12.3 Billion RMB Deal: Chinese-developed TL1A Monoclonal Antibody FG-M701 Inks Global Licensing Agreement with AbbVie for IBD Treatment

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

According to 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, along with tiered royalties of up to a low double-digit percentage of net sales. (Note: A total of $1.7 billion, equivalent to approximately RMB 12.3 billion.)

Inflammatory Bowel Disease (IBD), represented by Crohn's Disease (CD) and Ulcerative Colitis (UC), is a chronic lifelong condition characterized by gastrointestinal inflammation. The pathogenesis of IBD results from the interaction of genetic susceptibility and environmental influences on the microbiome, leading to inappropriate activation of intestinal immunity due to a weakened intestinal barrier.

Currently, targeted biologics for the treatment of IBD, such as anti-TNFα monoclonal antibodies, have been widely used in clinical practice. In addition, small molecule drugs represented by JAK inhibitors are already in use. Despite many treatment options available clinically, there is currently no cure for IBD.

Mingji Biotech is an innovative biopharmaceutical company with a series of proprietary innovative antibody drugs and a unique STEP technology platform. The company has completed the construction of a pilot production base in Daxing, Beijing, and has preliminarily established a complete antibody drug development industry chain, covering an upstream antibody drug screening and validation platform, as well as downstream small-scale and pilot-scale production, drug analysis, and quality control platforms for antibody drug manufacturing.

FG-M701 is a fully human monoclonal antibody targeting TL1A independently developed by Mingji Biotech. TL1A is a clinically validated target for inflammatory bowel disease. Compared with the first-generation TL1A antibodies, FG-M701, through unique engineering modifications, aims to provide higher efficacy for the treatment of inflammatory bowel disease and reduce dosing frequency, demonstrating the potential to be the best-in-class.

Dr. Jonathon Sedgwick, Senior Vice President and Head of Global Discovery Research at AbbVie, 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 therapies to help more patients with autoimmune diseases achieve remission. We look forward to collaborating with Mabgen Biopharma to advance the development of FG-M701 for the treatment of inflammatory bowel disease.

Dr. Zhaoyu Jin, founder and CEO of Mingji Biotech, stated, "We are very pleased to collaborate with AbbVie, a global leader in the development and commercialization of innovative therapies for inflammatory and autoimmune diseases. We believe that AbbVie is an excellent partner, well-equipped to leverage their expertise and global reach to fully realize the therapeutic potential of FG-M701 and rapidly advance this therapy for patients with inflammatory bowel disease. Furthermore, our collaboration with AbbVie highlights Mingji Biotech's capability to develop potentially best-in-class products through our proprietary STEP platform (Structure-based Targeted Evolutionary Platform)."

As a chronic disease that is difficult to cure completely, inflammatory bowel disease (IBD) includes ulcerative colitis (UC) and Crohn's disease (CD). In North America and Europe, more than 1.5 million and 2 million people, respectively, are affected by it. The broad market brings the possibility of strong revenue. According to Huachuang Securities data, just in the United States, advanced therapies targeting IBD represent an annual commercial market of nearly $15 billion, and the scale continues to grow.

The IBD field is home to many blockbuster products and has always been favored by MNCs. Due to the limitations in remission rates and durability of classic anti-TNF biologics, scientists continue to explore new targets and therapies—evidence suggests that anti-TL1A (TNF Ligand-Related Molecule 1A) antibodies could potentially become the next "breakthrough" in the IBD market.

TL1A, a member of the TNF superfamily, can independently mediate inflammation and fibrosis. It is associated with immune and fibrotic diseases such as RA, atopic dermatitis, SLE, asthma, and psoriasis. The TL1A blocking mechanism shows broad application potential in inflammatory and fibrotic diseases and has been clinically validated for the treatment of IBD.

Despite TL1A not yet being market-tested, many pharmaceutical companies are making significant bets on it, including high-value deals. In June 2023, Merck acquired Prometheus for $10.8 billion in cash to obtain PRA-023, a TL1A monoclonal antibody, which has now entered Phase III clinical trials and is currently the most advanced product in development.

In addition, Roche acquired the U.S. and Japanese rights to RVT-3101 from Roivant for $7.25 billion, which has now entered Phase IIb clinical trials. Sanofi introduced TEV-574 from Teva for $1.5 billion, currently in Phase IIb clinical trials. The remaining products are all in Phase I clinical trials or earlier stages.

In China, according to the data from荃信生物's prospectus, the number of IBD patients in China is less than that in the United States, with 449,300 patients in 2017, increasing to 626,300 in 2021, and it is expected to reach 1.2 million by 2030; the drug market size has slightly increased, from USD 480 million in 2017 to USD 885 million in 2021. As a typical industrialized disease, the prevalence in developing countries is approaching that of developed countries.

IBD Market Boasts Large Scale with High Unmet Clinical Needs; TL1A's Anti-Fibrotic Potential Highly Anticipated. This Transaction Between Mingji Biotech and AbbVie Also Marks the Start of China's Autoimmune Drug Export Journey.