Kelun-Biotech's breast cancer drug shows promising phase 3 results

Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (6990.HK) reported positive Phase 3 trial results for its antibody-drug conjugate sacituzumab tirumotecan (sac-TMT) in hormone receptor-positive, HER2-negative breast cancer, demonstrating significantly improved progression-free survival and a trend toward overall survival benefit, leading to priority review in China. This pipeline success contrasts with a separate report on Sichuan Kelun Pharmaceutical, which experienced a 23% revenue and 44% profit decline in H1 2025 due to increased competition, prompting a UBS downgrade to Neutral.

Analysis

Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (6990.HK) reported compelling Phase 3 results for its antibody-drug conjugate sacituzumab tirumotecan (sac-TMT) in HR-positive, HER2-negative breast cancer, demonstrating a median progression-free survival of 8.3 months versus 4.1 months for standard chemotherapy. This "significant breakthrough" also showed a trend toward overall survival benefit (HR 0.33), leading to priority review by China’s NMPA for this new indication. The company's robust 49% gross profit margins and 18% YTD stock return underscore strong investor confidence in its pipeline and financial health.

In contrast, Sichuan Kelun Pharmaceutical (002422) experienced a significant financial downturn in H1 2025, with revenues decreasing by 23% and profits dropping by 44% year-over-year. This decline is attributed to heightened competition and weak demand within its large-volume parenteral and drug intermediate segments. Consequently, UBS downgraded the stock from Buy to Neutral, adjusting its price target from RMB46.00 to RMB40.00.

These developments highlight a bifurcated outlook within similarly named entities in the Chinese pharmaceutical sector. While 6990.HK exhibits strong clinical pipeline momentum and regulatory tailwinds, 002422 faces considerable operational challenges and a deteriorating financial performance, prompting analyst skepticism. Investors must carefully distinguish between these two distinct companies.

Key Decisions for Investors

• Investors should carefully differentiate between Sichuan Kelun-Biotech (6990.HK) and Sichuan Kelun Pharmaceutical (002422) due to their divergent performance trajectories
• Monitor the regulatory approval process for sac-TMT in China and the progress of global Phase 3 trials for Sichuan Kelun-Biotech (6990.HK), given its strong clinical data and positive market reception
• Exercise caution regarding Sichuan Kelun Pharmaceutical (002422) due to its significant H1 2025 financial decline, increased competitive pressures, and the recent UBS downgrade