XBiome Files IPO Prospectus: Pioneering AI-Driven Microbiome Therapeutics in China

At the Clinical Innovation Forum of the 2019 China Gut Conference held in May 2019, Dr. Tan Yan, CEO of Xbiome Co. Ltd., shared insights into the industrial exploration of microbiota-based pharmaceuticals in China, a novel drug development approach that has garnered widespread attention across various sectors.

Recently, leveraging the opportunity of Xbiome’s disclosure of its latest financing developments, VBNewMed (WeChat ID: biobeat1) conducted an exclusive interview with Dr. Tan Yan, who provided us with a detailed introduction to the microbiome-based pharmaceutical sector, which is currently igniting enthusiasm across both industry and capital markets.

The gut microbiota is referred to as the human "second genome." As the largest microbial ecosystem in the human body, the intestine harbors approximately 100 trillion microorganisms spanning 500–1,000 different species, with a metagenomic count 150 times that of the human genome. Studies have shown that more than 50 human diseases are closely associated with gut microbial dysbiosis. Dr. Tan Yan pointed out that microbiome-based pharmaceuticals represent an emerging trend in the international pharmaceutical industry in recent years, demonstrating significant potential particularly in the realm of complex and chronic diseases; this field has already become a highly prominent area for industrialization abroad.

The strategy of microbiome-based therapeutics is to treat the human gut microbiota as a complete ecosystem. When disease occurs, it leads to an imbalance in the patient's gut microbial ecology. By administering live bacteria isolated from nature, a new ecological balance can be introduced, thereby correcting the dysbiosis. Intuitively, the most distinctive feature of microbiome-based therapeutics is the administration of live bacteria to patients, serving as an alternative to small-molecule compounds or antibody drugs.

Similar to traditional pharmaceutical development, microbiome-based drug development requires clinical trials to be conducted on the basis of druggability and toxicological analysis. The primary difference between the two lies in the drug discovery phase. Microbiome-based drug development is a data-driven approach that, combined with fecal microbiota transplantation (FMT) technology, compares large-cohort data of gut microbiota from patients and healthy individuals to uncover associations between microbial ecological fluctuations and diseases. Companies specializing in microbiome-based drugs need to establish hypotheses for introducing live bacterial strains to treat diseases based on the aforementioned associations, validate these hypotheses, and thereby complete the drug discovery process.

Dr. Tan Yan believes that the traditional approach to drug development starts from targets, pathways, or genes, and verifies mechanisms of action based on simplified data models. However, the human body is a complex, multidimensional system, and in vitro data models struggle to fully replicate the environment in which drugs act, leading to issues where drugs validated in experiments fail to perform consistently in humans. Microbiome-based drug development, by contrast, starts with human data and leverages AI technology to deeply mine multidimensional datasets, thereby better ensuring the performance of the final therapeutic product.

Abroad, microbiome-based drug development has gradually emerged as a new trend in the pharmaceutical industry. Taking the United States as an example, nearly thirty companies are engaged in microbiome therapeutics, with some having advanced to the mid-to-late stages of clinical trials. In recent years, major pharmaceutical companies, including Merck & Co. and AstraZeneca, have also begun acquiring pipelines and strategically positioning themselves in the field of microbiome-based drug development. Dr. Tan Yan summarizes that microbiome therapeutics companies abroad primarily operate under three business models:

Category 1: Strain-Based. These companies are primarily research-oriented, conducting functional validation around specific types of strains to achieve drug development. Most of these strains are well-known probiotics.

Category II: Synthetic Biology-Based. There are very few companies in this category. They tend to focus on specific diseases or particular functional deficiencies in the human body, addressing these gaps by engineering probiotics to restore the missing functions.

Category 3: Platform-Based. This type of company has emerged only in recent years. Their R&D systems resemble those of traditional pharmaceutical companies, featuring proprietary strain libraries and the capability to conduct functional validation from in vitro assays to animal models. The R&D strategy of platform-based strain pharmaceutical companies is disease-oriented, identifying strains based on clinical data to develop comprehensive solutions.

Dr. Tan Yan believes that the platform-based model will become the mainstream business development mode for future strain-based pharmaceutical companies, which is also the model currently adopted by Xbiome.

Xbiome, founded in 2017 and headquartered in Shenzhen Bay Technology Ecological Park, has independently developed a preclinical development platform specifically designed for gut microbiome-based pharmaceuticals. By integrating artificial intelligence and big data analytics with gut microbiome modulation technologies, this platform covers the entire preclinical workflow, thereby enhancing the efficiency and success rate of drug development.

According to disclosures, Xbiome completed its Series A and Series A+ financing rounds in August 2018 and January 2019, respectively, raising a total of nearly $10 million. Investors included Gaorong Capital, Morningside Venture Capital, ZhenFund, Lihe Hongxin, and Yahui Investment. Dr. Tan Yan told VCBeat New Medicine that within less than two years of its establishment, Xbiome had built multiple technical platforms, including a multi-omics big data computing platform for the microbiome, a key strain discovery platform, a microbial knowledge base, and facilities for functional validation and production of microbial drugs. The company has also assembled a world-class clinical team. By integrating “artificial intelligence + bioinformatics analysis” with gut microbiota technology, Xbiome is able to significantly enhance the efficiency and success rate of new drug development.

Regarding the reasons why Xbiome has attracted capital favor, Dr. Tan Yan stated that the ability to capture the trend of microbiota-based drug development at a sufficiently early stage was a key factor. Since entering 2019, domestic companies focused on microbiota-based therapeutics have emerged one after another, but Xbiome had already laid out its strategy two years prior, completing its initial accumulation.

After earning his Ph.D. from the Broad Institute, Dr. Yan Tan joined a big-data startup incubated by Harvard University, where he began engaging in gut microbiome research, becoming one of the earliest researchers internationally to enter this field. During his several years of work in the United States, Dr. Tan participated in multiple projects focused on the development of microbiome-based pharmaceutical tools and the analysis of data related to immune diseases.

Xbiome’s core R&D team comprises scientists from world-renowned universities and prestigious research institutions, including the Broad Institute, Harvard University, Massachusetts Institute of Technology (MIT), Stanford University, Icahn School of Medicine at Mount Sinai (New York University), and Johns Hopkins University. The drug development team brings extensive R&D experience from leading global pharmaceutical and biotechnology companies such as Pfizer, Novartis, and Bristol-Myers Squibb. The clinical team possesses over 20 years of expertise in conducting clinical trials, managing regulatory submissions, and navigating FDA drug review processes.

When Xbiome was founded, Dr. Tan Yan’s vision garnered support from many classmates and alumni who shared an interest in microbiome-based drug development, imprinting Xbiome with the hallmark of a research-driven enterprise. “Many colleagues have told me that the R&D atmosphere within the company is even stronger than it was during our academic years.”

The gut microbiome has been a subject of research for only slightly over a decade. Despite numerous scientific and clinical attempts by the industry, fundamental research achievements in microbiome-based drug development remain insufficient. Dr. Tan Yan believes that existing basic scientific theories and data are inadequate to support the growing demands for efficacy and safety validation accompanying the continuous advancement of microbiome therapeutics.

Therefore, since its inception, Xbiome has collaborated with research institutions and hospitals to conduct extensive basic research, exploring topics such as the mechanisms of action of microbiome-based therapeutics, metabolites and their interactions with the host, and changes in biomarkers. According to Dr. Tan Yan, the results of the basic research projects involving Xbiome will be published sequentially within this year. He believes that there is vast potential for exploration in microbiome-based drug development, and that industry enterprises should maintain close communication with research institutions, hospitals, pharmaceutical companies, and regulatory agencies to jointly promote the advancement of the entire sector.

Furthermore, Xbiome has collaborated with numerous renowned medical institutions both domestically and internationally, including Massachusetts General Hospital, Peking University Cancer Hospital, Nanfang Hospital of Guangzhou, and Shanghai Xinhua Hospital, to conduct clinical trials on drugs and in vitro diagnostic products for various indications, achieving multiple breakthrough results.

Currently, Xbiome has progressively advanced its R&D pipeline for immune and metabolic diseases into the clinical stage. Dr. Tan Yan introduced to VCBeat New Medicine two ongoing clinical studies conducted in collaboration with Peking University Cancer Hospital, which investigate combination therapies involving anti-PD-1 immune checkpoint inhibitors.

Among these patients, those with tumors who received anti-PD-1 immune checkpoint inhibitor therapy began sample collection for studies on the correlation between gut microbiota and drug response in early 2018. To date, fecal samples from over 300 patients have been collected, resulting in a total of more than one thousand samples. This represents the largest clinical study globally related to gastrointestinal cancers, monitoring and analyzing the gut microbiota of responders and non-responders to immunotherapy.

According to Dr. Tan Yan, the purpose of this project is to clarify the mechanisms by which gut microbiota influence responses to anti-PD-1 immune checkpoint inhibitors through human data research, thereby enabling companion diagnostics and prognostic assessment. Subsequent efforts will focus on translational research into biomarkers for oncology drug therapy, and collaborations with leading large pharmaceutical companies are currently being explored.

Based on the results of this study, Xbiome submitted an application for in vitro diagnostic product qualification to the U.S. FDA.

Another study is a clinical trial currently recruiting patients to evaluate the combination of fecal microbiota transplantation (FMT) and anti-PD-1 immune checkpoint inhibitors. In recent years, although anti-PD-1 immunotherapy has become a hotspot in cancer treatment, its response rate of only 20%–40% means that most patients fail to benefit from it. The collaborative effort by Xbiome and Peking University Cancer Hospital aims to modulate patients’ gut microbiota, thereby inducing responses in patients previously non-responsive to immunotherapy and reducing immune-related adverse events. Preliminary mouse studies conducted by Xbiome, along with certain clinical cases reported overseas, have confirmed the potential of microbiome-based therapy in this field. The launch of this study positions Xbiome at the forefront of microbiome pharmaceutical development internationally.

Dr. Tan Yan told VCBeat New Medicine that the majority of human data supporting Xbiome’s drug development efforts are derived from these clinical studies. As regulatory oversight of microbiome-based therapeutics in China gradually loosens, Xbiome is maintaining active communication with the Center for Drug Evaluation (CDE). Dr. Tan stated that Xbiome will continue to explore the potential of microbiome-based drugs for treating a broader range of diseases, including highly prevalent conditions such as obesity.

Xbiome’s ability to complete its Series A financing, build its platform, and even advance its R&D pipeline into clinical trials within two years is closely tied to the team’s execution capability and curiosity.

Dr. Tan Yan told VCBeat New Medicine that assembling a team united by curiosity and passion, focusing on microbiome-based drug development, and jointly exploring the unknown was his original intention for starting the business. The achievements made by the Xbiome team in recent years have further strengthened his confidence in the company and even the entire industry. Microecological pharmaceuticals will soon experience an explosive growth.