategic Relationships Advance Commercialization Activities and Pipeline Development

We continue to grow and deepen relationships with key global strategic partners, including partners in China, to expand commercialization of our in-market and late-stage drugs, bolster our early-stage pipeline of potential FIC/BIC molecules, and access technologies that complement our research and development efforts.

We entered into a strategic collaboration for nofazinlimab in mainland China with 3SBio and granted 3SBio exclusive rights for the development, registration, manufacturing, and commercialization of nofazinlimab in mainland China in November 2023. This partnership will accelerate the CMC development and commercialization of nofazinlimab.

We entered into a commercial partnership with Allist in China for the promotion and marketing of pralsetinib in November 2023. This deal integrates pralsetinib into Allist's highly synergistic lung cancer franchise and enables pralsetinib to benefit from Allist's more mature commercial team and a significantly larger market coverage, while concurrently allowing CStone to reduce overhead and operating costs associated with pralsetinib commercialization thereby improving overall profitability.

We transferred the Greater China and Singapore rights to ivosidenib to the global license holder Servier for up to US$50 million including US$44 million upfront (transfer of ivosidenib business) in December 2023. This highly accretive transaction allowed CStone to recoup its initial investment on this asset and monetize future potential cash flow from the business.

Under our partnership with Jiangsu Hengrui Pharmaceuticals Co., Ltd. ("Hengrui") for anti- CTLA-4 mAb (CS1002), a phase Ib/II trial of CS1002 combination therapy for the treatment of advanced solid tumors including HCC and NSCLC is being conducted by Hengrui. Currently, the trial is recruiting patients smoothly. In January 2024, Hengrui received an IND approval from the NMPA for evaluating CS1002 (SHR-8068) in combination with adebrelimab and chemotherapy as the first-line treatment of patients with advanced or metastatic non-squamous NSCLC.

We regained rights for the development and commercialization of sugemalimab and nofazinlimab outside of Greater China, with the termination of the license agreement for sugemalimab and nofazinlimab between CStone and EQRx on May 9, 2023. The transition was completed in August 2023. Currently, we are leading the regulatory process for sugemalimab MAA reviews by the EMA and the U.K. MHRA. The termination of this License Agreement will not affect the upfront and milestone payments previously received from EQRx. We are currently exploring potential partnership opportunities for both sugemalimab and nofazinlimab outside of Greater China.

V. Other Business Updates

Manufacturing: We are also in the process of technology transfer for multiple imported products, which is expected to reduce costs and improve the long-term profitability of our products. Specifically, the application relating to technology transfer for avapritinib is under review by the CDE. At the same time, the technology transfer for pralsetinib, including manufacturing and clinical BE study, has been successfully completed and the application dossier have been submitted to CDE.

FUTURE AND OUTLOOK

Looking forward, we will continue to advance innovative pipeline and maximize commercial value of mature products.

A detailed breakdown of expected catalysts in the near term is set forth as below.

• Sugemalimab: opinion from the Committee for Medicinal Products for Human Use ("CHMP") to the MAA for the first-line treatment in stage IV NSCLC in the E.U. in the first half of 2024 and MAA approval in the second half of 2024; MAA approval for the first-line treatment in stage IV NSCLC in the U.K. in the second half of 2024; ex-China partnership exploration
• Lorlatinib: pre-NDA/NDA in mainland China for ROS1-positive advanced NSCLC in 2024
• Avapritinib: expect the abbreviated NDA ("ANDA") approval for manufacturing localization in the second half of 2024
• Pralsetinib: expect the ANDA acceptance for manufacturing localization in the first half of 2024
• Nofazinlimab: final assessment of OS and ex-China partnership exploration in 2025
• CS5001: to disclose the latest clinical safety and efficacy data at international academic conferences (e.g. ASCO in the first half of 2024, and ESMO/ASH in the second half of 2024); initiate registrational study in 2024; expected to reach global business development ("BD") partnership in 2024 or 2025
• CS2009: submit clinical trial notification ("CTN") to Australian Human Research Ethics Committee ("HREC") by the end of 2024, and apply for China IND in the first quarter of 2025
• CS5006: nominate PCC in the first half of 2024, and expect to file IND in 2025
• CS5005: nominate PCC in 2024, and expect to file IND in 2025

Financial highlights

International Financial Reporting Standards ("IFRS") Measures:

• Revenue was RMB463.8 million for the year ended December 31, 2023, composed of RMB336.7 million in sales of pharmaceutical products (avapritinib, pralsetinib and ivosidenib), RMB95.7 million in license fee income and RMB31.4 million in royalty income of sugemalimab, representing a year-on-year increase of RMB10.1 million, or 8.6%, in license fee and royalty income which largely offset a decrease in revenue from sales of pharmaceutical products, such that total revenue decreased by RMB17.5 million, or 3.6%, year on year.
• Research and development expenses were RMB527.8 million for the year ended December 31, 2023, representing a decrease of RMB86.4 million from RMB614.2 million for the year ended December 31, 2022, primarily due to the decrease in milestone fee and third party contracting costs and the decrease in employee costs.
• Administrative expenses were RMB182.7 million for the year ended December 31, 2023, representing a decrease of RMB66.4 million from RMB249.1 million for the year ended December 31, 2022, primarily due to the decrease in employee costs.
• Selling and marketing expenses were RMB199.3 million for the year ended December 31, 2023, representing a decrease of RMB128.0 million from RMB327.3 million for the year ended December 31, 2022, primarily attributable to the decrease in employee costs and professional fees.
• Loss for the year was RMB367.2 million for the year ended December 31, 2023, representing a decrease of RMB535.5 million, or 59.3%, from RMB902.7 million for the year ended December 31, 2022, primarily attributable to a substantial decrease in employee costs and the net gain related to the transfer of ivosidenib business.

Non-International Financial Reporting Standards ("Non-IFRS") Measures:

• Research and development expenses excluding the share-based payment expenses were RMB534.7 million for the year ended December 31, 2023, representing a decrease of RMB24.4 million from RMB559.1 million for the year ended December 31, 2022, primarily due to the decrease in milestone fee and third party contracting costs and the decrease in employee costs.
• Administrative and selling and marketing expenses excluding the share-based payment expenses were RMB338.2 million for the year ended December 31, 2023, representing a decrease of RMB151.1 million from RMB489.3 million for the year ended December 31, 2022, primarily attributable to the decrease in employee costs and professional fees.
• Loss for the year excluding the share-based payment expenses was RMB330.2 million for the year ended December 31, 2023, representing a decrease of RMB430.4 million, or 56.6%, from RMB760.6 million for the year ended December 31, 2022, primarily attributable to a substantial decrease in employee costs and the net gain related to the transfer of ivosidenib business.

About CStone

CStone (HKEX: 2616) is a biopharmaceutical company focused on research, development, and commercialization of innovative immuno-oncology and precision medicines to address the unmet medical needs of cancer patients in China and worldwide. Established in 2015, CStone has assembled a management team with extensive experience in innovative drug development, clinical research, and commercialization. The Company has built an oncology-focused pipeline of 12 drug candidates with a strategic emphasis on immuno-oncology combination therapies. Since inception, CStone has obtained 14 NDA approvals for various drugs (including ivosidenib). Multiple late-stage drug candidates are now under pivotal clinical trials or registration. CStone's vision is to bring innovative oncology therapies to cancer patients worldwide.

For more information about CStone, please visit www.cstonepharma.com.

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