Key Takeaways:
- Akeso swung to an annual profit of 1.94 billion yuan, boosted by licensing income of 2.92 billion yuan
- The next highly anticipated product in the firm’s drug pipeline is ivonescimab, the first PD-1/VEGF bispecific antibody to enter Phase III clinical trials
By Molly Wen
Chinese drug company Akeso Inc. (9926.HK) has pushed its way into profit in the biopharma industry’s most competitive arena, developing new ways to help the immune system defeat cancer.
In its latest annual results, the company made advances on two fronts, with a big jump in income from drug licensing rights and increased revenue from product sales.
Revenues for 2023 surged more than five times to 4.53 billion yuan ($628 million), propelling the accounts from a loss to a profit of 1.94 billion yuan.
Emboldened by the results, Akeso shrugged off a dip in its share price and took the opportunity to issue another set of shares to fund more drug research.
The company draws its revenues from product sales and technology licensing. Combined sales of its two approved anti-cancer products, cadonilimab and penpulimab, rose 48% to 1.63 billion yuan last year. Cadonilimab is a bispecific antibody targeting the PD-1/CTLA-4 immune checkpoints while the other drug is a PD-1 monoclonal antibody.
While overall product sales are rising, the biggest profit impact came from a licensing-out agreement with U.S. pharmaceutical company Summit Therapeutics (NASDAQ: SMMT) that bumped up Akeso’s tech partnership revenue to 2.92 billion yuan.
Without the licensing windfall, the company’s net loss for 2023 would have narrowed to 788 million yuan from 1.43 billion yuan the previous year, still pointing to progress in its commercialization efforts.
The company’s share price, which had been boosted by positive earnings guidance a few weeks earlier, fell 3.7% to HK$49.95 the day after the results, when the wider pharma sector was struggling.
Analysts are upbeat about the company’s earnings outlook from here. Citibank recently revised up its Akeso revenue forecast by 10% this year and 6% for 2025, expressing ...