MSD Secures Global Rights to China-Originated PD-1/VEGF Bispecific Antibody LM-299 with $588M Upfront Payment

On November 14, MSD announced an agreement with Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. to obtain the global exclusive license rights for the development, manufacturing, and commercialization of Lixin's novel investigational PD-1/VEGF bispecific antibody LM-299.

Under the terms of the agreement, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. has granted MSD exclusive global rights for the development, manufacturing, and commercialization of LM-299. Lixin Pharmaceutical will receive an upfront payment of $588 million. Based on the technology transfer, development, approval, and commercialization progress of LM-299 across multiple indications, Lixin Pharmaceutical is also eligible to receive up to $2.7 billion in milestone payments (Note: The total transaction amount is $3.288 billion, equivalent to approximately RMB 23.8 billion). The deal is expected to be completed in the fourth quarter of 2024.

Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. was founded in 2019, focusing on unmet therapeutic needs in the fields of tumor immunology and the tumor microenvironment, with an emphasis on the research and development of biologic innovative drugs. The company is particularly dedicated to the development of macromolecular anti-tumor drugs targeting GPCRs and multi-transmembrane proteins. It also owns ADC drug and bispecific antibody drug development platforms, implementing a differentiated drug development strategy.

Currently, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. has established multiple innovative drug pipelines with independent intellectual property rights and global competitiveness, successfully advancing several innovative drug projects to globally leading clinical stages.

Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. boasts a robust product pipeline supported by its three distinctive technology platforms: a proprietary antibody platform capable of generating antibodies against various targets, including GPCRs and multi-transmembrane proteins; a next-generation ADC platform that leverages linker-toxin payload combinations to develop highly differentiated ADCs; and a modular TCE (T-cell engager) platform based on 4-1BB, designed to develop specific antibodies targeting tumor-associated antigens (TAAs).

Notably, in just over four years since its establishment, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. has consecutively licensed three products to large multinational pharmaceutical companies, making it one of the very few Chinese biotech companies in the industry whose entire portfolio of overseas products is partnered with global pharmaceutical giants.

First, the project involved in this deal with MSD is LM-299, an investigational PD-1 (Programmed Cell Death Protein)/VEGF (Vascular Endothelial Growth Factor) bispecific antibody. This innovative treatment is designed to block both the PD-1/PD-L1 immune checkpoint and the VEGF/VEGFR signaling pathways, thereby achieving a synergistic anti-tumor mechanism based on "cancer immunotherapy + anti-angiogenesis." LM-299 features a differentiated molecular design, comprising an anti-VEGF antibody linked to two C-terminal single-domain anti-PD-1 antibodies. The Phase 1 clinical trial of LM-299 is currently recruiting patients in China.

LM-299 can be combined with various therapeutic approaches, including cancer immunotherapy drugs, small-molecule targeted drugs, antibody-drug conjugates, and T-cell activators, which are expected to significantly expand the market potential of LM-299-based combination therapies. Currently, the Phase I clinical trial of LM-299 is actively enrolling participants.

Secondly, on May 6, 2022, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. reached a license out deal worth up to 1.1 billion US dollars with Turning Point (acquired by BMS) for LM-302 (BMS-986476, TPX-4589), marking the beginning of China's CLDN 18.2-related new drug assets going global.

Lixin Pharmaceutical's LM-302 is an innovative Claudin 18.2-targeted antibody-drug conjugate developed based on the company’s unique multi-transmembrane protein antibody discovery platform. The drug consists of a Claudin 18.2-specific antibody and the toxin payload monomethyl auristatin E (MMAE), linked via a cleavable linker, VC-PAB. Claudin 18.2 is a transmembrane protein highly expressed in gastrointestinal tumors such as gastric cancer, gastroesophageal junction cancer, pancreatic cancer, and biliary tract cancer. Therapeutic strategies targeting this molecule have already demonstrated significant anti-cancer potential in clinical settings. Currently, the Phase III registrational clinical trial for LM-302 was initiated in China in the first quarter of 2024, placing its development progress among the top three globally within similar programs. Additionally, the Phase II clinical trial exploring the combination of LM-302 with a PD-1 monoclonal antibody is actively underway.

In addition, the global rights of Lixin Pharmaceutical's LM-305 have been licensed to AstraZeneca. On May 12, 2023, Lixin Pharmaceutical announced an exclusive licensing agreement with AstraZeneca for the global development and commercialization rights of LM-305, a GPRC5D-targeted antibody-drug conjugate (ADC). This project represents a potential first-in-class novel ADC molecule currently in the preclinical stage. The total value of this transaction is $600 million, with Lixin Pharmaceutical receiving $55 million as an upfront payment and near-term milestone payments, up to $545 million in development and commercialization milestone payments, as well as tiered sales royalties based on global net sales.

In addition, other pipelines of Lixin Pharmaceutical Technology (Shanghai) Co., Ltd., such as LM-108 (anti-CCR8 monoclonal antibody), are in Phase II clinical trials; LM-101 (anti-SIRPα monoclonal antibody) and LM-24C5 (anti-CEACAM5/4-1BB bispecific antibody) are in Phase I clinical trials. Through continuous innovation and strategic cooperation, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. is committed to accelerating the advancement of its product pipeline to benefit patients worldwide.

It is reported that Lixin Pharmaceutical Technology (Shanghai) Co., Ltd. has recently completed a C1 round of financing worth 300 million yuan, which will accelerate the advancement of its multiple clinical-stage pipelines.

MSD and Lixin Pharmaceutical Technology (Shanghai) Co., Ltd.'s deal is another significant overseas transaction for PD-(L)1/VEGF, following the previous day's deal between Promab and BioNTech.

In two days, two major overseas transactions were announced, and the potential of PD-(L)1/VEGF bispecific antibodies has been recognized within the industry. However, for a long time, the industry was not optimistic about the prospects of dual immunotherapy antibodies or dual immunotherapy + angiogenesis inhibition antibodies for cancer treatment, with few multinational corporations (MNCs) making significant investments. This perception began to change only after Akeso's PD-1/VEGF and Alphamab Oncology’s PD-L1/VEGF achieved continuous clinical progress.

Previously, MSD, the owner of Keytruda (K药), did not recognize the efficacy of PD-(L)1/VEGF bispecific antibodies. At this year's WCLC conference, Akeso Biopharma announced the efficacy of its bispecific antibody AK112 (PD-1/VEGF) as a first-line treatment for PD-L1 positive NSCLC, and it head-to-head defeated Keytruda. Among 398 patients, the ORR for AK112 treatment was 50%, while the ORR for Keytruda was 38.6%. AK112 is a globally pioneering PD-1/VEGF bispecific antibody independently developed by Akeso Biopharma. The antibody is constructed based on Akeso Biopharma’s Tetrabody bispecific technology. AK112 can block the binding of PD-1 to PD-L1 and PD-L2, and simultaneously block the binding of VEGF to VEGF receptors.

At that time, MSD believed that the combination of anti-PD-1 and anti-VEGF often varied between different regions. It also believed that AK112 might only perform better in East Asian populations and could not replicate the clinical results in international multicenter trials. Meanwhile, MSD stated that AK112 would not outperform Keytruda (K-drug) in overall survival, adding that "Keytruda combined with chemotherapy will set a higher standard in non-small cell lung cancer treatment, one that is more difficult to surpass."

In addition to the NSCLC field, PD-(L)1/VEGF bispecific antibodies have also demonstrated promising efficacy in the TNBC field. At this year's ESMO conference, BioNTech announced the progress of BNT327 in the TNBC field, combined with the progress disclosed by Akeso at the WCLC meeting. Although the two bispecific antibodies were not directly compared head-to-head with Keytruda (K drug) for TNBC indications, historical data comparisons for first-line TNBC show that the objective response rates (ORR) of Ivonescimab and BNT327 were 72% and 74%, respectively, while Keytruda’s was 41%. In patients with PD-L1 expression below 10%, the ORR of Ivonescimab was 70%, compared to 33% for Keytruda. The median progression-free survival (PFS) of BNT327 was 13.3 months, higher than the 7.5 months median PFS for Keytruda plus chemotherapy across all patients in the Keynote-355 study. This may provide a target market for BioNTech and Summit: patients with PD-L1 expression below 10%.

If KangFang Biotech's AK112 head-to-head victory against K-drug in the NSCLC field still leaves MSD with a glimmer of hope, then the breakthroughs of Ivonescimab and BNT327 in the TNBC domain might truly signify that K-drug could be replaced by PD-(L)1/VEGF bispecific antibodies.

In addition, MSD is attempting to expand its product portfolio and reduce reliance on Keytruda. In 2023, MSD spent nearly $11 billion acquiring Prometheus Biosciences, a developer of autoimmune therapies, and signed a cancer drug collaboration agreement with Daiichi Sankyo worth up to $22 billion. Earlier, in 2021, MSD spent approximately $11 billion acquiring Acceleron Pharma, gaining a drug for treating rare lung diseases.

The introduction of Lixin Pharmaceutical's assets this time not only reflects a positive shift in the view of PD-(L)1/VEGF bispecific antibodies but also continues MSD's transaction strategy. The subsequent clinical progress of LM-299 is worth looking forward to.

In fact, there have been several major overseas licensing deals for PD-(L)1/VEGF bispecific antibodies, including Akeso's PD-1/VEGF bispecific antibody licensed to Summit for 50 billion US dollars; Promab Biotechnologies’ PD-L1/VEGF bispecific antibody licensed to BioNTech for over 1 billion US dollars, followed by the company being acquired by the latter for 9.5 billion US dollars; and this time, Lixin Pharmaceutical Technology (Shanghai) Co., Ltd.’s PD-1/VEGF bispecific antibody licensed to MSD for 3.288 billion US dollars.

Currently, multiple antibodies targeting PD-1/VEGF-related targets have entered clinical trials in China, including KeyStone Biologics, Primus Bio, Huahai Pharmaceutical, and ImmuneOnco, which disclosed clinical progress at the ASCO meeting. Companies such as Huahai Pharmaceutical and Tasly are also actively making strategic investments.