Executive Summary / Key Takeaways

• CASI Pharmaceuticals has undergone a significant strategic transformation, divesting its China-focused hematology-oncology business to concentrate entirely on the global clinical development of CID-103, an anti-CD38 monoclonal antibody, for autoimmune diseases and organ transplant rejection.
• CID-103 represents the company's core technological differentiator, with preclinical and early clinical data suggesting a favorable safety profile, including reduced infusion reactions, due to its unique epitope recognition and strong ADCC activity.
• Recent positive clinical momentum includes the Safety Monitoring Committee's recommendation to escalate the CID-103 dose in an ongoing Phase 1 ITP study and FDA clearance of an IND for a Phase 1 study in renal allograft antibody-mediated rejection (AMR).
• Financially, the divestiture provides a capital infusion, but the company reported a widened net loss of $13.38 million in Q2 2025 and a cash position of $6.7 million as of June 30, 2025, underscoring the critical need for successful clinical development and potential future financing.
• The investment thesis hinges on CID-103's ability to demonstrate clinical superiority and gain regulatory approvals in less saturated immunological markets, differentiating CASI from larger competitors focused on oncology.

Setting the New Stage: CASI's Strategic Transformation

CASI Pharmaceuticals has embarked on a profound strategic transformation, fundamentally reshaping its business model and future trajectory. The company has pivoted from its historical focus on the hematology-oncology market in China to emerge as a U.S.-centric clinical-stage biopharmaceutical entity. This significant shift, formalized by the definitive divestiture of its entire China business in May 2025, now centers the company's future on the global development of CID-103, a promising anti-CD38 monoclonal antibody, for indications in organ transplant rejection and autoimmune diseases.

The appointment of David Cory as CEO in July 2025 underscores this renewed strategic direction, signaling a dedicated focus on advancing CID-103 through clinical development. The divestiture, which included 100% equity in two wholly-owned subsidiaries and licensing rights for BI-1206 (in China), CID-103 (in Asia excluding Japan), and Thiotepa (in China excluding Hong Kong, Macau, and Taiwan) to Kaixin Pharmaceuticals Inc., an entity owned by former CEO Dr. Wei-Wu He, was valued at $20.0 million, including the assumption of up to $20.0 million in indebtedness. This move streamlines CASI's operations and capital allocation, allowing for a concentrated effort on its lead asset. The broader biopharmaceutical industry is witnessing increasing innovation in autoimmune and transplant rejection, driven by a deeper understanding of immune pathways. This evolving landscape presents both opportunities for novel therapies and intense competition.

CID-103: The Core Technological Differentiator

At the heart of CASI's revitalized strategy is CID-103, a fully human IgG1 anti-CD38 monoclonal antibody. This investigational product is designed to recognize a unique epitope on the CD38 protein, a cell surface glycoprotein expressed on various immune cells and malignant cells. This unique binding characteristic is crucial to its differentiated mechanism of action. CID-103 is a potential best-in-class, clinical-stage anti-CD38 monoclonal antibody.

CID-103 has demonstrated encouraging preclinical efficacy and a favorable safety profile compared to other anti-CD38 monoclonal antibodies. Specifically, it exhibits strong antibody-dependent cellular cytotoxicity (ADCC) activities against CD38-positive malignant cells while showing reduced complement-dependent cytotoxicity (CDC) activity. This reduction in CDC is a tangible benefit, potentially leading to fewer infusion reactions, a common side effect observed with existing anti-CD38 treatments. Early Phase 1 data in multiple myeloma patients had supported this, with management noting no infusion reactions even at relatively high doses. The safety profile observed in the first four dose cohorts of the Phase 1 ITP study supports continued development, with no serious adverse events or dose-limiting toxicities reported.

The company is actively pursuing CID-103's development across multiple fronts. A Phase 1 dose escalation and expansion study in adults with chronic immune thrombocytopenia (ITP) is ongoing, with the Safety Monitoring Committee (SMC) recently recommending dose escalation to cohort 5 (900 mg target dose) after observing no serious adverse events or dose-limiting toxicities in the first four cohorts. Furthermore, the FDA cleared an Investigational New Drug (IND) application for CID-103 in renal allograft antibody-mediated rejection (AMR) in August 2025, with a Phase 1 study in adults with active and chronic active renal allograft AMR planned to initiate in Q1 2026.

For investors, CID-103's unique profile and expanding indications represent a significant competitive moat. Its potential for a superior safety profile, particularly regarding infusion reactions, could offer a distinct advantage in patient adoption and physician preference. The strategic pursuit of both autoimmune diseases like ITP and transplant rejection indications like AMR broadens its market potential beyond the highly competitive multiple myeloma space, positioning CASI for long-term growth in areas with substantial unmet medical needs.

Financial Repositioning and Capital Strategy

The divestiture of CASI's China assets fundamentally reshapes its financial profile. While the company historically generated revenue from EVOMELA sales in China, reaching $30 million in 2021 and showing continued growth in early 2022 despite COVID-19 lockdowns, this revenue stream is no longer directly attributable to the current CASI entity. The $20.0 million proceeds from the divestiture, including debt assumption, provide a capital infusion to support the U.S.-focused clinical development of CID-103.

In its second quarter 2025 financial results, CASI reported revenue of $4.2 million, a modest 5% year-over-year increase, while the company's net loss widened significantly to $13.38 million, up 92% from $6.96 million in the prior-year quarter. This widening loss stems from increased R&D expenses, which were 31% higher, focused on advancing CID-103, as well as higher marketing costs and a $2.2 million loss from its equity investment in Precision Autoimmune Therapeutics.

As of June 30, 2025, the company's cash position stood at $6.7 million, a decline from $13.5 million in December 2024. This financial snapshot underscores the capital-intensive nature of clinical development and the critical need for successful trial outcomes and potential future financing.

CASI has also faced challenges related to its Nasdaq listing, receiving a deficiency notice in May 2025 for not maintaining a minimum Market Value of Listed Securities (MVLS) of $35 million. This followed a ten-to-one reverse stock split in May 2022, executed to meet Nasdaq's minimum bid price requirement. The company's ability to maintain its listing and secure further financing will be critical for its long-term development.

Competitive Landscape for CID-103

In the anti-CD38 monoclonal antibody space, CID-103 enters a market with established players such as daratumumab (Janssen/Genmab (GMAB)) and isatuximab (Sanofi (SNY)), primarily in multiple myeloma. However, CASI's strategic pivot positions CID-103 to target autoimmune diseases and organ transplant rejection, areas where the competitive landscape for anti-CD38 therapies is less saturated compared to oncology.

CID-103's technological differentiation, particularly its unique epitope recognition, strong ADCC activity, and reduced CDC activity leading to a potentially superior safety profile with fewer infusion reactions, provides a competitive edge. This could translate into better patient tolerability and broader applicability in non-oncology indications where safety and convenience are paramount. While larger pharmaceutical companies like Gilead Sciences (GILD), Novartis (NVS), Bristol-Myers Squibb (BMY), and Johnson & Johnson (JNJ) have extensive oncology and immunology pipelines, CASI's focused development of CID-103 allows for agility and specialized expertise in its chosen indications. CASI's competitive advantage lies in its ability to potentially offer a best-in-class anti-CD38 antibody with a differentiated safety profile, which could capture significant market share in underserved autoimmune and transplant rejection patient populations. The company's ability to execute on its clinical trials and secure regulatory approvals will be paramount in establishing its competitive standing against these larger, more resourced rivals.

Outlook and Risks

The immediate outlook for CASI Pharmaceuticals is centered on the rapid advancement of CID-103's clinical program. The ongoing Phase 1 ITP study is expected to reach the recommended Phase 2 dose within the next one to two dose escalations, with potential for early data presentation at an upcoming medical conference. The planned initiation of the Phase 1 study in renal AMR in Q1 2026 further expands CID-103's clinical footprint. These milestones, if successful, could significantly de-risk the asset and attract further investment.

Key assumptions underpinning this outlook include favorable clinical trial results, timely regulatory approvals, and the ability to secure adequate financing for late-stage development. The company's previous sub-license agreement for CID-103 in autoimmune diseases, which included a $10 million upfront payment and a 15% equity stake, demonstrates a strategy to leverage partnerships for non-core indications, potentially reducing CASI's direct financial burden while retaining upside.

Significant risks remain. Clinical trials are inherently uncertain, and CID-103's success is not guaranteed. Regulatory hurdles, particularly for novel therapies, can be substantial. Furthermore, the company's financial health, as evidenced by the Nasdaq MVLS deficiency notice and declining cash reserves, highlights the ongoing need for capital. While the divestiture provides a cash infusion, sustained funding will be required for CID-103's extensive development pathway. Competition from existing and emerging therapies in autoimmune and transplant rejection also poses a threat, requiring CID-103 to demonstrate clear superiority or differentiation.

Conclusion

CASI Pharmaceuticals stands at a pivotal juncture, having strategically divested its China operations to concentrate entirely on the global development of CID-103. This transformation positions the company as a focused clinical-stage entity with a lead asset targeting high-unmet-need areas in autoimmune diseases and organ transplant rejection. The unique pharmacological profile of CID-103, particularly its potential for a superior safety profile, forms the bedrock of its investment thesis.

The success of this focused strategy hinges on the efficient execution of CID-103's clinical development, timely regulatory progress, and prudent capital management. While the company faces the inherent risks of clinical-stage biotechnology and the challenges of a competitive landscape, its streamlined operational structure and the promising attributes of CID-103 offer a compelling, albeit high-risk, opportunity for investors seeking exposure to potentially differentiated therapies in immunology.