HSBC initiates Akeso stock with Buy rating on strong 1H25 results

HSBC initiated coverage on Akeso Inc. (HK:9926) with a Buy rating and a HK$208.00 price target, citing the biotech's strong first-half 2025 results, which saw product sales increase 49% year-over-year to RMB1.4 billion. This positive outlook is primarily driven by the clinical success of Akeso's dual-target antibody AK112 (Ivonescimab), which outperformed Merck's Keytruda in head-to-head lung cancer trials and demonstrated significant clinical benefit in its China Phase III study for EGFRm NSCLC. HSBC projects over 50% revenue CAGR for Akeso between 2025-2027, with a partnership with Summit Therapeutics expected to expedite the drug's US market entry.

Analysis

HSBC has initiated coverage on Akeso Inc. (HK:9926) with a 'Buy' rating and a HK$208.00 price target, signaling strong institutional confidence. This is underpinned by robust first-half 2025 financial performance, where product sales grew 49% year-over-year to RMB1.4 billion. The primary catalyst for this bullish outlook is significant clinical progress for its pioneer PD-1/VEGF dual-target antibody, Ivonescimab (AK112). The drug has not only demonstrated a statistical and clinical benefit for overall survival in its China Phase III study for EGFRm NSCLC but has also outperformed Merck’s blockbuster drug, Keytruda, in head-to-head lung cancer trials. This competitive success is a critical differentiator. Consequently, HSBC projects an aggressive revenue compound annual growth rate (CAGR) exceeding 50% for Akeso between 2025 and 2027. The company's strategic partnership with Summit Therapeutics is a key de-risking factor, expected to facilitate and expedite the drug's clinical progress and eventual launch in the lucrative U.S. market.

Key Decisions for Investors

• Given the strong clinical data outperforming a market leader, a new 'Buy' rating from HSBC, and a high-growth revenue forecast, investors should evaluate Akeso Inc. (9926) for its significant potential upside in the biotech sector.
• Holders of Merck (MRK) should closely monitor the competitive threat from Ivonescimab, as its superior trial performance against Keytruda could erode market share in key lung cancer indications upon approval.
• The partnership with Akeso makes Summit Therapeutics (SMMT) a direct beneficiary of Ivonescimab's potential success, and investors should track the joint clinical and regulatory milestones as key catalysts for SMMT's valuation.
• Potential investors should recognize that future returns are heavily dependent on successful regulatory approvals in major markets like the U.S., which remains a critical hurdle for realizing the projected growth.