Dexcom Bets Big on Diabetes Monitoring, Sees 100x Market Cap Surge; BeiGene Nears Breakeven; CloudVerse Biotech IPO Halted

A total of 4 briefs | Reading time approximately 4 minutes◆◆ ◆

01

Decans Bets on Diabetes Monitoring, Market Value Increases a Hundredfold

When a company's development journey is defined as a certain "model," it means that the company has become one of the legends in the capital market. Decans Medical is such a legend, and its "Decans model" is being emulated by an increasing number of companies, while the company’s stock price has created a "hundredfold" miracle.

Behind the Brilliant Crown: Few People Notice the Hardships of Decans Medical's Journey. Before the company became fully profitable, Decans Medical endured twenty years of consecutive losses. However, these continuous losses did not break the will of Decans Medical; instead, they strengthened its determination to persist in the CGM track. Finally, in the twentieth year of the company's establishment, Decans Medical achieved a historic turnaround from loss to profit.

In the current atmosphere of global healthcare system division of labor, the "large and comprehensive" development model is destined to belong only to multinational companies with substantial historical accumulation. However, companies that can break through in this era mostly excel in specific niche fields, and Decans Medical is a typical representative.

Whether from a commercial perspective or a spiritual one, Decans Medical, with its never-give-up spirit, stands as a beacon, illuminating the path for medical device companies currently experiencing challenging growth periods.

What doesn't break me will ultimately make me stronger.

Before Decans Medical turned profitable overall, it had been mired in a vortex of losses for a long time.

From its listing in 2005 to achieving profitability in 2019, Decans Medical had never realized a profit in the interim. Over thirteen years, Decans Medical accumulated losses of $716 million, averaging a loss of $55 million annually. For any investor, over a decade of consecutive losses is a test of investment faith, but the management of Decans Medical withstood the pressure and did not alter their development path due to external doubts.

The core reason for Decans Medical's success lies in the management's unwavering commitment to sustained development along a set path, resisting the influence of conventional perspectives, and ultimately conquering the market with performance.

Of course, Decans Medical's persistence is not blind confidence, but rather based on years of deep insights in the diabetes sector. Decans Medical focuses on the Continuous Glucose Monitoring (CGM) device track, which represents a comprehensive upgrade and iteration over traditional Blood Glucose Meters (BGM).

For diabetic patients, the traditional method of measuring blood glucose by pricking the fingertip has become an invisible burden. Since BGM (Blood Glucose Monitoring) can only provide blood glucose concentration data at the time of sampling, obtaining more blood glucose information requires multiple blood draws. Repeated blood collection involves repeatedly puncturing the skin, causing pain and risk of infection. Even when away from home, blood glucose monitoring can still be a burden for diabetic patients.

These shortcomings of BGM have been comprehensively upgraded and iterated by CGM. The hardware of the CGM blood glucose monitoring system includes three main components: the sensor, transmitter, and receiver. The sensor, implanted under the skin, continuously detects the glucose concentration in the interstitial fluid, converts it into an electrical signal, and transmits it to the accompanying receiver or mobile app, enabling continuous monitoring of blood glucose levels.

In terms of compliance and convenience, CGM will undoubtedly become mainstream. If we must find a flaw with CGM, it might be that it is too expensive. Therefore, reducing costs and improving efficiency remain the direction of CGM's continuous evolution, which is also the core secret behind Decans Medical's ultimate success.

The 20-Year Cost Reduction Journey

Looking back at the entire development process of Decans Medical, it is a history of cost reduction and efficiency enhancement for modern enterprises.

In 1967, Decans Medical founders Stuart J. Updike and George P. Hicks made a significant breakthrough in the first-generation "enzyme electrode" technology. This research enabled the immobilization and stabilization of glucose oxidase by fixing it within a specific colloidal matrix, allowing the glucose oxidase catalyst to be reused and leading to the creation of the world's first enzyme electrode.

It was based on this groundbreaking breakthrough that guided the emergence of the CGM model. Finally, in 1981, Updike began attempting to industrialize this technology and established the Markerwell Institute, which was the predecessor of Decans Medical. In 1999, Decans Medical was officially established and acquired the technology from the Markwell Institute to further develop a fully implantable continuous glucose sensor.

However, in the early stages of its establishment, due to issues with the R&D route, the company's commercialization did not proceed smoothly. After years of hard work, Decans Medical finally launched its first-generation CGM product, the Dexcom STS CGM, in 2006. This system was approved for use for up to 72 hours and can provide up to 288 glucose measurements every 24 hours. It was also based on the expectations for this first-generation CGM product that Decans Medical successfully entered the capital market.

But it is somewhat regrettable that although Dexcom STS CGM achieved technological breakthroughs, the initial product was expensive and market acceptance was not high. Observing from the company’s financial statements, Decans Medical faced significant operational pressure in the years following its IPO. For instance, in 2006, the combined management and R&D expenses were 20 times the scale of revenue.

Since then, Decans Medical has embarked on a path of cost reduction and efficiency improvement. On the one hand, Decans Medical continues to launch new-generation products in the hope of achieving better sales performance; on the other hand, the management team keeps controlling expenses and is always committed to reducing the cost ratio.

In 2007, the second-generation SEVEN CGM was launched, extending the sensor usage time from 3 days to 7 days; in 2009, the third-generation SEVEN PLUS CGM was approved; in 2012, the fourth-generation product G4 PLATINUM (G4 Platinum) was released, becoming the most advanced CGM system in the world at that time; in 2015, the upgraded version of the G4 product, G4 PLATINUM CGM, was launched.

Starting with the fifth-generation product, the G5 Mobile CGM System, Decans Medical's CGM products entered the fully mobile era. In 2017, the G5 Mobile CGM System became the first and only CGM platform in the U.S. at that time available for Android. Subsequently, the sixth-generation product, the G6 Integrated Continuous Glucose Monitoring (iCGM) System, released in 2018, not only features 10-day continuous sensor detection technology but can also function as a standalone CGM or be integrated into an Automated Insulin Delivery (AID) system.

In summary, the main three iterative directions of Decans Medical's CGM products are: continuous reduction of MARD (error between two sets of data), extended sensor wear time, and decreasing product size.

From the operating data, the proportion of Decans Medical's sales and administrative expenses dropped below 85% after the launch of the third-generation product; after the introduction of the fifth-generation product, this figure fell below 50%; by 2019, following the release of the sixth-generation product, the proportion of sales and administrative expenses had decreased to just 35%.

In fact, as early as 2018 when the sixth-generation product was launched, Decans Medical had already achieved profitability at the operational level. However, due to the heavy investment of $417 million in R&D expenses that year, the loss for 2018 ultimately widened compared to 2017, and the company's profitability was postponed until 2019.

But these cannot change the release of Decans Medical's profitability. In the past five years, Decans Medical's profitability has continued to strengthen, with its net profit in 2023 surpassing US$523 million.

The Core of the CGM Battlefield: Cost-Effectiveness

From a business model perspective, Decans Medical is a typical "ecosystem-based" enterprise.

Although the core product of CGM is the machine, the real profit comes from the sensors that need frequent replacement. In 2023, 90% of Decans Medical's revenue came from disposable sensors, while reusable hardware accounted for only 10% of total revenue.

It can be said that Decans Medical has spent 20 years of losses cultivating users' dependence on the company's CGM products. This two-decade-long "loss" accumulation is precisely Decans Medical's unparalleled competitive moat.

On the payment side, public health insurance and commercial private insurance coverage have further driven the increased adoption of Decans Medical's products.

In 2017, CMS established the medical CGM category under Medicare Part B in the United States, covering 80% of CGM costs for eligible diabetes patients. Medicare primarily targets individuals aged 65 and above as well as disabled persons. By the end of 2020, the seven largest commercial private insurers with the most members had all issued coverage policies for the CGM category, allowing these members to purchase Decans Medical's CGM at negotiated prices.

In terms of external cooperation, Decans Medical maintains a very open attitude towards collaboration.

As early as 2015, Decans Medical announced a collaboration with Google to develop the next generation of CGM products, resulting in the G5 for Android. Since then, Decans Medical has partnered with multiple insulin pump or insulin pen manufacturers, such as Insulet and Tandem Diabetes, for the G6, enabling semi-automated insulin delivery. In addition, collaborations with various diabetes management platforms like Bluestar have allowed patients and doctors to achieve better blood glucose management.

These external collaborations have continuously enhanced the competitive strength of Decans Medical's ecosystem, further increasing patients' trust in Decans Medical products.

However, this dominance is not without its vulnerabilities. As Decans Medical's performance has grown, giants like Abbott have also started to see the business potential and have fully entered this sector. As a latecomer, Abbott's FreeStyle Libre focuses on a cost-effective strategy, and after the launch of its first product in 2014, it quickly captured market share. To date, it has become the second-largest CGM product by market share in the U.S.

Taking user costs as an example, the annual usage cost of Abbott's latest third-generation FreeStyle Libre product is approximately one-third that of Decans Medical's G6 product (around $1,700), combined with the $1,500 annual reimbursement limit from U.S. commercial insurance, further enhancing the cost-effectiveness of FreeStyle Libre. Under the strong pressure from Abbott's FreeStyle Libre, the annual cost of Decans Medical’s G7 product has also decreased compared to the G6.

In J.P. Morgan's survey of factors influencing CGM patients' purchasing decisions in the U.S., price and insurance reimbursement rates were the top concerns for patients, while technical factors like adherence and physician guidance were considered less important. This indirectly highlights that the core issues for CGM actually revolve around price and reimbursement.

Looking at the development trends of the entire CGM track, apart from competition at the technical level, cost-performance ratio may become another core main line of future competition. As the trend of CGM channels replacing BGM gradually forms, Decans Medical has the advantages of reputation and early entry, while Abbott's FreeStyle Libre breaks through with its cost-performance ratio.

Returning to the Chinese market, the rapid development of CGM will be a major trend, but this comes with a prerequisite: the cost-performance ratio of domestically produced CGM products must continue to improve. Only when the price difference between CGM and BGM is not so significant can CGM become a true mainstream in China.

(Source: Yi Yao)

02

The Break-even Point for BeiGene is Approaching

The trend and stock price strength of leading companies play a pivotal role in the trend of industry sectors.

In the past few days, the pharmaceutical industry's leading player has not been the "spared" Wuxi AppTec, but rather BeiGene, the leader in innovative drugs; since this week, the company's share price has increased by more than 4% across its three listings, a significant achievement for a company of its size.

The reason for the unusually sharp intensity of the company's stock price has been a subject of varied opinions among investors, with no consensus reached.

BeiGene's Recent Catalyst or Incremental Information Output: Participation and Speech at the 45th Annual Global Healthcare Conference. The core highlights of the speech focus on three directions: 1) Frequently discussed: Zanubrutinib’s increasing new patient adoption and favorable Ibrutinib replacement progress, with the Bcl-2 and BTK-CDAC combination expected to expand coverage to more patients with hematological malignancies; 2) Improved internal operational efficiency; 3) Early R&D pipeline: Emphasis on a next-generation CDK4i selective inhibitor in breast cancer and gynecological oncology, as well as mention of the ADC pipeline layout. Two novel-target ADCs, FGFR2b and CEACAM5, are known, with more pipelines expected to enter clinical trials in the future.

But the core logic of large funds aggressively buying BeiGene is likely due to some details from the recent shareholders' meeting and the major trend of the company quickly approaching the break-even point.

Variables in the Incentive Plan

The source of the enthusiastic market sentiment likely partially stems from the amendments to the 2016 Options and Incentive Plan approved at the company's 2024 Annual General Meeting of Shareholders.

Looking back at BeiGene's numerous daily announcements of external grants of stock options and restricted share units in the past, the main basis was the company’s 2016 Option and Incentive Plan. It can be seen that this is a guiding document for systematically incentivizing senior management and employees in recent years.

At the 2024 Annual Shareholders' Meeting, the number of authorized shares available for issuance under the original 2016 plan will be increased by 92.82 million ordinary shares, raising the total from approximately 283 million ordinary shares to a revised total of approximately 376 million ordinary shares.

According to the company, this is to address the rapid development of the company, the increase in personnel size, and the accelerated consumption rate of previously approved incentivized shares, hence the proposal for an increase.

More notably, the incentive changes for mid-to-senior level administrative personnel have shifted. The reward mix for these individuals has changed from "2/3 stock options + 1/3 restricted stock units" used in 2023 to "1/3 performance stock units + 1/3 stock options + 1/3 restricted stock units."

Increasing performance-based stock units means the company is beginning to enhance the assessment of management's performance (which may also imply stricter commercialization standards). The assessment period for these performance-based stock units is three years, using total revenue as the performance metric, and will be vested in a cliff-like manner.

Using total revenue as a performance metric is evidently fair for companies like BeiGene. Currently, the company’s product revenue is rapidly increasing, and total revenue not only assesses the commercialization progress of the company's products but also, to a certain extent, takes into account the evaluation requirements for external BD licensing.

Moreover, we can also gain insight into the company's internal evaluation mechanism from the 2023 Annual Non-Equity Incentive Plan. The evaluation is conducted across multiple dimensions: Research and Innovation (e.g., the number of selected FIC/BIC candidate molecules, IND and the number of Phase I clinical trials with the first patient dosed), Global Clinical Development (e.g., marketing application status in various regions around the world, number of publications in top-tier journals), China Leadership (e.g., domestic revenue in China, number of approved indications for products), Global Leadership (e.g., overseas commercial achievements, MRCT data), Broad Accessibility (coverage of commercialized drugs), and Business Maturity (e.g., talent attrition rate, operational efficiency). Each dimension carries different weight.

It is not difficult to see from the above that Beigene has a relatively complete equity and compensation incentive system, which is also the core reason why the company's execution is stronger than most innovative pharmaceutical companies in China.

Quarterly Turnaround Point

Obviously, BeiGene is gradually getting better. However, market investors are still looking forward to its break-even or even the arrival of its first profitable quarter.

BeiGene's Q1 2024 product revenue reached $747 million (an 82% year-over-year increase), including global sales of zanubrutinib at $488 million (a 131% year-over-year and 18% quarter-over-quarter increase). Zanubrutinib achieved $1.3 billion in sales in 2023, and surpassing $2 billion in 2024 is now certain, though this is far from its sales peak. Tislelizumab generated revenue of $145 million in China during Q1 2024 (a 26% year-over-year and 14% quarter-over-quarter increase). Although its revenue growth is much slower than zanubrutinib, tislelizumab received approvals in the EU for second-line esophageal cancer in 2023 and for first- and second-line non-small cell lung cancer in 2024. In March 2024, the U.S. FDA approved its second-line esophageal cancer indication, and overseas revenue will become its core growth driver in the future.

In addition to the rapid growth in product revenue, cost control and improved operational efficiency are also key factors in the company's turnaround to profitability.

From a year-over-year perspective, revenue in Q1 2024 increased by 74.79%, total costs rose by 29.64%, and sales, management, and R&D expenses grew by 32.57%, 30%, and 18.09% respectively. Combined, the three expense categories increased by 24.21% year over year. The rapid growth in revenue far outpaced the growth in expenses and costs, which is the core reason why the company significantly reduced its losses in Q1 2024.

Looking at it from a month-on-month perspective makes it even more evident. In 2024 Q1, revenue increased by 17.83% month-on-month, total costs rose by 1.74%, while sales, management, and R&D expenses increased month-on-month by -7.48%, 31.89%, and -8.47% respectively. Combined, the three expenses decreased by -3.29% month-on-month.

The month-on-month data more intuitively shows that while revenue has grown by double digits, the increase in total costs is far lower than the growth in revenue (operating costs have increased in tandem month-on-month, with an approximate growth of 11.53%). This indicates that the company is reducing losses by lowering sales expenses to improve sales efficiency and stabilizing the scale of R&D expenses.

From the perspective of the entire year of 2024, conservatively assuming Zanubrutinib achieves $2 billion in sales and Tislelizumab maintains a 15% growth rate, this will bring the company an incremental revenue of 5.655 billion RMB. In 2023, the company's total cost was 26.547 billion RMB, and assuming a growth range of 0-20% for the year, corresponding to a range of 26.547-31.856 billion RMB, there will still be an estimated loss gap of approximately 3.5-8.8 billion RMB.

However, looking at a single quarter in detail, based on the growth rate of total costs from previous quarters (2023Q-2024Q1), it is estimated that the total cost for a single quarter by 2024Q4 will be around 7.8 to 8 billion RMB. Assuming Zanubrutinib grows by 18% quarter-over-quarter and Tislelizumab by 10% quarter-over-quarter, it is possible that the quarter could approach break-even, with profitability expected to be achieved in 2025Q1 (for reference only).

Barring any major unforeseen circumstances, Beigene's first quarter of break-even is expected to be in 2024Q4 or 2025Q1.

Conclusion: For the entire innovative drug industry, the landmark event of a leading company turning a profit may not lead to an across-the-board surge, but it will undoubtedly boost market attention and valuation for outstanding companies within the industry. This is inevitable.

(Source:瞪羚社)

03

Cloud Boat Biotech IPO Terminated

On June 13, the official website of the Shanghai Stock Exchange showed that Haitong Securities, the sponsor of VectorBuilder Biotech (Guangzhou) Co., Ltd. (referred to as VectorBuilder), applied to withdraw its sponsorship, and VectorBuilder's STAR Market listing has been terminated.

The prospectus shows that Yunzhou Ltd. was established in 2014 as a biotechnology company specializing in gene delivery products and services.

Cloud Boat Biotech uses the online visual vector design platform "VectorBuilder" as its commercial expansion platform. It serves the differentiated needs of the life science research market, gene delivery CRO, and gene vector CDMO markets by providing end-to-end gene delivery services covering basic research, preclinical research, and clinical trials.

During the reporting period, the company mainly focused on scientific research carrier construction services, with gene delivery CRO services and gene carrier CDMO services as supplementary businesses. Its main operations were concentrated overseas, primarily through online sales supplemented by offline sales, and predominantly through a direct sales model, with a small amount of agency involved.

Cloud Boat Bio selected the listing standard as the relevant standard of Article (1) in Chapter 2.1.2 of the "Shanghai Stock Exchange STAR Market Stock Listing Rules": an estimated market value of no less than RMB 1 billion, with positive net profits in the last two years and cumulative net profits of no less than RMB 50 million.

According to the PharmaCube InvestGo investment and financing database, Cloud Boat Biotech completed a C-round financing of 410 million yuan in October 2022.

Financially, during the 2020-2022 period, the company's operating revenues were RMB 99.60 million, RMB 163.62 million, and RMB 280.65 million respectively, with an average annual compound growth rate of operating revenue reaching 67.86%. During the same period, the net profit attributable to parent company shareholders after deducting non-recurring gains and losses was RMB 18.81 million, RMB 25.86 million, and RMB 46.60 million respectively, consistently achieving profitability.

As of the date of signing the prospectus, LAHN BRUCE and his spouse YU Shan directly hold 49.79% and 20.69% of the company's shares, respectively, collectively holding 70.48% of the company’s shares. They also indirectly control 17.78% of the company’s shares through the employee shareholding platform, Jingning Yunzhou. Together, they can control 88.26% of the company’s shares. Therefore, LAHN BRUCE and YU Shan are the controlling shareholders and actual controllers of the company.

The prospectus shows that LAHN BRUCE is a U.S. citizen with permanent residency in China. LAHN BRUCE obtained a bachelor's degree in biology from Harvard University in 1991 and a Ph.D. in biology from the Massachusetts Institute of Technology in 1998.

His academic experience mainly includes: September 1998 to July 1999, serving as a postdoctoral researcher at MIT; July 1999 to August 2006, serving as an assistant professor in the Department of Human Genetics at the University of Chicago; September 2006 to September 2021, serving as a tenured full professor in the Department of Human Genetics at the University of Chicago; June 2000 to August 2012, serving as a researcher at the Howard Hughes Medical Institute (HHMI); March 2023 to present, serving as a guest researcher at the Guangzhou Institutes of Biomedicine and Health, Chinese Academy of Sciences.

His corporate experience mainly includes: From February 2006 to August 2018, serving as a director of Cyagen Biosciences (Guangzhou); From August 2016 to November 2019, serving as a director of Cyagen Biosciences (Suzhou) and Cyagen Model Organisms Research Center (Taicang) Co., Ltd.; From August 2016 to December 2019, serving as a director of Guangzhou Saixu Biotechnology Co., Ltd.; From August 2021 to September 2022, serving as a director of Yunzhou Yixin; From September 2022 to present, serving as a supervisor of Yunzhou Yixin; In March 2014, LAHN BRUCE founded the issuer and has been serving as its Chairman, General Manager, and Chief Scientist.

LAHN BRUCE was selected for the "Changjiang Scholars Reward Program" and the "National Major Talent Project," and has received honorary titles such as "Outstanding Expert of Guangzhou City" and "Guangzhou Innovation Leading Talent." His research achievements were listed in Science magazine's "2005 Discovery of the Year" and Discovery magazine's "Top 100 Scientific Discoveries of 2005." At the age of 39, he became the Chair Professor of the Department of Human Genetics at the University of Chicago. As a globally renowned scholar in biological genetics, he has achieved breakthrough results in multiple fields including genetics, evolution, stem cells, epigenetics, and model organisms, publishing over a hundred papers (with an average impact factor of 112, including 33 publications in the globally influential Science/Nature/Cell/PNAS/HMG series).

Yu Shan is of Chinese nationality and has no permanent residency rights abroad. Yu Shan obtained a bachelor's degree in biotechnology from Fudan University in 2010 and a Ph.D. in genetics from the University of Chicago in 2016. From January 2017 to May 2018, she served as Product Manager at Cyagen Biosciences Inc.; from January 2020 to August 2022, she served as Manager and Executive Director at Blueprint Biotech; since August 2022, she has served as Executive Director at Blueprint Biotech; since December 2020, she has successively held positions such as Supervisor, Executive Director, and Manager at Yunzhou Yixin; since September 2017, she has successively held positions such as Director and International Business Operations Officer of the issuer, and currently serves as the International Business Operations Officer of the issuer.

(Source: PharmaCube Invest)

04

AbbVie Partners with Chinese Biotech

On June 13, AbbVie and MabGenesis Biopharmaceuticals (Beijing) Co., Ltd. announced the signing of a licensing agreement to jointly develop FG-M701. FG-M701 is a next-generation TL1A antibody currently in preclinical development for the treatment of inflammatory bowel disease (IBD).

Under the terms of the agreement, AbbVie will obtain the exclusive global license for the development, manufacturing, and commercialization of FG-M701. MabGenesis will receive $150 million as an upfront payment and near-term milestone payments and is eligible to receive up to an additional $1.56 billion in clinical development, regulatory registration, and commercialization milestone payments, as well as tiered royalties of up to a low double-digit percentage of net sales.

Targeting TL1A Monoclonal Antibody

Mingji Biotech is an innovative biopharmaceutical company dedicated to providing high-quality innovative biologics for patients with cancer, immune diseases, and other conditions. By integrating structural biology, advanced antibody engineering, and artificial intelligence technologies, Mingji Biotech has developed its proprietary STEP platform, enabling efficient, rapid, and high-throughput drug screening and optimization.

FG-M108, an ADCC-enhanced CLDN18.2 monoclonal antibody injection developed by Mingji Biotech using the STEP platform, is currently in Phase III clinical trials. In Phase I/II clinical trials for first-line treatment of advanced gastric/gastroesophageal junction adenocarcinoma and pancreatic cancer, it demonstrated excellent efficacy and superior safety, showing best-in-class potential. Additionally, Mingji Biotech has a series of innovative multi-specific antibodies and ADC drugs for cancer immunotherapy, including a CD40/PDL1 bispecific antibody currently in clinical development.

Mingji Biotech R&D Pipeline

The core product of this transaction, FG-M701, is a fully human monoclonal antibody targeting TL1A. It is a clinically validated target for inflammatory bowel disease and also the first autoimmune pipeline product from Mingji Biotech. Compared with the first-generation TL1A antibodies, FG-M701 has undergone unique engineering modifications, giving it the potential to become the best-in-class in terms of functional characteristics. It aims to provide better efficacy for the treatment of inflammatory bowel disease and reduce the frequency of medication.

Regarding this collaboration, Dr. Jonathon Sedgwick, Senior Vice President of AbbVie and Head of Global Discovery Research, stated that the prevalence of inflammatory bowel disease continues to rise, and many people with ulcerative colitis and Crohn's disease do not respond to current therapies. AbbVie’s mission is to raise the standard of care by pursuing transformative treatments to help more patients with autoimmune diseases achieve remission. AbbVie looks forward to collaborating with MabGenesis to advance the development of FG-M701 for the treatment of inflammatory bowel disease.

Zhaoyu Jin, Ph.D., Founder and CEO of Mingji Biotech, stated that Mingji Biotech believes AbbVie is an excellent partner with the ability to leverage their expertise and global scale to fully realize the therapeutic potential of FG-M701 and rapidly advance this therapy for the treatment of patients with inflammatory bowel disease. Meanwhile, the collaboration with AbbVie also highlights Mingji Biotech's capability to develop potentially best-in-class products through its proprietary STEP platform (Structure-based Targeted Evolutionary Platform).

TL1A: A Strategic Location

TL1A is a star target in the fields of autoimmune and inflammation, and AbbVie's move is just the latest in a series of fascinating explorations by MNCs in the TL1A space. As MNCs' interest in TL1A continues to grow, a series of related BD deals have also followed in recent years.

On October 23, 2023, Roche announced the acquisition of Telavant, a joint venture between Roivant and Pfizer, gaining access to its core investigational product, the TL1A antibody RVT-3101. Roche will also have the option to co-develop a next-generation p40/TL1A bispecific antibody. According to the agreement, Roche will pay Telavant an upfront payment of $7.1 billion and a near-term milestone payment of $150 million.

On April 16, 2023, Merck & Co. and Prometheus Biosciences jointly announced the acquisition of Prometheus at a price of $200 per share, with a total acquisition price of approximately $10.8 billion. Merck gained access to PRA023, a potential first-in-class/best-in-class drug. PRA023 is a humanized monoclonal antibody (mAb) targeting tumor necrosis factor (TNF)-like ligand 1A (TL1A).

Sanofi Joins the TL1A Target Race. On October 4, 2024, Sanofi and Teva reached a co-development agreement for Teva's investigational TL1A monoclonal antibody TEV-48574 for the treatment of inflammatory bowel disease (IBD). Under the agreement, Teva will receive an upfront payment of 460 million euros (approximately 500 million US dollars) and milestone payments of up to 940 million euros (approximately 1 billion US dollars).

Summary

The competitive landscape of TL1A monoclonal antibodies in the IBD field has now become clear. Merck (PRA023), Roche (RVT-3101), and Sanofi (TEV-48574) have already seized new opportunities early on, quickly secured their positions, forming a tripartite trend. AbbVie's recently acquired FG-M701 is still in the pre-IND stage and will require further efforts.

(Source: Yaoke Headlines)