China International Capital (CICC) has essentially kept its forecasts for SKB BIO-B's (06990) net profit attributable to shareholders for 2025 and 2026 unchanged. Benefiting from the overseas commercialization of sac-TMT, the firm has introduced a 2027 net profit forecast of 630 million yuan. CICC maintains an Outperform rating and, based on a DCF model, reiterates a target price of HK$550, implying a 30.0% upside from the current share price.
Key points from CICC are as follows:
Recent Company Developments: On February 6, the company announced that its TROP2 ADC drug, sac-TMT (also known as Jia Tailai, SKB264), received approval in China for its fourth indication. It is for treating HR+/HER2- breast cancer patients who have previously received endocrine therapy and at least one line of chemotherapy. HR+/HER2- breast cancer is expected to become a major indication for the drug both domestically and internationally. According to company disclosures, the HR+/HER2- molecular subtype accounts for approximately 70% of all breast cancer cases. Currently, CDK4/6 inhibitors combined with endocrine therapy are the standard first-line treatment, but options in later lines are limited, with chemotherapy offering limited clinical benefit. This latest approval is based on positive results from the Phase III OptiTROP-Breast02 clinical trial, where sac-TMT demonstrated a median progression-free survival of 8.3 months compared to 4.1 months for chemotherapy, with a hazard ratio of 0.35. The benefit was shown to be independent of HER2 expression. Overall survival data are not yet mature but show a promising trend with a hazard ratio of 0.33. The company has initiated global and Chinese Phase III clinical trials for sac-TMT, both with and without pembrolizumab, as a first-line treatment for HR+/HER2- breast cancer patients who have received prior endocrine therapy. Given the high incidence of breast cancer in Western populations, CICC believes this indication holds significant global commercial potential.
2026: A Pivotal Year for sac-TMT Commercialization, Frontline Expansion, and Global Progress: In December 2025, the company announced that sac-TMT was included for the first time in China's National Reimbursement Drug List, covering third-line or later triple-negative breast cancer and third-line or later EGFR-mutated non-small cell lung cancer. CICC believes this should accelerate domestic commercial uptake. In January 2026, the company announced that sac-TMT combined with pembrolizumab received Breakthrough Therapy Designation in China for first-line treatment of NSCLC. CICC expects data readouts within the year, with several other first-line indications also nearing key milestones. Furthermore, overseas partner Merck & Co. announced that the U.S. FDA has granted sac-TMT a priority review voucher, with plans to submit a biologics license application in the U.S. in 2026. Investors are advised to monitor developments related to sac-TMT's R&D, regulatory review, and commercial catalysts throughout the year.
Risk warnings include R&D failure, commercialization underperformance, and delays in external partnerships.