JPMorgan: Ascentage Pharma-H - Model Update Assuming 2027 Exercise of Olverembatinib Option and CML Launch

JPMorgan updated its model for Ascentage Pharma-H (6855.HK), maintaining an Overweight rating while lowering the December 2026 target price from HKD 93 to HKD 89. The revised valuation is based on a discounted cash flow model incorporating a risk-free rate of 3.8%, a terminal growth rate of 3%, and a WACC of 10.6%. The adjustment reflects the assumption that Takeda will likely exercise its exclusive option for olverembatinib in 2027, rather than earlier, pending FTC approval and the expiration of ponatinib patents. Furthermore, the commercial launch for the CML indication (POLARIS-2) is delayed to 2028, contingent upon securing Phase III data in 2027. The model modifications also include trimmed short-term product revenue projections and higher anticipated sales and R&D expenditures. Notably, the adjusted EPS estimate for 2026 dropped from RMB 1.91 to a loss of RMB 2.50. Despite these near-term headwinds, JPMorgan remains positive on the clinical differentiation of olverembatinib and the promising pipeline of lisaftoclax. Several global registration Phase III trials are advancing rapidly, with GLORA-4 positioned to potentially become the first Bcl-2 inhibitor approved for frontline HR-MDS. Key downside risks encompass slower commercial penetration, clinical trial failures, and regulatory uncertainties.