Kangai Bio Submits IPO Prospectus: Focused on DC+T-Based Solid Tumor Immunotherapy with MTCA-CTL Platform Advancing Toward IND

According to the cancer statistics released by the National Cancer Center in 2019, “in 2015, there were approximately 3.929 million new cases of malignant tumors and about 2.338 million deaths. On average, more than 10,000 people were diagnosed with cancer each day, equating to 7.5 diagnoses per minute.” Furthermore, over the past decade, the incidence rate of malignant tumors in China has maintained an annual increase of approximately 3.9%, while the mortality rate has seen an annual rise of 2.5%.

With the successive listings of Legend Biotech and SinoCellTech, China’s cellular immunotherapy industry experienced another minor surge in 2020. Beijing Biohealthcare Biotechnology Co., Ltd. (hereinafter referred to as “Biohealthcare”) is a company dedicated to the research and development of tumor cellular immunotherapy products, leveraging innovative technologies to provide high-quality, highly accessible treatment solutions for cancer patients.

The team at Beijing Biohealthcare Biotechnology shares certain historical ties with the Lanzhou Institute of Biological Products. The company’s founder, Dr. Lu Xu, holds a doctoral degree. From 1996, for a period of eight years, Dr. Lu served as a researcher at the Lanzhou Institute of Biological Products. In 2004, Dr. Lu joined forces with a group of like-minded colleagues to embark on research in the field of cell therapy. Today, some of the core technical staff at Beijing Biohealthcare Biotechnology are former members of the Lanzhou Institute of Biological Products.

In fact, there were some interludes in between. Dr. Lu Xu joined companies affiliated with BGI Genomics midway through his career. In 2008, he briefly worked at Beijing BGI GBI Biotechnology Co., Ltd.; in 2010, Dr. Lu Xu served as the Marketing Director of the Medical Health Division at Beijing BGI Genomics Research Center Co., Ltd. For Dr. Lu Xu, this experience helped him accumulate valuable market insights. However, subsequent interactions between the two parties were limited, as BGI Genomics focused more on front-end diagnostics, while Biohealthcare Biotechnology concentrated on the research and development of anticancer drugs.

In 2012, Beijing Biohealthcare Biotechnology was officially established. In an interview, Li Junyang, Deputy General Manager of Beijing Biohealthcare Biotechnology, stated that Dr. Lu Xu’s original expertise lay in cell research, and the technical patents currently employed are largely the result of transformations of achievements from his academic period. The research team from the Lanzhou Institute of Biological Products contributes to Beijing Biohealthcare Biotechnology not only in terms of technological R&D. Team members are also involved in production processes and possess extensive familiarity with the entire product commercialization and manufacturing workflow. This expertise will significantly benefit the imminent industrial-scale production and commercial launch of the company’s products.

In an interview, Li Junyang stated that although R&D on CAR-T products targeting CD19 and CD20 is ongoing, the focus has shifted to the MTCA-CTL product. The MTCA-CTL product is currently preparing for a pre-Investigational New Drug (pre-IND) meeting with the Center for Drug Evaluation. Animal studies, including efficacy and acute toxicity assessments, were completed last year. The clinical trials will primarily target patients with advanced gastric cancer. While there are plans to expand into dozens of indications in the future, the current strategy remains focused on the treatment of advanced gastric cancer.

MTCA-CTL is a type of autologous immune cell therapy. Its main feature is the directed expansion of MHC-restricted, CD8+ specific cytotoxic T lymphocytes (CTLs), while simultaneously ensuring the expansion of non-MHC-restricted natural killer T (NKT) cells. During the expansion process, autologous dendritic cells pulsed with multiple tumor antigens are added for co-culture to stimulate and induce immune cells, enabling them to specifically recognize and kill tumor cells.

The “KACM001 Injection” mentioned in the 2019 annual financial report is, in fact, the company’s MTCA-CTL product. Beijing Biohealthcare Biotechnology stated that the pricing for this product would range from RMB 30,000 to 50,000 per treatment course. In practice, immune cell therapy utilizes the patient’s own immune cells for treatment; aside from mild fever as a side effect, patients experience virtually no adverse burden.

In terms of clinical efficacy, Phase II clinical study data released by the National Cancer Center/Cancer Hospital of the Chinese Academy of Medical Sciences on the next-generation cellular immunotherapy MTCA-CTL combined with chemotherapy for gastric cancer showed that, compared to the chemotherapy group, the combination therapy group achieved a 135-day extension in median progression-free survival (PFS) and a 206-day extension in median overall survival (OS) in patients with unresectable gastric cancer. As a next-generation cellular immunotherapy, MTCA-CTL incorporates multiple specific antigens, offering more precise targeted tumor-killing effects and the ability to generate immune memory, surpassing previous generations represented by non-specific DC-CIK immunotherapy and specific DC-CIK immunotherapy.

Prioritizing MTCA-CTL products over CAR-T products is a decision grounded in practical considerations. Currently, due to the intense interest in this field, 90% of companies are focusing on developing CAR-T products. The surge in CAR-T product applications has led to a more prolonged review process, hindering rapid approval.

More pragmatic considerations may stem from the market. CAR-T products are primarily focused on hematologic malignancies, but the small patient population limits market potential. Two CAR-T products already approved abroad are priced at $475,000 and $375,000, respectively. Such high prices make them unaffordable for patients. Clinically, adverse events such as cytokine release syndrome and neurotoxicity may also occur. These technical challenges remain to be resolved. Furthermore, Li Junyang stated, “Although CAR-T products achieve remission rates as high as 80%, the relapse rate reaches 50%. In cases of off-target effects or subsequent retreatment with CAR-T therapy, the outcome is more often ineffectiveness.” It is challenging for companies to identify new targets for CAR-T products beyond CD19, CD20, CD22, and CD138.

In addition to its collaborations with the Fourth Military Medical University and the Cancer Hospital of the Chinese Academy of Medical Sciences, Beijing Biohealthcare Biotechnology is currently partnering with more than 30 other hospitals across China, achieving nationwide coverage. Hospitals currently conducting clinical trials in collaboration with Beijing Biohealthcare Biotechnology include the Cancer Hospital of the Chinese Academy of Medical Sciences, Lu Daopei Hospital, Gansu Provincial Hospital, Gansu Provincial Cancer Hospital, and the Second Hospital of Lanzhou University. Upon obtaining regulatory approval, Beijing Biohealthcare Biotechnology plans to initiate multi-center patient recruitment for clinical trials at its partner hospitals.

In fact, in addition to its MTCA-CTL product, Beijing Biohealthcare Biotechnology is also balancing the development of its CAR-T products (targeting CD19 and CD20) and stem cell products. The CAR-T products have undergone clinical trials and demonstrated favorable response rates. In the stem cell sector, the company is currently developing two drugs using mesenchymal stem cells: one targeting osteoarticular conditions and the other for Type 2 diabetes. Additionally, it currently operates a small-scale ancillary stem cell storage business.

The medical testing laboratories under its umbrella, which conduct immunological assays, are the source of cash flow for the company. These laboratories have established collaborations with Grade 3A hospitals and commercial health checkup providers. Primarily used to sustain cash flow operations prior to new drug development, Beijing Biohealthcare Biotechnology possesses self-sustaining revenue-generating capabilities, unlike other companies that have collapsed due to the broader economic environment.

Beijing Biohealthcare Biotechnology has a clear understanding of its competitive advantages. The company recognizes the critical importance of sales channels to business success; even with high-quality pharmaceutical products, distribution channels remain a vital factor for growth. The more than 30 hospitals it has previously collaborated with will provide strong support for Beijing Biohealthcare Biotechnology’s future industrialization and facilitate rapid market entry. Currently, its medical testing services not only generate cash flow but also serve as a customer acquisition channel, helping the company establish product evaluation standards. Furthermore, the marketing team of its third-party medical testing division can assist in the rapid promotion and commercialization of the MTCA-CTL product in the future.

For Beijing Biohealthcare Biotechnology, safety and efficacy are always the top priorities. A drug can only be considered superior if it demonstrates a high cost-effectiveness ratio along with robust safety and efficacy after market launch. Ensuring safety, efficacy, and cost-effectiveness not only defines a quality product but also signifies vast future market potential for the enterprise.

Currently, Beijing Biohealthcare Biotechnology is prioritizing engagement with local governments to identify suitable bases for industrialization and seeking support from industrial investment funds during the implementation phase. In essence, these efforts constitute preliminary preparations in anticipation of obtaining regulatory approval for its new drugs. The company notes that while many enterprises’ products remain confined to the laboratory stage and lack the capacity for industrial-scale production, Beijing Biohealthcare Biotechnology expresses confidence in its technical team’s familiarity with the commercialization process, thereby mitigating such concerns. The company’s objective is clear: to drive full-scale industrialization.

In fact, capital investors are also in contact with Beijing Biohealthcare Biotechnology, hoping to enter before the Investigational New Drug (IND) application stage. Li Junyang believes that the capital market has entered a harvest period for cell therapy companies. Currently, biomedical companies listed on the Hong Kong Stock Exchange only need to meet a valuation of HK$1.5 billion to go public, even without revenue. The STAR Market also provides certain conveniences for biomedical enterprises. Biomedical companies require significant capital investment in the early stages, but later on, they basically no longer need additional funding, which is beneficial for capital. Beijing Biohealthcare Biotechnology is optimistic about the reforms of the registration-based system in the capital market and will consider aiming for listing on the STAR Market or ChiNext at an appropriate time in the future.