On the evening of January 14, LEADS BIOLABS-B (09887) announced that its core investigational drug, the anti-PD-L1/4-1BB bispecific antibody VELIXIN® (LBL-024), was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for the treatment of extra-pulmonary neuroendocrine carcinoma (EP-NEC). For a pre-revenue Hong Kong-listed 18A company, achieving a critical R&D milestone for a highly promising core asset during the early, pre-commercialization stage typically garners significant attention from on-market investors and leads to market allocation; this is one reason many 18A stocks experience阶段性上涨行情. However, LEADS BIOLABS's recent major announcement似乎并未得到相应关注. Following the announcement, the company's stock price rose 3.15% and 1.44% on January 15 and 16, respectively, only to be followed by a three-day consecutive decline and a plunge. This was partly due to a broader pullback in the Hong Kong healthcare sector (the Hang Seng Healthcare Index experienced a 'four-day losing streak' from January 15 to 20), and partly related to LEADS BIOLABS's impending lock-up expiry.
The combination of a sector-wide 'plunge' and the lock-up expiry has led to a market dominated by wait-and-see sentiment. On January 15, as the JPM Conference concluded, the Hong Kong healthcare sector, having fully priced in the various conference-related positives, entered a phase of profit-taking. Furthermore, numerous healthcare companies are scheduled to release their full-year 2025 performance forecasts. Driven by a logic of avoiding market uncertainty, investors typically choose to adopt a观望 stance. Under the influence of these two factors, the Hang Seng Healthcare Index, after reaching an intraday high of 4326.18 points on January 15 following nearly half a month of consecutive gains, commenced a 'four-day阴线' downward trend. The index underwent a rapid technical regression from the upper Bollinger Band and has now approached the middle band.
Returning to LEADS BIOLABS, from a technical chart perspective, the stock experienced a 'seven-day阳线' rally from December 30 last year to January 8 this year, a upward trend that largely coincided with the broader Hong Kong healthcare sector during the same period. The reason was LEADS BIOLABS's participation in this year's JPM Conference, a positive that had been largely anticipated and priced in by the market before the event even began. However, considering trading volume, this 'JPM Conference rally' appeared more like a one-sided狂欢 among existing holders. Technically, during this seven-day rally, LEADS BIOLABS's price moved from the lower Bollinger Band towards the upper band, pulling a large阳线 on the days it touched the band. Despite this, no significant increase in trading volume was observed to support the move, failing to form a solid breakout candle—technically constituting a 'false breakout' according to Bollinger Band indicators. Particularly on January 7, a distinct 'long-legged阳线' appeared. Analyzing the volume, although the daily turnover reached 2.2458 million shares at the start of the rally, it remained consistently subdued thereafter, indicating that potential buyers were持币观望, leading to a lack of market承接力量. This resulted in the stock price failing to sustain its rally along the upper Bollinger Band, instead experiencing volatile declines on thin volume.
In reality, the recent three-day decline in LEADS BIOLABS might be attributed not only to profit-taking by on-market investors following the core asset's R&D milestone but also to the company's approaching lock-up expiry. It is understood that during its IPO, LEADS BIOLABS introduced nine cornerstone investors, including Zhenxingu Capital, OrbiMed, Gaoyi Investment, Zhenmai Investment, Tencent (00700.HK),易方达基金,睿远基金, Sage Partners, and Hankang Capital. These investors directly or indirectly subscribed to a total of $69 million (approximately HK$542 million) worth of offering shares, accounting for 50.74% of the total. After a six-month lock-up period, LEADS BIOLABS will face its lock-up expiry on January 25 this year. Objectively speaking, based on the closing price of HK$51.25 on January 21, the cornerstone investors are sitting on paper gains of nearly 50%, presenting a favorable opportunity for profit-taking.
However, facing the typically market-pressuring 'lock-up expiry test,' if LEADS BIOLABS can demonstrate significant resilience and strong承接力 on that day, it would serve as a positive allocation indicator for off-market investors, especially the incoming 'Northbound' capital. The arrival of 'Northbound' capital means the performance of the cornerstone investors could become a key风向标. The next regular review for the Hang Seng Index and the Stock Connect scheme is scheduled for March this year, with results announced on February 25, covering the review period from January 1, 2025, to December 31, 2025. Calculations indicate that 31 constituents are currently poised for potential inclusion in the Southbound Stock Connect. Excluding three stocks to be included via the 'A+H' route, the remaining 28 are expected to be included by meeting the inclusion threshold, with LEADS BIOLABS being one of them. Data shows that LEADS BIOLABS's average daily market capitalization during the review period was HK$9.462 billion, just surpassing the HK$9.247 billion inclusion threshold, meaning the company is set to receive inflows from Southbound capital in March.
When new, off-market incremental capital encounters a newly eligible stock, it naturally seeks guidance from market indicators. Beyond LEADS BIOLABS's fundamental performance, the动向 of the cornerstone investors post-lock-up expiry could serve as a valuable reference for Northbound capital. From a fundamental perspective, discussing LEADS BIOLABS inevitably involves its distinctive differentiated innovation strategy. The company has built a globally competitive R&D pipeline by focusing on three key areas: T-cell engagers (TCEs), immuno-oncology 2.0 (IO 2.0), and antibody-drug conjugates (ADCs). Among these, LBL-024, as the core product in the IO 2.0 domain, is the crown jewel of the pipeline. This drug innovatively employs a PD-L1/4-1BB bispecific antibody design with an optimal 2:2 structure, capable of reversing PD-1/L1-mediated immunosuppression while enhancing 4-1BB-regulated T-cell activation. It successfully addresses the industry-wide challenge of developing therapies targeting 4-1BB, a star target in immuno-oncology, making it the first and only 4-1BB antibody drug globally to enter the registration clinical trial stage, with potential for broader-spectrum cancer treatment compared to PD-1/L1 inhibitors.
Currently, LBL-024 has demonstrated global first-in-class/best-in-class (FIC/BIC) potential in Phase II or registration clinical trials for three indications: NSCLC, SCLC, and EP-NEC. The FDA's grant of Fast Track designation for EP-NEC on January 14, coupled with prior Breakthrough Therapy Designation (BTD) in China and Orphan Drug Designation (ODD) from the FDA, indicates that the drug's therapeutic potential is recognized by regulatory authorities both domestically and internationally. However, this core asset represents only a portion of LEADS BIOLABS's intrinsic value. For this pre-revenue biotech firm, securing substantial business development (BD) deals and gaining recognition from leading industry players serves as the most direct and powerful validation of its technology and pipeline value. LEADS BIOLABS has previously entered合作协议 with BeiGene and Aditum Bio, accumulating over $1.3 billion in potential BD collaboration value.
For the incoming Northbound capital, LEADS BIOLABS's track record is a crucial reference for allocation decisions, and the market dynamics surrounding the lock-up expiry of the cornerstone investors are undoubtedly a key focus. If, despite the temptation of realized profits, the cornerstone investors choose to hold their positions, it would signal their confidence in LEADS BIOLABS's long-term prospects outweighs their need for short-term liquidity. Once the overhang of the lock-up expiry is lifted, removing the final sentiment-driven pressure on the stock price, the company's valuation is expected to realign with the fundamental logic of its innovative R&D, potentially leading to a restorative rebound. This presents a significant temptation for Northbound capital, which often engages in contrarian or value-based trading strategies.
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