Industrial Securities Co.,Ltd. has issued a research report initiating coverage on SKB BIO (ASX: 06990), assigning an "Overweight" rating. The report highlights the company's presentation of pivotal Phase III data for its core product at the 2026 ASCO meeting. The global clinical advancement of sac-TMT is proceeding smoothly, consistently demonstrating its potential to be best-in-class worldwide. With overseas commercialization on the horizon and a partnership with Merck & Co., the company is well-positioned to capture significant international market opportunities. The firm forecasts revenues of RMB 3.587 billion, RMB 4.355 billion, and RMB 6.712 billion for 2026 through 2028, with net profits attributable to shareholders of RMB 75 million, RMB 498 million, and RMB 1.434 billion, respectively.

Significance of the Phase III Data in First-Line NSCLC

The Phase III OptiTROP-Lung05 study evaluated sac-TMT combined with pembrolizumab versus pembrolizumab monotherapy in 413 randomly assigned patients with PD-L1 TPS ≥1% NSCLC. The median PFS, assessed by Blinded Independent Central Review (BICR), was Not Reached (NR) versus 5.7 months (HR=0.35). The 12-month PFS rates were 62.4% versus 29.0%, showing statistically significant and clinically meaningful improvement. The product showed particularly strong results in patients with PD-L1 TPS 1-49% and those with non-squamous NSCLC, with PFS HRs of 0.28 in both subgroups. Overall survival (OS) data, while immature, showed a positive trend favoring the combination, with median OS of NR versus 14.5 months (HR=0.55) and 12-month OS rates of 80.4% versus 68.9%. The safety profile of the combination therapy was manageable and consistent with the established profiles of each agent alone.

Anticipated Exploration of Combination Therapy with a PD-1/VEGF Bispecific Antibody

The company licensed SKB118 from Crescent in December 2025, and the domestic clinical trial application has been accepted. There are plans to develop combination therapies with the company's portfolio of ADC assets. Internationally, the partner disclosed initial Phase 1/2 clinical data for MK-2010 at the 2026 AACR meeting and plans to explore its combination with ADC assets, including sac-TMT. The potential synergy between sac-TMT and a PD-1/VEGF bispecific antibody could lead to superior anti-tumor efficacy.

Global Commercialization Phase Approaches Following First Phase III Success

Merck & Co. announced on May 18th that the global pivotal Phase III TroFuse-005 study of sac-TMT monotherapy in 3L+ endometrial cancer patients met its primary endpoints of OS and PFS. This makes it the first and only ADC to achieve this goal in this treatment setting for endometrial cancer. Merck has initiated 17 registrational clinical studies around sac-TMT, with more global Phase III data readouts expected in the future, which will further validate the product's global market potential.

Key Investment Risks

Potential risks include clinical development progress or results falling short of expectations, commercial performance being weaker than anticipated, and policy changes exceeding forecasts.