Akeso's Ivonescimab Beats Keytruda in Overall Survival: Establishing the IO 2.0 Cornerstone and Triggering a Revaluation of Chinese Innovative Drugs

Akeso's ivonescimab just did something no Chinese-made bispecific antibody has done before: beat Keytruda head-to-head on the hardest endpoint in oncology — overall survival.

The interim analysis of the HARMONi-2 trial showed ivonescimab, used as a first-line treatment for PD-L1-positive non-small cell lung cancer, delivered superior overall survival compared with pembrolizumab (Keytruda) monotherapy. The result, disclosed on September 3, sent shockwaves through Hong Kong's biotech sector and raised a question Wall Street is now grappling with: Could this be the moment Chinese innovative drugs stop following and start leading?

A Hard-Won Victory

Overall survival is the gold standard in cancer drug trials — the endpoint regulators, doctors, and investors trust most. It measures whether patients actually live longer, not just whether tumors shrink. When a drug wins on OS in a head-to-head trial against the world's best-selling cancer therapy, the clinical statement is unambiguous.

Keytruda, made by Merck, is the undisputed king of the PD-1 inhibitor class — a franchise worth over $25 billion annually. For a Chinese-developed bispecific antibody to outperform it on overall survival is not a story of "me-too" substitution. It is a story of superiority, validated by the most rigorous clinical benchmark available.

The market responded immediately. Akeso (09926.HK) surged 4.27% intraday to HKD 91.55 on the day of the disclosure, leading the Hong Kong biotech rally. The broader innovation drug sector followed: the HK Stock Connect Innovation Drug ETF (E Fund), which tracks the sector, climbed 2.62% intraday.

Commercial Ceiling Rises

The positive OS data does more than validate a clinical hypothesis — it resets the commercial calculus for ivonescimab. A head-to-head win against Keytruda in first-line NSCLC, one of the largest indications in oncology, expands the drug's addressable market and strengthens its position in potential licensing deals overseas.

For Akeso, the direct beneficiary, the implications are clear. But the confidence spillover is broader. Investors began reassessing where Chinese innovative drugs stand in the global clinical landscape — and whether the sector's valuation framework needs an upgrade.

From Theme Trading to Data-Driven Valuation

Historically, Hong Kong-listed biotech stocks have traded on narrative — policy signals, sentiment shifts, and thematic momentum. The ivonescimab OS result offers something different: a clinical data point that can serve as an anchor for valuation.

If the market begins pricing innovative drug companies on the strength of their clinical data rather than the momentum of their themes, the implications are significant. Bispecific antibodies and antibody-drug conjugates with similar best-in-class potential, as well as the contract research and manufacturing organizations that support their development, could see more durable valuation support.

The Broader Scoreboard

The September 3 session reflected cautious optimism across the sector, with notable divergence among key names:

Innovent Biologics (01801.HK), China's leading PD-1 developer with a pipeline spanning bispecific and multi-specific antibodies, rose 0.88% to HKD 102.70.

BeOne Medicines (06160.HK), the globalized innovator behind the BTK inhibitor zanubrutinib, dipped 0.27% to HKD 218.80. The company remains a bellwether for Chinese drugmakers' ability to commercialize products in Western markets.

WuXi AppTec (02359.HK), the contract research giant that serves as the "picks and shovels" play on innovative drug development, fell 0.41% to HKD 192.90.

The Shanghai Composite Index, by contrast, was essentially flat at 3,942.19 points, up roughly 0.02% — a reminder that mainland investors have not yet priced in the implications the way Hong Kong's more biotech-heavy market has.

For ETF Investors

For those looking to gain broad exposure to the trend, the HK Stock Connect Innovation Drug ETF (E Fund, ticker: 159316) rose approximately 2.62% intraday. The fund focuses exclusively on Hong Kong-listed innovative drug companies, with feeder fund shares available under tickers 024328 (Class A) and 024329 (Class C).

The CSI Innovation Drug ETF (E Fund, ticker: 516080), which climbed roughly 0.89% intraday, offers a blended approach: approximately 75% exposure to innovative drug developers and 25% to CXO companies, capturing both the R&D leaders and the supply chain beneficiaries. Feeder fund shares are available under tickers 019666 (Class A) and 019667 (Class C).

What Comes Next

The ivonescimab OS result is a single data point — albeit a powerful one. The sustainability of the sector's re-rating will depend on what follows: additional clinical readouts from bispecific and ADC programs, the pace of commercialization, and whether more Chinese drugmakers can replicate Akeso's head-to-head success on the global stage.

For now, the market has a new benchmark. Chinese innovative drugs are no longer just an aspiration. They are a clinical reality — and the valuation models are catching up.