Akeso Announces $70 Million Upfront Payment from Expanded Ivonescimab Licensing Deal with Summit Therapeutics

On June 3, 2024, Akeso (9926.HK) announced that it had entered into a supplemental license agreement with Summit Therapeutics (“Summit”) to expand the licensed territory for ivonescimab (i.e., Yidafang®), the PD-1/VEGF bispecific antibody, under the parties’ existing collaboration and license agreement.

Under the Supplemental License Agreement, Akeso will receive an upfront payment and milestone payments totaling $70 million (approximately RMB 500 million), as well as sales royalties for ivonescimab in the newly licensed markets (with royalty rates consistent with those set forth in the collaboration agreement entered into by both parties on December 5, 2022). Akeso will continue to supply ivonescimab injection for all licensed markets, including the newly licensed territories, and will generate revenue from such supply. Furthermore, the Supplemental License Agreement strengthens cross-regional sharing and collaboration provisions regarding deliverables such as clinical trial data and regulatory filing documents, thereby accelerating the regulatory registration and commercialization of ivonescimab worldwide.

Summit will additionally acquire exclusive rights to develop and commercialize ivonescimab in relevant markets including China, the United States, South America, the Middle East, and Africa. Meanwhile, Summit will remain responsible for clinical development, product registration, and commercialization, along with all associated costs, across all licensed territories, including the newly licensed markets.

The relationship between Akeso and Summit Therapeutics dates back to late 2022.

On December 26, 2022, a blockbuster deal ignited the domestic bispecific antibody sector: Akeso announced that it had granted Summit Therapeutics an exclusive license to develop and commercialize ivonescimab (a PD-1/VEGF bispecific antibody, which had not yet been branded as Yidafang® at the time) in the United States, Canada, Europe, and Japan. Akeso retained the rights to develop and commercialize ivonescimab in all other regions, including China.

The agreement indicates that Akeso will receive a $500 million upfront payment. Including development, regulatory, and commercialization milestone payments, the total value of the transaction is expected to reach up to $5 billion (approximately RMB 35 billion), setting a new record for Chinese outbound licensing deals. Meanwhile, Akeso will also receive royalties on ivonescimab in the low double-digit percentage range of net sales. In addition, Dr. Xia Yu, Chairman of Akeso, will be appointed as a member of the Board of Directors of Summit Therapeutics.

At that time, Summit Therapeutics set its sights on the immense global commercial potential of ivonescimab, aiming to pave a fast-track path to victory for its global development and commercialization.

Ivonescimab is a potential first-in-class bispecific antibody independently developed by Akeso, which simultaneously blocks the PD-1 and VEGF pathways. By achieving “one drug, two targets,” it exerts both immune-mediated and anti-angiogenic effects. This innovative antibody structure design effectively reduces treatment-related side effects and safety concerns.

By the end of 2022, Ivonescimab was the first PD-1/VEGF bispecific antibody worldwide to enter Phase III clinical trials, with its clinical development progress significantly ahead of global competitors.

On January 26, 2023, Akeso announced that all conditions for its collaboration agreement with Summit Therapeutics had been satisfied, and the transaction officially took effect. Akeso received the first installment of the upfront payment totaling $300 million, comprising $274.9 million in cash and Summit Therapeutics stock valued at $25.1 million (10 million shares). The receipt of this upfront payment further strengthened Akeso’s cash reserves and will fully support the company’s subsequent drug development and strategic growth initiatives. In 2023, Akeso successfully achieved a turnaround from loss to profitability.

Notably, Summit had already positioned ivonescimab as its core asset and was fully committed to advancing its clinical development in the licensed territories. Currently, two Phase III clinical trials of ivonescimab are underway in China: one evaluating ivonescimab monotherapy versus pembrolizumab (Keytruda) monotherapy as first-line treatment for PD-L1-positive non-small cell lung cancer (NSCLC), and the other assessing ivonescimab plus chemotherapy versus chemotherapy alone in patients with advanced non-squamous NSCLC harboring EGFR mutations who have developed resistance to EGFR-TKIs. Furthermore, ivonescimab has received three Breakthrough Therapy Designations from the National Medical Products Administration (NMPA). In addition to the indications corresponding to the aforementioned two Phase III studies being conducted in China, the third designation covers ivonescimab in combination with docetaxel for the treatment of non-squamous NSCLC that is refractory to prior PD-(L)1 inhibitor and platinum-based chemotherapy.

After the steady advancement of clinical trials, the real turning point finally arrived in 2024.

First, on May 24, 2024, the official website of the National Medical Products Administration (NMPA) announced that Ivonescimab (generic name: Ivonescimab Injection), marketed under the brand name Yidafang®, was officially approved for marketing. The indicated use is in combination with chemotherapy for the treatment of EGFR-mutated non-squamous non-small cell lung cancer (nsq-NSCLC; i.e., locally advanced or metastatic non-squamous NSCLC) that has progressed after treatment with epidermal growth factor receptor (EGFR) tyrosine kinase inhibitors (TKIs).

With this approval, ivonescimab has officially become the world’s first approved novel bispecific antibody drug with a dual mechanism of “tumor immunotherapy + anti-angiogenesis,” and China’s second independently developed and approved novel bispecific antibody drug. Akeso has also become the only biopharmaceutical innovator globally to possess two novel tumor immunotherapy bispecific antibody drugs.

Good things come in pairs. On May 31, 2024, the pre-specified interim analysis conducted by the Independent Data Monitoring Committee (IDMC) for the registrational Phase III clinical study (HARMONi-2 or AK112-303) of ivonescimab injection monotherapy versus pembrolizumab as first-line treatment for locally advanced or metastatic non-small cell lung cancer (NSCLC) with positive PD-L1 expression (PD-L1 TPS ≥1%) demonstrated strongly positive results: the primary endpoint of progression-free survival (PFS) was met.

Data from the HARMONi-2 (AK112-303) study demonstrated that, in the intent-to-treat (ITT) population, ivonescimab significantly prolonged progression-free survival (PFS) compared with pembrolizumab, with a hazard ratio (HR) that was significantly more favorable than anticipated. These results have established ivonescimab as the first and only drug globally to demonstrate superior efficacy over pembrolizumab in a Phase III head-to-head monotherapy clinical trial.

Before Ivonescimab surpassed Keytruda, it endured an extremely dramatic "darkest hour." First, the approval and market launch of Ivonescimab were based on a randomized, double-blind, multicenter Phase III clinical trial conducted in China (AK112-301/HARMONi-A). However, the report indicated that in the interim data from the Phase III trial, the objective response rate (ORR) for the combination with chemotherapy was 50.6%, the median progression-free survival (mPFS) was 7.06 months (HR=0.46), and overall survival (OS) had not yet been observed. This means that while the overall response rate and interim progression-free survival data have been disclosed, overall survival data have not yet been released.

The undisclosed news had kept industry watchers closely monitoring the results of ivonescimab on edge. Therefore, when rumors of “missing expectations” emerged, the taut string suddenly snapped, triggering landslide-like consequences: Akeso closed down 22.27% that day.

Fortunately, with the release of the head-to-head clinical study results, Akeso’s consecutive daily stock price declines finally came to an end, giving way to a nearly 40% surge.

Summit Therapeutics, which holds exclusive licensing rights for ivonescimab in the United States, Canada, Europe, and Japan through its collaboration with Akeso, saw its stock price surge 272% overnight, reaching a market capitalization of $7.6 billion. Furthermore, on June 3, Baker Brothers invested $200 million in Summit, making it the firm’s ninth-largest holding.

Looking back at the history of innovative drugs in China, the last piece of news of such magnitude was the head-to-head victory of the independently developed BTK inhibitor zanubrutinib over Johnson & Johnson’s ibrutinib. Ibrutinib, the world’s first marketed BTK inhibitor, reached a peak annual sales figure of $9.78 billion in 2021. Following its launch, zanubrutinib’s sales rose rapidly, generating $1.3 billion in revenue in 2023 and becoming China’s first “billion-dollar molecule” among innovative drugs.

For China’s innovative drug industry, Ivonescimab’s victory over Keytruda in a head-to-head trial marks another instance where a domestically developed innovative drug has defeated an imported medication from a multinational pharmaceutical giant in direct competition—following the earlier success of Zanubrutinib.

Furthermore, it is worth noting the indication for ivonescimab: non-squamous non-small cell lung cancer (nsq-NSCLC). It should be pointed out that the National Cancer Center recently released the 2024 National Cancer Report, which confirms that lung cancer remains the leading cause of cancer incidence and mortality both in China and globally, with non-small cell lung cancer accounting for 85% of cases.

Meanwhile, another historic breakthrough was announced at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting: Pfizer presented the long-term follow-up results of the Phase III CROWN study in an oral presentation. The data showed that in the 5-year follow-up of the CROWN study evaluating lorlatinib as first-line treatment for ALK-positive non-small cell lung cancer (NSCLC), the 5-year progression-free survival (PFS) rate in the lorlatinib group was 60%, and the median PFS had not yet been reached. This represents not only the longest PFS achieved to date with single-agent targeted therapy in advanced NSCLC, but also the longest across the entire field of solid tumors, marking unprecedented survival benefits for patients.

Within less than a week, the field of solid tumor therapy has witnessed two breakthroughs poised to go down in history, potentially reshaping the global treatment landscape for lung cancer.

Interestingly, Akeso and Pfizer also entered into a collaboration in 2021 to conduct clinical studies on the combination of cadonilimab, a PD-1/CTLA-4 bispecific antibody, and Pfizer’s axitinib (brand name: Inlyta®) for the treatment of advanced/metastatic clear cell renal cell carcinoma (ccRCC). The trial aimed to evaluate the efficacy and safety of the combination of cadonilimab and axitinib as first-line therapy for advanced/metastatic ccRCC. At that time, lorlatinib was largely under the radar, and it is likely that Pfizer could hardly have predicted its current market success.

For Akeso, its bispecific antibody is poised to usher in a new era for a multi-billion-dollar market. According to forecasts by Minsheng Securities Research Institute, ivonescimab is expected to reach peak sales of RMB 8.15 billion in 2030. Regarding subsequent commercialization, Dr. Xia Yu, Chairman of Akeso, stated that the company will actively engage with regulatory authorities as soon as possible to accelerate the approval of the second indication for ivonescimab. The company has previously set specific sales targets for the first approved indication of ivonescimab and plans to expand its commercial team in the future based on sales revenue.