Aiolos Bio Acquired by GSK for $1.4 Billion Just Months After Licensing TSLP Antibody AIO-001 from China’s Hengrui Medicine

On January 9, GSK announced the acquisition of Aiolos Bio. According to the terms of the agreement, GSK will pay an upfront payment of up to 1 billion USD, along with milestone payments of up to 400 million USD. Additionally, GSK will be responsible for making success-based milestone payments and tiered royalties to Hengrui Pharma.

Through this acquisition, GSK will obtain Aiolos' core pipeline product AIO-001, a thymic stromal lymphopoietin (TSLP) monoclonal antibody, which is about to enter Phase 2 clinical development overseas for the treatment of adult asthma patients and has the potential for other indications, including chronic rhinosinusitis with nasal polyps.

AIO-001 originates from Hengrui Pharma. In August 2023, Hengrui Pharma granted the exclusive rights for the development, production, and commercialization of the TSLP antibody SHR-1905 injection (now known as AIO-001) outside of Greater China to One Bio (formerly known as Aiolos Bio) for a fee.

Speaking of Aiolos, it is actually no stranger to many. Last year, the company gained recognition in the industry for two key events: the acquisition of Hengrui Pharma's SHR-1905 pipeline and the completion of a $245 million Series A financing round.

In August 2023, Hengrui Pharma announced that it had reached an agreement with U.S.-based One Bio to grant an exclusive, royalty-bearing license for the development, manufacturing, and commercialization of the SHR-1905 project outside Greater China. Hengrui Pharma will receive a $25 million upfront payment, near-term milestone payments, up to $1.025 billion in development and sales milestone payments, as well as a certain percentage of sales royalties.

In October 2023, Aiolos Bio, with only one pipeline in hand, announced the completion of a $245 million Series A financing round. The round was led by Atlas Venture, Bain Capital Life Sciences, Forbion, and Sofinnova Investments, with RA Capital Management participating as a follow-up investor.This is also one of the major Series A financings for biotechnology companies in 2023, second only to Orbital Therapeutics' $270 million Series A financing in April for the development of RNA drugs.

Aiolos Founded for less than a year, the introduction of the only product for less than half a year, it has gained full recognition from the capital market and MNCs. Its rapid and efficient returns have brought a glimmer of hope to those in the winter of the industry, and also aroused curiosity about the background of this company.

In January 2023, Aiolos was co-founded by Tony Adamis and Khurem Farooq.

Co-founder and CEO Khurem Farooq has over 25 years of experience in drug development and operational leadership. He has served as the CEO of gene therapy company Gyrograph Therapeutics and as Senior Vice President and Head of the Immunology and Ophthalmology Business Units at Genentech.

Co-founder Tony Adamis is an academician of the National Academy of Medicine in the United States, and has also worked at Genentech. He is well-known for co-discovering the central role of VEGF in ocular diseases. Throughout his career, Tony has led teams in global trials involving more than 25,000 patients to develop 20 drugs for 30 indications, seven of which have received FDA Breakthrough Therapy designation.

Two seasoned veterans in the pharmaceutical industry plan to establish a Biotech. The first thing they did was to create a list of their most intriguing immunological targets. While searching for drug candidates, the two founders astutely identified Hengrui Pharma's SHR-1905, later known as AIO-001.

Regarding the AIO-001 pipeline alone. Before this pipeline was licensed to Aiolos, Hengrui Pharma had already invested a total of 57.05 million yuan in research and development costs, with promising clinical data. Tony Adamis once stated that the data to date indicates that this molecule is highly effective, "which indeed led us to conclude: SHR-1905 may be the best-in-class molecule."

Not only may AIO-001 be the best-in-class molecule, but the TSLP antibody track behind it could also be a hot track.

Analysis shows that TSLP polymorphisms are associated with various allergic inflammations, chronic inflammations, autoimmune diseases, and cancers, including asthma, allergic rhinitis, eosinophilia, atopic dermatitis, etc. If all the clinical studies related to the above indications pass, TSLP monoclonal antibody will be considered a blockbuster product with the potential to challenge Dupixent (dupilumab)'s market position.

However, as an important target for inflammatory and autoimmune diseases, TSLP currently has only one monoclonal antibody drug, Tezspire from Amgen and AstraZeneca, successfully on the market. Tezspire requires monthly injections, while AIO-001 can achieve once every six months. If the latter is approved, it will have a significant advantage over Tezspire in terms of drug accessibility.

The excellent data currently demonstrated by AIO-001, along with the billion-dollar autoimmune and inflammation market represented by the TSLP antibody, are key factors contributing to the success of Aiolos Bio.

On the other hand, the recent frequent mergers and acquisitions by multinational companies seem to have brought another promising development path for Biotech in the midst of a harsh winter.

Only in 2023, the pharmaceutical industry witnessed several multi-billion-dollar blockbuster M&A cases:Pfizer Acquires ADC Company Seagen for $43 Billion to Strengthen Its Cancer Treatment Programs; BMS Acquires CNS Company Karuna for $14 Billion, Betting on the Schizophrenia Market; Merck Acquires Prometheus for $10.8 Billion to Enhance Its Autoimmune Pipeline.

These enterprises that have been successfully acquired by large corporations share a common trait: they are either leaders in their respective niche markets or possess one or two highly targeted flagship products.

According to a December 2023 article in The Times, GSK Chief Commercial Officer Luke Miels publicly stated that the company will focus on transactions worth $2 billion within the next six months to expand its drug pipeline. Meanwhile, Miels emphasized in the report that...GSK focuses on "one to two highly targeted products."

The news revealed by GSK tells us that while it is important for a pharmaceutical company to excel in all aspects such as R&D, production, and commercialization, this is not the only viable path. Biotech companies that focus on R&D and push a particular project to its extreme, with impressive clinical data, also have the opportunity to partner with large enterprises to step out of the "winter."

This is further evidenced by the case of Gracell Biotechnologies, the first Chinese biotech company to be fully acquired by an MNC.

Gracell Biotechnologies' core pipeline, GC012F, is an innovative BCMA/CD19 dual-target autologous chimeric antigen receptor T (CAR-T) cell therapy currently in the clinical stage. It has the potential to become a next-generation treatment for multiple myeloma, various other malignant hematological tumors, and autoimmune diseases, including systemic lupus erythematosus (SLE). Prior to its acquisition by AstraZeneca (AZ), GC012F demonstrated promising clinical data at the 65th American Society of Hematology (ASH) Annual Meeting.

In addition to the excellent clinical data of the pipeline and the focused and huge corresponding market, if an enterprise's technology platform is leading and valuable, it will also be considered by large enterprises for mergers and acquisitions.

This point can also be verified in the case of Gracell Biotechnologies. In response to the current industry challenges of CAR-T cell therapy, Gracell Biotechnologies has established its own three major technology platforms, including the FasTCAR next-day production technology platform, TruCAR, and SMART CART. Based on these three technology platforms, Gracell Biotechnologies is building a rich clinical-stage product pipeline that includes various autologous and allogeneic candidate products, which are expected to create significant differentiation from the current CAR-T cell therapies in the industry. The introduction of the three major technology platforms will not be elaborated here.

Whether it's China's Biotech Gracell Biotechnologies, or today's overseas Biotech newcomer Aiolos Bio, they have both shown us new ways to successfully exit amidst the industry's winter. We look forward to more outstanding Biotechs and large enterprises joining hands in the industry, combining their strengths to forge new paths.