CN4 Billion Upfront: Chinese Biotech Kangji Ruined Records with New Bispecific ADC Deal; Files IPO Prospectus

On September 29, 2024, Alphamab Oncology (Stock Code: 9966.HK) announced thatIts wholly-owned subsidiary, Jiangsu Alphamab Biopharmaceuticals Co., Ltd. (hereinafter referred to as “Alphamab”), has entered into a licensing agreement with Shanghai GeneMab Biological Technology Co., Ltd. (hereinafter referred to as “GeneMab Biotech”), a wholly-owned subsidiary of CSPC Pharmaceutical Group Limited (stock code: 1093.HK), regarding JSKN003, an HER2 bispecific antibody-drug conjugate (ADC) independently developed by Alphamab.

According to the agreement,Alphamab Oncology will be entitled to receive upfront and milestone payments totaling up to RMB 3.08 billion, including an upfront payment of RMB 400 million, RMB 300 million in development milestones tied to the first patient enrollment in multiple registrational clinical studies, as well as regulatory and sales milestone payments contingent upon regulatory approval progress. In addition, Alphamab Oncology is entitled to receive double-digit percentage royalties based on net sales of JSKN003.

Pursuant to the terms of the agreement, Shanghai GeneMab Biological Technology Co., Ltd. will obtain the exclusive license and right to sublicense the development, sale, offer for sale, and commercialization of JSKN003 for tumor-related indications in mainland China (excluding Hong Kong, Macao, and Taiwan), and will become the sole Marketing Authorization Holder (MAH) for JSKN003 for tumor-related indications in mainland China. Shanghai GeneMab Biological Technology Co., Ltd. shall bear the costs of clinical development activities for JSKN003 under the licensing agreement. Alphamab Oncology retains the exclusive manufacturing rights for JSKN003.

According to incomplete statistics,The transaction between Alphamab Oncology and CSPC has set a new record for the upfront payment in domestic rights deals for Chinese innovative drugs, with the RMB 400 million upfront payment becoming the largest single upfront payment to date.

As a result, as of press time,Alphamab Oncology’s stock price surged 52.29%, with a total market capitalization of HK$4.492 billion.

By combining the advantages of antibody-based drugs and small-molecule drugs, antibody-drug conjugates (ADCs) can deliver cytotoxic agents precisely to tumor cells. However, an ideal ADC must remain stable in systemic circulation, specifically bind to its target upon reaching the therapeutic site, and subsequently release its cytotoxic payload. Therefore, key factors for the specific killing of tumor cells by ADCs include a selective target, high affinity for tumor binding, an optimized conjugation strategy, and enhanced stability in systemic circulation.

To this end, Alphamab Oncology has developed an antibody-drug conjugate (ADC) development platform with independent intellectual property rights. Based on site-specific conjugation technology targeting the glycan chains in the antibody CH2 domain, this platform employs a one-enzyme, two-step method that simplifies the manufacturing process and reduces costs. Leveraging this platform, ADCs with highly homogeneous drug-to-antibody ratios (DAR) can be produced, offering superior serum stability and significantly reduced side effects.

Alphamab Oncology’s One-Enzyme, Two-Step Method for JSKN003. Image source: Alphamab Oncology official website

JSKN003 is a novel HER2-targeting bispecific epitope ADC developed by Alphamab Oncology using its glycosylation site-specific conjugation platform.It is a site-specific antibody-drug conjugate (ADC) obtained by click chemistry modification of the heavy chain glycans of the KN026 antibody molecule, with a drug-to-antibody ratio (DAR) of approximately 4. JSKN003 binds to HER2 on the surface of tumor cells and releases a topoisomerase I inhibitor via HER2-mediated endocytosis, thereby exerting antitumor effects.

Clinical studies have shown that,JSKN003 demonstrates superior serum stability, a more potent bystander killing effect, and equivalent tumor-killing activity compared to similar drugs, thereby effectively widening the therapeutic window. It exhibits a favorable safety profile and efficacy comparable to DS-8201 in both HER2-high and HER2-low expressing cells (in CDX and PDX models).

Previously,Multiple clinical study data presented by Alphamab Oncology at international academic conferences demonstrate that JSKN003 has a favorable tolerability and safety profile, with significant efficacy in various advanced solid tumors previously treated with multiple lines of systemic therapy.

For example, on September 16, 2024, Alphamab Oncology presented the latest clinical study results of JSKN003 at the ESMO Congress, which were pooled analyses from two Phase I clinical trials conducted in Australia and China for platinum-resistant ovarian cancer and advanced HER2-positive (IHC 3+) solid tumors.

In the clinical study of JSKN003 for treating patients with platinum-resistant ovarian cancer, a total of 50 patients received JSKN003 treatment. Data showed that among the 44 patients who underwent at least one post-baseline tumor assessment, the objective response rate (ORR) was 56.8% (95% CI: 41.0, 71.7), with 39 patients (88.6%) experiencing tumor shrinkage. In patients with HER2 IHC 0 and those with HER2 expression (IHC 1+, 2+, and 3+) confirmed by central laboratory testing, the ORRs were 52.9% (95% CI: 27.8, 77.0) and 68.8% (95% CI: 41.3, 89.0), respectively. Among the 33 patients previously treated with bevacizumab, the ORR was 54.5% (95% CI: 36.4, 71.9); among the 26 patients previously treated with PARP inhibitors, the ORR was 46.2% (95% CI: 26.6, 66.6).

A pooled analysis of two studies demonstrated that JSKN003 exhibited favorable tolerability and a manageable safety profile, with low incidences of gastrointestinal and hematologic toxicities. JSKN003 showed robust efficacy in patients with platinum-resistant ovarian cancer, both HER2-positive and HER2-negative, who had received multiple prior lines of therapy.

In the clinical study of JSKN003 for the treatment of patients with advanced HER2-positive (IHC 3+) solid tumors (excluding breast cancer), a total of 29 patients were enrolled and received intravenous infusion of JSKN003 once every three weeks. Data showed that as of July 15, 2024, 28 patients were evaluable for efficacy analysis, with an objective response rate (ORR) of 75.0% and a disease control rate (DCR) of 89.3%. Among the seven patients who had previously received anti-HER2 antibody-drug conjugate (ADC) therapy, the ORR was 71.4%. The ORRs for gastric cancer and colorectal cancer were 83.3% (5/6) and 66.7% (6/9), respectively.

The study results indicate that JSKN003 demonstrates favorable tolerability and safety, with a low incidence of hematologic toxicity. It shows significant efficacy in patients with advanced HER2-positive solid tumors who have previously undergone multiple lines of systemic therapy, particularly exhibiting promising objective response rates (ORR) in patients with HER2-high gastrointestinal cancers.

Currently,JSKN003 is conducting multiple clinical trials in Australia and China, and has entered Phase III clinical development in China for the indication of HER2-low breast cancer.

Alphamab Oncology is an innovative biopharmaceutical company focused on the development, manufacturing, and commercialization of novel biologics in the field of oncology. The company has established proprietary technology platforms for the research, development, and production of biologic macromolecule drugs, including protein/antibody engineering, antibody screening, and multi-module/multi-functional antibody modification technologies. These platforms specifically encompass a bispecific antibody development platform, an antibody-drug conjugate (ADC) development platform, and a hybrid antibody development platform.

Leveraging its advanced technology platform, Alphamab Oncology has developed a product pipeline with significant differentiated features and strong global competitiveness, covering innovative anti-tumor drugs such as single-domain antibodies/monoclonal antibodies, multi-specific antibodies, and antibody-drug conjugates (ADCs). Notably, KN035 (envafolimab injection; brand name: ENWEIDA®), the world’s first subcutaneously administered PD-(L)1 inhibitor, was approved for marketing in China in 2021. Three new drug candidates are currently undergoing Phase III or pivotal clinical studies, while several others are in various stages of clinical development.

Alphamab Oncology’s Product Pipeline. Image source: Alphamab Oncology 2024 Interim Results Report

Alphamab Oncology’s 2024 Interim Results Report shows that,In the first half of 2024, the Company achieved operating revenue of RMB 173.56 million, representing a year-on-year increase of 27.18%; product revenue amounted to RMB 90.64 million, a year-on-year decrease of 22.54%; and R&D expenses totaled RMB 194.53 million, remaining largely flat compared to the same period last year. Notably, the Company maintains a robust financial position, with cash reserves of RMB 1.45659 billion as of June 30, 2024.

With these impressive achievements and substantial investment in R&D, Alphamab Oncology has long been one of the most watched innovative pharmaceutical companies in the past three years. In recent years, Alphamab Oncology has further focused on several highly innovative bispecific antibody and ADC products, promoting pipeline progress through a “combination” strategy, while also engaging in business development (BD) collaborations for certain self-developed products to jointly accelerate their market launch.

It is worth noting that Alphamab Oncology’s unique ADC technology platform has also gained recognition from other innovative pharmaceutical companies. On June 6, 2024,Alphamab Oncology Announces R&D and Commercialization Collaboration Agreement with ArriVent BioPharma. The two parties will collaborate to discover and develop novel antibody-drug conjugates (ADCs) using Alphamab Oncology’s proprietary linker-payload platform (Alphatecan) and glycosite-specific conjugation platform.

Under the terms of the agreement, Alphamab Oncology is entitled to receive a one-time, non-refundable upfront payment, as well as potential milestone payments, including those related to product registration, development, and sales milestones, totaling up to $615.5 million (approximately RMB 4.317 billion). In addition, Alphamab Oncology is entitled to receive tiered sales royalties from ArriVent for each ADC product.

To date, according to incomplete statistics,As of 2024, Alphamab Oncology has finalized two business development (BD) deals totaling RMB 7.404 billion for its ADC technology and related R&D products.

In its 2024 interim results report, Alphamab Oncology stated that the Company will continue to leverage its in-house R&D capabilities and technology platforms to discover, validate, and select leading drug candidates, thereby enriching its early-stage pipeline, with a focus on bispecific antibody drugs for tumor immunotherapy and bispecific ADCs. Meanwhile, it will continue to optimize manufacturing processes and technologies to enhance product quality and reduce costs.To maximize the commercial value of its global patent portfolio, the Company will also continue to actively pursue additional strategic collaboration opportunities for its core products, such as co-development, joint development partnerships, and out-licensing.

Now, let us turn to the other party in this transaction. CSPC is an innovation-driven pharmaceutical enterprise integrating research and development (R&D), production, and sales. The company focuses on key therapeutic areas, including oncology, psychiatry and neurology, cardiovascular diseases, immunology and respiratory conditions, digestive and metabolic disorders, and anti-infective therapies. It has established eight innovative technology R&D platforms, covering nano-formulations, mRNA, siRNA, antibodies/fusion proteins, cell therapy, and antibody-drug conjugates (ADCs), thereby providing robust support for the development of innovative drugs. Currently, CSPC has approximately 130 innovative drug candidates in its pipeline, comprising over 40 large-molecule projects, more than 40 small-molecule projects, and upwards of 40 novel formulation projects. It is expected that around 50 new products or new indications will be submitted for market approval over the next five years.

Antibody drugs and ADCs are also a key focus area for CSPC. According to its 2024 interim report, CSPC currently has more than 60 key products in development that have entered clinical trials or regulatory filing stages, including five ADC candidates and three bispecific antibody drugs.

Source: Compiled from public data; graphic by VCBeat New Medicine

Notably, the anti-HER2 bispecific antibody KN026 is also a key outcome of the strategic collaboration between CSPC and Alphamab Oncology. Previously,The two parties signed a licensing agreement for the development and commercialization of KN026, independently developed by Alphamab Oncology, in mainland China in 2021, with a total transaction value of up to RMB 1 billion. Alphamab Oncology will receive an upfront payment of RMB 150 million, milestone payments of up to RMB 850 million, and double-digit tiered sales royalties.

In addition to continuously introducing innovative bispecific antibody ADC products, CSPC is also actively promoting the license-out of its own ADC products. To date, two of its ADC products have successfully gone global, with total transaction amounts reaching $1.8875 billion.

Source: Compiled from public data; graphic by VB New Medicine

CSPC’s proactive expansion into bispecific antibody-drug conjugates (ADCs) underscores the surging momentum of this sector in China.. Data shows that amid the global surge in bispecific antibody-drug conjugates (ADCs), Chinese innovative pharmaceutical companies have delivered particularly impressive performances. In the view of many industry insiders, bispecific ADCs represent one of the few therapeutic areas where Chinese pharmaceutical companies can directly compete with, and even lead, their overseas counterparts.

The Insight database shows that,As of May 2024, only 16 bispecific antibody-drug conjugates (ADCs) have entered clinical trials globally, with the majority developed by Chinese pharmaceutical companies, including Baili Tianheng, Alphamab Oncology, and Chia Tai Tianqing.

Global Clinical-Stage Bispecific Antibody–Drug Conjugates (16 Candidates) (Data Source: Insight; Data as of End-May 2024)¹

In addition, domestic pharmaceutical companies such as 3SBio, RemeGen, Junshi Biosciences, and SinoCellTech are actively advancing the research, development, and clinical trials of their bispecific antibody drugs. These agents target multiple high-profile pathways, including PD-1/VEGF, and have demonstrated favorable efficacy and safety profiles in clinical studies.

Importantly, the development of domestically produced bispecific antibody-drug conjugates (ADCs) is advancing rapidly. These agents have not only achieved significant progress within China but also realized substantial business development in international markets. Backed by robust platform technologies and a rich pipeline of candidate drugs, Chinese bispecific ADCs are highly favored by overseas pharmaceutical companies, which have been actively acquiring them.

According to incomplete statistics, as of press time, there have been a total of 8 BD deals involving domestically produced bispecific antibody ADCs from 2024 to date, with the cumulative total transaction value exceeding USD 5.465 billion.

Image source: Compiled from public data; graphic by VCBeat New Medicine

As one of the hottest tracks for innovative drugs, bispecific antibody-drug conjugates (BsADCs) have attracted numerous Chinese pharmaceutical companies, ushering in a period of robust growth. With an increasing number of deals being closed, the global community is once again recognizing the potential and market value of Chinese-made BsADCs. It is believed that more differentiated BsADC products will enter the global market in the future, ultimately providing patients with a broader range of effective treatment options.

References:

1. VCBeat. “High-Value BD Deals, Head-to-Head Victories, and Major Funding Rounds… How Are Chinese Bispecific Antibodies Dominating the Market?”