Candid Therapeutics Emerges with $370M Financing, Acquires Two China-Originated TCE Antibody Assets

On September 9 (local time), Candid Therapeutics, a newly established biotechnology company dedicated to developing therapeutics for autoimmune diseases, announced the completion of a $370 million (approximately RMB 2.636 billion) financing round. Concurrently, it announced the acquisition of the biotechnology companies Vignette Bio and TRC004. Vignette Bio is a NewCo co-founded by WuXi Biologics’ affiliate WuXi MAB, while TRC004 is a NewCo co-founded by Genor Biopharma.

This round of financing was co-led by prominent firms including Venrock Healthcare Capital Partners, Fairmount, TCGX, and venBio Partners, with participation from well-known investment institutions such as Foresite Capital, Third Rock Ventures, Fidelity Management & Research Company, Samsara BioCapital, Qiming Venture Partners USA, OrbiMed, Boxer Capital, Redmile Group, Vida Ventures, Two River, Franklin Templeton, LifeSci Venture Partners, Mirae Asset Capital Life Science, Polaris, and Soleus Capital.

Candid acquired Vignette Bio and TRC 2004 through a three-way merger and multi-step financing, breaking records upon its debut:According to data from the Fierce Biotech website, this is the largest financing round in the biopharmaceutical industry so far this year, surpassing the record set on September 4 when cell therapy company ArsenalBio completed its $325 million Series C financing.

“Combining three financing rounds, two licensing deals, and one merger and acquisition into a single closing is unconventional, but Candid pulled it off,” said Dr. Ken Song, Chairman, President, and Chief Executive Officer of Candid, in an interview with Fierce Biotech.

As an emerging enterprise, Candid’s rapid growth is inseparable from the efforts of its experienced core team, particularly those of key figure Dr. Ken Song.

Dr. Ken Song’s experience spans clinical medicine, basic scientific research, venture capital, and entrepreneurship. As a serial entrepreneur in the pharmaceutical industry, he has successfully founded and led several life sciences companies. He served as President and Chief Executive Officer of Metacrine, Inc., where he spearheaded the early discovery and clinical development of a first-in-class therapy for non-alcoholic steatohepatitis (NASH) and guided the company through its initial public offering. Additionally, as Co-founder and Chief Executive Officer of Ariosa Diagnostics (later acquired by Roche), he led the organization from early-stage research to the global commercialization of the Harmony Prenatal Test (a non-invasive prenatal test) in over 100 countries and regions.

The “highlight” case that truly resonates with everyone is Dr. Ken Song’s experience in co-founding the radiopharmaceutical company RayzeBio.

As a supernova in the radiopharmaceutical sector, RayzeBio’s story was once widely celebrated within the industry: Founded in 2020, it successfully completed four rounds of financing within three years, raising a total of $418 million, despite having only three products in its pipeline. Also within this three-year period, RayzeBio went public against the tide in 2023, when capital markets had cooled, successfully raising $311 million and becoming the second-largest biotech IPO in the U.S. stock market that year. Moreover, just over three months after its listing, in December 2023, RayzeBio was acquired by Bristol Myers Squibb (BMS) for $4.1 billion, representing a 250% premium.

Less than a year later, Dr. Ken Song embarked on a new entrepreneurial venture. In an interview with Fierce Biotech, he stated, “We initially evaluated various opportunities in the biotechnology sector and established Candid Therapeutics as a shell company. After assessing more than 50 opportunities, I ultimately selected T-cell engagers (TCEs).”

Currently, Candid is developing T-cell engager (TCE) antibodies capable of depleting specific B-lymphocyte populations and plans to advance the application of these novel therapies in the field of autoimmune diseases. Its core pipeline consists of two TCE antibodies: CND106 (EMB-06), a BCMA x CD3 bispecific antibody licensed from Vignette Bio, and CND261 (GB261), a CD20 x CD3 bispecific antibody licensed from TRC 2004. Both core candidates have completed Phase I dose-escalation studies. Moving forward, Candid will focus on advancing the development of its core pipeline and aims to obtain clinical data on drug safety by at least 2025.

Notably, the two companies acquired by Candid, along with the two core pipelines obtained thereby, both originate from Chinese biotech firms.

Vignette Bio, one of the acquired companies, is a NewCo established by EMB-06, licensed from Mabwell Bioscience, and Foresite Labs in 2024, focusing on innovative therapies for immune and inflammatory diseases.The company was incubated by Foresite Labs and received co-investment from Foresite Capital, Qiming Venture Partners USA, Samsara Biocapital, and Mirae Asset Capital Life Science. In September this year, EMB-06 Bio announced that it had entered into a licensing agreement with Vignette Bio for EMB-06, its BCMA-targeting T-cell engager (TCE) molecule.

Under the agreement, Akeso Biopharma will grant Vignette exclusive rights to develop and commercialize EMB-06 outside of China, while Akeso Biopharma will retain the rights to EMB-06 in the Greater China region. Akeso Biopharma will receive a total upfront consideration of $60 million in cash and equity in Vignette, and will be entitled to receive up to $575 million in development, regulatory, and commercialization milestone payments, as well as royalties based on net sales.

EMB-06, the core asset in our pipeline, is a novel BCMA×CD3 T-cell engager bispecific antibody. By binding to BCMA on the surface of tumor cells and activating T cells, this bispecific antibody mediates T cell-specific killing of BCMA-expressing tumor cells and is primarily indicated for the treatment of relapsed or refractory multiple myeloma (RRMM). In terms of clinical trials, Phase I/II studies are evaluating its safety, tolerability, pharmacokinetics, and preliminary anti-tumor activity in patients with RRMM. As of August 28, 2023, 33 patients had received EMB-06 at various dose levels. Preliminary results indicate that EMB-06 exhibits a differentiated safety profile in RRMM patients, with low incidences of cytokine release syndrome (CRS) and neurotoxicity.

Another acquired entity, TRC 2004, is a NewCo established by Genor Biopharma through licensing GB261 to Two River and Third Rock, which was also recently incorporated.In August this year, Genor Biopharma announced that it had entered into a license agreement and an equity agreement with TRC 2004. Under the license agreement, Genor Biopharma has agreed, among other things, to grant the licensee an exclusive global license (excluding China) to develop, use, manufacture, commercialize, and otherwise exploit GB261.

Under the agreement, in consideration for the license, Akeso Biopharma will receive a substantial equity stake in the licensee, an upfront payment of tens of millions of U.S. dollars, milestone payments of up to $443 million (approximately RMB 3.16 billion), and tiered royalties ranging from single-digit to double-digit percentages of net sales.

GB261, a core asset in the pipeline, is a novel, differentiated CD20/CD3 bispecific T-cell engager (TCE) featuring ultra-low CD3-binding affinity and intact Fc function. It significantly inhibits the growth of rituximab-resistant cancer cells in vitro and in vivo models, achieving T-cell activation with lower cytokine release compared to similar products. Therefore, GB261 is a highly promising bispecific therapeutic antibody for B-cell malignancies, offering significant competitive advantages over other CD3/CD20 inhibitors and holding promise as a superior and safer T-cell engager therapy. As of October 2023, the Phase I/II clinical trial of GB261 has completed dose escalation, demonstrating favorable safety, pharmacokinetic profiles, and clinical anti-tumor activity.

In fact, the NewCo model is emerging as a new trend for Chinese innovative drugs going global. Since the beginning of this year, numerous Chinese pharmaceutical companies have successfully expanded overseas through this approach. The bispecific antibodies developed by Genor Biopharma and EMBiologics were both internationalized via the NewCo model; however, the respective NewCo entities were subsequently acquired by Candid Therapeutics, which was established by a consortium of US dollar funds. Notably, EMBiologics and Genor Biopharma, which had previously exchanged global rights to their assets for equity in the assignees, are now shareholders of Candid. The NewCo model enables Chinese biotech firms to accompany their outstanding achievements on a path of rapid global growth through an innovative approach.

References:

https://www.fiercebiotech.com/biotech/370m-debut-candid-therapeutics-upfront-about-goal-lead-coming-t-cell-engager-wave