HK Stock Connect Insight | CSTONE PHARMA-B (02616.HK) Falls 21% Since Stock Connect Inclusion; CS2009 Global Phase III Trial Targeted for Year-End

On October 28, 2026, the innovative drug and tumour immunology theme traded divergently, and CSTONE PHARMA-B (02616.HK) rebounded. As of 13:31, the stock was quoted at HKD 4.820, up 5.47%, with a turnover of about HKD 17.4114 million and a market capitalisation of about HKD 7.694 billion based on the latest price. It touched a low of HKD 4.615 and a high of HKD 4.875 during the day, with an amplitude of 5.69%.

On the news front, the company's share price weakened and then recovered over the past week (October 20 to October 28). The stock fell 7.21% to close at HKD 4.570 on October 27 and rebounded on October 28, touching an intraday high of HKD 4.875. During the year the stock reached a high of HKD 10.410 and a low of HKD 4.010.

It is understood that on September 7, the new round of regular adjustments to Stock Connect officially took effect. The number of constituents of the Hang Seng Composite Index increased from 534 to 580, and CSTONE PHARMA-B (02616.HK) was included, and was thereby added to Stock Connect.

Public information shows that CStone Pharmaceuticals listed on the Main Board of HKEX on February 26, 2019 at an offer price of HKD 12.00, offering 186 million shares globally and raising about HKD 2.232 billion; it opened at HKD 13.32 on its debut, up 11% from the offer price, touched an intraday high of HKD 14.50 and closed at HKD 12.86, up 7.17% from the offer price, with a turnover of about HKD 784 million. The company is a clinical-stage biopharmaceutical company focused on the research, development and commercialisation of innovative drugs for oncology, autoimmune and inflammatory diseases, with marketed products including sugemalimab injection, pralsetinib capsules and avapritinib tablets. As at October 28, 2026, the company had about 1.596 billion issued shares.

The basis for CSTONE PHARMA-B's inclusion lies, first, in its inclusion in the Hang Seng Composite Index, which gave it the "index identity" of a Stock Connect eligible security. Second, the company's market capitalisation remained at a high level around the review period: based on the closing price of HKD 4.710 on June 30, 2026, the total market capitalisation was about HKD 7.519 billion, well above the HKD 4 billion market capitalisation threshold for small-cap Stock Connect eligible securities. In addition, the securities added in this adjustment were concentrated in AI, robotics, innovative drugs and high-end manufacturing, and CStone Pharmaceuticals, as an innovative drug developer, is consistent with this structural direction. (The above is an inference based on public rules and data, not an official determination by the exchange. The specific reason for inclusion is subject to the exchange's announcement.)

Although this Stock Connect inclusion provides CSTONE PHARMA-B with institutional conditions to broaden southbound capital participation and improve liquidity, the company's share price has fallen 20.6% cumulatively from its September 7 close of HKD 6.070 to date, and 59.8% cumulatively from its offer price of HKD 12.00, occurring alongside progress in the clinical development of its core pipeline.

On the operating side, the company's revenue in the first half of 2026 was RMB 205.1 million, up 314.8% year on year; revenue comprised RMB 183.2 million from product sales, RMB 6.90 million from licence fees and RMB 15 million from sugemalimab royalty income. Cost of revenue was RMB 110.9 million, and gross profit was RMB 94.199 million, against a gross loss of RMB 92.79 million a year earlier. Research and development expenses were RMB 205.5 million, an increase of RMB 100.3 million, mainly due to higher third-party contract costs for the Phase II study of CS2009 and other projects including CS5006 and CS5007; selling and marketing expenses were RMB 73.114 million, an increase of RMB 37.40 million, mainly due to higher channel service fees; administrative expenses were RMB 51.316 million. The loss for the period was RMB 252.28 million, compared with RMB 270.18 million a year earlier, a reduction of RMB 17.90 million, mainly attributable to the turnaround from gross loss to gross profit, partly offset by higher R&D and selling expenses; basic loss per share was RMB 0.17. As at June 30, cash and cash equivalents and time deposits totalled RMB 1.5602 billion.

In terms of products and business developments, the core pipeline asset CS2009 is a PD-1/VEGF/CTLA-4 trispecific antibody; its global Phase I/II trial has enrolled more than 300 patients in China and Australia and received US FDA investigational new drug clearance in February 2026; the company targets launching the first global Phase III multi-regional registration trials before the end of 2026, and will present Phase I/II data in advanced non-small cell lung cancer and metastatic colorectal cancer through two rapid oral presentations at the 2026 ESMO Congress. CS5007, an EGFR/HER3 bispecific ADC, entered a global Phase I trial in June 2026. On commercialisation, pralsetinib's terminal sales grew nearly 500% year on year in the seven months to July after its inclusion in the National Reimbursement Drug List from January 1, 2026; sugemalimab has been approved in the European Union and the United Kingdom for stage III and stage IV non-small cell lung cancer indications, with marketing applications approved or under review in nearly 30 countries; in June 2026 the company signed an exclusive commercialisation agreement with Australia's Arrotex Pharmaceuticals, extending sugemalimab's global commercial network to five strategic partnerships covering more than 60 countries and regions.

China Merchants Securities International noted in a research report that CS2009, as a trispecific antibody, leads globally in development progress among comparable assets, that its preliminary efficacy data in lung cancer are positive, that the management team has a clear R&D approach and strategy, and that there is potential for in-depth cooperation with large overseas pharmaceutical companies.