Kelun Biotech (6990.HK)

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14 August 2023 | 12:02AM HKT
Kelun Biotech (6990.HK)

Early-mover ADC player in China with global potential; initiate at Buy
Buy
6990.HK 12m Price Target: HK$115.00 Price: HK$77.20 Upside: 49.0%

Ziyi Chen
+852-2978-0526 | ziyi.chen@gs.com
Goldman Sachs (Asia) L.L.C.
Kelun Biotech is an antibody drug conjugates (ADCs)-focused Linhai Zhao, Ph.D.

+852-3966-4059 | linhai.zhao@gs.com
biotech that is well positioned to grow into a global player with Goldman Sachs (Asia) L.L.C.
1) extensive partnership with its 2nd largest shareholder, MSD for Diwen Tang
+852-2978-7664 | diwen.tang@gs.com
global market access (2 clinical stage candidates, 7 pre-clinical Goldman Sachs (Asia) L.L.C.
assets); 2) differentiated ADC pipeline, led by SKB264, a TROP-2

For the exclusive use of KECHENG.JIN@BITMAIN.COM
ADC eyeing China NDA and rollout of multiple global pivotal studies
in 2H23; and 3) near-commercial stage of the China franchise. Key Data __________________________________
Initiate at Buy with our 12-m TP of HK$115 implying 59% upside. Market cap: HK$16.9bn / $2.2bn
Enterprise value: HK$15.3bn / $2.0bn
3m ADTV: NA
Preliminary data has been encouraging in breast cancer and lung China
China Pharma, Biotech & Medtech
cancer, particularly the differentiated efficacy in EGFRmut NSCLC M&A Rank: 3
Leases incl. in net debt & EV?: Yes
patients (2023 ASCO), and favorable safety profile (no ILD, no
GS Forecast ________________________________
drop-out). We see SKB264 as a core value driver and expect it to 12/22 12/23E 12/24E 12/25E
Revenue (Rmb mn) 803.9 1,073.0 928.2 1,675.0
explore a broad spectrum of indications for commercialization, EBITDA (Rmb mn) (346.8) (510.3) (909.1) (397.7)
leveraging MSD’s capabilities in clinical development / biomarker EPS (HK$) (5.74) (3.31) (5.16) (2.94)
P/E (X) NM NM NM NM
development and Keytruda as a potential cornerstone for ADC/PD-1 P/B (X) NM 7.4 14.7 10.1
Dividend yield (%) NM 0.0 0.0 0.0
combos. We forecast SKB264 to generate risk-adjusted peak sales N debt/EBITDA (ex lease,X) -- -- -- --
of US$3.6bn by 2033E (contribute 62% of fair value), assuming CROCI (%) 61.4 (141.9) (81.2) (10.2)
1fc9fa9cf8844a388c506688498547c5
FCF yield (%) NM (4.7) (7.8) (4.2)
c.30% market share in TROP2 ADC class. Key catalysts in 2H23: 1)
-- -- 6/23E 12/23E
rollout of key global pivotal studies in TNBC and NSCLC; 2) longer
EPS (HK$) -- -- (3.93) 0.63
follow-up data on HR+/HER2- breast cancer (ESMO) and NSCLC;
GS Factor Profile ____________________________
and 3) first China NDA filing for SKB264. Growth
Financial Returns
Our risk-adjusted DCF based 12-m TP of HK$115 assumes: 1) 13.5%
discount rate/3% terminal growth rate; and 2) probability of success Multiple
(PoS) based on industry average success rates for different stages Integrated
and adjustments based on available clinical data. Key risks: 1) R&D

Percentile 20th 40th 60th 80th 100th
risks in developing new indications & future ADCs; 2) increasing
ADC competition; 3) limited commercial manufacturing & sales track 6990.HK relative to Asia ex. Japan Coverage
6990.HK relative to China Pharma, Biotech & Medtech
record; 4) challenges in talent competition; & 5) alliance risks in
Source: Company data, Goldman Sachs Research estimates.
MSD partnership. See disclosures for details.
Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result,
investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this
report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC
certification and other important disclosures, see the Disclosure Appendix, or go to
www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research
analysts with FINRA in the U.S.
更多一手调研纪要和研报数据加V：shuimu9870
Goldman Sachs Kelun Biotech (6990.HK)
Kelun Biotech (6990.HK) Income Statement (Rmb mn) _______________________________

Buy Rating since Aug 14, 2023 Total revenue
12/22
803.9
12/23E
1,073.0
12/24E
928.2
12/25E
1,675.0
Cost of goods sold (276.8) (350.0) (433.1) (514.4)
SG&A (95.3) (435.9) (607.3) (734.5)
Ratios & Valuation _______________________________________ R&D (846.0) (862.9) (880.2) (924.2)
12/22 12/23E 12/24E 12/25E Other operating inc./(exp.) -- -- -- --
P/E (X) NM NM NM NM EBITDA (346.8) (510.3) (909.1) (397.7)
P/B (X) NM 7.4 14.7 10.1 Depreciation & amortization (67.4) (65.5) (83.2) (100.4)
FCF yield (%) NM (4.7) (7.8) (4.2) EBIT (414.2) (575.8) (992.3) (498.1)
EV/EBITDAR (X) -- NM NM NM Net interest inc./(exp.) (148.8) (148.8) (139.6) (146.4)
EV/EBITDA (excl. leases) (X) -- NM NM NM Income/(loss) from associates -- -- -- --
CROCI (%) 61.4 (141.9) (81.2) (10.2) Pre-tax profit (567.4) (724.6) (1,131.9) (644.5)
ROE (%) NM NM (71.2) (49.3) Provision for taxes (48.7) 0.0 0.0 0.0
Net debt/equity (%) (90.6) (77.2) (25.9) (30.1) Minority interest -- -- -- --
Net debt/equity (excl. leases) (%) (86.7) (83.1) (37.5) (38.1) Preferred dividends -- -- -- --
Interest cover (X) (2.8) (3.9) (6.6) (3.3) Net inc. (pre-exceptionals) (616.1) (724.6) (1,131.9) (644.5)
Days inventory outst, sales 29.8 33.4 74.9 56.6 Post-tax exceptionals 68.0 -- -- --
Receivable days 40.2 16.8 8.2 17.8 Net inc. (post-exceptionals) (548.1) (724.6) (1,131.9) (644.5)
Days payable outstanding 282.6 276.9 271.2 276.3 EPS (basic, pre-except) (Rmb) (6.45) (3.31) (5.16) (2.94)
DuPont ROE (%) 19.1 (34.3) (106.2) (41.7) EPS (diluted, pre-except) (Rmb) (6.45) (3.31) (5.16) (2.94)
Turnover (X) 0.8 0.3 0.4 0.6 EPS (basic, post-except) (Rmb) (5.74) (3.31) (5.16) (2.94)
Leverage (X) NM 1.5 2.0 1.7 EPS (diluted, post-except) (Rmb) (5.74) (3.31) (5.16) (2.94)
Gross cash invested (ex cash) (Rmb) (203.1) 648.2 1,040.1 1,432.4 DPS (Rmb) -- -- -- --
Average capital employed (Rmb) (383.0) (35.5) 511.8 812.0 Div. payout ratio (%) 0.0 0.0 0.0 0.0
BVPS (Rmb) (33.78) 9.64 4.86 7.06
Balance Sheet (Rmb mn) __________________________________
Growth & Margins (%) ____________________________________ 12/22 12/23E 12/24E 12/25E
12/22 12/23E 12/24E 12/25E Cash & cash equivalents 93.0 1,927.9 571.3 760.6
Total revenue growth NM 33.5 (13.5) 80.4 Accounts receivable 98.7 -- 41.9 121.4
EBITDA growth 56.1 (47.1) (78.1) 56.3 Inventory 52.6 143.8 237.3 281.9
EPS growth 33.3 40.2 (62.3) 43.1 Other current assets 88.1 97.1 97.1 97.1
DPS growth NM NM NM NM Total current assets 332.3 2,168.9 947.6 1,260.9
EBIT margin (51.5) (53.7) (106.9) (29.7) Net PP&E 647.8 892.7 1,131.4 1,363.6
EBITDA margin (43.1) (47.6) (97.9) (23.7) Net intangibles 3.2 6.8 9.7 12.0
Net income margin (76.6) (67.5) (121.9) (38.5) Total investments 0.0 0.0 0.0 0.0
Other long-term assets 9.8 9.8 9.8 9.8
Price Performance _______________________________________ Total assets 993.1 3,078.1 2,098.6 2,646.4
6990.HK (HK$) Hang Seng China Ent. Accounts payable 243.4 287.7 356.0 422.8
Short-term debt 2,890.8 171.9 171.9 171.9
110 7,000
Short-term lease liabilities 82.3 82.3 82.3 82.3
100 6,800 Other current liabilities 950.9 370.9 370.9 370.9
Total current liabilities 4,167.4 912.7 981.0 1,047.8
90 6,600
Long-term debt -- -- -- --
80 6,400 Long-term lease liabilities 41.3 41.3 41.3 41.3
70 6,200 Other long-term liabilities 10.7 10.7 10.7 10.7
Total long-term liabilities 52.0 52.0 52.0 52.0
60 6,000 Total liabilities 4,219.3 964.7 1,033.0 1,099.8
1fc9fa9cf8844a388c506688498547c5
Preferred shares -- -- -- --
Jul-23
Total common equity (3,226.2) 2,113.5 1,065.6 1,546.6
3m 6m 12m Minority interest -- -- -- --
Absolute -- -- -- Total liabilities & equity 993.1 3,078.1 2,098.6 2,646.4
Rel. to the Hang Seng China Ent. -- -- -- Net debt, adjusted 2,797.8 (1,756.1) (399.5) (588.7)
Source: FactSet. Price as of 11 Aug 2023 close.
Cash Flow (Rmb mn) ______________________________________
12/22 12/23E 12/24E 12/25E
Net income (567.4) (724.6) (1,131.9) (644.5)
D&A add-back 67.4 65.5 83.2 100.4
Minority interest add-back -- -- -- --
Net (inc)/dec working capital 34.5 42.7 (67.1) (57.2)
Other operating cash flow 194.6 194.6 223.6 271.9
Cash flow from operations (270.8) (421.8) (892.1) (329.4)
Capital expenditures (32.7) (313.9) (324.9) (335.0)

Acquisitions -- -- -- --
Divestitures -- -- -- --
Others 0.5 -- -- --
Cash flow from investing (32.2) (313.9) (324.9) (335.0)
Repayment of lease liabilities -- -- -- --

Dividends paid (common & pref) -- -- -- --
Inc/(dec) in debt 316.4 -- -- --
Other financing cash flows (2.2) 2,570.7 (139.6) 853.6
Cash flow from financing 314.2 2,570.7 (139.6) 853.6
Total cash flow 11.2 1,835.0 (1,356.6) 189.2
Free cash flow (303.5) (735.8) (1,217.0) (664.4)
Source: Company data, Goldman Sachs Research estimates.
14 August 2023 2
Table of Contents
PM Summary 4
Early-mover ADC firm in China with global potential 10
Dissecting the pipeline: 3 ADCs + supporting franchise 15
Key strengths 56
Key risks 61
Financials 62
Valuation 66
Glossary 70
Appendix 71
Disclosure Appendix 72
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14 August 2023 3
PM Summary
Founded in 2016, Kelun Biotech is an integrated ADC platform that has developed an
ADC-focused pipeline, with 33 candidates that fall into three major categories:
n Core franchise – 3 ADCs: SKB264 (TROP2) in pivotal studies as mono/combo

therapies for breast cancers, lung cancers and potentially broader cancer types,
A166 (HER2) under China NMPA NDA review, and SKB315 (CLDN18.2) in phase 1a.
The ex-China rights of SKB264 and global rights of SKB315 have been licensed out
to MSD for global market access; we see the 3 ADCs as the key revenue drivers.
n Long-tail ADCs – up to seven early-stage ADC assets including nectin-4 ADC
(SKB410, ph1) that have been out-licensed to MSD targeting various solid tumors.
n Supporting oncology franchise – A167 (NDA-stage tagitanlimab, PD-L1 as I/O
backbone for combo therapy), A400 (phase 1/2 2nd-gen RET inhibitor), A140 (Erbitux
biosimilar) and three phase 1 I/O assets. While we forecast minor direct valuation /
revenue contribution from the supporting franchise, it could provide clinical /

commercial synergies to the core ADC franchise.
n Exploratory non-oncology – led by two phase 2 small molecules, A223 (JAK1/2)
and A227 (KOR).
Exhibit 1: Kelun advances a deep pipeline including over ten ADCs as the core
Overview of Kelun Biotech’s key franchises
ADC franchise
3 ADCs Early-stage ADCs
● SKB264 (TROP2, ph3) Including up to seven pre-

● SKB315 (CLDN18.2, ph1a) clinical ADCs out-licensed to
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MSD
● A166 (HER2, NDA filed)
Supporting franchise Non-oncology franchise
A167 (PD-L1, NDA filed) A223 (JAK1/2, ph2)

A140 (EGFR biosimiliar, ph3) A277 (KOR, ph2)
A400 (RET, ph1/2)
SKB378 (TSLP, ph1)
SKB337 (PD-L1/CTLA-4 BsAb, ph1)
A289 (LAG3, ph1) SKB336 (FXI/FXIa, ph1)
A296 (STING, ph1)
Source: Company data
ADC is an emerging class of therapeutic modality with the potential to shift the current
treatment paradigm of oncology in front- and late-line settings, growing R&D investment
in the space aims to improve the efficacy and safety profile of ADC products.
We believe Kelun Biotech, as one of the early movers in the ADC field in China, is
well-positioned to grow into a global ADC platform given the following strengths:
14 August 2023 4
1. Competitive TROP2 ADC as key value driver – Leveraging MSD’s capability, TROP2
ADC SKB264 is targeting global opportunities in the treatment of breast cancer (BC),
non-small cell lung cancer (NSCLC) and broader indications:
n TNBC (c. 11% of breast cancer): In treating Trodelvy validated 3L TNBC, SKB264
showed potentially more favorable safety profile (esp. lower GI tox and no interstitial
lung disease / ILD) vs. Trodelvy and Dato-DXd; preliminary data of SKB264 also
suggested potential to move into earlier lines (ORR of 85.7% in 1L TNBC for PD-L1
combo).
n HR+/HER2- BC (74% of breast cancer): in late-line setting, where Trodolvy secured
approval in early 2023, the early data of SKB-264 showed potentially better response
(ORR of 42.9%, vs. Trodelvy 21% and Dato-Dxd 27%), pending more evidence from
phase II data update at upcoming ESMO. While Enhertu has been recommended in
clinical guideline for HR+/HER2-low (IHC 1+ or IHC2+/ISH-) with robust phase 3
data (DESTINY-Breast04), we see more opportunities lie in treatment of
HR+/HER2-zero (c. 25% of breast cancer) patients for TROP-2 ADCs.
n NSCLC: the key domain for TROP-2 ADCs, where we have seen:
o Potential differentiated clinical benefits in patients who failed EGFR TKIs:
Per recent data from 2023 ASCO abstract, SKB264 showed ORR of 60% (vs.
Dato-Dxd 35% in TROPION-panTumor01 study and HER3-Dxd 40.2% in phase
1 study) and mPFS of 11.1 months (vs. HER3-Dxd 6.4 months), which looks
even more favorable than PD-1/L1 and VEGF combos (e.g. Atezolizumab +
bevacizumab + chemo) and bispecific antibodies (e.g. AK112) in this setting.
o Comparable early data in late-line EGFRwt; focus on PD-1 combo in 1L:
SKB264 showed ORR of 26% and mPFS of 5.3 months, similar to Trodelvy
17% / 5.2 months, Dato-Dxd 28% / 6.9 months (at 6mg/kg Q3W dose) and
HER3-Dxd 27.7% / 5.4 months. We believe SKB264 / Keytruda combo’s
potential in frontline setting will be key, given Keytruda’s dominant position as
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standard-of-care (SoCs) in NSCLC patients without actionable genetic
alternations; and biomarker-stratified design could play a role in clinical
development differentiation.
2. A fully-integrated ADC platform OptiDC to facilitate deep ADC franchise – Based

on a decade of R&D in the ADC field, Kelun Biotech has established the fully integrated
technology platform, OptiDC, to support the systematic R&D of ADCs with continuous
upgrade in the toolbox of key components as well as the know-how of ADC drug design
and development. With the competitive ADC franchise of 10+ clinical and preclinical
assets and out-license deals with MSD, we believe the ADC platform to be the engine
for the continued innovation of future ADC assets.
3. MSD / Kelun Pharma as long-term partners – With Kelun Pharma (the parent
company) and MSD (2nd largest shareholder) as the top 2 shareholders (68.0%
[includes 13.7% ESOP] /6.1% as of Aug 2023), Kelun Biotech is well placed to leverage
resources from the two leaders in the China market and global oncology space,
respectively:
14 August 2023 5
n MSD’s strategic edge in 1) global clinical development and commercial expertise in a

broader spectrum of cancer types, 2) capability in biomarker companion diagnostics
(CDx) development, which could be critical for TROP2 and CLDN18.2 ADCs to drive
clinical adoption, and 3) Keytruda, the SoC in multiple cancer types for combo
therapies development.
n Kelun Pharma’s expertise in manufacturing (e.g., QA/QC), regulatory / government
affairs, and market access in China.
4. Robust portfolio strategy that enables synergies – Apart from developing ADCs as
single agent, Kelun Biotech is also expanding its non-ADC franchise as part of its
portfolio strategy to maximize the value of its ADC franchise through 1) synergies in
combination therapies with ADCs, e.g., SKB264 is being studied in combo with PD-1,
Tagrisso and chemotherapy for 1L EGFR-wt and EGFR-mutant NSCLC; 2) sales and
marketing synergies with overlap in target indications, e.g., A400 (RET inhibitor) and
SKB264 in NSCLC; and 3) operational synergies with biologics and small molecule
platforms potentially helping to expand the toolbox of ADC components and
accumulating development know-how to drive future ADC innovations.
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14 August 2023 6
Key revenue catalysts to watch in 2H23/2014

We believe 2023-2024 will be a key phase of value realization for Kelun Biotech with
multiple clinical readouts and potential approvals of key assets.
Exhibit 2: Four approved products and multiple assets at pivotal stage by the end of 2024
Upcoming key revenue catalysts for Kelun Biotech and other competitive products in 2023-2024
Indication Asset Type Time Catalyst

TNBC SKB264 Data readout Dec-23 Interim data (ORR/mPFS) readout from ph3 trial in 3L+ TNBC (2023 SABCS)
Data readout Dec-23 Final OS data readout from ph2 trial in 3L+ TNBC (2023 SABCS)
Clinical development 2H23 Completed patient enrollment of pivotal ph3 China trial for 3L+ advanced TNBC
Clinical development 1H24 Commence ph3 China trial for SKB264 +/- A167 in 1L advanced TNBC
Regulatory YE23 NMPA NDA filing in 3L+ advanced TNBC
Regulatory 2H24 Launch in China market for 3L+ advanced TNBC
Dato-DXd Data readout 2024 Ph3 data readout from TROPION-Breast02 study in 1L TNBC (locally recurrent inop./met.)
BL-B01D1 Data readout 1H24 Ph1b data readout for unresectable locally a/m TNBC
Enhertu Regulatory 2024 NDA submission for 2L HER2-low BC based on DESTINY-Breast06 study
HR+/HER2- BC SKB264 Data readout Oct-23 Full data readout (n=50, follow-up time >15m) from ph2 trial in 2L+ HR+/HER2- BC (2023 ESMO)
Clinical development 2H23 Commence ph3 clinical trial for advanced HR+/HER2- BC
Dato-DXd Data readout 2H23 Ph3 data reatout from TROPION-Breast01 study in 2L+ HR+/HER2- BC
Regulatory 2024 NDA submission for 2L+ HR+/HER2- BC based on results from ph3 TROPION-Breast01 study
Trodelvy Clinical development 2H23 ASCENT-07 ph3 FPI for 1/2L HR+/HER2- mBC (endocrine-resistant / chemo-naïve)
Regulatory 2H23 EMA approval for 3L+ HR+/HER2- mBC based on TROPiCS-02 study
EGFRwt a/m NSCLC SKB264 Clinical development 2H23 MSD to initiate PD-L1/TROP2 biomarker-stratified ph3 global trial in NSCLC (potentially on 1L EGFRwt
combo w/ Keytruda)
Data readout Nov-23 Updated subgroup analysis on two other NSCLC cohorts from 2023 ASCO data (ESMO-Asia)
Data readout 2024 Data readout from ph2 trial for 1L EGFRwt NSCLC (SKB264+PD-L1) (potentially in 2024 AACR/ASCO)
Trodelvy Data readout Sep-23 Data readout from ph2 EVOKE-02 study (combo w/ Keytruda ± chemo) for 1L a/m NSCLC without AGA
(WCLC oral presentation)
Data readout 2024 Initial data readout from pivotal ph3 EVOKE-01 study for 2/3L a/m NSCLC with or without AGA
Dato-DXd Data readout Sep-23 Data readout from ph1b TROPION-Lung04 (+ Durvalumab ± Carboplatin) for a/m NSCLC without AGA
(WCLC oral presentation)
Regulatory 2H23 NDA submission for 3L a/m NSCLC with or without AGA (ph3 TROPION-Lung01 study)
EGFRmut a/m NSCLC SKB264 Data readout Sep-23 Updated 2023 ASCO data for EGFRmut NSCLC (TKI failure) with longer follow-up (2023 CSCO)
Clinical development 2H24 Completed patient enrollment of pivotal China ph3 trial for EGFRmut advanced NSCLC (TKI failure)
HER3-DXd Data readout Sep-23 Data readout from registrational ph2 HERTHENA-Lung01 for 3L EGFRmut NSCLC (WCLC oral
presentation)
SHR-A2009 Data readout Oct-23 Ph1 data readout of SHR-A2009 (HER3 ADC) for advanced solid tumors (2023 ESMO)
BL-B01D1 Data readout Oct-23 Data update from FIH ph1 study with longer follow-up (2023 ESMO)
Clinical development 2H23 Initiate head-to-head pivotal ph3 trial (vs. platinum based doublets chemo) in 2L EGFRmut NSCLC (TKI
failure)
AK112 Regulatory 2H23 NMPA NDA submission for EGFRmut NSCLC (TKI failure)
Besides catalysts of SKB264, MSD announced at its 2023 ASCO update call that company will initiate a series of ph3 global trials for SKB264 in TNBC, HR+/HER2- BC, and
NSCLC, potentially including combo therapy with Keytruda
Other assets from Kelun Biotech Type Time Catalyst

A166 (HER2 ADC) HER2+ BC Clinical development 2H23 Commence confirmatory ph3 trial in 2L+ advanced HER2+ BC
Regulatory 2H24 NMPA approval for 3L+ advanced HER2+ BC
Regulatory 2H24 Launch in China market for 3L+ advanced HER2+ BC
HER2+ solid Clinical development 1H24 Conclude two ph1b trials for 2L+ HER2+ GC and 3L+ HER2+ CRC
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tumors Clinical development 2H24 Conclude dose expansion study of ph1 trial for advanced HER2+ solid tumors
A400 (RET) RET+ NSCLC Clinical development 2H23 Commence pivotal trial for 1L advanced RET+ NSCLC
RET+ MTC Clinical development 1H24 Commence pivotal trial for advanced RET+ MTC
A167 (PD-L1) NPC Clinical development 1H23 Complete patient enrollment of ph3 trial of A167 in combo with chemo in 1L NPC
Regulatory 2H23 Receive conditional marketing approval from the NMPA for 3L+ NPC
A140 (EGFR biosimiliar) RASwt CRC Regulatory 2H23 Complete primary analysis of pivotal ph3 trial and filed NDA with NMPA for 1L RASwt CRC
Regulatory 2H24 Launch in China market for 1L RASwt CRC
A223 (JAK1/2) RA Clinical development 2H23 Initiate a pivotal ph3 trial for moderate-to-severe rheumatoid arthritis (RA)
AA Clinical development 2H23 Complete pts enrollment of A223's ongoing ph2 trial for severe alopecia areata (AA)
Major catalysts
Competitive products
Financials and Valuation

Kelun Biotech is likely to transition into a commercial stage company in 2024 with
potential multiple approvals, including two lead ADCs A166 (filed NDA to NMPA in early
May) / SKB264 (plan to filed NDA in China in 2H23) and PD-L1 (3L NPC, NDA filed in late
2021). We estimate total revenue (probability-of-success adjusted) to reach Rmb1.07bn
for 2023E, Rmb928mn for 2024E, and Rmb1.68bn for 2025E, which consist of product
sales and license income from MSD. The company is likely to stay loss making in the
coming three years, and we forecast net losses of Rmb725mn/1.13bn/644mn in
2023E-2025E.
14 August 2023 7
We derive a 12-month target price of HK$115 (equity valuation of HK$25.2bn or

US$3.2bn), using a risk-adjusted DCF methodology:
n Assets included in our estimates: 3 ADCs (SKB264, A166 and SKB315),

supporting oncology (RETi, PD-L1, Erbitux biosimilar) and non-oncology candidates
(JAK1/2 inhibitor and KOR inhibitors);
n Indication-specific PoS assigned: We assume SKB264 and A166 to be approved in
2024E with probabilities of success (PoS) of 81% for SKB264 in 3L+ TNBC and 90%
for A166 in 3L+ HER2+ BC. We assigned PoS between 7%-90% for different
indications of different assets, based on clinical stage and available early-stage data;
n WACC/TGR: We apply a terminal growth rate of 3%, and a discount rate of 13.5%
for our forward equity valuation.
Exhibit 3: Sensitivity analysis on WACC and terminal growth rate

WACC
115 12.5% 13.0% 13.5% 14.0% 14.5%
0.0% 110 103 97 92 87
1.0% 116 109 102 96 91

TGR
2.0% 124 115 108 101 95
3.0% 133 123 115 107 101
Source: Goldman Sachs Global Investment Research
Risks
As Kelun Biotech is still an early-stage biotech company without product sales, we view
most of the risks as associated with the ADC development and commercialization:
n Clinical development risk of ADCs – Given the complex nature of ADC as a

combination of key components (payload, linker, antibody), there is no
“one-size-fit-all” solution, and therefore, the validity of OptiDC as an ADC technology
platform to continuously deliver future ADC innovation may require further proof. The
1fc9fa9cf8844a388c506688498547c5
company’s ADC assets may carry inherent development risks that could result in
delays, failure or cost overruns if NMPA may require additional clinical studies to
grant approval, thus pose downside risk to the revenue outlook.
n Increasing competition in ADC field – Global ADC market is becoming increasingly
heated in both R&D interest and business development (BD) activities since 2019.
We see competition coming from 1) ADCs targeting the same target, 2) ADCs with
different targets developed for same indication (e.g., TROP2 ADC vs. Enhertu in
HER2-low BC), and 3) treatment regimens based on other modalities (e.g.,
antibodies, chemotherapies, target therapies as in NSCLC).
n Limited commercial manufacturing and sales track record – Although Kelun
Biotech has extensive R&D experience in ADC, the operating history of seven years
as a standalone company is relatively short, with limited market approval and
commercialization track record. An insufficient commercialization layout could
negatively impact the market penetration of key assets such as SKB264, which
could indicate 1) higher follow-up investment in sales & marketing may be needed,
and 2) our estimated peak sales may not be reached, thereby putting pressure on
the revenue outlook.
14 August 2023 8
n Challenges in recruiting and retaining talent – We note that the know-how of

drug design and clinical development of ADC is particularly critical to the success of
Kelun Biotech. Difficulty in recruiting and retaining talent with project experience in
ADC R&D could 1) negatively impact the execution in the preclinical / clinical
programs, 2) delay product launches, and 3) deteriorate the value of the pipeline if
competing companies develop novel ADC molecules faster.
n Risk of realizing partnership benefits – We estimate that global payments from
MSD deals will contribute materially to Kelun Biotech’s future revenue, and the
revenue outlook of Kelun Biotech may be negatively impacted if the partnership
benefits are not realized due to various risks, e.g., milestone payments and royalties
are contingent upon the achievements of certain regulatory and commercialization
targets.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 9
Early-mover ADC firm in China with global potential
Building an ADC-centric portfolio; TROP2 / CLDN18.2 targets global market

With the strong systematic R&D capabilities in small molecule and biologics drugs, and
the accumulated know-how of ADC development, Kelun Biotech has become the
leading ADC-focused biotech company in China. Leveraging the in-house proprietary
OptiDC ADC platform, Kelun Biotech has built a deep pipeline with ADC products as the
core, and other non-ADC franchise products to supplement/strengthen the ADC
franchise.
Exhibit 4: Broad pipeline with ADC as the core and other franchise products to supplement
Summary of Kelun Biotech’s products and key pipeline
Commercial IN
Candidates Targets Potential indications Ph 1a Ph 1b/2 Registrational NDA Filing Approved
rights D
SKB264 TROP2 TNBC (3L+) Greater China 2H24

TNBC (1L)
HR+/HER2-BC (3L+)
EGFR-mutant NSCLC (TKI failure)
EGFR-wild type (1L) and EGFR-mutant (TKI failure) NSCLC
EGFR-mutant NSCLC (1L)
NSCLC (EGFR-wild type (1L))
GC (2L+)
OC (platinum-resistant)
Solid tumors (SCLC, UC, HNSCC and EC)
NPC (PD-(L)1 relapse or refractory)
ADC
CC (2/3L)
UC (1L)
OC (2L maintenance)
CRPC (2L+)
A166 HER2 HER2+ BC (3L+) Global 2H24
HER2+ BC (2L+)
HER2+ GC (2L+)
HER2+ CRC (3L+)
SKB315 CLDN18.2 Solid tumors (GC, PC etc.) Licensed-out
1fc9fa9cf8844a388c506688498547c5
SKB410 Nectin-4 Solid tumors Greater China
Up to seven PCC Solid tumors Greater China
A167 PD-L1 NPC (3L+) Greater China 2H23
NPC (1L)
A140 Erbitux biosimilar CRC Global
A400 RET RET+ NSCLC (1L) Greater China >>> (2H 2023)
RET+ NSCLC (2L+) and part of Asia
Non-ADC
RET+ MTC and other RET+ solid tumors
Oncology
RET+ inhibitor-resistant solid tumors
SKB337 PD-L1/CTLA4 Solid tumors Global
A289 LAG3 Solid tumors Global
A296 STING Solid tumors (intravenous infusion) Global
Solid tumors (intratumoral injection)
A223 JAK 1/2 Rheumatoid arthritis Global >>> (2H 2023)
Alopecia areata
Non-oncology A277 KOR CKD-aP Global
SKB378 TSLP Asthma Global
SKB336 FXI/FXIa Thromboembolic disorders Global
ADC franchise as the primary anchor with global potential

ADC to be the major revenue contributor - While currently most advanced assets in
the pipeline are non-ADC assets (e.g., PD-L1 and cetuximab biosimilar), we see the ADC
14 August 2023 10
franchise led by SKB264 as the primary driver of the pipeline value and expect ADCs to
contribute sales of Rmb7.1bn in 2033E or 68% of total revenue as part of our
risk-adjusted DCF framework.
Exhibit 5: ADC franchise to contribute 68% of revenue in 2033E

Estimated revenue breakdown of Kelun Biotech by 2033E (risk-adjusted)
12,000 Rmb, mn
SKB315 global launch
10,000
SKB264
8,000
ex-China launch
6,000
SKB264 / A166
4,000
ADC
68%
2,000
-
2021A 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
SKB264 (TROP2) A166 (HER2) SKB315 (CLDN18.2)

A400 (RET) A223 (JAK) Others
SKB264 as the primary value driver with global potential - Among the three
clinical-stage ADC assets (TROP2 / HER2 / CLDN18.2), we see SKB264 as the most
critical asset, and expect it to contribute over Rmb5.3bn in revenues by 2033E (or 75%
of ADC franchise revenue, c.63% of total equity value, see breakdown details below),
1fc9fa9cf8844a388c506688498547c5
given: 1) the broad spectrum of indications where TROP2 has over-expression (e.g.
BC/NSCLC/UC/GC), 2) the unique drug design of SKB264 could potentially deliver
clinical benefits over TROP2 ADC peers as illustrated in early encouraging data, and 3)
the strong leverage of MSD’s expertise and network in the global market to drive
clinical development and commercialization in both mono and combo settings (we
estimate ex-China risk-adjusted peak sales to contribute to 89% of total peak sales by
2033E).
14 August 2023 11
Exhibit 6: SKB264 as the primary value driver with global potential

Valuation breakdown of drug assets (late-stage vs. early stage)
US$ mn
Late-stage assets Early-stage assets Cash
PoS
70%
US mn
PoS PoS
653
PoS 20% PoS 65%
36% 71%
2,539 US mn
PoS
PoS 81%
PoS 77%
73%
PoS
27%
Exhibit 7: NSCLC indication as the major part of pre-PoS overseas Exhibit 8: Sales from BC and NSCLC contributes to major part of
sales of SKB264 overseas valuation of SKB264
Pre-adjusted sales breakdown of SKB264 (TROP2 ADC) by indications Global valuation breakdown of SKB264 (TROP2 ADC) by indications
(exclude China) (exclude China)
US$ mn US$ mn
BC NSCLC Others BC NSCLC PoS Others
50%
PoS
32% PoS
PoS 7%
22% PoS
US mn
581
7%
5,373 US mn
1fc9fa9cf8844a388c506688498547c5
PoS
1,375 US mn
58%
US mn
8,969
764 US mn
PoS
72%
US mn
2,913
Source: Goldman Sachs Global Investment Research Source: Goldman Sachs Global Investment Research
Differentiated HER2/CLDN18.2 ADC to be competitive treatment options – Besides

SKB264, the other two ADC assets SKB315 (CLDN18.2) and A166 (HER2) also have
differentiated drug design demonstrating competitive efficacy/safety profile that make
them meaningful treatment options amid competition. For CLDN18.2 ADC, we expect
SKB315, as a ph1 asset to capture US$558mn PoS-adjusted sales globally by 2033E,
14 August 2023 12
given 1) it is among the leading CLDN18.2 ADCs with Kthiol-based design to expand
therapeutic window, and 2) potential advantage in ex-China market on the back of MSD’s
commercial execution. For A166, despite the competitive efficacy data, we are more
conservative on sales forecasts (PoS-adjusted of Rmb941m, or c. US$140m) with likely
strong competition from Enhertu and the possible examination requirement due to
ocular toxicity.
MSD-endorsed technology platform to drive further growth - In addition, with the

fully integrated ADC platform (OptiDC), which is endorsed by MSD in extensive
collaboration deals, we expect ADC pipeline to further expand into a long-tail growth
driver for the company.
Non-ADC assets to supplement ADC indications as portfolio strategy

Besides ADC franchise, the non-ADC franchise of Kelun Biotech is also expanding with
the portfolio strategy to:
n Supplement indications of ADCs and build synergies in terms of specialty

expertise, KOL / oncologist access, and combination treatment opportunities

particularly in lung / breast / GI cancers (e.g. RET inhibitor and SKB264 in lung
cancer). In addition, with A167 (PD-L1) and Keytruda as backbone I/O drugs for
domestic / global market, SKB264 is currently under clinical studies to explore
combination treatment with the PD-(L)1 drugs in a number of indications including
BC and NSCLC.
n Accumulate know-how for OptiDC given the R&D expertise in small molecule
drugs and biologics drugs would continuously enrich the toolbox for OptiDC to drive
further innovation in ADC (e.g., immune-stimulatory payloads, BsAb ADC).
n Explore non-oncology TAs, such as autoimmune areas, in an effort to expand the
range of indications and molecular targets that could be potentially applicable by
1fc9fa9cf8844a388c506688498547c5
ADC.
14 August 2023 13
Exhibit 9: ADC and non-ADC franchise synergistically cover major oncology areas with significant unmet needs
Mapping of major markets targeted by Kelun Biotech’s oncology franchise
128k
(global)
234k
(global)
176k
(global)
325k
(global)
83k
(global)
126k 99k
(global) (global) 43k 31k 21k
(global) (global) (global)
https://ascopubs.org/doi/abs/10.1200/JCO.2017.35.15_suppl.4038
15k
77k 61k 140k

(global)
200k 229k
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6135466/
(global) (global)
63k 41k
(global) (global)
61k
1fc9fa9cf8844a388c506688498547c5
45k
128k
(global) 67k
42k 25k 36k
(global) (global) (global)
29k 11k 8k
ADC mono Non-ADC mono ADC combo
Note: Size of shaded areas represent the number of addressable patients in FY2022 (global number for indications of SKB264 / SKB315, others are China)
14 August 2023 14
Dissecting the pipeline: 3 ADCs + supporting franchise
SKB264: a competitive TROP2 ADC with promising global sales potential

TROP2 is a validated target for ADC as it is overexpressed with low heterogeneity in a
wide range of cancers, including advanced tumors with limited treatment options (e.g.,
TNBC, GC) and/or highly prevalent cancers (e.g., NSCLC). Positioned to be the first
domestically developed TROP2 ADC in China, SKB264 adopts a differentiated drug
design to improve ADC stability and maintain bioactivity, enhancing its targeting ability
and reducing its off-target and on-target off-tumor toxicity, potentially leading to a
broader therapeutic window.
n US$3.6bn risk-adjusted global sales for SKB264 by 2033E – We forecast sales for
BC/NSCLC and potential expanded indications in GC/OC etc. by 2033E, and the
US/EU market to contribute 55%/34% of risk-adjusted global sales. Our estimates
are based on 1) the clinical benefit of TROP2 ADC compared to the standard of care
(SOC) in BC and NSCLC, 2) the large number of addressable patients globally (close
to 400k addressable BC patients and over 1mn addressable NSCLC patients
according to Globocan 2020), and 3) encouraging preliminary data of SKB264 vs.
front-runners Trodelvy and Dato-DXd. China sales and royalties on non-China sales
for SKB264 could add up to Rmb5.3bn as revenue to Kelun Biotech in 2033E.
Exhibit 10: We forecast global sales of SKB264 to reach $3.6bn by Exhibit 11: …and US as the largest market contributing over half of
2033E with NSCLC as the biggest driver… global sales
Estimated combined sales of SKB264 globally during 2024E-2033E Sales breakdown by geographic regions during 2024E-2033E
(risk-adjusted)
4,000 Revenue 350% Revenue

4,000
(USD, mn) (USD, mn)
3,500 300% 11%
3,500
3,000
250% 3,000
1fc9fa9cf8844a388c506688498547c5
2,500 34%
200% 2,500
2,000
150% 2,000
1,500
100% 1,500
1,000
500 50% 1,000
55%
0 0% 500
0
2024
2033
2025
2026
2027
2028
2029
2030
2031
2032
TNBC HR+/HER2- BC
NSCLC - 1L NSCLC - 2L US EU5 China
Others yoy
n We expect material global market share; await more data to assess further
potential – SKB264 has shown some early encouraging clinical data in comparison
with TROP2 ADC peers, e.g., higher ORR/PFS in 2L EGFRmut patients and generally
better safety profile across indications. Leveraging MSD’s expertise in clinical
development, we see the value of SKB264 could be better unveiled in the coming
years, and the asset could capture material market share globally. More positive data
14 August 2023 15
could further strengthen its market position. We elaborate more on the treatment
landscape and SKB264’s position in the following sections.
n Potential higher market share in China - In China, we see additional competitive
advantage of SKB264 given the early market access (BLA in 2H23) and the premium
pricing of Trodelvy, which will cost Rmb80k per month, materially higher than other
BC treatments in China, e.g. 1) ADCs: Enhertu (Rmb44k per month without PAP),
and 2) CDK4/6i (Rmb4-5k for palbociclib/abemaciclib). Given the CMC challenges,
we expect Trodelvy to be less flexible on price cut which could limit its ability to get
into NRDL for broader usage, and therefore we expect SKB264 to capture higher
market share in China (5% higher than in US/EU).
Exhibit 12: We estimate $3.6bn global sales for SKB264 by 2033E…

Key estimates and assumptions for SKB264 across indications
Key estimates in 2033E Breast Cancer Lung Cancer Other indications
TNBC HR+/HER2- BC (2/3L) EGFRmut EGFRwt GC OC
HER2-low HER2- HER2-
1L 2L 3L 3L zero 2L zero 3L 1L TKI-failed 1L 2L 1/2L 2L
US / TROP2 penetration (%) 25% 40% 60% 30% 50% 60% 10% 40% 30% 30% 20%/25% 25%
EU SKB264 share (%) 25% 25% 25% 30% 30% 30% 30% 30% 35% 35% 25% 25%
SKB264 treated pts (k) 2 2 2 6 6 2 1 4 14 8 2 2
DOT (month) 8 7 6 6 7 6 18 7 9 5 9/5 9
pre-POS sales (mn USD) 310 260 242 793 1,000 309 580 667 3,160 966 284 384
China TROP2 penetration (%) 20% 35% 55% 30% 45% 55% 10% 35% 25% 25% 20%/25% 25%
SKB264 share (%) 30% 30% 30% 35% 35% 35% 35% 35% 40% 40% 30% 30%
SKB264 treated pts (k) 2 2 1 2 5 2 7 17 28 15 19 2
DOT (month) 8 7 6 6 7 6 18 7 9 5 9/5 9
pre-POS sales (mn USD) 26 23 12 22 62 20 246 220 462 141 249 34
Monthly price (k USD) - China 2
Monthly price (k USD) - US 30
Monthly price (k USD) - EU5 19
pre-POS sales (mn USD) 335 283 254 815 1,062 328 826 886 3,622 1,107 533 418
POS (%) 58% 81% 81% 58% 58% 58% 7% 50% 22% 32% 8% 8%
risk-adj sales (mn USD) 193 229 206 469 612 189 60 447 782 349 43 34
Total risk-adj sales (mn USD) 3,636
Total sales also include add-on sales from other smaller indications.
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Differentiated drug design to improve therapeutic window
Leveraging the ADC platform and expertise, SKB264 is designed to improve upon the
first FDA-approved TROP2 ADC, Trodelvy, with a differentiated drug design:
14 August 2023 16
Exhibit 13: SKB264 has different drug design vs peers

Drug design of key components for TROP2 ADCs
Molecule SKB264 Trodelvy Dato-DXd
Developer Kelun Biotech Gilead Daiichi Sankyo/AstraZeneca
Antibody sacituzumab sacituzumab datopotamab
Payload KL610023 SN-38 DXd
(belotecan derivative) (irinotecan derivative) (exatecan derivative)
IC50 on TOPO-1 0.7uM 1.1uM 0.31uM
inhibition
Payload class TOPO1 inhibitor TOPO1 inhibitor TOPO1 inhibitor
Linker CL2A (acid cleavable CL2A (acid cleavable Enzyme cleavable tetrapeptide
carbonate linker) carbonate linker) linker
Conjugation Irreversible site-specific Reversible sites-pecific Reversible sites-pecific
methylsulfonyl pyrimidine-thiol maleimide-thiol maleimide-thiol
conjugation conjugation conjugation
DAR 7.4 7.6 4
Source: Company data (for SKB264), Frontiers in Oncology (for Trodelvy), Clinical Cancer Research 22.20 (2016) (for Dato-DXd)
n Moderate payload for better safety – A novel belotecan-derivative topoisomerase I

(TOPO1) inhibitor (KL610023) with moderate cytotoxicity, is conjugated to
sacituzumab (TROP2-targeting antibody). The choice of a moderately potent payload

provides better control on safety in the circulation system / normal cells given the
wide spectrum of TROP2 expression. The high membrane permeability enables the
payload to exert cytotoxicity into bystander cells. We note that all three TROP2 ADCs
use TOPO1 inhibitor as payload while SKB264’s payload is in the midpoint in terms
of potency (higher than Trodelvy, lower than Dato-DXd), which could potentially
expand the therapeutic window.
n Irreversible covalent conjugation to improve stability – Compared to Trodelvy,
the largest difference of SKB264 lies in the conjugation method: unlike the
reversible binding used in Trodelvy, SKB264 conjugates the linker-payload to the
antibody through an irreversible binding to the cysteine residue, aiming to reduce
premature payload release in circulation. With the improved payload stability (e.g.,
1fc9fa9cf8844a388c506688498547c5
payload half-life of 56.3h/15.5h for SKB264/Trodelvy, respectively), SKB264 is able to
carry significantly higher payload in tumor tissue vs in plasma compared to Trodelvy
(based on preclinical CDX model findings), suggesting potentially improved efficacy
and therapeutic window of SKB264.
n Potentially better homogeneity than Dato – Similar to Trodelvy, SKB264 adopts a
high DAR strategy (DAR=7.4) to complement the moderate potency of the payload.
In contrast, Dato-DXd has a DAR of 4 and could potentially have higher
heterogeneity in DAR distribution with less than 60% of products with DAR=4.
14 August 2023 17
Exhibit 14: SKB264 exhibited comparable level of plasma payload Exhibit 15: … but about 4.6 times higher payload exposure in tumor
with Trodelvy, … tissue
Plasma concentrate-time curve of KL610023 & SN38 Tumor concentration-time curve of KL610023 & SN38
Source: Company data Source: Company data
Indication#1: TNBC – validated field for TROP2 ADC; non-inferiority as

baseline
TROP-2 is validated in 3L TNBC – For TNBC, which is c. 11% of total breast cancer
patients, the SOCs are limited especially for patients who lack actionable genetic
alterations (AGA) (e.g., PD-L1 negative, BRCA1/2 wild-type). TROP-2 ADC has proven to
be a better option in this population: with significant improvement in progression-free
survival (PFS) and overall survival (OS) over chemotherapy in 3L+ TNBC, FIC TROP-2
ADC Trodelvy obtained FDA approval in April 2020 and full approval in 2021.
Exhibit 16: TROP2 ADC primarily target TNBC and HER2-zero BC

Percentage of breast cancer cases by cancer subtype in US
Including HR+/HER2+ and HR-

/HER2+ subtypes
1fc9fa9cf8844a388c506688498547c5
HER2+, 15%
TNBC, 11%
HR+/HER2-low (IHC 1+
or IHC 2+/ISH -), 49%
HR+/HER2-zero
(IHC 0), 25%
Targeted patients
Source: National Cancer Institute SEER Incidence Data
14 August 2023 18
Exhibit 17: 3L TNBC as the baseline for TROP2 ADC with opportunity to push for earlier-lines adoption
SOCs for different lines of treatment for TNBC
SOC / Efficacy Safety
Setting Subtype/Biomarker Competitor ORR (%) PFS (mos) OS (mos) SAE G3+ AE Discontinuation Clinical trial
1L PD-L1 CPS>=10 Keytruda+chemo 53% 9.7 23 68% KEYNOTE-355
PD-L1 CPS<10 and BRCA1/2mut PARPi 60% 7 19.3 37% 5% OlympiAD
PD-L1 CPS<10 and BRCA1/2wt chemo 38% 6.1 21
2L BRCA1/2mut PARPi 60% 7 19.3 37% 5% OlympiAD
Any Trodelvy 35% 5.6 12.1 15% 64% 5% ASCENT
chemo 11% 3.3 10.8 20% 36% KEYNOTE-119
BRCA1/2wt and HER2-low Enhertu 50% 8.5 18.2 28% 53% 16% Destiny-Breast04
3L Biomarker positive (TMB-H etc.) targeted therapy 18% 8% 15% 9% KEYNOTE-158
Any chemo 5% 1.7 6.7 8% 47% 5% ASCENT
Source: NCCN guidelines
Emerging opportunity in earlier lines – some early data from TROP-2 ADCs in are
encouraging – e.g., SKB264 / A167 showed ORR 85.7% (n=7, phase 1/2) in 1L TNBC,
and Dato-DXd / durvalumab combo 73.6% (n=61) in the same setting. Both look higher
than SOC (Keytruda / chemotherapy, ORR of 52.7%, ph3 KEYNOTE-355), though need
to be validated in larger samples. We note that all three TROP2 ADCs have initiated
clinical trials for 1L TNBC, and even adjuvant setting for Dato-DXd / Trodelvy.
Exhibit 18: TROP2 ADC showed encouraging response data in 1L TNBC over SOC
Clinical data of SKB264, Dato-DXd, and SOC (Keytruda+chemo) in 1L TNBC
Molecule SKB264 Dato-DXd Keytruda + chemotherapy
Developer Kelun Biotech Daiichi Sankyo/AstraZeneca MSD
Study SKB264-II-07 (China trial) BEGONIA1 KEYNOTE-355
Latest reported time 29-Dec-2022 8-Dec-2022 21-Jul-2022
Follow-up period, median N/A 7.2 months vs 16.6 months 44.1 months
NCT no. NCT05445908 (phase 2) NCT03742102 (phase 1b/2) NCT02819518 (phase 3)
Combo A167 (PD-L1) Durvalumab (PD-L1) PD-1 + chemotherapy
Treatment line 1L TNBC 1L TNBC 1L TNBC
Baseline N 8 61 (Arm 7: Dato-DXd + PD-L1) vs 23 220 vs 103 (PD-L1 CPS ≥10)
(Arm 1: PD-L1 + chemo)
Prior treatment previously untreated: 41% (25/61) in previously untreated locally recurrent
Arm 7 (Dato-DXd + PD-L1) inoperable or metastatic TNBC
1fc9fa9cf8844a388c506688498547c5
Median age (yrs) 53 (31-74) 52 vs 55
ECOG ECOG PS 1: 86% vs 41%
Efficacy ORR 85.7% (6/7) 73.6% (39/61) vs 56.5% (13/23) 52.7% (116/220) vs 40.8% (42/103)
DCR 100% (7/7) 65.0% vs 54.4%
DOR, m 12.8 vs 7.3
PFS, m 9.7 vs 5.6 (HR=0.66)
OS, m 23.0 vs 16.1 (HR=0.73)
AE G3+ AE 37.5% (3/8) 41% (25/61) 68.1% vs 66.9%
SAE 0 16.4% (10/61)
TR death 0 0 2 vs 0
AE of concern mainly Grade 1/2 events including predominantly Grade 1/2 events neutropenia (29.7% vs 29.9%);
neutropenia (62.5%), lymphopenia including stomatitis, rash, pruritus, neutrophil count decreased (17.4% vs
(62.5%), rash (62.5%), and and dry eye (≥10% of patients) 20.3%);
stomatitis (62.5%) anemia (16.5% vs 14.6%)
Discontinuation N/A 6.6% (4/61)
Note: 1. Ph1 data reported on 2022 SABCS (Arm 7, data cut-off: Jul 2022) and 2021 SABCS (Arm 1, data cut-off: Sep 2020)
Source: Company data for SKB264, SABCS 2022 for Dato-DXd, New England Journal of Medicine (2022) for Keytruda
Over US$600mn of risk-adjusted global sales for SKB264 – We expect SKB264 to

achieve US$628mn of risk-adjusted sales globally for TNBC by 2033E, with US/EU5
markets to contribute 57%/36% of global sales. Accordingly, we forecast Kelun Biotech
to capture Rmb754mn as revenues by 2033E (primarily China sales and royalties from
14 August 2023 19
ex-China sales), which feeds into our DCF valuation framework.
n Penetration: Given the preferred recommendation position of Trodelvy in 2L TNBC

(v4.2023 NCCN guidelines), we expect 2L adoption of SKB264 to be the major
usage (37%) in clinical setting for TNBC with meaningful contribution from 1L/3L
(33%/31% in 2033E). We estimate that the TROP2 ADC class will have deepening
penetration in 1L-3L (e.g., 25%/40%/60% in US), by comparing the available TROP2
ADC data with the SOC across the treatment paradigm in TNBC. (See details
below).
Exhibit 19: We estimate the penetration of TROP2 ADC in TNBC by comparing with SOC across the
treatment paradigm
Treatment paradigm for TNBC
Subtypes SOC data TROP2 data penetration blended

11% penetration
TNBC BRCA1/2 PARPi:

20%
mutation ORR=60%
ORR=
38% 89% 86% / 74%
PD-L1 BRCA1/2 chemo: for SKB264 /

45% 25%
CPS<1 wildtype ORR=38% Dato-DXd in
combo with
1 L TNBC 62% PD-L1 in 1L
TNBC
PD-L1 PD1+chemo:
CPS>= ORR=53% 30%
38%
PD-L1 PARPi
CPS<10 refractory 60%
11% 62%
BRCA1/2 PD-L1 PARPi:
mutation 20%
CPS>=10 ORR=60%
2 L TNBC 89% 55% 40%
BRCA1/2 Enhertu: ORR=
wildtype HER2-low 44% for 20%
ORR=50%
SKB264 3L
45% TNBC
Trodelvy
1fc9fa9cf8844a388c506688498547c5
HER2-zero 60%
chemo:
3 L TNBC ORR=5% 60% 60%
Source: NCCN guidelines for treatment regimens, FDA labels for SOC data, Goldman Sachs Global Investment Research for penetration estimates
n Expect 6-8 months of duration of treatment (DOT): In 1L setting, a median PFS

of 7.6 months with Keytruda/chemo (ph3 KEYNOTE-355) was used as the
benchmark for ADC DOT, while we see upside on potentially longer survival data
given the promising response data of SKB264/Dato-DXd in 1L TNBC. As for 3L
TNBC, a 5.6-month DOT is estimated referencing to the phase 3 ASCENT study of
Trodelvy in 3L+ TNBC.
14 August 2023 20
Exhibit 20: Close to 60% of global sales in TNBC expected from US Exhibit 21: 2L adoption to be the major clinical usage in TNBC
SKB264 global sales in TNBC breakdown by geographic regions TNBC sales breakdown by lines of treatment
700 Revenue 700 Revenue

(USD, mn) (USD, mn)
600 pts (k) 5 2 2 7% 600

31%
0% 50% 100%
500 500
36%
400 400
300 37%
300
200 200
57%
100 100
33%
0 0
2026
2024
2025
2027
2028
2029
2030
2031
2032
2033
2024
2029
2025
2026
2027
2028
2030
2031
2032
2033
US EU5 China 1L TNBC 2L TNBC 3L TNBC
n Expect SKB264 to capture 27% TNBC pts by 2033E - We expect c.10k TNBC
patients globally (5/2/2 for China/US/EU) to be treated by SKB264 by 2033E. We
assume 25% of market share in 1L-3L TNBC for SKB264 in ex-China market, while
market share is 5% higher in China. Based on that:
1. Time to market - We assume SKB264 to be the 3rd-to-market TROP2 ADC in TNBC

globally, with Dato-Dxd having already started a global phase 3 ahead of SKB264;
2. Comparable efficacy as baseline - In 3L TNBC, SKB264 showed largely on-par
preliminary PFS data in 3L TNBC (e.g., mPFS=5.7 months vs. 4.8/7.3 for Trodelvy /
Dato-DXd). Although in 1L TNBC, SKB264/A167 reported numerically higher ORR
than Dato-DXd/durvalumab (ORR 85.7% vs. 73.6%), the sample size was too small
1fc9fa9cf8844a388c506688498547c5
to be meaningful (7 vs. 61) in defining differentiation; we await more matured data in
earlier line of TNBC.
Exhibit 22: TROP2 ADCs are targeting TNBC in both front-line and late-line treatment
Clinical development landscape of TROP2 ADC in TNBC
Company TROP-2 Study Lines PD-L1 Regimen Trial status
ADC eL 1L 2L+ + - Mono Combo Ctrl Phase Masking N1 Endpoint Start Completion
SKB264-III-03 NS Chemo Ph3 Open label 254 PFS Jun-2022 Oct-2023
Kelun Biotech SKB264 KL264-01 NS - Ph2 Open label 59 MTD/ORR Feb-2020 Nov-2024
SKB264-II-07 NS +/- PD-L1 - Ph2 Open label 95 ORR Jul-2022 Apr-2024
TROPION-Breast02 NS ICC2 Ph3 Open label 600 PFS/OS May-2022 Dec-2025
AstraZeneca
TROPION-Breast03 adj. NS +/- PD-L1 ICT3 Ph3 Open label 1,075 iDFS Nov-2022 Sep-2027
/ Daiichi Dato-Dxd
BEGONIA +PD-L1 PD-L1+chemo Ph1b/2 Open label 61 ORR Dec-2018 Aug-2024
Sankyo
TROPION-PanTumor01 NS - Ph1 Open label 44 DLT Jan-2018 Jan-2025
IMMU-132-01 NS - Ph1/2 Open label 108 ORR Dec-2012 Mar-2019
ASCENT NS TPC4 Ph3 Open label 529 PFS Nov-2017 Mar-2020
ASCENT-03 TPC5 Ph3 Open label 540 PFS Jul-2022 May-2027
Gilead Trodelvy
ASCENT-04 +PD-1 PD-1+TPC5 Ph3 Open label 440 PFS Jul-2022 Feb-2027
ASCENT-05 adj. NS +PD-1 PD-1+/-chemo Ph3 Open label 1,514 iDFS Dec-2022 Jul-2027
ELEVATE TNBC +CD47 - Ph3 Open label 144 ORR Dec-2021 Aug-2024
Note: 1. Estimated number is used when no actucal enrollment reported; 2. Investigator's choice of chemotherapy; 3. Capecitabine and/or pembrolizumab; 4. Eribulin, capecitabine,
gemcitabine, or vinorelbine; 5. Treatment of physician's choice: Paclitaxel, or nab-paclitaxel, or gemcitabine + carboplatin.
Source: ClinicalTrials.gov, Pharmcube
14 August 2023 21
Exhibit 23: SKB264 showed comparable efficacy in 3L+ TNBC

Clinical data of TROP2 ADC in 3L+ TNBC
Molecule SKB264 Trodelvy Dato-DXd
Developer Kelun Biotech Gilead Daiichi Sankyo/AstraZeneca
Study KL264-01 ASCENT TROPION-PanTumor014
Data source SABCS 2022 FDA drug label SABCS 2022
Follow-up period, median 12.8 months 19.3 months
NCT no. NCT04152499 (phase 1b/2) NCT02574455 (phase 2) NCT03401385 (phase 1)
Treatment line 3L+ TNBC 3L+ TNBC 3L+ TNBC
Baseline N 59 267 (Trodelvy) vs 262 (chemo) 44 (all pts) 27 (Topo I
inhibitors-naïve)
Prior treatment ≥3: 88% (52 pts) prior PD-1/PD-L1 therapy: 29% median 3 (1-10)
Median age (yrs) 54 53 (32-82)
ECOG ECOG PS 1: 57% ECOG PS 1: 59%
Efficacy ORR 43.6% (24/55), with cORR = 40% 35% (82/235) vs 5% (11/233)3 32% (14/44) 44% (12/27)
DCR 80% (44/55) 34% (81/235) vs 27% (62/233) 80% (35/44) 81% (22/27)
DOR, m 11.5 6.3 vs 3.6 (HR=0.39) 16.8 16.8
PFS, m 5.7 4.8 vs 1.7 (HR=0.43) 4.4 7.3
OS, m 14.6 11.8 vs 6.9 (HR=0.51) 13.5 14.3

AE G3+ AE 55.9% (33/59)1 64% (156/258) vs 47% (104/224)3 52% (23/44)
SAE 24.2% (51/211)2 27% in Trodelvy group 20% (9/44)
TR death 1 1.2% in Trodelvy group 0
not reported
AE of concern neutrophil count decreased: 23.7%; diarrhea (11% vs 1%); stomatitis (11%);
(G3+) anemia (20.3%); fatigue (6% vs 9%); nausea (2%);
platelet count decreased: (16.9%)1 nausea (3% vs 0.4%) vomiting (5%)
Discontinuation 6.8% (4/59)1 5% in Trodelvy group 2.3% (1/44)

Note: 1. Ph1b/2 data reported on 2022 SABCS (Dec 8, 2022); 2. data from patients across all indications (n=211) in the Ph1b/2 dose expansion
cohort; 3. response and safety data based on brain-met–negative patients; 4. Data reported on 2022 SABCS (Dec 8, 2022)
Source: Company data for SKB264, FDA drug label (2023) for Trodelvy, SABCS 2022 for Dato-DXd
1fc9fa9cf8844a388c506688498547c5
14 August 2023 22
Exhibit 24: We estimate $0.6bn sales with 10k patients in TNBC for SKB264 globally (2033E)
Estimation process for the sales of SKB264 in TNBC patients globally
Peak sales (2033E) China US EU5 Source and assumption
Population base
1413mn/332mn/325mn for China/US/EU5 in 2021 (World
Population (mn) 1,396 364 337 Bank, stats.gov.cn)
BC incidence, 1/105 45 82 89 Globocan 2020
CAGR of BC incidence 3% 1% 1% cancer.org, PMC8330522
New BC pts (k) 628 299 301
Subtype breakdown within BC
TNBC 13% 13% 13% cancer.org, BMC Cancer (2011)
Advanced stage % 42% 37% 37% SEER, medRxiv (2021)
Addressable advanced TNBC pts
(k) 34 14 14
1L treatment
Treatment rate % 90% 95% 95% established chemotherapy in 1L
benchmarks: 18% for Trodelvy in 1L TNBC in US (GSe for POS=58%
GILD); 30% for Enhertu for 1L HER2+ BC (GSe for DS); phase 1b/2
TROP2 ADC penetration 20% 25% 25% assume lower penetration in China
DOT=7.6m
1L pts on TROP2 (k) 6.1 3.3 3.3 PFS for Keytruda /
3rd-in-market product with non-inferiority 21-33% (Nature chemo in
Reviews Drug Discovery (2023)); assume lower market KEYNOTE-355
capture ex-China (vs. in China) given the later global

SKB264 market share % 30% 25% 25% timeline
1L pts on SKB264 (k) 1.8 0.8 0.8
2L treatment
Treatment rate % 80% 85% 85% lower rate due to drop-out
Trodelvy as Class 1 preferred recommendation in NCCN
TROP2 ADC penetration 35% 40% 40% guideline (2023.v4)
2L pts on TROP2 (k) 6.4 3.1 3.2
POS=81%
SKB264 market share % 30% 25% 25% registraional trial
2L pts on SKB264 (k) 1.9 0.8 0.8
3L treatment DOT=6.6m/5.6m for
Treatment rate % 75% 80% 80% lower rate due to drop-out 2L/3L
PFS for Trodelvy
in ASCENT
TROP2 ADC penetration 55% 60% 60% assume higher penetration given fewer options in later-lines
3L pts on TROP2 (k) 3.9 3.5 3.5
1fc9fa9cf8844a388c506688498547c5
SKB264 market share % 30% 25% 25%
3L pts on SKB264 (k) 1.2 0.9 0.9
Total pts on TROP2 (k) 16.4 9.9 9.9
Total TNBC pts on SKB264 (k) 5 2 2
Monthly price (k) USD 2 30 19 benchmark with Trodelvy price
SKB264 Sales, unadjusted,
mn USD 61 494 318
SKB264 sales, risk-adjusted,

mn USD 43 356 229 SKB264 global risk-adjusted sales (mn USD) = 628
TROP2 market, mn USD 203 1,975 1,270 TROP2 global market in TNBC (mn USD) = 3,449
Source: stats.gov.cn, Globocan 2020, Nature Reviews Drug Discovery (2023), BMC Cancer (2011), National Cancer Institute SEER Incidence Data, Cancer Biol Med (2021), NCCN guidelines, Goldman
Sachs Global Investment Research
Indication#2: HR+/HER2- BC - SKB264 remains a competitive option amid

Enhertu competition
A larger HER2- BC subsector with unmet needs post CDK4/6 combo – Accounting
for 80+% of HER2-negative breast cancer, HR+/HER2- BC has naturally been the next
focus of TROP2 ADC after TNBC. For this patient group, the CDK4/6 inhibitors and
14 August 2023 23
endocrine therapies are well established for 1/2L treatment. Nevertheless, the
treatment options are limited if the patients become refractory/recurrent from these
combo therapies. With the phase 3 TROPiCS-02 study, Trodelvy demonstrated improved
survival (mPFS=5.5 vs. 4.0 months, mOS=14.4 vs. 11.2 months) over chemotherapy in
3L+ HR+/HER2- BC and obtained FDA approval in Feb 2023.
Exhibit 25: CDK4/6i-based combo therapies are established in early-line treatment for HR+/HER2- BC
SOCs for different lines of treatment for HR+/HER2- BC
Setting Subtype/Biomarker Competitor ORR (%) PFS (mos) OS (mos) SAE G3+ AE Discontinue Clinical trial
1L Endocrine therapy (ET)+CDK4/6i 32% 20.5 53.7 29% rare MONALEESA-3
Aromatase inhibitor+CDK4/6 42% 24.8 53.9 20% 76% 10% PALOMA-2
57% 30.6 90% DAWNA-2
2L BRCA1/2wt ET+CDK4/6 if not used in 1L 35% 16.4 46.7 22% 61% 9% MONARCH-2
27% 15.7 6% 88% 3% DAWNA-1
systemic chemo 3.4 25.6 PMC7501162
BRCA1/2mut PARPi (Lynparza etc.) 52% 7 19.3 37% 5% OlympiAD
3L HER2-low Enhertu 53% 10.1 23.9 28% 53% 16% DESTINY-Breast04
HER2-zero Trodelvy 21% 5.5 14.4 14% 6% TROPiCS-02

TROP-2 could be better positioned in HER2-zero patients – HER2-negative patient

population can be further broken down into: 1) HER2-low (IHC 1+ or IHC 2+/FISH-),
which accounts for 46-66% of HER2- patients in China/US; and 2) HER2-zero (IHC 0), c.
25%.
n For HER2-low patients, Enhertu was FDA approved in August 2022, and is the
preferred treatment in NCCN guidelines, as it showed significant clinical benefit over
chemotherapy (mPFS=10.1 vs. 5.4 months, mOS=23.9 vs. 17.5 months,
DESTINY-Breast04 study).
n For HER2-zero, Trodelvy is guideline recommended. There are debates on the
potential threat from Enhertu and DESTINY-Breast06 readouts could provide more
visibility, although we see TROP-2 ADC has a higher chance of maintaining its
favorable position, as Enhertu’s phase 2 DAISY trial suggested deteriorating efficacy
1fc9fa9cf8844a388c506688498547c5
with lower HER2 expression - in late-line setting, mPFS is 4.2 months for HER2-zero
vs. 6.7 months for HER2-low / 11.1 months for HER2+.
HR+/HER2- to contribute US$1.3bn risk-adjusted sales to SKB264 by 2033E - We

expect SKB264 to capture 24k HR+/HER2- BC patients globally and achieve over $1.3bn
of risk-adjusted global sales by 2033E, with US/EU5 markets to contribute 58%/37% of
global sales. Accordingly, we forecast Kelun Biotech to capture Rmb1.35bn as revenues
by 2033E (primarily China sales and royalties from ex-China sales), which feeds into our
DCF valuation framework.
n Penetration: Given that 1) the current SOC is primarily chemotherapy for patients
progressed after ET/CDK4/6i combo, and 2) Trodelvy/Enhertu are the preferred
recommendation for 3L HER2-zero/HER2-low subsectors respectively (v4.2023
NCCN guidelines), we expect 2L adoption of SKB264 to contribute 48% of revenue
in HR+/HER2- BC by 2033E. We estimate that TROP2 ADC will only be used in
HER2-low subsector when patients are not responsive to Enhertu (0/30% for 2L/3L)
given the strong position of Enhertu, while higher penetration (50%/60% for 2L/3L)
could be seen in HER2-zero subsector.
14 August 2023 24
Exhibit 26: We estimate the penetration of TROP2 ADC in HR+/HER2- BC by comparing to SOC across the
treatment paradigm
Treatment paradigm in HR+/HER2- BC
HR+ HER2-
Subtypes SOC data TROP2 data Penetration
BC
Endocrine
1L therapy +
CDK4/6i:
9%
BRCA1/2 PARPi:
mutation 20%
ORR=52%
2L 91% 66%
BRCA1/2 HER2- Enhertu:
wildtype 0%
low ORR=53%
34% ORR=
HER2- 43% for

Trodelvy SKB264 3L 50%
zero
HR+/HER2-
66% BC
HER2- Enhertu
60%
low refractory
3L 34%
HER2- Trodelvy:
60%
zero ORR=21%
n Assume 5.5 months of DOT in HR+/HER2- BC: In 2L/3L settings, median PFS of
5.5 months from Trodelvy’s ph3 TROPiCS-02 study was used as the benchmark for
DOT of SKB264.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 25
Exhibit 27: Close to 60% of global sales in HR+/HER2- BC expected Exhibit 28: 2L adoption as a primary revenue driver
from US HR+/HER2- BC sales breakdown by lines of treatment
SKB264 global sales in HR+/HER2- BC breakdown by geographic regions
Revenue 1,400 Revenue

1,400 (USD, mn)
(USD, mn)
pts (k) 9 7 7 1,200
1,200 5%
0% 50% 100%
1,000 52%
1,000
37%
800
800
600
600
400
400 48%
58% 200
200
0
2030
2024
2025
2026
2027
2028
2029
2031
2032
2033
0
2033
2024
2025
2026
2027
2028
2029
2030
2031
2032
2L HR+/HER2- BC 3L HR+/HER2- BC
US EU5 China
n Expect 30-35% of market share for SKB264: within TROP2 ADC class across
regions, considering its potential competitive advantage with higher ORR and good
safety profile illustrated in HR+/HER2- BC.
n Time to market: with an ongoing ph2 study and Kelun to commence registrational
ph3 trial in 2H23, we expect SKB264 to have data readout and to file NDA in 2025,
followed by potential China approval in 2026 and in US/EU as early as 2027.
Exhibit 29: The focus of TROP2 ADC is largely settled in 2L+ HR+/HER2- BC
Clinical development landscape of TROP2 ADC in HR+/HER2- or HR+/HER2-low BC
1fc9fa9cf8844a388c506688498547c5
Company ADC Study Lines Regimen Trial status
Phase Masking
1L 2L+ Mono Combo Ctrl N1 Endpoint Start Completion
Kelun Biotech SKB264 KL264-01 Ph2 - Open label 59 MTD/ORR Feb-2020 Nov-2024
TROPION-Breast01 ICC2 Ph3 Open label 733 PFS/OS Oct-2021 Aug-2025
AstraZeneca Dato-Dxd
TROPION-PanTumor01 - Ph1 Open label 41 DLT/safety Jan-2018 Jan-2025
/ Daiichi
DESTINY-Breast04 TPC3 Ph3 Open label 494 PFS Dec-2018 Jan-2022
Sankyo Enhertu
DESTINY-Breast06 TPC4 Ph3 Open label 850 PFS Jul-2020 Jul-2023
IMMU-132-01 - Ph1/2 Open label 54 ORR Dec-2012 Mar-2019
Gilead Trodelvy TROPiCS-02 TPC5 Ph3 Open label 543 PFS/OS May-2019 Oct-2024
ASCENT-07 TPC4 Ph3 Open label 654 PFS May-2023 Sep-2025
Note: DESTINY-Breast04 and DESTINY-Breast06 enrolled patients with HER2-low BC; 1. Estimated number is used when no actucal enrollment reported; 2.
Investigator's choice of chemotherapy: eribulin, vinorelbine, capecitabine, and gemcitabine; 3. Treatment of physician's choice: capecitabine, eribulin,
gemcitabine, paclitaxel, and nab-paclitaxel; 4. Treatment of physician's choice: capecitabine, paclitaxel, nab-paclitaxel; 5. Treatment of physician's choice:
eribulin, capecitabine, gemcitabine and vinorelbine.
n Competitive early-stage data among TROP-2 peers – Although the treatment

position of TROP2 ADC in HR+/HER2- BC may not appear as competitive as in
TNBC, given the strong clinical benefit of Enhertu as demonstrated in
DESTINY-Breast04 trial, SKB264 reported decent ORR of 42.9% among 28 patients
(vs. 21%/27%/52.6% for Trodelvy/Dato-DXd/Enhertu). While no subgroup analysis
based on IHC level is available for more straightforward comparison, we believe that
14 August 2023 26
the ORR data of SKB264 could put it in a more competitive position in IHC1+
subgroup despite the presence of Enhertu, particularly if the efficacy can be
maintained in larger clinical trials.
Exhibit 30: SKB264 could become a competitive player in HR+/HER2- BC

Clinical data comparison of TROP2/HER2 ADC in HR+/HER2- BC
Target TROP2 HER2
Molecule SKB264 Trodelvy Dato-DXd Enhertu
Developer Kelun Biotech Gilead Daiichi Sankyo / Daiichi Sankyo/AstraZeneca
AstraZeneca
Study KL264-01 TROPiCS-02 TROPION-PanTumor01 DESTINY-Breast04 DESTINY-Breast06
Latest reported time 15-Nov-2022 26-Aug-2022 8-Dec-2022 7-Jul-2022 /
Follow-up period, median 10.2 mo and
up to 12 months 13.7 months 18.4 months /
12.5 mo for OS results
Phase phase 1b/2 phase 3 phase 1 phase 3 phase 3
NCT no. NCT04152499 NCT03901339 NCT03401385 NCT03734029 NCT04494425
Treatment line 3L+ HR+/HER2- 3L+ HR+/HER2- 2/3L HR+/HER2- 2/3L HER2-low 2L HER2-low
Baseline N 39 272 vs 271 (chemo) 41 331 vs 163 (chemo) ~ 850
Prior treatment 3 (0-8) 5 (3-10) 3
Median age 57 vs 55 57 57 vs 56
ECOG PS 1: 57% vs 54% PS 1: 43.5% vs 41.7%

HER2 IHC0 yes yes yes no yes
inclusion IHC1+ yes yes yes yes yes
IHC2+/ISH- yes yes yes yes yes
Efficacy ORR 42.9% 21% 27% 52.6% vs 16.3% Data anticipated: 2H2023
DCR 85.7% 85% 88% vs 66.3%
DOR, m 7.4 vs 5.6 10.7 vs 6.8
PFS, m 5.5 vs 4.0 (HR=0.66) 8.3 10.1 vs 5.4 (HR=0.51)
OS, m 14.4 vs 11.2 (HR=0.79) NR 23.9 vs 17.5 (HR=0.64)
AE G3+ AE 56.7% 41% 52.6% vs 67.4% 2
SAE 24.2% 1 14% vs 10% 15% 27.8% vs 25%
TR death 0 0.3% vs 0 0 1.9% vs 0
AE of concern anemia (26.7%); neutropenia (51% vs 38%); decreased lymphocyte neutropenia (13.7% vs
(G3+) neutropenia (23.3%); diarrhea (9% vs 1%) count (15%), stomatitis 40.7%); anemia (8.1% vs
leukopenia (16.7%) (10%), anaemia (7%) 4.7%); fatigue (7.5% vs
4.7%)
1fc9fa9cf8844a388c506688498547c5
Discontinuation None 6% vs 4% 12% 16.2% vs 8.1%
Note: 1. Data from patients across all indications (n=211) in the Ph1b/2 dose expansion cohort; 2. Safety results are based on all cohort data (n=543).
Source: Company data for SKB264, ESMO 2022 for Trodelvy, AACR 2023 for Dato-DXd, New England Journal of Medicine (2022) for Enhertu
14 August 2023 27
Exhibit 31: We estimate $1.3bn sales with 24k HR+/HER2- BC patients for SKB264 globally (2033E)
Estimation process for the sales of SKB264 in HR+/HER2- patients
Population base
1413mn/332mn/325mn for China/US/EU5 in 2021
Population (mn) 1,396 364 337 (World Bank, stats.gov.cn)
BC incidence, 1/105 45 82 89 Globocan 2020
CAGR of BC incidence cancer.org, PMC8330522
New BC pts (k) 628 299 301
Subtype breakdown within BC
Luminal A (HR+/HER2-) 49% 68% 68% cancer.org, BMC Cancer (2011)
Advanced stage % 28% 37% 37% SEER, PMC7898196
Addressable advanced Luminal
A BC pts (k) 84 75 75
1L treatment
Treatment rate % 90% 95% 95% established chemo or endocrine therapy in 1L
2L treatment
2L Luminal A BC pts (k) 61 60 61
HER2-low pts account for 46-66% of HER2- pts in

HER2-low 28 40 40 China/US. Frontiers in oncology 11 (2022), ASCO (2022)
TROP2 ADC penetration 0% 0% 0% Enhertu recommended for HER2-low pts
HER2-low pts on TROP2 (k) - - -
SKB264 market share %

HER2-low pts on SKB264 (k) - - -
HER2-zero 33 21 21
TROP2 ADC penetration 45% 50% 50% Trodelvy recommended for HER2-zero pts
HER2-zero pts on TROP2 (k) 15 10 10
3rd-in-market product with BIC potential captures 27-
40% (Nature Reviews Drug Discovery (2023)); assume
lower market capture ex-China (vs. in China) given the POS=58%
SKB264 market share % 35% 30% 30% later global timeline phase 1b/2
HER2-zero pts on SKB264 (k) 5 3 3
2L pts on TROP2 (k) 15 10 10 DOT=6.5m/5.5m for
2L pts on SKB264 (k) 5.2 3.1 3.1 2L/3L
PFS for Trodelvy in
3L treatment
TROPiCS-02
3L Luminal A BC pts (k) 46 49 49
HER2-low 21 32 32
TROP2 ADC penetration 30% 30% 30% assume TROP2 for pts not suitable for Enhertu
HER2-low pts on TROP2 (k) 6 10 10
1fc9fa9cf8844a388c506688498547c5
HER2-low pts on SKB264 (k) 2 3 3
HER2-zero 10 6 6
TROP2 ADC penetration 55% 60% 60% TROP2 recommended for HER2-zero pts
HER2-zero pts on TROP2 (k) 6 4 4
HER2-zero pts on SKB264 (k) 2 1 1
3L pts on TROP2 (k) 12 13 13
3L pts on SKB264 (k) 4.2 4.0 4.0
Monthly price (k USD) 2 30 19 benchmark with Trodelvy price
SKB264 Sales, unadjusted
(mn USD) 104 1,279 822
SKB264 sales, risk-adjusted

(mn USD) 60 737 474 SKB264 global risk-adjusted sales (mn USD) = 1,270
TROP2 market, mn USD 319 4,670 3,003 TROP2 global market (mn USD) = 7,991
Source: stats.gov.cn, Globocan 2020, Cancer Biology & Medicine (2021), BMC Cancer (2011), National Cancer Institute SEER Incidence Data, Nature Reviews Drug Discovery (2013), Breast Cancer
Research (2022), Goldman Sachs Global Investment Research
Indication#3: NSCLC as the major swing factor

Major potential of TROP2 ADC lies in NSCLC – Though there is tremendous R&D
interest on NSCLC given the large patient size (over 1.4mn annual new incidence
globally), and quickly evolving treatment paradigms (SOCs are TKIs for those with
14 August 2023 28
actionable genetic alternation (AGA), e.g. EGFR / ALK, and PD-1/L1-based

chemo-immunotherapy), we continue to see unmet medical needs, particularly in
front-line settings (better response and longer survival) and EGFR TKI failed population
(more options).
Exhibit 32: Competitive treatment regimens in 1/2L NSCLC

SOCs for different lines of treatment for NSCLC

Setting Subtype/Biomarker Competitor ORR (%) PFS (mos) OS (mos) SAE G3+ AE Discontinue Clinical trial
1L EGFRmut Tagrisso 80% 18.9 38.6 22% 34% 13% FLAURA
EGFRwt (AGA-) & PD-L1≥50% Keytruda 45% 10.3 30 21% 27% 7% KEYNOTE-024
EGFRwt (AGA-) & PD-L1<50% Keytruda+chemo 49%/32% 9.2/6.2 21.8/17.2 72% 14% KEYNOTE-189
AGA positive (ALK/ROS1 etc.) targeted therapy 83% 34.8 57+ 28% 41% 11% ALEX
2L no previous IO Keytruda/Opdivo 21% 3.3 12.9 11% 10% KEYNOTE-033
IO treated Cyramza+docetaxel 29% 4.1 11.6 REACTIVE
EGFR-TKI failed sintilimab+IBI305+chemo 44% 7.2 21.2 56% ORIENT-31
3L+ Any PD-1 36% 3.8 11.7 11% 10% 7% ARCTIC
chemo 13% 2.2 6.8 11% 44% 6% ARCTIC
TROP2 ADCs showed early encouraging data in late line NSCLC patients that
failed SOCs – In 1L NSCLC, Dato-Dxd / pembro combo showed a comparable PFS of
8.3 months vs. other PD-1/PD-L1 combos at c. 8 months; while in later line, SKB264,
based on the first set of data to be presented at ASCO 2023, showed encouraging
response in both EGFRwt patients and EGFRmut (TKI failed) patients.
Exhibit 33: SKB264 showed encouraging efficacy in 2L+ EGFR TKI-failed NSCLC
ORR and PFS of monotherapies in pretreated NSCLC
80% ORR PFS mos 14

70% 12
11.1 68%
60%
62% 10
60% 58%
7.3
1fc9fa9cf8844a388c506688498547c5
50% 7.2 8.2
8
40% 6.4
44% 6
30% 35% 40%
4
20%
10% 2
0% 0
SKB264 Dato-DXd HER3-DXd Tyvyt Atezo PD-1/VEGF EGFR/HER3
(ph1/2, n=20) (ph1, n=34) (ph1, n=102) +chemo +chemo BsAb (AK112) ADC
+beva +beva +chemo (BL-B01D1)
(ph3, n=158) (ph2, n=149) (ph2, n=19) (ph1, n=34)
KL264-01 TROPION- GFPC BL-B01D1-

U3-1402 ORIENT-31 AK112-201
PanTumor01 06-2018 101
Source: ASCO 2023 for KL264-01, Journal of Thoracic Oncology (2021) for TROPION-PanTumor01, ASCO 2023 for HER3-DXd, Journal of Clinical Oncology
(2017) for IMMU-132-01, European Journal of Cancer for GFPC 06-2018, Journal of Thoracic Oncology 14.5 (2019) for CheckMate078, ASCO2022 for
AK112-201, ASCO 2023 for BL-B01D1-101
14 August 2023 29
Exhibit 34: TROP2 ADC showed early comparable efficacy data in Exhibit 35: … while we await more data vs. VEGF/chemo combos in
combo with PD-1 +/- chemo in 1L EGFRwt NSCLC, … 2L+ EGFRwt NSCLC
ORR and PFS of various treatment regimens in combo with PD-1 in 1L ORR and PFS of TROP2 ADC vs. PD-1 monotherapy in 2L+ EGFRwt
NSCLC NSCLC
ORR PFS
40% 8
mos ORR PFS mos
80% 15
35% 6.9 7
70%
30% 6
60% 64% 64% 5.3
5.4
10 25% 28% 5.2 5
57%
50% 8.8 26%
50% 8.3 23% 4.0
7.8 48% 20% 4
40% 6.8
8.3 19%
15% 17% 3
30%
5
38%
10% 2
20%
10%
5% 1
0% 0 0% 0
Dato-DXd Dato-DXd Pembro Atezo Nivo PD-1/VEGF SKB264 Dato-DXd Trodelvy HER3-DXd Pembro
+pembro +pembro + +chemo +VEGF +CTLA-4 BsAb (AK112) (ph1/2, n=19) (ph1, n=50) (ph1/2, n=54) (ph1, n=30) (ph2/3,
(ph1b, n=34) chemo (ph3, +chemo +chemo +chemo

(ph1b, n=53) n=410) (ph3, n=356) (ph3, n=361) (ph2, n=135) n=346)
KEYNOTE- IMpower CheckMate TROPION- IMMU- U31402-A- KETNOTE
TROPION-Lung02 AK112-201 KL264-01
189 150 9LA PanTumor01 132-01 U102 -010
EGFRwt: 100% 84% 93% 100% 83%
Dato-Dxd updated TROPION-Lung02 data (on Jun 5 2023, with longer follow-up) showed On July 3, 2023, AZ/DS announced topline data of TROPION-Lung01 ph3 trial in 2L+ NSCLC
deteriorating efficacy in both 1L/2L+ EGFRwt NSCLC v.s. previous results reported on ASCO 2023 (Dato-DXd vs. docetaxel) with presence of ILD-related death.
(e.g., in doublet cohort, PFS decreased from 10.5m to 8.3m, ORR decreased from 60% to 50%)
Source: ASCO 2023 for KL264-01, WCLC 2021 for TROPION- PanTumor01, Journal of Clinical
Source: Company data for TROPION-Lung02, New England Journal of Medicine (2018) for Oncology (2017) for IMMU-132-01, ASCO 2023 for U31402-A-U102, Lancet (2016) for
KEYNOTE-189, New England Journal of Medicine (2018) for Impower150, Lancet Oncology (2021) KEYNOTE-010, company data for TROPION-Lung01
for CheckMate 9LA, ASCO 2023 data for AK112-201
US$1.6bn opportunity in NSCLC for SKB264 – We expect SKB264 to capture c.95k

NSCLC patients globally by 2033E, with US/EU5/China contributing 52%/31%/17% of
sales. Accordingly, we forecast Kelun Biotech to capture Rmb3.0bn as revenues by
2033E (primarily China sales / ex-China sales royalties).
1fc9fa9cf8844a388c506688498547c5
Exhibit 36: 52% of global sales in NSCLC expected from US Exhibit 37: EGFRwt and EGFR-TKI failed patients to be the major
SKB264 global sales in NSCLC breakdown by geographic regions contributors in NSCLC
NSCLC sales breakdown by lines of treatment
1,800 Revenue 1,800 Revenue

(USD, mn) (USD, mn)
1,600 1,600
pts (k) 68 14 13 17% 21%
1,400 1,400
0% 50% 100%
1,200 1,200
31%
48%
1,000 1,000
800 800
600 600
400 400
52% 27%
200 200
0 0 4%
2026
2027
2028
2029
2030
2031
2032
2033
2030
2026
2027
2028
2029
2031
2032
2033
US EU5 China 1L EGFRmut 2L EGFRmut 1L EGFRwt 2L EGFRwt
14 August 2023 30
We factor in four potential patient segments (1L and 2L for NSCLC without AGA; and 1L
EGFRmut NSCLC and patients who failed EGFR TKI) for SKB264, while assigning
different PoS (higher for two 2L setting given the ASCO data, lower for 1L EGFRwt for
potential TROP-2 / PD-1 combo, and lowest for EGFRmut 1L for potential TROP-2 /
Tagrisso combo). Again, we are fully aware of the caveats of cross-trial comparison,
given the patient baseline could vary meaningfully in those early-stage studies;
nevertheless, we believe those shoulder-to-shoulder comparisons could set the
framework for us to evaluate the potential relative performance of each TROP-2 ADC
asset, subject to easy modification with more clinical readouts.
Exhibit 38: Dato-DXd leads the clinical development of TROP2 ADC in lung cancer
Clinical development landscape of ADC drugs in NSCLC
Company ADC Study Lines AGA PD-L1 Regimen Trial status
1L 2L+ + - + - Mono Combo Ctrl Phase Masking N* Endpoint Start Completion
SKB264-II-08 NS - Ph2 Open label 237 ORR Nov-2022 Oct-2024
Kelun
SKB264 KL264-01 NS - Ph2 Open label - MTD/ORR Feb-2020 Nov-2024
Biotech
SKB264-II-05 +PD-L1 / (Pt) - Ph2 Open label 110 ORR Apr-2022 Aug-2023
TROPION-PanTumor01 NS - Ph1 Open label 180 DLT Jan-2018 Jan-2025
TROPION-LUNG01 NS DTX Ph3 Open label 590 PFS/OS Dec-2020 Sep-2023
TROPION-LUNG02 NS +PD-1 / (Pt^) - Ph1b - 140 Tox Sep-2020 Dec-2023
TROPION-LUNG04 NS +ICI/ (Pt) - Ph1b - 232 Tox Feb-2021 Feb-2025
Dato-Dxd
AstraZeneca TROPION-LUNG05 NS Ph2 - 137 ORR Mar-2021 Sep-2023
/ Daiichi TROPION-LUNG07 TPS<50% +PD-1 / (Pt) PD-1+Pt Ph3 Open label 975 PFS/OS Jan-2023 Aug-2027
Sankyo TROPION-LUNG08 TPS≥50% +PD-1 PD-1 Ph3 Open label 740 PFS/OS Mar-2022 Jun-2026
AVANZAR NS +PD-L1 / (Pt) PD-1+Pt Ph3 Open label 1,000 PFS/OS Dec-2022 May-2027
U31402-A-U103 NS +Osimertinib Ph1 Open label 280 DLT/ORR Jun-2021 Jun-2025
HER3-DXd HERTHENA-Lung01 3L+ NS Ph2 Open label 420 ORR Feb-2021 Nov-2023
HERTHENA-Lung02 NS PBC# Ph3 Open label 560 PFS May-2022 Aug-2024
IMMU-132-01 NS - Ph1/2 Open label 108 ORR Dec-2012 Mar-2019
EVOKE-01 NS DTX Ph3 Open label 580 OS Nov-2021 May-2024
Gilead Trodelvy
EVOKE-02 NS +PD-1 / (Pt) - Ph2 Open label 224 ORR/DLT Mar-2022 May-2023
EVOKE-03 TPS≥50% +PD-1 PD-1 Ph3 Open label 614 PFS/OS Feb-2023 Jan-2027
BL-B01D1-101 NS Ph1 Open label 96 Tox Nov-2021 Dec-2023
BL-B01D1
Baili Pharma BL-B01D1-203 NS +Osimertinib Ph2 Open label 42 ORR Jul-2023 Jul-2025
(EGFR/HER3)
BL-B01D1-SI-B003-201-01 NS +PD-1/CTLA-4 BsAb Ph2 Open label 90 ORR Aug-2023 Aug-2025
*: Estimated number is used when no actucal enrollment reported; ^: Platinum based drugs; #: Platinum-based chemotherapy
Source: ClinicalTrials.gov; Pharmcube
Exhibit 39: We estimate the penetration of TROP2 ADC in NSCLC by comparing to SOC across the treatment
paradigm
Treatment paradigm of NSCLC
NSCLC Subtypes SOC data TROP2 data Penetration
1fc9fa9cf8844a388c506688498547c5
24%
EGFR Tagrisso: ORR=80%,
10%
mutation PFS=19m, OS=39m
1L
76%
EGFR Keytruda + chemo:
Dato-DXd + 30%
wildtype ORR=32%-49%, PFS=6-
PD-1:
10m, OS=17-30m;
ORR=50%,
PD-1+ VEGF + chemo:
PFS=8m
ORR=64%, PFS=8m
24%
EGFR PD-1+chemo: ORR=31%,
SKB264: 40%
mutation PFS=6m; PD-1+ VEGF+
ORR=60%,
chemo: ORR=44-68%,
2L PFS=11m
PFS=7-8m, OS=17-21m
76%
EGFR Cyramza + chemo: SKB264:
30%
wildtype ORR=29%, PFS=4m, ORR=26%,
OS=12m PFS=5m
n Penetration / PoS: We estimate the penetration of TROP2 ADC in four major
14 August 2023 31
indications (1L/2L EGFRmut/EGFRwt NSCLC), by comparing the available clinical

data of TROP2 ADC to current SOCs.
o EGFRmut NSCLC – PD-1/VEGF as potential competitors: For EGFR TKI
failed patients, SoC chemo (e.g., docetaxel) is currently the available option.
Given SKB264’s encouraging early data is (ORR 60%; mPFS 11.1months), we
assign 50% PoS, while also aware of the potential competition from PD-1 /
VEGF doublets, triplets (+chemo) or bispecific (e.g. AK112), and thus assign
40% penetration; While for 1L EGFRmut, where Tagrisso is well established
with robust clinical benefits (over 80% ORR and OS of close to 40 months),
SKB264 is the only asset planning for Tagrisso/TROP-2 ADC combo study, and
we assume low PoS (<10%) and low penetration (10%) given the tough bar to
beat and long-duration of the potential study before meaningful data readouts.
o EGFRwt NSCLC – key swing factor for TROP-2 ADC potential: EGFRwt
could pose the most significant opportunity for TROP-2 ADC, but the visibility
remains low. Two major data sets from Dato-Dxd in past months bring more
uncertainties - 1) in TROPION-Lung02 study (ph1b), efficacy of Dato/Keytruda
duplets deteriorated with lower follow-up and expanded sample size - ORR
down from 60%/22.2% to 50%/20% in 1L and 2L/2L+, respectively, and
blended mPFS down from 10.5 to 8.3 months, which make it less
differentiated vs. available treatment options; 2) for TROPION-Lung01 ph3
study in late-line NSCLC, though Daiichi/AZ reported positive topline with PFS
meeting the endpoint, OS has not showed statistical significance yet (still
relatively short follow-up), and fatal AEs observed, which lower the chance for
frontline. Given the lack of visibility on EGFRwt NSCLC indications, we assign
30% penetration in 1L and 2L/2L+ EGFRwt NSCLC and PoS at 32% for
late-line / 22% for frontline.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 32
Exhibit 40: Dato-DXd is leading the clinical progress in NSCLC

Timeline of clinical trials of TROP2 ADC in NSCLC
Molecule Indication 2020 2021 2022 2023 2024 2025
2/3L EGFR-mut NSCLC (TKI Phase 3 (initiate in 1H23)

SKB264
failure)
2/3L EGFR-mut NSCLC (TKI Phase 2 (initiated Nov 2022)

failure)
EGFR-wt (1L) and EGFR-mut Phase 2 (initiated Apr 2022)

NSCLC (TKI failure)
IND approval in
EGFR-wt/mut (1L), EGFR- Phase 2 basket study (initiate in 1H23)
Jan 2023
mut (TKI failure) NSCLC
Trodelvy 2/3L NSCLC Phase 3 (data readout in 2024)
1L a/m NSCLC with PD-L1 Phase 3 (initiated in Feb 2023)

TPS ≥50%
1L a/m NSCLC w/o AGAs* Phase 2 (FPI 1H22)

Dato-DXd 2L+ a/m NSCLC Phase 3 (data readout in 1H23)
1L a/m NSCLC w/o AGAs Phase 3 (FPCD: Q1 2022)

(PD-L1 high expression)
1L a/m NSCLC w/o AGAs Phase 3 (FPCD: Q1 2023)

(PD-L1 TPS <50%)
1L NSCLC w/o AGAs Phase 3 (FPCD: Q1 2023)
2L+ a/m EGFR-mut NSCLC Phase 2 (data readout in 2024)

(TKI and PLT failure)
1L a/m NSCLC Phase 1 (data readout in 2024)
1fc9fa9cf8844a388c506688498547c5
1/2L a/m NSCLC Phase 1 (data readout in 2024 or after)
2L a/m NSCLC Phase 1
2020 2021 2022 2023 2024 2025

*AGA: actionable genomic alterations First-line settings
Phase 1 Phase 2 Phase 3
Source: clinicaltrials.gov, company data for SKB264
n Market share: We continue to forecast market shares in NSCLC indications based

on two major factors: 1) potential time to market; and 2) available clinical data. Given
the early stage of the lung cancer exploration for all three leading TROP2 ADCs,
where the data is missing or less meaningful given small sample size, time to
market could play a bigger role in our assumptions.
o Time to market: Dato-DXd is frontrunner; SKB264 catching up. Based on
updated data from clinicaltrials.gov, Dato-DXd is currently leading among
TROP2 ADC in the clinical progress in NSCLC with three ongoing phase 3
trials in 1L NSCLC and one phase 3 for late-line treatment. SKB264 has
14 August 2023 33
initiated phase 2 trials for both first-line and late-line settings, and most
recently initiated its first phase 3 China trial in EGFR-TKI failed patients (based
on clinicaltrials.gov). Given the progress, we see SKB264 as the potential 2nd
or 3rd to market TROP-2 ADC in different NSCLC indications.
o EGFR TKI failed NSCLC – potentially a better option: SKB264 data appears
stronger in EGFRmut patients that failed prior EGFR TKI treatment, with ORR
of 60%, notably higher vs. 35% for Dato-Dxd, and DCR is 100%; more
encouragingly, mPFS is 11.1 months with 9-month OS at 66.7%, which looks
more favorable vs. Dato-Dxd’s DoR of 9.5 months. We see chance for SKB264
to be a better option for this group of patients among TROP-2 ADCs, and thus
assign a market share of 30%.
o 2L+ EGFRwt NSCLC – comparable efficacy so far to Dato: Based on
SKB264’s ASCO2023 data, SKB264 showed ORR of 26% vs. 28% for
Dato-Dxd (6mg/kg, the dose chosen for phase 3) and 17% for Trodelvy.
Reminder that in Dato-Dxd’s PanTumor01 study, the lung cohort included 16%
EGFRmut patients (better ORR vs. EGFGwt), the effective ORR for EGFRwt in
2L is likely lower than 28%. PFS/OS data was more mixed: SKB264 showed
mPFS of 5.3 months, similar to Trodelvy’s 5.2 months, while 9-month OS of
80.4% looks more favorable vs. Trodelvy’s mOS at 9.5 months. Given the
mixed message from those early data, we assume SKB264 to show
comparable clinical benefits in this setting vs. Dato-Dxd, while potentially
more competitive vs. Trodelvy, and hence we assign a market share of 35%.
o 1L EGFRwt/mut NSCLC – lower visibility so far: While frontline poses more
significant opportunities, the SoC set a higher bar to beat. SKB264 has not
presented any data in this setting, though a phase II for PD-1/SKB264 combo
is ongoing, and we could potentially see data in 2024. We believe TROP-2
ADC / PD-1 combo works in this setting, per Dato-Dxd’s TROPION-Lung02
study, and assign a similar market share of 35% for SKB264 to 2L EGFRwt
1fc9fa9cf8844a388c506688498547c5
setting.
14 August 2023 34
Exhibit 41: SKB264 showed comparable efficacy in 2L+ NSCLC without EGFR mutations...
Clinical data comparison of ADC drugs in EGFRwt NSCLC
Molecule SKB264 Trodelvy Dato-DXd HER3-DXd BL-B01D1
Developer Kelun Biotech Gilead Daiichi Sankyo/AstraZeneca Baili Pharma
Study KL264-01 IMMU-132-01 TROPION-PanTumor011 TROPION-Lung01 TROPION-Lung022 U31402-A-U102 BL-B01D1-101
Data cutoff date 9-Feb-2023 16-Oct-2016 6-Apr-2021 3-Jul-2023 7-Apr-2023 26-Mar-2021 31-Dec-2022
Follow-up period, 11.5 months 6.0 months 13.4 months Ongoing 14.8 (doublet) / 9.5 months /
median / 12.9 (triplet)
NCT no. NCT04152499 NCT01631552 NCT03401385 NCT04656652 NCT04526691 (phase 1b) NCT03260491 NCT05194982
(phase 1b/2) (phase 1/2) (phase 1) (phase 3) (phase 1) (phase 1)
Combo Mono Mono Mono Mono + pembrolizumab (doublet) +/- Mono Mono
platinum chemotherapy (triplet)
Treatment line 2L+ 2L+ 2L+ 2L+ 2L+ 1L 2L+ 2L+
Baseline N 19 54 50 (4mg/kg) / ~590 27 (doublet) / 34 (doublet) / 30 (w/o AGA) 42
50 (6mg/kg) / 19 (triplet) 53 (triplet)
80 (8mg/kg)
Prior median 2 (incl. anti- ≥1: 91% (49/54) median 3 (1-9) w/o AGA: PLT+ 2L+ None median 3 (0-8) median 2 (1-8)4
treatment PD-1/L1) PD-1
w/ AGA: PLT+TKI
Median age 59 64 61 / 63 / 64 62
(yrs)
ECOG 88% ECOG PS 1 91% ECOG PS 1
Efficacy ORR 26% (5/19) 17% (9/54) 24% / 28% / 24% 22% (doublet) / 50% (doublet) / 23% 41%
26% (triplet) 57% (triplet)
DCR 89% (17/19) 74% (doublet) / 91% (doublet, 95%
74% (triplet) N=31) / 91%

(triplet, N=48)
DOR, m 3.8 NE / 10.5 / 9.4 NR NR
PFS, m 5.3 5.2 4.3 / 6.9 / 5.2 8.3 / 7.8 <5.4
OS, m 9-month: 80.4% 9.5
AE G3+ AE 67.4% (29/43) 49% (88/180)3 31% / 58%
SAE 14% / 26% / 35%
TR death 0 0 0 5
AE of neutrophil count neutropenia (28%); ILD (3%); nausea (1%); All grade ILD was stomatitis (56% and 35%), nausea neutropenia (26%), leukopenia (30%),
concern decreased (33%), leukopenia (9%); stomatitis (2%); fatigue generally (41% and 47%), anaemia (21% and thrombocytopenia neutropenia (34%),
(G3+) anemia (30%), pneumonia (9%) (1%) consistent with 48%) and fatigue (31% and 37%) (15%), fatigue anemia (15%),
WBC decreased prior clinical trials, ILD: 20% (27/136), G3+ ILD: 4% (15%); ILD(0, 9% in thrombocytopenia
(23%), stomatitis with the majority Grade1/2) (19%), No ILD
(9%), rash (7%), being low grade observed
lymphopenia (7%)
Discontinue 3.7% (2/54) 15% 9%

Note: 1. Data reported on 2021 World Conference on Lung Cancer, 2. Data reported on 2023 ASCO, 3. TEAE, 4. All had prior platinum-based chemotherapy (PBC), 88% (37/42) had prior PD-1/L1 and
PBC.
Source: ASCO 2023 for SKB264, Journal of Clinical Oncology (2017) for Trodelvy, ESMO 2021/ WCLC 2021/ ASCO 2023 for Dato-DXd, ASCO 2022 for HER3-DXd, ASCO 2023 for BL-B01D1
1fc9fa9cf8844a388c506688498547c5
14 August 2023 35
Exhibit 42: ...and demonstrated competitive efficacy in late-line NSCLC with EGFR mutations
Clinical data comparison of ADC drugs in EGFRmut NSCLC
Molecule SKB264 Dato-DXd HER3-DXd BL-B01D1
Developer Kelun Biotech Daiichi Sankyo/AstraZeneca Baili Pharma
Study KL264-01 TROPION-PanTumor011 U3-1402 BL-B01D1-1012
Data cutoff date 9-Feb-2023 6-Apr-2021 16-Mar-2023 31-Dec-2022
Follow-up period, median 11.5 months 13.4 months 23 months /
NCT no. NCT04152499 NCT03401385 NCT03260491 NCT05194982

(phase 1b/2) (phase 1) (phase 1) (phase 1)
Combo Mono Mono Mono Mono
Treatment line 2L+ 2L+ 2L+ 2L+
Baseline N 20 34 102 34
Prior EGFR-TKI failed; ≥3: 82% median 4 (1-14) median 4 (1-7)3
treatment 50% failed 1+ chemo
Median age 59 62
(yrs)
ECOG 88% ECOG PS 1
Efficacy ORR 60% (12/20) 35% 40% 62%
DCR 100% (20/20) 78% 91%
DOR, m 9.5 7.6
PFS, m 11.1 6.4

OS, m 15.8
AE G3+ AE 67.4% (29/43) 57%
SAE
TR death 0 3% 2% (ILD)
AE of neutrophil count decreased (33%), ILD (3%) platelet count decrease (26%), leukopenia (30%), neutropenia
concern anemia (30%), WBC decreased neutropenia (21%), fatigue (10%), (34%), anemia (15%),
(G3+) (23%), stomatitis (9%), rash (7%), anemia (9%), WBC decrease thrombocytopenia (19%), No ILD
lympenia (7%) (8%), nausea (7%), hypokalemia observed
(7%), lymphocyte count decrease
(7%), dyspnea (6%), ILD (3%)
Discontinue 0%
Note: 1. Data reported on 2021 ESMO, 2. Data reported on 2023 ASCO, 3. All had prior EGFR TKI, 88% (30/34) had prior 3rdgen EGFR TKI and 68% (23/34) had prior
platinum-based chemotherapy (PBC).
Source: ASCO 2023 for SKB264, ESMO 2021 for Dato-DXd, Company data for HER3-DXd, ASCO 2023 for BL-B01D1
1fc9fa9cf8844a388c506688498547c5
14 August 2023 36
Exhibit 43: We estimate $1.6bn of sales with 95k NSCLC patients to be treated by SKB264 (2033E) globally
Estimation process for the sales of SKB264 in NSCLC
Population base
Population (mn) 1,396 364 337 Bank, stats.gov.cn)
LC incidence, 1/105 85 69 73 Globocan 2020
CAGR of LC incidence 3% 0% 0% PMC7797233
NSCLC % 85% 85% 85% PMC3256477
New NSCLC pts (k) 1,006 214 209
Stage 3b/4 % 61% 56% 56% Journal of thoracic oncology (2010)
New advanced NSCLC pts (k) 615 119 116
1L treatment
Treatment rate % 90% 92% 92% established chemo/PD-1 as 1L
Pts on 1L treatment (k) 554 110 107
EGFR mutation rate % 38% 24% 14% PMC5346692
EGFRwt/AGA(-) rate % 50% 59% 66% PMC7043073
1L EGFRwt/AGA(-) NSCLC
POS=22%
1L EGFRwt/AGA(-) NSCLC pts (k) 279 65 70 phase 1b/2
assume lower than in TNBC given more treatment
TROP2 ADC penetration % 25% 30% 30% options in front-line NSCLC DOT=9m
EGFRwt NSCLC pts on TROP2 (k) 70 19 21 PFS for Keytruda /
3rd-in-market product with non-inferiority 19-31% (Nature chemo in
KEYNOTE-189
SKB264 market share % 40% 35% 35% Reviews Drug Discovery (2023))
EGFRwt NSCLC pts on SKB264 (k) 28 7 7

1L EGFRmut NSCLC
POS=7%
1L EGFRmut NSCLC pts (k) 213 26 15 phase 1b/2, high bar
assume lower than EGFRwt NSCLC given the less use of set by Tagrisso
TROP2 ADC penetration % 10% 10% 10% chemo in 1L EGFRmut NSCLC
EGFRmut NSCLC pts on TROP2 (k) 21 3 2 DOT=18m
PFS for Tagrisso in
SKB264 market share % 35% 30% 30% FLAURA
EGFRmut NSCLC pts on SKB264 (k) 7 1 0
2L treatment
addressable EGFRwt NSCLC pts (k) 154 36 39 POS=32%
TROP2 ADC penetration % 25% 30% 30% phase 1b/2
EGFRwt pts on TROP2 (k) 38 11 12 DOT=5m
SKB264 market share % 40% 35% 35% assume higher than
Keytrudat (4m) in
EGFRwt NSCLC pts on SKB264 (k) 15 4 4
EGFR-TKI failed NSCLC
EGFR-TKI progression rate % 32% / 33% for 1y / 2y FLAURA trial POS=50%
phase 1b/2
EGFR-TKI failed NSCLC pts (k) 201 26 15
Drop-out rate post treatment failure 20% 15% 15% DOT=7m
Addressable EGFR-TKI failed pts (k) 139 19 11 PFS in ORIENT-31
1fc9fa9cf8844a388c506688498547c5
TROP2 ADC penetration % 35% 40% 40%
EGFR-TKI failed pts on TROP2 (k) 49 8 4
SKB264 market share % 35% 30% 30% assume higher share given competitive ORR data
EGFR-TKI failed pts on SKB264 (k) 17 2 1
Total NSCLC pts on SKB264 (k) 68 14 13
Monthly price (k USD) 2 30 19 benchmark with Trodelvy price
SKB264 sales, unadjusted
1,069 3,348 2,025
(mn USD)
SKB264 sales, risk-adjusted,
273 858 506 SKB264 global risk-adjusted sales (mn USD) = 1,637
(mn USD)
Source: stats.gov.cn, Globocan 2020, Chinese Journal of Cancer Research (2020), Journal of Thoracic Disease (2010), Oncotarget (2016), Journal of Thoracic Oncology (2010), Nature Reviews Drug
Discovery (2013), Goldman Sachs Global Investment Research
Potentially favorable safety profile

As elaborated earlier, SKB264 aims to improve safety profile by 1) adopting an
irreversible conjugation method to strengthen payload stability, and 2) using a payload
that is less potent than DXd as used in Dato-DXd. Based on the available clinical data,
SKB264 demonstrates potentially favorable safety profile when compared to Trodelvy
and Dato-DXd, with note on caveat of cross-trial comparisons on different indications
given the lack of available data for direct comparison:
14 August 2023 37
Exhibit 44: SKB264 shows potentially favorable safety profile

Non-head-to-head comparisons of TROP2 ADCs on safety profile
SKB264 (N=188) Trodelvy (N=258) Dato-DXd (N=64)
Recommended dosage 5mg/kg, Q2W 10mg/kg, twice every 21d 6mg/kg, Q3W
Indication Solid tumor-basket trial mTNBC 1/2L+ NSCLC
Stage Ph1/2 Ph2 Ph1b
Trial No. NCT04152499 NCT02574455 (ASCENT) TROPION-Lung02
AE All grades G3+ All grades G3+ All grades G3+
GI-related AEs
Diarrhea 4% 0% 59% 11% 13% 2%
Stomatitis 44% 9% 17% 2% 48% 8%
Vomiting 27% 0.5% 33% 2% 19% 0%
Nausea 31% 1% 57% 3% 39% 2%
Lung-related AEs
ILD 0% 0% 0.4% 0.4% 17% 3%
Blood-related AEs
Neutropenia 56% 26% 64% 52% 3% 0%
Anemia 72% 23% 40% 9% 19% 2%
Thrombocytopenia 35% 8% 14% 3% 3% 0
Lymphopenia 60% 17% 10% 2% N.A. N.A.
Other AEs
Rash 35% 4% 12% 0.4% 25% 0%
Alopecia 32% 0% 47% 0% 25% 0%

Decreased appetite 45% 1% 28% 2% 30% 5%
Source: Company data for SKB264, FDA label for Trodelvy, ASCO 2023 for Dato-DXd
n Favorable GI safety – Among the GI toxicities, SKB264 in general provides

favorable safety profile in comparison with Trodelvy and Dato-DXd, especially in
diarrhea on which FDA issued a black box warning for Trodelvy. SKB264 showed
significantly lower occurrence of diarrhea in all grades (4% vs. 59%/13% in
Trodelvy/Dato-DXd) and nil of G3+ (vs. 11%/2% in Trodelvy/Dato-DXd). In addition,
SKB264 demonstrated better control in G3+ nausea and vomiting (1% / 0.5% for
SKB264, vs. 3%/2% for Trodelvy, and 2%/0% for Dato-DXd), which requires dosage
withholding per Trodelvy FDA label.
n ILD less likely a concern – Interstitial lung disease (ILD)/pneumonitis is recognized
1fc9fa9cf8844a388c506688498547c5
as an adverse drug reaction characterized by lung inflammation and could be
life-threatening. ILD was brought into attention in Enhertu’s studies and has been
observed with multiple ADCs with TOPO1 inhibitors (e.g., Dato-DXd and HER3-DXd).
Per Enhertu FDA label, strict management of ILD is applied with 1) corticosteroid
treatment as soon as ILD is suspected, 2) dose interruption with grade 1 ILD, and 3)
permanent discontinuation with G2+ ILD. This AE was not observed in 188 patients
treated with SKB264 across solid tumors (vs. 17%/0.4% in Dato-DXd/Trodelvy).
n Mixed blood safety – For the blood-related AEs, we note that SKB264
demonstrated mixed safety profile: 1) better control in neutropenia on which FDA
issued a black box warning for Trodelvy (26% vs. 52% on G3+ events for SKB264
and Trodelvy) requiring dosage withhold for neutropenic fever, and 2) higher
occurrences in anemia (23% of G3+ AE for SKB264, vs. 9%/2% for
Trodelvy/Dato-DXd), lymphopenia and thrombocytopenia which would require
corresponding clinical management.
14 August 2023 38
Basket trial plan to drive long-term growth

Given TROP2 expressed in many epithelial tumors, SKB264 may have a potentially
favorable clinical benefit rate compared to chemotherapy across different types of solid
tumors which have no specific effective SoC. Kelun Biotech has initiated a phase 1/2
basket trial to include a variety of other solid tumor types, e.g., GC, OC, UC, HNSCC
etc. Besides, we see potential opportunity for SKB264 to further expand therapeutic
areas (TAs) in which Trodelvy has been investigating.
Exhibit 45: SKB264 basket trial plan to drive long-term growth across various solid tumors
Comparison between global TROP2 ADC basket trials
Company TROP-2 Basket Study Indications Regimen
ADC OC CC GC UC SCLC HNSCC EC BLC CRC CRPC GBM HCC PC RCC Mono Combo
Kelun Biotech SKB264 KL264-01
SKB264-II-05 +PD-1
+PD-1
AstraZeneca
Dato-Dxd TROPION-PanTumor03 +/- PARP
/ Daiichi Sankyo
+/- chemo
Gilead Trodelvy IMMU-132-01
OC: ovarian cancer, CC: cervical cancer, GC: gastric cancer, UC: urothelial cancer, SCLC: small cell lung cancer, HNSCC: head and neck squamous cell carcinoma,
EC: endometrial carcinoma, BLC: bladder cancer, CRC: colorectal cancer, CRPC: castration-resistant prostate cancer, GBM: glioblastoma multiforme, HCC:
hepatocellular carcinoma, PC: pancreatic cancer, RCC: rental cell cancer.
SKB315: a CLDN18.2 ADC targeting global unmet needs in GI tumors

CLDN18.2 is a pan-cancer target with therapeutic potential in GI tumors -
CLDN18.2 is highly expressed in multiple tumor types especially in GI tumors including
gastric, esophageal, and pancreatic cancers, which makes it an attractive anti-cancer
target. For selected cancers with high level of CLDN18.2 expressions, effective
treatment is lacking in clinical setting, particularly in later-line patients.
Exhibit 46: CLDN18.2 as a pan-cancer target is highly expressed in Exhibit 47: Lacking effective therapies for patients progressing
gastric cancer and pancreatic cancer from prior lines
Global incidence of major cancers and percentage of CLDN18.2 Current SOC in cancers with CLDN18.2 expressions
overexpression
1fc9fa9cf8844a388c506688498547c5
555 Unit: K
vs. HER2+
~16%
370
252
42%
30% 60%
GC EC PC
CLDN18.2 medium to high expression
* GC - gastric cancer; EC - esophageal cancer;
PC - pancreatic cancer
Source: Frost & Sullivan , Globocan 2020, Journal of Hematology & Oncology (2019) Source: Lancet (2021), The lancet oncology (2014, 2018) for GC; New England Journal of
Medicine (2011), New England Journal of Medicine (2013) for PC; New England Journal of
Medicine (2022), Journal of Clinical Oncology (2022) for EC
14 August 2023 39
Exhibit 48: We forecast global sales of SKB315 to reach $558mn by Exhibit 49: …and China to account for 58% of patients and 15% of
2033E in GC and PC… global sales by 2033E
Estimated combined sales of SKB315 globally during 2027E-2033E Sales breakdown by geographic regions during 2027E-2033E
(risk-adjusted)
600 Revenue 300% 600 Revenue

(USD, mn) (USD, mn)
500 250% 15%

500
pts 30 10 13
400 200% 400 0% 50% 100%
42%
300 150% 300
200 100% 200
100 50% 100 43%
0 0% 0
2027 2028 2029 2030 2031 2032 2033 2027 2028 2029 2030 2031 2032 2033
GC PC yoy US EU5 China
n US$558mn global risk-adjusted sales of SKB315 by 2033E – We expect SKB315

to achieve over $558mn of risk-adjusted global sales by 2033E, with US/EU5
markets to contribute 43%/42% of global sales.
n We expect SKB315 to capture 54k pts globally by 2033E – We expect c.54k pts
with GC or PC globally (30k/10k/13k in China/US/EU) to be captured by SKB315 with
$558mn risk-adjusted sales by 2033E. We estimate SKB315 to capture
25%/45%/45% of market share within CLDN18.2 ADC class in China/US/EU,
considering that 1) it is among the leading CLDN18.2 ADCs and has 2) potential
advantage in ex-China market given MSD’s commercial execution capabilities in the
oncology franchise. Accordingly, we forecast Kelun Biotech to capture Rmb371mn
1fc9fa9cf8844a388c506688498547c5
as revenues by 2033E (primarily China sales and royalties from ex-China sales),
which feeds into our DCF valuation framework.
14 August 2023 40
Exhibit 50: We expect SKB315 to have $558mn risk-adjusted global sales by 2033E
Key estimates and assumptions for SKB315
Key estimates in 2033E Gastric Cancer Pancreatic Cancer

HER2-/CLDN18.2+ CLDN18.2+
1L 2L+ 1L 2L+
China Addressable patients (k) 180 216 103 77
CLDN18.2 penetration (%) 60% 60% 60% 60%
ADC share (%) 20% 50% 20% 50%
SKB315 share (%) 25% 25% 25% 25%
SKB315 treated pts (k) 5 16 3 6
DOT (month) 9 5 6 3
pre-POS sales (mn USD) 98 146 37 35
US Addressable patients (k) 7 8 33 25
ADC share (%) 25% 60% 25% 60%
SKB315 share (%) 45% 45% 45% 45%
DOT (month) 9 5 6 3

EU5 Addressable patients (k) 13 15 39 29
ADC share (%) 25% 60% 25% 60%
SKB315 share (%) 45% 45% 45% 45%
DOT (month) 9 5 6 3
Monthly price (k USD) - China 2
Monthly price (k USD) - US 29
Monthly price (k USD) - EU5 19
POS (%) 18% 35% 10% 20%
risk-adj sales (mn USD) 77 222 92 166
Total risk-adj sales (mn USD) 558
1fc9fa9cf8844a388c506688498547c5
CLDN18.2 validated as a drug target with room to improve

n Growing competition in CLDN18.2 across modalities - With the positive phase 3
results of zolbetuximab in both GLOW and SPOTLIGHT studies, the debate over the
druggability of CLDN18.2 is now largely settled. According to Pharmcube, by the end
of Apr 2023, a total of 34 players (vs. 23 in Oct 2021) have driven their
CLDN18.2-targeting therapies into clinical stage, within which there are 12
CLDN18.2 ADC entering clinical stage globally. While we see increasing competition
in CLDN18.2 therapy development across modalities, the detailed data of
zolbetuximab left decent room for other frontrunners to differentiate within
CLDN18.2.
14 August 2023 41
Exhibit 51: CLDN18.2 received tremendous R&D interest in a variety of drug modalities
CLDN18.2 competitive landscape (as of August 2023)
Stage mAb ADC BsAb CART
NDA IMAB362 / Zolbetuximab
Ph3 TST001
Ph2 CT041; CT048
Ph1/2 ASKB589 LM-302 PM1032
ZL-1211 SHR-A1904
BNT141 RC118; YH005
LM-102 SOT102
Ph1 AB011 BA1301 ASP2138 IBI345
MIL93 IBI343 Q-1802 LB1908
M108 JS107 BC007 LY011
BA1105 CMG901 IBI389 IM92
KD-496; KD-182;
BC008 SYSA1801 TJ-CD4B
KD-275; KD-U182
NBL-015 SKB315 QLS31905 CTB001
DR30303 ATG-022 PT886
IBI360
JS012
QL1779
Pre-clinical KD-055 MIL106 MBS304 BNT212

HBM1029 L008 DR30318 P2-003 ; PR401
HLX58 CLDN18.2 ADC Y160 L007
SX001 HBM7022 YT-claudin18.2
Ori-Ab-005 ABP-150 GB70041
SNG2002
A364; A362
Source: Pharmcube
n Promising early data for CLDN18.2 ADC vs other modalities – Among the
CLDN18.2-targeting modalities, different indication strategies are being adopted:
o Antibodies target the first-line treatment with zolbetuximab demonstrated
improved survival data (OS=14.4 months with HR=0.77) though had minimal
improvement on ORR (54% vs. 49%) and worse GI safety profile;
1fc9fa9cf8844a388c506688498547c5
o CLDN18.2-ADCs are targeting 2L+ patients with encouraging preliminary
efficacy shown by CMG901 with an ORR of 75% among 8 patients (vs.
54%/73% of zolbetuximab/TST001 in 1L GC) as well as good control of safety
events (3 out of 27 with grade 3+ AE);
o BsAbs and CAR-T products started clinical trials with later-line
treatment, e.g., CT041 targeted patients with 2+ prior treatments, and
Q-1802 (PD-L1/CLDN18.2 BsAb) targeted 4L+ patients.
n Current SOCs for GC/PC are mainly chemoimmunotherapies, which deliver only
modest efficacy (e.g., ORR less than 50% in 1L GC of chemotherapy as in GLOW
study), with limited options for later-line treatment. Though we are still waiting for
more clinical data of CLDN18.2-targeting therapies across ADC/BsAbs/CAR-T, we
see the current results from the ADC class encouraging with potential to improve
efficacy without much deteriorated safety profile compared to antibodies, which
could provide potential upside with higher penetration in front-line adoption.
14 August 2023 42
Exhibit 52: Data from zolbetuximab leaves room for improvement

Clinical data of CLDN18.2-targeting molecules across modalities
mAb ADC BsAb CART
Molecule Zolbetuximab (IMAB362) Osemitamab (TST001) AB011 ASKB589 CMG901 SYSA1801 Q-1802 (PD-L1/CLDN18.2) CT041
Line of treatment 1st line treatment Late-line treatment
Company Astellas Pharma Transcenta CARsgen Aosaikang Keymed CSPC QureBio CARsgen
Study GLOW SPOTLIGHT TST001-1002 AB011-ST-01 (Part 2) ASK-LC-B589-I/II (China KYM901 SYSA1801-CSP-001 Qure-1802-101 CT041ǦSTǦ01
(China trial) (China trial) trial) - PartB (China trial) (China trial) (China trial) (China trial)
Latest reported time 23-Mar-2023 24-Jan-2023 2022 ASCO GI 2023 ASCO 2023 ASCO GI 2023 ASCO GI 2023 ASCO GI 2023 ASCO 2023 ASCO GI 2022 ASCO
Cut off date 4-Aug-2022 31-Dec-2022 6-Sep-2022 9-Sep-2022 4-Aug-2022 5-Nov-2022 20-Sep-2022 22-Dec-2021
Follow-up, median / / 65 days (~2 mths) 151 days (~5 mths) 13.1 months / / / 8.8 months
NCT no. NCT03653507 NCT03504397 NCT04495296 NCT04495296 NCT04400383 NCT04632108 NCT04805307 NCT05009966 NCT04856150 NCT04581473
(phase 3) (phase 3) (phase 1/2a) (phase 1/2a) (phase 1) (phase 1/2) (phase 1a) (phase 1) (phase 1b/2)
Combo + CAPOX + mFOLFOX6 + CAPOX + CAPOX + CAPOX + CAPOX Mono Mono Mono Mono
Treatment line 1L 1L 1L 1L 1L 1L 2L+ r/r (79% GC, 21% PC) 4L+ 3L+
Baseline N 254 vs 253 283 vs 282 51 64 (15 / 49 at dose 24 (13 in 20mg/kg, 11 in 21(Part B: ASKB589 + 13 33 9 (dose expansion) 14
escalation / expansion) 30mg/kg) chemo)
Prior treatment Part B: pts had no prior median 2 (1-5) SULRUOLQHV PRVWUHFHLYHGSULRU 85.7% had received 2
systemic treatment regimens prior treatments
Efficacy ORR 53.8% vs 48.8% similar between treatment 73.3% (11/15) 67.5% (27/40), confirmed 52.2% (12/23) 75% (9/12) 75.0% (6/8) 47.1% (8/17) for GC, 0 22.2% (2/9) 57.1% (8/14)
arms 52.5% (21/40) for PC
DCR 100% (15/15) 100% (12/12) 100% (8/8) 64.7% (11/17) for GC, 66.6% (6/9) 78.6% (11/14)
25% (1/4) for PC
PFS, m 8.21 vs 6.80 (HR=0.69) 10.61 vs 8.67 not reached 5.6
(HR=0.75)
OS, m 14.39 vs 12.16 18.23 vs 15.54 (HR=0.75) not reached 10.8
(HR=0.77)
AE G3+ AE 72.8% vs 69.9% 62.5% (15/24) 38% (8/21) 11.1% (3/27) 24% 24.1% (7/29)1 100%
SAE 47.2% vs 49.8% 44.8% vs 43.5% 37.5% (9/24) 14.3% (2/14)
TR death 2.4% vs 2.8% 0 0 0
AE of concern All grades: nausea All grades: nausea Mostly grade 1-2, All grades: nausea (65%, G3+: Nausea (12.5%), All grades: All grades: nausea All grades: mainly GI AEs G3+: Lymphopenia
(68.5% vs 50.2%), (82.4% vs 60.8% in including nausea, 2% for G3), vomiting (46%, Hypoalbuminemia Part B: nausea (76%), (42.4%), vomiting (89.7%, 26/29), including (100%), Leukopenia
vomiting (66.1% vs zolbetuximab vs placebo hypoalbuminemia, 2% for G3), (8.3%), Anemia (8.3%), vomiting (66%), (36.4%), dry eye nausea 18/29 (62.1%), (78.6%), Neutropenia
30.9%), and decreased arms), vomiting (67.4% vs anemia, vomiting, hypoalbuminemia (65%, 2% and vomiting (4.2%) hypoalbuminemia syndrome (21.2%) and vomiting 18/29 (62.1%), (50%), Anemia (14.3%),
appetite (41.3% vs 35.6%), and decreased platelet count decreased for G3) (52%), granulocytopenia anemia (21.2%); abdominal pain 8/29 (27.6%), Lipase elevation (14.3%)
33.7%) appetite (47.0% vs 33.5%) (38%) and 2 DLTs at 3mg/kg dose gastroesophageal reflux
hypoleukemia (33%) disease 7/29 (24.1%)
Discontinuation 0 7.1% (1/14)
1. safety data based on full study population (n=29) with GI cancers
Source: 2023 ASCO Plenary Series for zolbetuximab, 2023 ASCO for Osemitamab/SYSA1801, 2023 ASCO GI for AB011/ASKB589/CMG901/Q-1802, 2022 ASCO for CT041
1fc9fa9cf8844a388c506688498547c5
14 August 2023 <3
Differentiated drug design and strong global leverage for SKB315

n Kthiol-based design to expand therapeutic window - SKB315 is a novel
CLDN18.2 ADC that aims to deliver cytotoxic drugs selectively to
CLDN18.2-expressing tumor including GC and PC. Similar to SKB264, SKB315
adopts a payload-linker design (Kthiol) with moderately cytotoxic TOPO I inhibitor and
high DAR (7-8) to improve the efficacy-safety profile of the ADC. In addition, SKB315
is configured with a proprietary, in-house developed humanized CLDN18.2 mAb with
higher binding affinity compared to zolbetuximab to further expand therapeutic
window. Preclinical data by far exhibited a good safety profile (limited and reversible
organ toxicities, etc.) and potent anti-tumor activities in various vivo tumor models
with high to low CLDN18.2 expression.
Exhibit 53: SKB315 adopts a similar drug design as SKB264

Drug design of SKB315
n Strong global leverage as competitive edge – In June 2022, SKB315 was out
licensed with a plan for MSD to exclusively develop and commercialize SKB315
1fc9fa9cf8844a388c506688498547c5
globally. In addition to a US$35mn upfront payment and aggregate milestone fees
over US$900mn (416mn in R&D and 485mn in future sales), Kelun biotech will
receive tiered royalties ranging from mid-single to low-double digit precent of the net
sales. We note that, although the competition of CLDN18.2 ADC in China is
growing, there are only very few assets that have secured global partners, among
which MSD is the most notable partner with deep expertise in R&D and extensive
global networks. With the support of MSD, we expect SKB315 will have competitive
advantages in overseas markets compared to other domestic players.
14 August 2023 44
Exhibit 54: SKB315 is among the very few CLDN18.2 ADCs that have global partners
Global partners of CLDN18.2 ADC and deal details
Molecules Company Stage Global Partner Deal Details Out-licensed Rights
Turning Point Upfront $25mn; Milestone $195mn; exclude China &
LM-302 LaNova Ph1/2
(BMS) Mid-single digit to mid-teens royalties South Korea
SHR-A1904 Hengrui Ph1/2
RC118 RemeGen Ph1/2
SOT102 Sotio Ph1/2
Upfront $63mn; Milestone $1.1bn;
CMG901 Keymed/Lepu Ph1 AstraZeneca Global
Up to low double-digit royalties
Upfront $27mn; Milestone $1.2bn;
SYSA1801 CSPC Ph1 Elevation Oncology ex-Greater China
Up to double-digit percent royalties
Upfront $35mn; Milestone $901mn;

SKB315 Kelun Biotech Ph1 MSD Global
Mid-single to low-double digit royalties
BA1301 Boan Biotech Ph1

IBI343 Innovent Ph1
JS107 Junshi Ph1
ATG-022 Antengene Ph1
YH005 RemeGen Pre-clinical
MIL106 Mabworks Pre-clinical
L008 L&L Biopharma Pre-clinical
Source: Pharmcube
GC: the leading CLDN18.2 indication with a China focus

Limited option for HER2- GC – Gastric cancer has been a large cancer indication (over
300k annual incidence of advanced GC patients globally) with significant unmet medical
needs (HER2 as the major AGA) especially for HER2- patients. Current guidelines
recommend chemo or chemo-based combo therapies for HER2- subgroup, delivering
only modest response and survival benefits (e.g., 28% in 2L GC, and less than 10
months of OS for 2L+ GC). Given the unmet needs, CLDN18.2-ADC currently target
usage in 2L+ GC with potential front-line adoption.
Exhibit 55: Limited SOC for HER2- GC particularly in 2L+

SOC across treatment lines for gastric cancer
Subtype/ SOC / Efficacy Safety
1fc9fa9cf8844a388c506688498547c5
Setting
Biomarker Competitor ORR (%) PFS (mos) OS (mos) SAE G3+ AE Discontinuation Clinical trial
1L HER2+ Herceptin+chemo 47% 6.7 13.8 32% 68% ToGA
HER2- Opdivo+chemo 60% 7.7 13.8 22% 60% 36% CheckMate-649
CLDN18.2+ zolbetuximab+chemo 54% 8.2 14.4 47% 73% GLOW
2L HER2+ Enhertu 51% 5.6 12.5 15% DESTINY-Gastric01
Any Cyramza+docetaxel 28% 4.4 9.6 47% 81% 12% RAINBOW
3L+ Trifluridine/Tipiracil 2 5.7 43% 80% TAGS
14 August 2023 45
Exhibit 56: CLDN18.2-ADC currently targeting usage in 2L+ GC with potential front-line adoption
Clinical development landscape of CLDN18.2 ADC in GC
Company CLDN18.2 Study Lines Regimen Trial status
ADC 1L 2L+ Mono Combo Phase Masking N1 Endpoint Start Completion
GC/GEJ
Turning Point Therapeutics CA128-1033 Ph1/2 Open label 42 DLT Feb-2022 Aug-2024
LM-302
LaNova LM302-01-201 +PD-12 Ph1/2 Open label 50 DLT/RP2D/OBD/MTD May-2022 Oct-2023
Sotio SOT102 CLAUDIO-01 +chemo Ph1/2 Open label 269 MTD/RP2D/ORR Mar-2022 Dec-2023
Keymed/Lepu Biopharma CMG901 KYM901 Ph1 Open label 162 DLT/ORR/RP2D Dec-2020 May-2024
Kelun Biotech SKB315 SKB315-I-01 Ph1 Open label 206 DLT/ORR Mar-2022 May-2024
Junshi JS107 JS107-001-I +PD-12 Ph1 Open label 118 MTD/RP2D/ORR Jul-2022 Jul-2024
CSPC SYSA1801 SYSA1801-CSP-001 Ph1 Open label 272 DLT/RP2D Sep-2021 Dec-2023
TORL Biotherapeutics TORL-2-307 TORL2307ADC-001 Ph1 Open label 70 MTD/RP2D Feb-2022 Jan-2025
Note: GC/GEJ: Gastric cancer/gastroesophageal junction adenocarcinoma; 1. Estimated number is used when no actucal enrollment reported; 2. Toripalimab.
n Close to US$300mn global risk-adjusted sales of SKB315 in GC by 2033E - We

expect SKB315 to generate $299mn global sales (post risk-adjusted) in GC by
2033E, with US/EU5 markets to contribute 34%/43% of global sales. Accordingly,
we forecast Kelun Biotech to capture Rmb199mn as revenues by 2033E (primarily
China sales and royalties from ex-China sales), which feeds into our DCF valuation
framework.
n More than 77% of GC pts come from China - We expect c. 28k pts with GC
globally (22k/2k/4k in China/US/EU) to be captured by SKB315 by 2033E. We
estimate SKB315 to capture 25% of market share in China amid growing
competition in the domestic market (vs. 45% in US and EU).
1fc9fa9cf8844a388c506688498547c5
14 August 2023 46
Exhibit 57: We estimate around $300mn of sales with 28k GC patients treated by SKB315 (2033E) globally
Estimation process for the sales of SKB315 in GC
Population base
Population (mn) 1,396 367 337
Bank, stats.gov.cn)
5
GC incidence, 1/10 31 7 13 Globocan 2020
CAGR of GC incidence -1% -1% -1% PMC8124120, SEER
New GC pts (k) 432 24 44
Subtype breakdown
Advanced stage % 65% 36% 39% China Oncology (2016), cancer.net
Newly diagnosed advanced GC pts (k) 281 9 17
accumulated advanced pts (k) 181 10 18
Total advanced pts (k) 461 19 36
HER2 % 16% 24% 24% Journal of Hematology & Oncology (2019)
HER2- advanced GC pts (k) 386 14 27
CLDN18.2>=40%, % 49% 49% 49% Ann Oncol (2021)
CLDN18.2+/HER2- advanced GC pts (k) 189 7 13
1L treatment
Treatment rate % 95% 95% 95% consistent with Transcenta model (same for 2/3L) POS=18%
1L GC pts (k) 180 7 13 phase 1a
CLDN18.2 penetration % 60% 75% 75% benchmark to HER2/EGFR class penetration based on PDB
DOT=9m
ADC market share % 20% 25% 25% benchmark to TROP2 ADC in TNBC (same for 2/3L) PFS=8.2/10.6 for
Zolbetuximab in
SKB315 is among the leading players in CLDN18.2 ADC, ph3 GLOW and
expect higher share in ex-China with MSD leverage SPOTLIGHT studies
1L pts on SKB315 (k) 5.4 0.6 1.1

2L treatment
Treatment rate % 75% 75% 75% POS=35%
2L GC pts (k) 135 5 9 phase 1a
CLDN18.2 penetration % 60% 75% 75%
ADC market share % 50% 60% 60% DOT=5m
SKB315 market share % 25% 45% 45% assume PFS in 2/3L
is half of 1L, based
2L pts on SKB315 (k) 10.1 1.0 1.9
on selected clinical
3L treatment trial data
Treatment rate % 60% 60% 60%
3L GC pts (k) 81 3 6
CLDN18.2 penetration % 60% 75% 75%
ADC market share % 50% 60% 60%
3L pts on SKB315 (k) 6.1 0.6 1.2
Total GC pts on SKB315 (k) 21.6 2.2 4.1
Monthly price (k) USD 2 29 19 assume same price with SKB264
POS - 1L GC 18% 18% 18%
POS - 2/3L GC 35% 35% 35%
1fc9fa9cf8844a388c506688498547c5
DOT - 1L GC, mos 9.0 9.0 9.0
DOT - 2/3L GC, mos 4.5 4.5 4.5
SKB315 Sales, unadjusted, mn USD 244 364 457
SKB315 sales, risk-adjusted, mn USD 69 102 128 SKB315 global risk-adjusted sales (mn USD) = 299
CLDN18.2 ADC market in GC, mn USD 976 808 1,014 CLDN18.2 ADC global market in GC (mn USD) = 2,799
Source: stats.gov.cn, Globocan 2020, Cancer Medicine (2021), National Cancer Institute SEER Incidence Data, China Oncology (2016), Journal of Hematology & Oncology (2019), Annals of Oncology
(2021), NCCN guidelines, Goldman Sachs Global Investment Research
PC: significant unmet clinical needs with more than 90% sales from
overseas markets
Limited treatment options for PC – Current SOC for PC is more limited compared to
GC: 1) for front-line treatment, chemotherapies are the primary recommendations with
low ORR (23-32%) and short survival data (PFS=5.5-6.4 months, OS=8.5-11.1 months),
2) more targeted therapies are recommended for patients with positive NTRK fusion
(entrectinib) or TMB-H (Keytruda), however, only 1% or less of PC patients are eligible
given the low prevalence of the biomarkers in PC, and 3) no preferred recommendations
for patients progressed after two lines of treatment.
14 August 2023 47
Exhibit 58: Limited effective treatment options for PC

Current SOCs for pancreatic cancer
Subtype/ SOC / Efficacy

Setting
Biomarker Competitor ORR (%) PFS (mos) OS (mos) Clinical trial
1L FOLFIRINOX 32% 6.4 11.1 NCT00112658
Gemcitabine+nab-paclitaxel 23% 5.5 8.5 NCT00844649
2L NTRK+ Entrectinib 12.8 12.9 ALKA-372-001/
(0.8%) STARTRK-1/
STARTRK-2
TMB-H Keytruda 18% 2.1 4 KEYNOTE-158
(1%)
3L+ Limited
Exhibit 59: CLDN18.2-ADCs are mostly developed in the early stage and target usage in 2L+ PC
Clinical development landscape of CLDN18.2 ADC in PC
Company CLDN18.2 Study Lines Regimen Trial status
ADC 1L 2L+ Mono Combo Phase Masking N1 Endpoint Start Completion
PC
Turning Point Therapeutics CA128-1033 Ph1/2 Open label 42 DLT Feb-2022 Aug-2024
LM-302
LaNova LM302-01-201 +PD-12 Ph1/2 Open label 50 DLT/RP2D/OBD/MTD May-2022 Oct-2023
Sotio SOT102 CLAUDIO-01 +chemo Ph1/2 Open label 269 MTD/RP2D/ORR Mar-2022 Dec-2023
Keymed/Lepu Biopharma CMG901 KYM901 Ph1 Open label 162 DLT/ORR/RP2D Dec-2020 May-2024
Kelun Biotech SKB315 SKB315-I-01 Ph1 Open label 206 DLT/ORR Mar-2022 May-2024
JS107-001-I +PD-12 Ph1 Open label 118 MTD/RP2D/ORR Jul-2022 Jul-2024
Junshi JS107
JS107-002-I +PD-12 Ph1 Open label 106 MTD/RP2D Dec-2022 Sep-2024
CSPC SYSA1801 SYSA1801-CSP-001 Ph1 Open label 272 DLT/RP2D Sep-2021 Dec-2023
TORL Biotherapeutics TORL-2-307 TORL2307ADC-001 Ph1 Open label 70 MTD/RP2D Feb-2022 Jan-2025
Note: 1. Estimated number is used when no actucal enrollment reported; 2. Toripalimab.
US$259mn global risk-adjusted sales of SKB315 in PC by 2033E - We expect

SKB315 to generate $259mn global sales (post risk-adjusted) in PC by 2033E, with
US/EU5 markets to contribute 54%/42% of global sales. Accordingly, we forecast Kelun
Biotech to capture Rmb172mn as revenues by 2033E (primarily China sales and royalties
from ex-China sales), which feeds into our DCF valuation framework.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 48
Exhibit 60: We estimate $259mn of global sales of SKB315 in PC by 2033E

Estimation process for the sales of SKB315 in PC
Population base
Population (mn) 1,396 367 337
Bank, stats.gov.cn)
PC incidence, 1/105 15 18 23 Globocan 2020
CAGR of PC incidence 4% 0% 0% consistent with Transcenta model
New PC pts (k) 206 67 77
Subtype breakdown
Advanced stage % 88% 88% 88% Transcenta A1
Newly diagnosed advanced PC pts (k) 181 59 68
CLDN18.2>=40%, % 60% 60% 60% consistent with Transcenta model, PMC9305579
CLDN18.2+ advanced PC pts (k) 109 35 41
1L treatment
Treatment rate % 95% 95% 95% consistent with Transcenta model (same for 2L) POS=10%
1L PC pts (k) 103 33 39 phase 1a
CLDN18.2 penetration % 60% 75% 75% benchmark to HER2/EGFR class penetration based on PDB DOT=6m
PFS=6 for
ADC market share % 20% 25% 25% benchmark to TROP2 ADC in TNBC (same for 2L) FOLFIRINOX in
1L PC
SKB315 is among the leading players in CLDN18.2 ADC,
expect higher share in ex-China with MSD leverage
1L pts on SKB315 (k) 3.1 2.8 3.3

2L treatment
Treatment rate % 75% 75% 75% POS=20%
2L PC pts (k) 77 25 29 phase 1a
CLDN18.2 penetration % 60% 75% 75% DOT=3m

assume PFS in 2L+
ADC market share % 50% 60% 60%
is half of 1L, based
SKB315 market share % 25% 45% 45% on selected clinical
trial data
2L pts on SKB315 (k) 5.8 5.1 5.9
Total PC pts on SKB315 (k) 8.9 7.9 9.2
Monthly price (k) USD 2 29 19 assume same price with SKB264
POS - 1L PC 10% 10% 10%
POS - 2L+ PC 20% 20% 20%
DOT - 1L PC, mos 6.0 6.0 6.0
DOT - 2L+ PC, mos 3.0 3.0 3.0
SKB315 Sales, unadjusted, mn USD 72 940 728
SKB315 sales, risk-adjusted, mn USD 11 140 108 SKB315 global risk-adjusted sales (mn USD) = 259
CLDN18.2 ADC market in PC, mn USD 290 2,090 1,618 CLDN18.2 ADC global market in PC (mn USD) = 3,998
1fc9fa9cf8844a388c506688498547c5
Source: stats.gov.cn, Globocan 2020, NCCN guidelines for treatment line of CLDN18.2 ADC in PC, Goldman Sachs Global Investment Research
A166: a competitive option for late-line HER2+ BC and GI tumors in China

HER2 as established targeted therapy - The overexpression of HER2 in tumor cells
promote their aberrant growth and survival, thus driving the development of various
cancer types led by GC, BC, and CRC. HER2 has been a well-established target with
successful HER2-targeted therapies in different modalities (e.g., mAb, ADC) which have
been included in the clinical guidelines as SOC across different lines of treatment.
14 August 2023 49
Exhibit 61: HER2 is highly expressed in BC/GC Exhibit 62: HER2-targeting therapies are established in guidelines
Major cancers’ incidence in China with HER2 overexpression Current SOC in cancers with HER2 overexpression
VEGFi HER2 mAb HER2 ADC Chemo
479 Unit: K 1L 2L 3L
416 ORR: ~47%; ORR: ~51%; mPFS: 2m;
GC
mPFS: ~6.7m; mPFS: ~5.6m; mOS:5.7m
mOS: ~13.8m mOS: ~12.5m
306
HER2+ tumor
ORR: ~80%; ORR: ~79%; ORR: ~41%;
BC
mPFS: ~18.5m; mPFS: ~28.8m; mPFS: ~7.8m;
mOS: ~56.5m mOS: 21.9m
ORR: ~57%; ORR: ~38%; ORR: ~45%;
RASwt
mPFS: ~11.7m; mPFS: ~8.2m; mPFS: ~6.9m;
CRC
30%
16% 7% mOS: ~29.8m mOS: ~24.1m mOS: ~15.5m
GC BC CRC
HER2+
GC - gastric cancer; BC - breast cancer; CRC - colorectal cancer Source: NCCN guidelines
Source: Journal of Hematology & Oncology (2019) for HER2+ in GC, BMC Cancer (2011) for
HER2+ in BC, Frontiers in Oncology (2022), Globocan 2020 for cancer incidence
A166 could be a competitive option of HER2 ADC - Deployed with a high-tox-low-DAR

design, in which duostatin-5 (a MMAF derivative) is conjugated through site-specific

conjugation method with DAR=2 via enzyme-cleavable linker to the HER2 mAb, A166
demonstrates competitive drug profile in both efficacy and safety which, in our view,
could enable it to be a competitive option for late-line HER2-positive solid tumors in
China.
Exhibit 63: A166 adopts a high-tox-low-DAR strategy

Structure of A166
1fc9fa9cf8844a388c506688498547c5
14 August 2023 50
Exhibit 64: A166 is the first domestic HER2 ADC to file for late-stage BC
Competitive landscape of HER2 ADC in China
Indications
Drug Company
BC GC CRC UC
Enhertu AstraZeneca/Daiichi Sankyo Approved Ph3 / /
Kadcyla Roche Approved Ph2/3 / /
Aidixi/RC48 RemeGen Ph3 Approved Ph2 Approved
A166 Kelun Biotech NDA filed* Ph1 Ph1 /
LCB14-0110 LegoChem/Fosun Pharma Ph3 Ph2 Ph2 /
ARX788 NovoCodex/Ambrx Ph2/3 completed Ph2/3 / /
MRG002 MiracoGen Ph2 Ph2 / Ph3
SHR-A1811 Hengrui Ph3 Ph1/2 Ph1 /
SYSA1501 CSPC Ph3 Ph2 / /
DX126-262 DAC Biotech Ph2 Ph1/2 / Ph1/2
BB-1701 Morphotek/BlissBio IND IND / Ph1/2
* NMPA NDA acceptance on May 11, 2023
Source: Pharmcube
n Expect A166 to capture 21k pts in China by 2033E – We expect c.21k patients
with HER2+ GC, BC, and CRC in China to be treated by A166 by 2033E. We
estimate that A166 will gain 22% domestic market share in HER2+ BC (18% in GC
and CRC), given its overall competitive drug profile compared to top players in HER2
ADC (see details below).
n Rmb941mn of risk-adjusted peak sales in China for A166 – With
probability-of-success rate assigned for GC/BC/CRC (68%/90%/65%) based on
current clinical progress, we estimate the risk-adjusted China sales for A166 to reach
c.Rmb941mn by 2032E, in which c.62% of the sales will be contributed by gastric
cancer. Given the large size of the HER2+ BC/GC markets we see room for multiple
players including Enhertu, Aidixi, A166, and SHR-A1811.
Exhibit 65: We estimate over Rmb900mn of risk-adjusted China Exhibit 66: We expect A166 to have over Rmb900mn of risk-adjusted
sales for A166 by 2033E sales in China by 2032E
Estimated A166 sales by indication during 2024E-2033E Key estimates and assumptions for A166
Key estimates in 2032E GC BC CRC
1fc9fa9cf8844a388c506688498547c5
1,000 Revenue 60% HER2+ HER2+ HER2+
(RMB, mn)
900 2L+ 3L+ 3L+
50%
800 China Addressable patients (k) 103 8 6
700 40% A166 share (%) 18% 22% 18%
600 A166 treated pts (k) 18 2 1
30%
500 DOT (month) 5 12 5
20%
400 pre-POS sales (mn RMB) 854 263 54
300 10% Monthly price (k RMB) - China 10
200 POS (%) 68% 90% 65%
0%
100 risk-adj sales (mn RMB) 584 236 35
0 -10% Total risk-adj sales (mn RMB) 941
GC BC Other yoy
Source: Goldman Sachs Global Investment Research Total sales also include add-on sales of Rmb86mn from other indications.
14 August 2023 51
Competitive efficacy/safety profile in late-line BC/GC

n Competitive preliminary efficacy data: Based on preliminary phase 1 results in
China, A166 demonstrated non-inferior efficacy in heavily pretreated advanced
HER2+ BC patients with an ORR of 73.9% (comparable to SHR-A1811, higher than
other HER2 ADCs) and in advanced HER2+ GC patients with an ORR of 31.3% (vs.
42.9%/24.8%/20.6% in Enhertu/RC48/T-DM1). Caveating the limitations of
cross-trial comparisons, the efficacy data of A166 in late-line BC and GC is at least
largely on par with the top competitors if not consistently better.
Exhibit 67: A166 shows encouraging safety profile in late-line HER2-positive GC compared to Enhertu
Clinical data comparison of HER2 ADC in HER2-positive GC/GEJ
Molecule A166 Kadcyla Enhertu Aidixi/RC48
Developer Kelun Roche Daiichi Sankyo / RemeGen
AstraZeneca
Study KL166-I-05 (China trial) GATSBY DESTINY-Gastric01 RC48-C008 (China trial)
Latest reported time 9-Feb-2023 23-Mar-2017 18-Jun-2020 20-May-2021
Follow-up period, median 6.7 months 17.5 (T-DM1) vs 15.4 4.6 (DS-8201a) vs 2.8 7.6 months
(taxane) months (chemo) months
NCT no. CTR20213396 (phase 1b) NCT01641939 (phase 2/3) NCT03329690 (phase 2) NCT03556345 (phase 2)
Treatment line 2L+ HER2+ GC/GEJ 2L+ HER2+ GC/GEJ 3L/3L+ HER2+ GC/GEJ 3L/3L+ HER2+ GC/GEJ
Baseline N 16 228 (T-DM1) vs 125 (DS-8201a) vs 125
117 (taxane) 62 (chemo)
Prior treatment trastuzumab previous anti-HER2 therapy: median 2 2 prior line (52.8%); ≥ 3
79% vs 76% prior lines (47.2%)
Median age (y) 62 vs 62 65 vs 66 58
ECOG ECOG PS 1: 62% vs 56% ECOG PS 1: 50% vs 52% ECOG PS 1: 76.8%
Genotype IHC 3+ or 2+/FISH+ IHC 2+ or 3+ IHC 3+ or IHC 2+/ISH+ IHC 2+ or 3+
ORR 31.3% (5/16) 20.6% vs 19.6% 42.9% vs 12.5% 24.8%
DCR 68.8% (11/16) 86% vs 62% 42.4%
Efficacy
DOR 4.3 vs 3.7 11.3 vs 3.9 4.7

PFS, m 4.6 2.7 vs 2.9 (HR=1.13) 5.6 vs 3.5 (HR=0.47) 4.1
OS, m 7.9 vs 8.6 (HR=1.15) 12.5 vs 8.4 (HR=0.59) 7.9
1fc9fa9cf8844a388c506688498547c5
G3+ AE 37.5% 60% vs 70% 85.6% vs 56.5% 56.8% (71/125)
SAE 29% vs 28% 16% (20/125)
TR death 4% vs 4% 0.8% (1/125) vs 0 0
AE of concern All grades: blurred vision All grades: anaemia (26%); G3+: Neutrophil count G3+: Decreased WBC
(68.8%), corneal thrombocytopenia (11%) decreased (51% vs 24%); count (14.4%);
epitheliopathy (68.8%), dry haemorrhage (10%) Anemia (38% vs 23%); Decreased neutrophil count
AE
eye Decreased WBC (21% vs (14.4%);

(50.0%) 11%); Anemia (12.8%)
decreased appetite (17% vs
13%)
Discontinuation 14% vs 14% 15% vs 6% 14.4%
Source: Company data for A166, The Lancet Oncology (2017) for Kadcyla, New England Journal of Medicine (2020) for Enhertu, Cancer Communications (2021) for Aidixi/RC48
n Mixed safety profile: In both BC and GC, A166 demonstrated mixed safety profile
compared to other HER2 ADCs: 1) cardiac, hematological, GI and lung toxicities
were uncommon (< 10%) and mostly mild (vs. 20+% of grade3+ neutropenia in
Enhertu in BC), 2) relatively good control of grade 3+ AEs particularly in GC (37.5%
vs. 85.6% in Enhertu), but 3) significantly higher ocular TRAEs (e.g., 31% of G3+
corneal epitheliopathy, 18.5% of blurred vision, vs. N.A. for T-DM1/Enhertu/RC-48)
14 August 2023 52
which could potentially require ophthalmic examination prior to doses (as is the case
for Tivdak with the FDA black box warning).
n Accessibility could be additional lever: With BC as the leading indication, and
GC/CRC as fast follow-ups, Kelun biotech adopted a multi-indication clinical
development plan to rapidly advance A166 in China, targeting for product launch in
the second half of 2024 or the first half of 2025. Leveraging the extensive network
of Kelun Pharmaceutical in China, the accessibility of A166 could be an additional
lever in the competitive HER2 ADC market in China.
Non-ADC assets to supplement ADC as portfolio strategy

Besides the ADC franchise led by the three leading ADCs described above, Kelun
Biotech is expanding the non-ADC assets as part of the portfolio strategy to supplement
ADC through both indication synergy and accumulation of know-how for future ADC
innovation. We expect the five leading non-ADC assets that have at least entered phase
2 to contribute aggregated risk-adjusted sales of c.Rmb3.3bn by 2033E, led by A167
(PD-L1), A400 (RET), and A223 (JAK1/2):
Exhibit 68: Non-ADC assets estimated to deliver c.Rmb3.3bn by 2033E

Sales of key non-ADC assets during 2024E-2033E
3,500 Revenue 160%

(RMB, mn)
3,000 140%
120%
2,500
100%
2,000
80%
1,500
60%
1fc9fa9cf8844a388c506688498547c5
1,000
40%
500 20%
- 0%
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
A167 (PD-L1) A400 (RET) A223 (JAK 1/2)

A140 (cetuximab biosimilar) Others (A277 etc.) yoy
n A167 (PD-L1): the I/O backbone for combination – Though the PD-(L)1 market in
China is competitive with fifteen approved products as of April 2023, A167 was
strategically developed more as the I/O backbone for combination with ADCs as
compared to monotherapy. Designed with a silenced Fc region to remove
antibody-dependent cellular cytotoxicity (ADCC) / complement-dependent
cytotoxicity (CDC), A167 demonstrated good safety profile with well-managed
immune-related adverse events (irAE), which enables the combination with SKB264
to target 1L treatment for TNBC and EGFRwt NSCLC.
14 August 2023 53
n A400 (RET): potential 2nd-generation selective RET inhibitor - A400 is a highly

selective RET inhibitor with potential to overcome drug resistance on the two
approved RET inhibitors (selpercatinib (Retevmo) and pralsetinib (Gavreto)). Based
on the phase 1/2 results, A400 demonstrated 1) on-par efficacy (76%/74% in 1L/2L
RET+ NSCLC) with peers, 2) preliminary response (3 out of 7) in patients who had
progressed on prior RET inhibitor Gavreto, and 3) differentiated safety profile
highlighted with great blood safety profile (no incidence of G3+ lymphopenia /
anemia / neutropenia, vs. 12%/9%/20% in Gavreto), and better control in liver tox /
hypertension compared to Retevmo.
Exhibit 69: A400 shows potentially better safety profile with promising efficacy in 2L+ RET+ NSCLC
Non-head-to-head comparisons of RET inhibitors for the treatment of RET+ NSCLC
pralsetinib selpercatinib
RET+ NSCLC A400
(Gavreto) (Retevmo)
RP2D 90mg, QD 400mg, QD 160mg, BID
Stage Ph1/2 Ph1/2 Ph1/2
NCT05265091 NCT03037385 NCT03157128
Trial No.
(KL400-Ⅰ/Ⅱ-01) (ARROW) (LIBRETTO-001)
2L+ 2L+ 2L+

Efficacy 1L 1L 1L
(SRI-naïve) (SRI-naïve) (SRI-naïve)
No. of pts n=25 n=23 n=75 n=158 n=69 n=247
ORR 76% 74% 72% 61% 84% 61%
DCR 92% 91% 91% 91% 93% 94%
TRAEs All grades* G3+ All grades G3+ All grades G3+
Safety population n=87 n=281 n=796
Liver AEs
Elevated AST level 51% 2% 41% 3% 29% 6%
Elevated ALT level 48% 2% 30% 2% 29% 9%
ALP increase 2% 9% 1%
Gastrointestinal AEs
Diarrhea N.A. 0% 14% 1% 27% 2%
Blood/Lymphatic AEs
Anemia 21% 0% 38% 12% N.A. N.A.
Hypocalcemia N.A. 0% N.A. N.A. N.A. N.A.
Lymphopenia N.A. 0% 15% 9% 52% 20%
Hyponatremia N.A. 0% N.A. N.A. N.A. N.A.
1fc9fa9cf8844a388c506688498547c5
Phosphate reduction N.A. 0% N.A. N.A. N.A. N.A.
Neutropenia N.A. 0% 46% 20% 25% 3%
Cardiovascular AEs
Hypertension N.A. 0% 25% 12% 28% 13%
Prolonged QT interval <5% 0% 5% 0% 16% 3%
Infections
Pneumonia N.A. 2% 12% 2% N.A. N.A.
Discontinuation 7% 7% 8%
Note: RP2D: recommended phase 2 dose; QD: once daily; BID: twice daily; SRI: selected RET inhibitor; TRAEs:
treatment-related adverse events; *: TRAEs data at all grades for A400 is based on full safety population (n=87)
treated with multiple doses (10-120mg, QD).
Source: ASCO 2023 for A400, Annals of Oncology (2022) for pralsetinib, Journal of Clinical Oncology (2023) for selpercatinib
n Autoimmune franchise led by A223 (JAK1/2) – The autoimmune franchise of

Kelun Biotech is led by A223, a small molecule JAK1/2 inhibitor with optimized PK
properties aiming to improve safety profile over Olumiant using potentially lower
effective dose. Based on preliminary phase 2 data, A223 demonstrated 1)
encouraging safety profile with most AEs as mild or moderate (e.g., reversible blood
and lymphatic AEs), compared to approved JAK inhibitors with FDA black box
warning-related AEs (e.g., serious tuberculosis, thrombosis, cardiovascular death,
myocardial infarction, and stroke, etc.), and 2) promising anti-rheumatic efficacy in
14 August 2023 54
moderate-to-severe RA patients, with A223 2 mg achieving significant

placebo-adjusted ACR20 difference of 35.1% and ACR50 difference of 33.7% at
week 12, which is greater than Olumiant at 4mg/Xeljanz at 5mg (BID) and
comparable to Rinvoq at 15mg.
Exhibit 70: A223 demonstrates encouraging safety profile at potentially lower effective dose compared to
other approved JAK1/2 inhibitors in China
Non-head-to-head comparisons of JAK1/2 inhibitors for the treatment of moderate-to-severe rheumatoid arthritis
(RA)
tofacitinib baricitinib upadacitinib
Moderate-to-severe RA A223
(Xeljanz) (Olumiant) (Rinvoq)
Dosage1 2mg, QD 5mg, BID 4mg, QD 15mg, QD
Stage Ph2 Ph3 Ph3 Ph3
CTR20202664 NCT00847613 NCT02265705 NCT02955212
Trial No.
(KL223-Ⅱ-03) (RA-III) (RA-BALANCE) (M15-557)
No. of patients 39 321 116 169
Efficacy (at week 12)
Treatment ACR20 64% 55% 53% 72%
Placebo ACR20 29% 27% 23% 31%
Difference in ACR20 35% 28% 31% 40%
Treatment ACR50 39% 29% 25% 41%
Placebo ACR50 6% 8% 4% 8%
Difference in ACR50 34% 21% 21% 33%

Safety N=382 N=3213 N=1164 N=1695
Any TEAE 50% 87% 76% 62%
Drug-related TEAE 34% N.A. N.A. N.A.
Grade 3+ TEAE 0% N.A. N.A. N.A.
SAE N.A. 27% 2% 7%
TEAE led to death 0% 1% N.A. 0%
Note: QD: once daily; BID: twice daily; TRAE: treatment-related adverse event; 1. Doses for baricitinib, tofacitinib, and
upadacitinib are approved dosages in China; 2. Enrollment completion in Nov. 2022 with the cut-off date on Dec. 27 2022 for data
analysis; 3. Safety data at month 24; 4. Safety data at week 24; 5. Safety data at week 12.
Source: Company data for A223, Arthritis & Rheumatology (2019) for tofacitinib, Rheumatology and Therapy (2020) for baricitinib, and company data
(AbbVie) for upadacitinib
1fc9fa9cf8844a388c506688498547c5
14 August 2023 55
Key strengths
Established ADC platform OptiDC with deep ADC franchise

Established ADC platform - With over a decade of accumulated experience in ADC
development, Kelun Biotech has established a fully integrated ADC platform, OptiDC, to
support the systematic R&D of ADCs with continuous upgrade in the toolbox of key
components as well as the know-how of ADC drug design and development. With the
competitive ADC franchise of over ten clinical and preclinical assets and out-license
deals with MSD, we believe the ADC platform will be the engine for the continued
innovation of future ADC assets.
Deep ADC franchise - Kelun Biotech has developed a deep pipeline of ADC franchise
with three clinical assets and over ten preclinical assets, led by SKB264 (TROP2), which
1) has a differentiated drug design for improved drug profile upon Trodelvy, 2) is
positioned to be the first domestically developed TROP2 ADC, and 3) has a broad
spectrum of cancer indications with MSD as the global partner. The other two clinical
ADC assets, A166 and SKB315, also demonstrate potential to be competitive options
among the HER2/CLDN18.2-targeting ADC classes with differentiated drug profiles. In
addition, Kelun Biotech has over ten preclinical ADC assets covering a range of high
potential targets expressed across a broad spectrum of solid tumors, among which up
to seven preclinical assets are under the license agreement with MSD.
OptiDC as the proprietary ADC platform for systematic R&D

Fully-integrated ADC platform that enables systematic R&D for ADC: As a hybrid of
antibody and small molecule drugs, ADC by nature is more complex in structure as well
as therapeutic profile (e.g. PK/PD) and therefore requires systematic R&D capabilities in
all key components of ADC (antibody, cytotoxic payload, linker) both separately and in
1fc9fa9cf8844a388c506688498547c5
combination, setting a higher barrier for companies to participate. With over 40 patents
and patent applications, Kelun Biotech has established OptiDC as a fully integrated ADC
development platform to support the systematic development of ADCs with key
capabilities in three major capability pillars:
n In-depth knowledge of biological targets and diseases to identify the unmet

needs of diseases and to assess whether ADCs are suitable solutions. Though much
of R&D interests have been concentrated on a number of very few targets
established for ADC (e.g., HER2) with a focus on downstream engineering
optimization, the development of novel targets for ADC could be fundamental to
pave the way for broader usage of ADCs (e.g., FRα in OC).
n Diverse toolbox of core ADC components that set the ground to address ADC
challenges in 1) drug-linker design and 2) balance between safety and efficacy.
Through over a decade of development, the company is continuously expanding the
toolbox including: 1) payload, 2) linker, 3) antibody, and 4) conjugation technologies.
For example, for the antibody, Kelun Biotech has a biologics platform to discover and
optimize antibody. The company also has a small molecule platform with a focus on
14 August 2023 56
compound optimization that could support R&D in potential payloads. These

platforms cover the entire R&D process for different drug modalities and are
integrated to allow cross-functional synergies for ADC development.
n Tested and verified ADC design and development know-how that have been
continuously accumulated and refined through R&D and can be further
strengthened with project experiences. Given the complex nature and the lack of
one-size-fits-all solutions to develop ADCs with different targets and indications, the
R&D of ADC requires extensive development know-how through empirical studies.
As one of the leading ADC companies in China, Kelun Biotech has honed its
expertise in ADC process development, manufacturing and quality control, to bring
ADCs from bench to bedside. The OptiDC platform has been verified through
preclinical studies and clinical trials with over 800 patients to date.
Strong backing of Kelun Pharma and MSD as top strategic partners

MSD investment in Kelun Biotech
n US$12bn strategic collaboration - With three consecutive deals between Kelun

Biotech and MSD as well as equity investment, we note that the aggregated total
value of Kelun/MSD strategic collaborations is around $12bn, accounting for c.63%
of total ADC transactions made by MSD. Looking separately into license deals, the
individual dollar sizes of the three deals are $1.3bn/$936mn/$9.5bn, which are all
among the largest ADC deals globally.
Exhibit 71: Strategic collaborations between Kelun Biotech and MSD totaled close to $12bn
Deal structures of ADC collaboration between Kelun Biotech and MSD
Asset SKB264 (TROP2)* SKB315 (CLDN18.2)* Up to 7 preclinical ADC assets
Deal date May 2022 June 2022 December 2022
Stage at licensing Ph3 Ph1a Pre-clinical
Partner MSD MSD MSD
1fc9fa9cf8844a388c506688498547c5
Upfront (US$, mn) 102 35 175
Milestone (US$, mn) 380 (R&D) + 780 (Sales) 416 (R&D) + 485 (Sales) 9,300
Royalties mid-single to low-double digit mid-single to low-double digit tiered royalties
Global commerical • MSD: ex-Greater China • MSD: develop and • MSD: ex-Greater China
rights • Kelun: Greater China commercialize SKB315 globally • Kelun: Greater China
Clinical development Explore SKB264’s potential as Collaboratively conduct an

plan mono/combo therapies to treat ongoing phase 1a clinical trial
various solid tumors, including of SKB315 in China
BC, NSCLC and other major
cancers
Notes Reimbursement from MSD for Milestone is eligible if all drug
the reasonable and documented candidates achieve regulatory
costs incurred in R&D activities approval and Kelun do not retain
mainland China, Hong Kong and
Macau rights for the Option ADCs
Equity Investment by MSD

Series Round B
Subscribed shares 13,443,693
Consideration 100 USD mn
Deal closing date 18-Jan-23
*include products based on SKB264/SKB315 respectively
14 August 2023 57
n MSD is active in ADC investment - In an increasingly competitive ADC market,

Pfizer, Gilead, MSD and AZ are active players. Unlike Pfizer and Gilead whose
transactions were predominantly from acquisitions, MSD expanded its ADC
franchise primarily through license and co-development agreements which include
the license-in deals with Kelun Biotech.
Exhibit 72: MSD has been an active buyer in ADC market Exhibit 73: All three Kelun & MSD deals are among the largest ADC
Global top ADC buyers, led by Pfizer, Gilead, and MSD (deal value in deals
USD bn) Number of global ADC deals grouped by dollar value (including
upfront/milestones, USD mn)
- 5 10 15 20 25 30 35 40 45 USD mn
Pfizer 43.0 > 1,000 24
Seagen
Gliead 21.0 acquisition Kelun & MSD deal on 7 PCC (up to
(2023) 800-1,000 10 $9.5bn), and SKB264 (up to $1.3bn)
MSD 2.8 16.3 19.0
Immunomedics
acquisition (2020)
AstraZeneca 14.7 Kelun & MSD deal
License deal with Kelun 600-800 2 on SKB315 (up to $936mn)
(2022) and 2 strategic

BMS 4.3 collaborations with Seagen
(2020)
Amgen 3.3 400-600 7
License deals with KYM
Seagen 2.6 Biosciences and LaNova
(2023) and collaboration with
Daiichi Sankyo (2019, 2020) 200-400 14
Takeda 2.5
License deals with RemeGen
Eli Lilly 1.7
for RC48 (2021)
≤ 200 140
BioNTech 1.7
M&A In-license
Note: license deal value includes upfront and milestones 0 50 100 150
Source: Pharmcube Source: Pharmcube
Strong advantages in both China and global market
1fc9fa9cf8844a388c506688498547c5
With Kelun Pharmaceutical and MSD as the top 2 shareholders (75%/7% as of Feb
2023), Kelun Biotech is well placed to leverage resources from the two large
pharmaceutical companies in areas such as clinical trial design, indication expansion
strategy, KOL engagement, and commercialization setup.
n China market – Kelun Pharmaceutical could provide help in: 1) market access
expertise as one of China’s largest and most established pharmaceutical
companies, 2) regulator communication experience which could smooth the
regulatory process, and 3) manufacturing management to support the sales
ramp-up.
n Global market – MSD could provide strategic edge in: 1) global clinical R&D
capability which includes its top-tier expertise in trial design/indication
expansion/clinical execution, 2) biomarker CDx development that is particularly
critical for TROP2 and CLDN18.2 to increase clinical adoption, and 3)
commercialization capacity with its extensive global network and the synergies in
combination use with Keytruda to exploit the global market potential of the
out-licensed ADC assets led by SKB264.
14 August 2023 58
Robust portfolio strategy that enables synergies with ADC

In addition to developing ADCs as single agent, Kelun Biotech is expanding its non-ADC
franchise as part of portfolio strategy to supplement and strengthen the value of the
ADC franchise through synergies in 1) combination therapy opportunities with ADC
to target earlier lines of treatment, e.g., SKB264 is being studied as combination
therapies (including with Keytruda, osimertinib and chemotherapy) for first-line advanced
EGFR-wild type and EGFR-mutant NSCLC; 2) sales and marketing synergies with
overlap in target indications, e.g., A400 (RET inhibitor) and SKB264 in NSCLC; and 3)
operational synergies as biologics and small molecule platforms could help further
expand the toolbox of ADC components and accumulate development know-how on
future ADC innovations.
Experienced leadership
Kelun Biotech’s senior management team has extensive experience in drug
development, consisting of industry veterans, regulatory experts, scientists, physicians,
and financial specialists.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 59
Exhibit 74: Kelun Biotech’s management team has extensive experience in biopharma industry
Name Prior experience Education
Title
Appointment time
Mr. LIU Gexin Founder of Kelun Pharmaceutical and chairman of Kelun M.S., Cardiovascular Pharmacology
Non-executive director, Pharmaceutical since establishment; Chongqing Medical University, China
Chairman Currently hold positions in four subsidiaries of Kelun Group M.A., Political Economics
Joined in Nov 2016 Southwest University, China
Dr. GE Junyou Kelun Pharmaceutical (Jul 2009 - Feb 2021) : Deputy general manager B.S., Pharmacy
Executive director and (quality management), joined Kelun in Jun 2007; Shanghai Medical College Fudan University,
general manager Ratiopharm GmbH (Jan 2006 - May 2007) : Quality manager; China
Joined in Feb 2021 Zhejiang Hisun Pharmaceutical (Jan 2004 - Jan 2006) : Assistant to M.S., Pharmaceutical Engineering
general manager; East China University of Science and
Boehringer Ingelheim Pharmaceutical (Shanghai) (Apr 2000 - Jan 2004) Technology, China
: GMP compliance manager; Ph.D., Biology and Medicine
Shanghai Hengshoutang Pharmaceutical (1998 - 2000): Deputy manager Fudan University, China
of technical department;
Shanghai Yan’an Pharmaceutical Factory (1994-1997): Production and
R&D officer
Mr. FENG Yi Kelun Research Institue (Nov 2018 - Nov 2020): Senior vice dean and B.S., Aviation Medicine
Deputy general manager, chief strategy officer; The Fourth Military Medical University of the
Chief Strategy Officer, and Clinchoice Inc. (Jan 2016 - Aug 2018): President of Greater China; Chinese People’s Liberation Army, China
senior vice president Covington & Burling Law Firm (China office) (Feb 2014 - Dec 2015): M.S., Radio Medicine
Joined in Dec 2020 Senior consultant for drug regulations Chinese People’s Liberation Army Academy of
Center of Drug Evaluation, NMPA: Assistant of the director Military Medical Sciences, China
Dr. ZHANG Yiwei Eli Lilly (Nov 2008 - Dec 2017): Senior scientist in quality control and B.S., Medicine
Deputy general manager technology development of biomacromolecule drugs; Chongqing Medical University, China
Joined in Jan 2018 ImClone System, Inc (Jun 2007 - Oct 2008): Quality control scientist; Ph.D., Theoretical and Applied Biology
Albert Einstein College of Medicine (Aug 1995 - May 2007): Postdoc University of Leeds, UK
fellow and associate researcher in Dept. of Pathology
Dr. TAN Xiangyang Duality Biologics (Mar 2021 - Jul 2021): Senior vice president (formulation B.S., Clinical Medicine
Deputy general manager, and implementation of the technology platform for preclinical innovative Harbin Medical University
and Chief Science Officer of drug); M.S., Microbiology and Immunology
Biologics R&D 4B Technologies (Aug 2019 - Feb 2021): Vice president in R&D; Wuhan Institute of Biological Products
Joined in Jul 2021 Harbour BioMed (Jul 2017 - May 2019): Vice president; Ph.D., Cell and Molecular Biology
Apbro Corporation (Jan 2016 - Jul 2017): Department head; Manchester Metropolitan University, UK
Biogen Inc. (Feb 2009 - Nov 2015): Principal scientist;
Pfizer Inc. (Jan 2008 - Jan 2009): Principal scientist;
Wyeth, LLC (Jan 1998 - Jan 2008): Principal scientist
Dr. JIN Xiaoping Akeso (May 2017 - Aug 2021): Vice president and head of clinical B.S., Chemistry
Deputy general manager development; Nanjing University, China
1fc9fa9cf8844a388c506688498547c5
and Chief Medical Officer AstraZeneca (Jun 2014 - Apr 2017): Scientific director; M.S., Statistics
Joined in Sep 2021 Daiichi Sankyo Inc. (Jul 2005 - Jun 2014): Staff biostatistician Washington State University, US
Ph.D., Biostatistics
University of Minnesota, US
Mr. ZHOU Zejian IDG Capital (Nov 2017 - Jul 2022): Managing director; B.A., Financial Managment
CFO and board secretary Goldman Sachs Gao Hua Securities (Apr 2014 - Nov 2017): Executive Renmin University, China
Joined in Feb 2022 director; M.A., Finance
Various investment banking experience in CICC and J.P. Morgan First Renmin University, China
Capital Securities
Mr. GUO Yong Everest Medicines (Mar 2021 - Jul 2021): Chief commercial officer; B.S., Clinical Medicine
Deputy general manager Eisai Inc (US) (Jan 2018 - Jan 2021): Vice president and deputy global Fourth Military University, China
and Chief Commercial brand lead; M.B.A.
Officer Eisai China Inc (Nov 2014 - Dec 2017): Vice president; China Europe International Business School
Joined in May 2023 Shanghai Roche Pharmaceutical Ltd (Dec 2010 - Oct 2014): Vice
president;
GlaxoSmithKline (China) Investment Company Ltd (Nov 2009 - Dec
2010): north China sales director of vaccine;
Wyeth Pharmaceutical Co., Ltd (May 2003 - Nov 2009): senior product
manager, market manager and associate market director;
Eli Lilly Asia Inc (May 1998 - April 2001): sales representative and product
executive
14 August 2023 60
Key risks
Clinical development risk of future ADCs based on the ADC platform

Based on the OptiDC technology platform, Kelun Biotech has developed over ten ADC
candidates in clinical and preclinical stage. Despite the accumulated development
know-how through over a decade of R&D in ADC, past successes in previous ADC
assets may not directly lead to future successes, and the validity of OptiDC as an ADC
technology platform to continuously deliver future ADC innovation may require further
proof. For the ADC franchise, development risks could result in delays and cost overruns
if NMPA requires additional clinical studies to grant approval. In our view, one or more
failed clinical pipelines could negatively impact Kelun Biotech’s outlook and pose
downside risk to the company’s revenue outlook.
Increasingly heated competition in ADC field

As described earlier, R&D competition in the ADC field is becoming crowded on a few
top targets (e.g., HER2, TROP2, CLDN18.2) which are also the targets of lead ADC
assets of Kelun Biotech. For ADC assets, the competition comes from 1) ADCs
targeting the same target, 2) ADCs targeting different targets (e.g., TROP2 ADC vs.
Enhertu in HER2-low BC), and 3) treatment of other modalities (e.g., antibodies,
chemotherapies, target therapies as in NSCLC). Amid the competition, if the company’s
three leading ADC assets do not capture as much market share as we estimate, it could
put downward pressure on the company’s revenue outlook.
Limited commercial manufacturing and sales track record

Kelun Biotech still lacks successful commercial manufacturing, sales and marketing
experience in Mainland China and outside. The company will need to compete with
1fc9fa9cf8844a388c506688498547c5
major domestic companies and MNCs with well-established sales channels (e.g.,
AstraZeneca has extensive sales network in China to facilitate market penetration of
Dato-DXd). An insufficient commercialization layout may negatively impact the market
penetration of key assets such as SKB264, which could indicate 1) higher follow-up
investment in sales & marketing may be needed, and 2) our estimated peak sales may
not be reached which could put pressure on the revenue outlook.
Challenges in recruiting and retaining talent

The biopharmaceutical industry, particularly the ADC field, has become increasingly
competitive, with large pharmaceutical companies leading the competition and small
biotechnology companies making frequent breakthroughs. We note that the know-how
of drug design and clinical development of ADC is particularly critical to the success of
Kelun Biotech. Difficulty in recruiting and retaining such talent could 1) negatively impact
the execution of Kelun Biotech in preclinical / clinical programs, 2) delay its potential
product launches, and 3) competing companies may develop novel ADC molecules
faster, which could deteriorate the value of the pipeline.
14 August 2023 61
Risk of realizing partnership benefits

To augment drug development and commercialization with respect to their drug
franchise, Kelun Biotech has in the past formed, and may continue to seek strategic
partnerships led by the out-license collaboration with MSD. License and collaboration
agreements are subject to various risks, e.g., milestone payments and royalties are
contingent upon the achievements of certain regulatory and commercialization targets.
We estimate that the global income from the MSD deals will contribute materially to
Kelun Biotech’s future revenue, and the revenue outlook of Kelun Biotech may be
negatively impacted if the partnership benefits are not realized as expected.
Financials
We expect Kelun Biotech’s revenue to exceed Rmb1bn by 2025E

Kelun Biotech currently has no product sales, and the revenue mainly comes from
license income from upfront and milestone payments. With the company expecting
A167 (PD-L1) to be approved by NMPA in 2H23, and two leading ADC assets, SKB264
(TROP2 ADC) and A166 (HER2 ADC), to be launched in 2H24, we estimate that the
company’s revenue will start to see significant growth driven by product sales starting
from 2025E (we forecast sales of Rmb0.72/0.53/1.23bn in 23E/24E/25E if excluding the
R&D reimbursement from partner, sales of Rmb1.07/0.93/1.68bn in 23E/24E/25E if
included). Driven by the expanding product sales, we expect the net losses to start
narrowing in 2025E (net losses of Rmb-0.73/Rmb-1.13/Rmb-0.64bn in 23E/24E/25E).
Exhibit 75: We expect Kelun Biotech’s revenue (ex. R&D Exhibit 76: We expect Kelun Biotech to remain loss-making during
reimbursement) to exceed Rmb1bn by 2025E 2021A-2025E
Sales and gross margin in 2021A-2025E Operating pro fit / net profit (ex. other net income), 2021A-2025E
1fc9fa9cf8844a388c506688498547c5
1,400 Rmb, mn 80% 0 Rmb, mn
1,200 70%
116 -200
60%
1,000 134
50% -400
800 282
40%
-600
600
30%
350
400 -800
723 240 20%
504
200 10%
321 -1000
220
32
- 0%
2021A 2022A 2023E 2024E 2025E Rmb, mn
License income Other drugs -1200
2021A 2022A 2023E 2024E 2025E
A166 (HER2) SKB264 (TROP2)
A400 (RET) A223 (JAK)
Operating profit Net profit
Gross margin
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
14 August 2023 62
R&D and SG&A expenses to rise in 2023E-2025E

We forecast R&D expenses to grow steadily from RMB728mn in 2021 to RMB924mn in
2025E driven by gradual initiation of new clinical trials with the progression to later stage
clinical trials, particularly for SKB264, with clinical plans in a broad spectrum of tumor
types (e.g., NSCLC / BC / GC / OC).
We also expect SG&A expenses to increase meaningfully from RMB96mn in 2021 to

RMB734mn in 2025E, reflecting the company’s ongoing business expansion and
preparation for more commercial launches (e.g., we expect market launch for A167,
SKB264, A166 in 2024E).
Exhibit 77: Out-of-pocket R&D expenses to rise steadily from 2021A Exhibit 78: SG&A expenses to rise with the product launch in
to 2025E 2021A-2025E
R&D spending in 2021A-2025E SG&A expenses in 2021A-2025E
1000 Rmb, mn 800 Rmb, mn
900
700
800
600
700
500
600
500 400
924 734
846 863 880
400
728 300 607
300
436
200
200
100
100
96 95
0 0
2021A 2022A 2023E 2024E 2025E 2021A 2022A 2023E 2024E 2025E
1fc9fa9cf8844a388c506688498547c5
Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research
14 August 2023 63
Exhibit 79: Financial Statements – Income Statement

1fc9fa9cf8844a388c506688498547c5
Source: Company data, Goldman Sachs Global Investment Research
14 August 2023 64
Exhibit 80: Financial Statements – Balance Sheet

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14 August 2023 65
Exhibit 81: Financial Statements - Cash Flow

Balance sheet and cash flow

With the series-B and IPO funding in 2023, we expect Rmb1.96bn of cash and
equivalents (including restricted deposits) by YE23. For 2024E, we forecast net cash
burn of Kelun Biotech to be Rmb1.36bn driven by the expanded spend in SG&A for the
launch of three products (SKB264/A166/PD-L1), leading to Rmb607mn of cash and
equivalents by YE24, which suggests further capital injection may be required to support
1fc9fa9cf8844a388c506688498547c5
Kelun’s growing franchise prior to break-even in 2026E.
Valuation
Risk-adjusted DCF-based TP of HK$115

Since we expect Kelun Biotech to be loss-making till 2025E and the success of clinical
development is not guaranteed, the value of the company relies on the cash flows
generated from the therapeutic products that manage to enter the market in the future.
Therefore, we consider a risk-adjusted DCF as an appropriate methodology to value the
company. To factor in the risk in clinical development (i.e., negative trial data, negative
review from regulators etc.), we apply probabilities of success (PoS) to the sales of
products treating different indications. This approach is consistent with our valuation
methodology for loss-making biopharmaceutical companies under our coverage.
We derive a risk-adjusted DCF-based HK$115 implying 59% potential upside.
14 August 2023 66
Exhibit 82: Risk-adjusted DCF valuation
RMB, Mn 2021A 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
SKB264 (TROP2 ADC) 37 109 298 878 1,702 2,341 2,692 2,804 2,840 2,840
ex-China royalties 25 45 204 703 1,379 1,695 2,303 2,409 2,487
A166 (HER2 ADC) 28 282 437 662 801 891 931 936 941 924
SKB315 (CLDN18.2 ADC)
royalties only 1 12 51 133 233 308 371
A400 (RET) 116 329 625 699 903 995 1,010 1,027 1,045
A223 (JAK 1/2) 29 154 341 497 573 619 666 682 696
Other products
(A140/A167/A277 etc.) 240 350 713 931 1,114 1,218 1,314 1,395 1,474 1,554
Licensing revenue
(ex. royalties) 4 786 1,054 603 743 825 866 909 955 1,003 1,053 1,105 1,161
Provision of R&D services 28 18 19 20 21 22 23 24 25 27 28 29 31
Revenue 32 804 1,073 928 1,675 2,823 4,530 6,461 8,336 9,409 10,428 10,815 11,109
yoy% 2387% 33% -13% 80% 69% 60% 43% 29% 13% 11% 4% 3%
Gross Profit 12 527 723 495 1,161 2,202 3,764 5,559 7,319 8,314 9,284 9,629 9,884
GP, % 36% 66% 67% 53% 69% 78% 83% 86% 88% 88% 89% 89% 89%
SG&A expenditure (96) (95) (436) (607) (734) (1,073) (1,563) (2,003) (2,292) (2,493) (2,659) (2,650) (2,722)
yoy% -1% 357% 39% 21% 46% 46% 28% 14% 9% 7% 0% 3%
R&D expenditure (728) (846) (863) (880) (924) (970) (1,019) (1,070) (1,123) (1,180) (1,238) (1,300) (1,365)
yoy% 16% 2% 2% 5% 5% 5% 5% 5% 5% 5% 5% 5%
EBIT (812) (414) (576) (992) (498) 159 1,182 2,486 3,903 4,641 5,387 5,679 5,796
yoy% -49% 39% 72% -50% -132% 645% 110% 57% 19% 16% 5% 2%
Operating Margin 6% 26% 38% 47% 49% 52% 53% 52%
Add: share-based comp 6 20 46 84 125 156 175 175 175 175 175 175 175
Less: Taxes (49) (2.0) (155.3) (351.6) (565.5) (678.5) (793.2) (840.2) (861.3)
Tax rate 0% 0% 0% 0% 0% 15% 15% 15% 15% 15% 15% 15% 15%
NOPAT (806) (443) (530) (908) (373) 313.0 1,201.3 2,309.3 3,512.4 4,137.6 4,768.1 5,013.2 5,109.9
Net Margin 11.1% 26.5% 35.7% 42.1% 44.0% 45.7% 46.4% 46.0%
Net Margin (ex. royalties) 9.6% 23.0% 27.8% 30.2% 30.5% 28.3% 28.4% 27.3%
Depreciation & amortization 23 67 65 83 100 117 136 158 181 205 230 254 276
y/y 194% -3% 27% 21% 16% 17% 16% 15% 14% 12% 10% 9%
Capital expenditures (95) (33) (314) (325) (335) (339) (408) (452) (500) (546) (584) (584) (578)
y/y -66% 861% 3% 3% 1% 20% 11% 11% 9% 7% 0% -1%
Changes in working capital 279 35 43 (67) (57) (114) 69 (57) (45) 128 2 7 10
y/y -88% 24% -257% -15% 99% -161% -183% -22% -387% -98% 180% 37%
Unlevered free cash flow (598) (374) (736) (1,217) (664) (23) 999 1,957 3,148 3,925 4,417 4,690 4,817
Discount Discounted Terminal Value Enterprise Equity

Rate Cash Flows 3.0% Value Net Cash Value TP
% Rmb, mn Rmb, mn Rmb, mn Rmb, mn Rmb, mn USD, mn HK$
13.5% 8,086 14,190 22,276 435 22,711 3,244 115.0
USD/CNY 7.0
USD/HKD 7.8
HKD/CNY 1.1
1fc9fa9cf8844a388c506688498547c5
Key assumptions in deriving our forward equity valuation:
n Discount rate of 13.5%: In line with pre-revenue or early-revenue loss-making

biotech companies under our coverage (InnoCare 13.5%, JW Therapeutics 14% etc.)
we apply a discount rate of 13.5% to Kelun Biotech, reflecting the blended risk
profile with 1) MSD’s operation as an established MNC (lower risk) for the R&D and
commercialization of SKB264 (ex-China) and SKB315, and 2) Kelun Biotech’s own
operations as an early-stage biotech (higher risk).
n Terminal growth rate of 3%: Given Kelun Biotech’s comprehensive pipeline,
particularly the ADC franchise whose growth could be driven further by the OptiDC
platform. Taking into consideration potential future growth of the company, we
assume a terminal growth rate of 3% which is consistent with our coverage
companies that have high growth potential.
n Product launch time: We expect SKB264 to receive approval (first approval for 3L
TNBC) and launch in 2024 in China and subsequently in US/EU in 2025. As for other
products, we expect A166 / A167 launch in 2024E, A400 / A223 / A140 in 2025E,
14 August 2023 67
A277 in 2026E, and SKB315 in 2027E in sequence.

n Pricing: For US pricing, we set the price of SKB264 at US$30k per month
(benchmarking against the list price for Trodelvy in US with 20% premium for the
improved drug profile). We assume EU price at 75% of the US pricing, consistent
with GS US/EU Biopharma team’s assumption for oncology drugs’ pricing in
different regions. For China pricing, we assume 30% of the US pricing at launch and
long-term ex-factory annual effective price to be Rmb150k accounting for the NRDL
effects, which is the mid-point of most oncology drugs in the NRDL (range of
c.Rmb95k to c.Rmb200k). As for other drugs, we assume similar pricing for SKB315
in different regions, annual Rmb300k for A166 at launch (in line with pre-NRDL price
of Rmb350k for RC48, or implied c.30% of the US pricing of Enhertu).
n Market share: Our market share assumptions are based on the order of market
entry and therapeutic advantage within the same drug class, based on development
status and clinical data. For example, for SKB264 in EGFRwt NSCLC, we assume
that it will be the 3rd TROP2 ADC in market with 1) non-inferior profile compared to
peers (given the limited data for SKB264) at the low-end, assuming 25% of market
share; or 2) best-in-class profile at the high-end, assuming 45% market share.

n Probability of success (PoS) based on industry average success rates in various
stages: PoS of 90% for NDA stage assets with positive data; 40-80% for pivotal
studies (phase III, or phase II in some occasions); 40-80% for proof-of-concept
studies (phase II or phase I/II) of innovative molecules; and 70% for phase I stage.
1fc9fa9cf8844a388c506688498547c5
14 August 2023 68
Exhibit 83: Probability of success assumptions incorporated in our DCF
Proof-of-
Probability of Success First-in-human Pivotal NDA
concept
PoS (Ph I) (Ph II) (Ph II / III)
SKB264 (TROP2)
3L+ TNBC 81% 100% 100% 90% 90%
1L TNBC 58% 100% 80% 80% 90%
3L+ HR+/HER2- BC 58% 100% 80% 80% 90%
EGFR-TKI failed NSCLC 50% 100% 80% 70% 90%
1L EGFRwt NSCLC 22% 100% 60% 40% 90%
1L EGFRmut NSCLC 7% 100% 40% 20% 90%
2L EGFRwt NSCLC 32% 100% 70% 50% 90%
GC 8% 100% 30% 30% 90%
OC 8% 100% 30% 30% 90%
UC 0% 100% 70% 0% 90%
A166 (HER2)
3L+ HER2+ BC 90% 100% 100% 100% 90%
2L+ HER2+ GC 68% 100% 95% 80% 90%
3L+ HER2+ CRC 65% 100% 90% 80% 90%
SKB315 (CLDN18.2)
GC 35% 80% 70% 70% 90%
PC 20% 80% 40% 70% 90%
A167 (PD-L1)
3L NPC 90% 100% 100% 100% 90%
1L NPC 72% 100% 100% 80% 90%

A400 (RET)
RET+ NSCLC (1L) 72% 100% 100% 80% 90%
RET+ NSCLC (2L+) 72% 100% 100% 80% 90%
RET+ MTC 65% 100% 90% 80% 90%
A140 (EGFR)
CRC 81% 100% 100% 90% 90%
A223 (JAK1/2)
RA 81% 100% 100% 90% 90%
AA 65% 100% 90% 80% 90%
A277 (KOR)
CKD-aP 65% 100% 90% 80% 90%
We also conduct sensitivity analysis on our WACC/TGR assumptions.
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Exhibit 84: Sensitivity analysis on WACC and terminal growth rate
WACC
115 12.5% 13.0% 13.5% 14.0% 14.5%
0.0% 110 103 97 92 87
1.0% 116 109 102 96 91
TGR
2.0% 124 115 108 101 95
3.0% 133 123 115 107 101
We assign an M&A rank of 3 to Kelun Biotech, indicating a low probability of the

company being acquired, after considering both qualitative (portfolio/operating
efficiency) and quantitative factors (market share, valuation) based on our M&A
framework. We also see low intention for being acquired based on: 1) management’s
commitment to grow the company since its inception in 2016, 2) Kelun Pharmaceutical
as parent company has a strong shareholding (c. 68%) with low intention to sell their
shares.
14 August 2023 69
Exhibit 85: We assign M&A rank of 3 to Kelun Biotech

Quantitative Factors Qualitative Factors
Final Score Government Intention Market Portfolio Operating

Company Valuation
Ticker (lower score = ownership to sell share (1=Less efficiency
name (1=Low)
higher probability) (Yes/No) (1=High) (1=Low) preferred) (1=Low)
6990.HK Kelun Biotech 3 No 3 3 3 3 3
Glossary
Exhibit 86: Glossary for key items
ADC antibody drug conjugate HR hormone receptor
ADCC antibody-dependent cell-mediated cytotoxicity IHC immunohistochemistry
ADCP antibody dependent phagocytosis ILD interstitial lung disease
AE adverse event IND investigational new drug
sALCL systemic anaplastic large cell lymphoma IgG immunoglobulin G
ALK anaplastic lymphoma kinase I/O Immuno-Oncology
ALL acute lymphocytic leukemia JAK1/2 Janus kinase 1 or Janus kinase 2
AML acute myeloid leukemia KOR kappa-opioid receptor

BC breast cancer LAG-3 lymphocyte-activation gene 3
BsAb bispecific antibody LC lung cancer
CART chimeric antigen receptor (CAR) T-cell mAb monoclonal antibody
CC cervical cancer mCRC metastatic colorectal cancer
CDC complement dependent cytotoxicity MOA mechanism of action
CDX cell-line derived xenograft MSD Merck Sharp & Dohme LLC
cHL classic hodgkin lymphoma NDA new drug application
CKD-aP chronic kidney disease (CKD)-associated pruritus NPC nasopharyngeal cancer
CLDN18.2 claudin18.2 NSCLC non-small-cell lung cancer
CR complete response OC ovarian cancer
CRC colorectal cancer ORR overall response rate
CRPC castration-resistant prostate cancer OS overall survival
CRO contract research organization PBD pyrrolobenzodiazepine
CTLA-4 cytotoxic T-lymphocyte-associated protein 4 PC pancreatic cancer
DAR drug-to-antibody ratio PFS progression-free survival
DCR disease control rate PD pharmacodynamics
DLBCL diffuse large B cell lymphoma PK pharmacokinetics
DOR duration of response PR partial response
DXd deruxtecan PTCL peripheral T-cell lymphoma
EGFR epidermal growth factor receptor PTM post-translational modifications
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EGFRwt epidermal growth factor receptor (wild type) RA rheumatoid arthritis
EGFRmut epidermal growth factor receptor (mutant) RET rearranged during transfection
ESOP employee stock ownership plan SAE serious adverse event
FcγR fragment crystallizable gamma receptors STING stimulator of interferon genes
FISH fluorescence in situ hybridization TR death treatment-related death
FXI/FXIa factor XI/factor Xia TKI tyrosine kinase inhibitor
GC gastric cancer TNBC triple-negative breast cancer
GEJ gastroesophageal junction adenocarcinoma TROP2 human trophoblast cell-surface antigen 2
GI gastrointestinal TSLP thymic stromal lymphopoietin
HCC hepatocellular carcinoma UC urothelial cancer
HER2 human epidermal growth factor receptor 2 VEGF vascular endothelial growth factor
HNSCC head and neck squamous cell carcinoma
14 August 2023 70
Appendix
Exhibit 87: Corporate and shareholding structure of Kelun Biotech (as of August 3, 2023)
Chengdu Wenjiang
Kelun Dr. WANG Wealthy Kexin LAV Anling Zhuhai Public
FIIF II Gygus Real Emerging Industry
Pharmaceutical Jingyi Linkage Lunda Kecheng Weijian Liangheng shareholders
Venture
54.29% 2.60% 3.32% 3.26% 1.06% 0.35% 0.44% 0.31% 0.18% 0.11% 10.21%
Employee Ningbo Cinda Suzhou BOSC Longyi

MSD Leyue Capital Wutong Juke ZHOU Youcai
Incentive Daoyi Capital Likang Xingling Technology
13.69% 6.13% 0.92% 1.92% 0.18% 0.18% 0.34% 0.28% 0.18% 0.09%
Sichuan Kelun-Biotech
Biopharmaceutical Co., Ltd. (PRC)
100% 100% 100%

Kelun-Biotech Research
Sichuan Konas KLUS PHARMA
Center
(PRC) (U.S.)
(PRC)
Kelun Biotech is a clinical-stage biotech company focused on developing and

commercializing differentiated antibody drug conjugates (ADCs) for global patients. We
believe Kelun Biotech is well-positioned to grow into a meaningful global ADC player
with 1) differentiated late-stage ADCs; 2) deep R&D know-how driving pipeline
expansion; and 3) extensive collaborations with MSD for global market access (2 clinical
stage and 7 pre-clinical assets, and MSD as a top shareholder) and Kelun Pharma (the
parent company) for China commercialization. We expect SKB264 (TROP2 ADC) to be
the key driver of Kelun Biotech’s future growth given: 1) the broad spectrum of
indications where TROP2 has over-expression (e.g. BC/NSCLC/UC/GC), 2) the unique
drug design of SKB264 could potentially deliver clinical benefits over TROP2 ADC peers
as illustrated in early encouraging data, and 3) the strong leverage of MSD’s expertise
and network in the global market to drive clinical development and commercialization.
We are Buy-rated. Key risks: 1) R&D risks in developing new indications and future
ADCs; 2) increasingly heated competition in ADC field; 3) limited commercial
manufacturing and sales track record; 4) challenges in talent competition; and 5) alliance
risks in partnership.
1fc9fa9cf8844a388c506688498547c5
Our 12-m TP of HK$115 is based on a risk-adjusted DCF methodology assuming: 1)
13.5% discount rate; 2) 3% terminal growth rate; and 3) probability of success (PoS)
based on industry average success rates in different stages and adjustments based on
available clinical data. Key risks: 1) R&D risks in developing new indications and future
ADCs; 2) increasingly heated competition in ADC field; 3) limited commercial
manufacturing and sales track record; 4) challenges in talent competition; and 5) alliance
risks in partnership.
14 August 2023 71
Disclosure Appendix
Reg AC
We, Ziyi Chen, Linhai Zhao, Ph.D. and Diwen Tang, hereby certify that all of the views expressed in this report accurately reflect our personal views
about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or
indirectly, related to the specific recommendations or views expressed in this report.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
GS Factor Profile
The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its
sector peers. The four key attributes depicted are: Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial
Returns and Multiple). Growth, Financial Returns and Multiple are calculated by using normalized ranks for specific metrics for each stock. The
normalized ranks for the metrics are then averaged and converted into percentiles for the relevant attribute. The precise calculation of each metric may
vary depending on the fiscal year, industry and region, but the standard approach is as follows:
Growth is based on a stock’s forward-looking sales growth, EBITDA growth and EPS growth (for financial stocks, only EPS and sales growth), with a
higher percentile indicating a higher growth company. Financial Returns is based on a stock’s forward-looking ROE, ROCE and CROCI (for financial
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indicating a stock trading at a higher multiple. The Integrated percentile is calculated as the average of the Growth percentile, Financial Returns
percentile and (100% - Multiple percentile).
Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future. Growth uses inputs
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For a more detailed description of how we calculate the GS Factor Profile, please contact your GS representative.
M&A Rank
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representing medium (15%-30%) probability and 3 representing low (0%-15%) probability. For companies ranked 1 or 2, in line with our standard
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factor into our price target, and may or may not be discussed in research.
Quantum
Quantum is Goldman Sachs’ proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for
in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.
Disclosures
The rating(s) for Kelun Biotech is/are relative to the other companies in its/their coverage universe: 3SBio Inc., Angelalign Technology, Autobio,
BeiGene Ltd. (A), BeiGene Ltd. (ADR), Betta Pharma, BioKangtai, CSPC Pharma, China Medical System Holdings, Dian Diagnostics, Eyebright, Fosun
Pharma (A), Fosun Pharma (H), Hansoh Pharma, Hengrui Medicine, Huadong Medicine Co., Hualan Biological Engineering, InnoCare Pharma (A),
InnoCare Pharma (H), Innovent Biologics, Jiangsu Nhwa Pharmaceutical Co., Kelun Biotech, Kingmed, Lepu, Livzon Pharmaceutical Group (A), Livzon
Pharmaceutical Group (H), Mindray, Pien Tze Huang, Shandong Weigao Group, Sichuan Kelun Pharmaceutical Co., Sino Biopharmaceutical, Tong Ren
1fc9fa9cf8844a388c506688498547c5
Tang Ltd., Tonghua Dongbao, United Imaging, Walvax, Zai Lab (ADR), Zai Lab (H), Zhejiang Huahai Pharmaceutical, Zhifei
Company-specific regulatory disclosures

The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, “Goldman Sachs”) and companies covered
by Goldman Sachs Global Investment Research and referred to in this research.
Goldman Sachs has received compensation for investment banking services in the past 12 months: Kelun Biotech (HK$77.20)
Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Kelun Biotech (HK$77.20)
Goldman Sachs had an investment banking services client relationship during the past 12 months with: Kelun Biotech (HK$77.20)
Goldman Sachs has managed or co-managed a public or Rule 144A offering in the past 12 months: Kelun Biotech (HK$77.20)
Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global Equity coverage universe
Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell
Global 48% 36% 16% 63% 56% 47%
As of July 1, 2023, Goldman Sachs Global Investment Research had investment ratings on 3,008 equity securities. Goldman Sachs assigns stocks as
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investment banking services within the previous twelve months.
14 August 2023 72
Regulatory disclosures
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14 August 2023 73
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14 August 2023 75

Kelun Biotech (6990.HK) - Early-Mover ADC Player in China With Global Potential Initiate at Buy

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Kelun Biotech (6990.HK) - Early-Mover ADC Player in China With Global Potential Initiate at Buy

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更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要

14 August 2023 | 12:02AM HKT

6990.HK 12m Price Target: HK$115.00 Price: HK$77.20 Upside: 49.0%

Kelun Biotech is an antibody drug conjugates (ADCs)-focused Linhai Zhao, Ph.D.

assets); 2) differentiated ADC pipeline, led by SKB264, a TROP-2

and adjustments based on available clinical data. Key risks: 1) R&D

Kelun Biotech (6990.HK) Income Statement (Rmb mn) _______________________________

Capital expenditures (32.7) (313.9) (324.9) (335.0)

Repayment of lease liabilities -- -- -- --

Source: Company data, Goldman Sachs Research estimates.

Early-mover ADC ﬁrm in China with global potential 10

Dissecting the pipeline: 3 ADCs + supporting franchise 15

n Core franchise – 3 ADCs: SKB264 (TROP2) in pivotal studies as mono/combo

revenue contribution from the supporting franchise, it could provide clinical /

3 ADCs Early-stage ADCs

● SKB264 (TROP2, ph3) Including up to seven pre-

Supporting franchise Non-oncology franchise

A167 (PD-L1, NDA filed) A223 (JAK1/2, ph2)

Source: Company data

2. A fully-integrated ADC platform OptiDC to facilitate deep ADC franchise – Based

n MSD’s strategic edge in 1) global clinical development and commercial expertise in a

accumulating development know-how to drive future ADC innovations.

Key revenue catalysts to watch in 2H23/2014

Indication Asset Type Time Catalyst

Other assets from Kelun Biotech Type Time Catalyst

Source: Company data

Financials and Valuation

We derive a 12-month target price of HK$115 (equity valuation of HK$25.2bn or

n Assets included in our estimates: 3 ADCs (SKB264, A166 and SKB315),

Exhibit 3: Sensitivity analysis on WACC and terminal growth rate

1.0% 116 109 102 96 91

Source: Goldman Sachs Global Investment Research

n Clinical development risk of ADCs – Given the complex nature of ADC as a

n Challenges in recruiting and retaining talent – We note that the know-how of

Early-mover ADC ﬁrm in China with global potential

Building an ADC-centric portfolio; TROP2 / CLDN18.2 targets global market

SKB264 TROP2 TNBC (3L+) Greater China 2H24

Source: Company data

ADC franchise as the primary anchor with global potential

Exhibit 5: ADC franchise to contribute 68% of revenue in 2033E

SKB264 (TROP2) A166 (HER2) SKB315 (CLDN18.2)

Source: Goldman Sachs Global Investment Research

Exhibit 6: SKB264 as the primary value driver with global potential

Late-stage assets Early-stage assets Cash

Source: Goldman Sachs Global Investment Research

Differentiated HER2/CLDN18.2 ADC to be competitive treatment options – Besides

MSD-endorsed technology platform to drive further growth - In addition, with the

Non-ADC assets to supplement ADC indications as portfolio strategy

n Supplement indications of ADCs and build synergies in terms of specialty

expertise, KOL / oncologist access, and combination treatment opportunities

77k 61k 140k

ADC mono Non-ADC mono ADC combo

Source: Goldman Sachs Global Investment Research

Dissecting the pipeline: 3 ADCs + supporting franchise

SKB264: a competitive TROP2 ADC with promising global sales potential

4,000 Revenue 350% Revenue

Exhibit 12: We estimate $3.6bn global sales for SKB264 by 2033E…

Source: Goldman Sachs Global Investment Research

Exhibit 13: SKB264 has different drug design vs peers

n Moderate payload for better safety – A novel belotecan-derivative topoisomerase I

sacituzumab (TROP2-targeting antibody). The choice of a moderately potent payload

Source: Company data Source: Company data

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