I-Mab Full-Year Update Uneventful; Potential Catalysts in H2 2023

I-Mab’s IMAB full-year update gave a refreshed timeline on potential milestones for this year, which will mostly occur in the second half of 2023, as well as lower spending guidance for the next few years. There was no progress on finding commercialization partners for felzartamab (CD38 inhibitor for multiple myeloma) and uliledlimab (CD73 inhibitor).

Similar to other clinical-stage biotech companies, no-moat I-Mab plans to reduce spending over the next few years to conserve cash and avoid the risk of having to raise capital in a depressed funding environment. As a result, we push back our timelines for drug commercialization and lower our market share assumptions to account for later market entry. We lower our fair value estimate to $23.00 per share (from $32.50). Our fair value estimate in a bear-case scenario is $9.70 per share, which only values the domestic assets. With our updated estimates, we don’t expect the company to be profitable until 2027 (previously, we had expected break-even in 2025 or 2026).

The company’s near-term commercial prospects will depend on eftansomatropin (long-acting growth hormone) in the domestic Chinese market. We think eftansomatropin could be approved in late 2024 or early 2025, and will likely be its first commercial product. We continue to think that uliledlimab is a promising asset, and especially like I-Mab’s exploration of using CD73 expression as a biomarker. We believe its differentiated clinical development plan is a plausible strategy to enter the market.

Key events for 2023 include: approval filing for eftansomatropin in the domestic market by the end of 2023 or early 2024, a phase 3 readout for felzartamab by the end of 2023, updated phase 2 results for lemzoparlimab (CD47 inhibitor, higher-risk myelodysplastic syndromes) in the second half of 2023, and readouts for a phase 2 trial for 72 patients with stage 4 nonsmall cell lung cancer treated with uliledlimab and PD-1 combination therapy.