Is Akeso (SEHK:9926) Undervalued On Its Phase III Colon Cancer Trial News?

Akeso (SEHK:9926) has put fresh attention on its core oncology program after dosing the first patient in a Phase III trial of cadonilimab for perioperative MSI-H or dMMR colon cancer.

Akeso’s latest oncology milestone lands after a volatile stretch for the shares, with a 7 day share price return down 16.32% and a year to date share price return down 19.42% from the current HK$91.3 level. Even though the 3 year total shareholder return is up 141.85%, which keeps long term momentum intact, this comes despite a 1 year total shareholder return that has declined 25.53% and recent follow on equity offering news adding short term pressure.

Spot 126 healthcare AI stocks that, like Akeso, are trying to turn high-impact clinical programs into the next wave of oncology and immunology breakthroughs.

So is the recent drop in Akeso mainly a verdict on dilution and risk appetite, or a temporary swing in sentiment around a business still leaning hard into high cost, high potential oncology assets? The valuation work starts there.

Most Popular Narrative: 41% Undervalued

Against the last close at HK$91.3, the most followed narrative pegs Akeso’s fair value much higher at about HK$154, which puts the recent drawdown in a very different light and turns the Phase III pipeline into the central swing factor.

The company's R&D pipeline, including advanced bispecific antibodies and ADC candidates, provides a foundation for long-term growth. This is described as setting the stage for potential increases in net margins as products move from development to commercialization. Akeso's comprehensive sales force and manufacturing capabilities, alongside anticipated growth in hospital coverage from 1,000 to 2,000, are cited as supporting a scalable commercial operation that may improve operational efficiencies and contribute to enhanced net margins.

See why 3 investors see Akeso as 41% undervalued.

Result: Fair Value of HK$154 (UNDERVALUED)

Still, the fair value story depends on Akeso turning a loss of CN¥967.2 million into sustainable profits while managing its heavy reliance on cadonilimab and ivonescimab.

Find out about the key risks to this Akeso narrative.

Another View: What Akeso’s Sales Multiple Is Saying

That HK$154 fair value narrative leans on future cash flows, yet Akeso currently trades on a P/S of 20.8x while the Hong Kong biotech group sits around 8.8x and the fair ratio is 12.8x. The gap points to richer expectations on revenue today. Which story do you trust more?

For a closer look at how those sales multiples stack up against what the fair ratio suggests the market could move towards, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Sentiment around Akeso is clearly split, which is exactly why fresh data matters more than headlines. Act quickly and review both the bear points and the 2 key rewards.

Looking for more investment ideas beyond Akeso?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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