After holding hands with the First Three Companies to reach three ADC (Antibody Coupled Drugs) collaborations, multinational pharmaceutical company MSD terminated two preclinical ADC collaborations with Kelenbotai (06990. HK).
On October 24th, Kolenbotai announced a resumption of trading and disclosed its partnership with Merck Sharp& Changes in cooperation matters between Dohme LLC (together with its affiliated companies, hereinafter referred to as "MSD"). The announcement shows that the company received a formal written notice from MSD on October 21st, stating that MSD has decided to terminate the exclusive license granted by Kolenbotai to develop, manufacture, and commercialize a preclinical ADC asset; Do not exercise the exclusive option granted by Kolenbotai to obtain an exclusive license for another preclinical ADC asset (hereinafter referred to as "Excluded preclinical ADC asset").
According to the agreement signed by both parties, Kelenbotai is not obligated to refund any received payments or make any payments to MSD regarding the cooperation of the excluded preclinical ADC assets. MSD is also not obligated to pay any termination fees or future milestones or royalties to Kelenbotai regarding the excluded preclinical ADC assets.
Kelun Botai is a subsidiary of Kelun Pharmaceutical (002422. SZ), established in 2016, focusing on the research and development of innovative small molecules and biological agents. In July of this year, Kelun Botai was listed on the Hong Kong stock market.
According to financial report data, in the first half of this year, Kelun Botai achieved a revenue of 1.046 billion yuan, a year-on-year increase of 203.26%, and a net profit loss attributable to the parent company of 31 million yuan, a year-on-year increase of 88.51%.
ADC is an important research and development pipeline for Kelenbotai to establish its presence in the market. In 2022, because of the signing of a large order for ADC cooperation with MSD, Kelenbotai has attracted the attention of the industry and the capital market, and has become the "popular Crispy fried chicken" in Biotech.
According to the prospectus, Kolenbotai has entered into three license and cooperation agreements with Mercado to develop up to nine ADC assets for cancer treatment, including three ADC assets (SKB264, SKB315, and SKB410) that have been advanced to the clinical stage and up to six preclinical ADC assets. The total amount of early and milestone payments reached 11.8 billion US dollars.
According to the announcement, neither of the two ADC assets that terminated the cooperation is a core or main product of Kolenbotai.
Kelun Pharmaceuticals, the parent company of Kelun Botai, stated in the announcement that there have been no other changes in the cooperation between Kelun Botai and MSD, and the remaining three clinical stage ADC assets and four preclinical ADC assets ("ongoing ADC assets") have not been affected. And MSD also confirmed to Kelenbotai, "We (MSD) plan to accelerate the clinical development project of SKB264/MK-2870, and recently released the launch of phase III clinical trials targeting specific non-small cell lung cancer patients
The other side of the "return" of some of Kolenbotai's ADC projects is that MSD has spent billions of dollars to purchase new goods.
Just three days ago, on October 20th, the First Third Republic, Mercado, announced the signing of a global development and commercialization agreement for three ADC drugs. According to the agreement, the two companies will jointly develop and commercialize three ADC candidate products worldwide. The First Third Party will retain exclusive rights in Japan and be fully responsible for production and supply. MSD will make a prepayment of $4 billion and a milestone payment of up to $16.5 billion. The maximum amount of this transaction can reach 22 billion US dollars.
From the targets disclosed by the First Three Companies, the three drugs involved in this collaboration with MSD are HER3-DXd (targeting HER-3), I-DXd (targeting B7-H3), and R-Dxd (targeting CDH6). The SKB264/MK-2870, which Collaborated with Mercado, targets TROP2, SKB315 targets CLDN18.2, and SKB410 targets Nectin-4.
MSD's $20 billion "sweep" is a microcosm of ADC's "frenzy".
ADC (Anti body drug conjugates), also known as antibody conjugated drugs, are tumor "biological missiles" that connect cytotoxic drugs similar to chemotherapy drugs with monoclonal antibodies to achieve targeted killing function on tumor tissue. They combine the principles of targeted therapy and chemotherapy therapy, thus possessing the advantages of both therapies.
The Southwest Securities Research Report shows that the concept of ADC drugs was proposed as early as 1900, but due to technical limitations, it has long remained at the theoretical level. Between 1990 and 2000, monoclonal antibodies were widely used in clinical practice, reducing the barriers to developing ADC drugs.
In recent years, the ADC track has continued to be favored by the industry, and the number of pharmaceutical companies in its layout has continued to increase. According to research data released by the Medical Strategy Department of Yidu Technology in April this year, the number of global ADC clinical trials increased to 208 in 2022, twice the number of trials in 2019 (97 trials); According to incomplete statistics, there are over 80 ADC research and development companies in China.
The global ADC drug research and development is racing, and related cooperative transactions are also exceptionally hot.
On the same day that DS announced its cooperation agreement with MSD, Hansen Pharmaceutical (03692. HK) also announced that GlaxoSmithKline (GSK) obtained its global (excluding Chinese Mainland, Hong Kong, Macao and Taiwan) development, production and commercialization rights and interests of HS-20089 (B7-H3 targeting ADC) from Hansen Pharmaceutical with a down payment of 85 million dollars, up to a milestone payment of 1.485 billion dollars.
According to a research report released by Anxin Securities on October 22nd, there have been multiple transactions of ADC drugs both domestically and internationally since the beginning of this year, including 9 overseas authorization transactions in China, demonstrating a high recognition of the future prospects of ADC drugs in the industry. Considering that domestic enterprises are currently at the forefront of the industry in some target areas in the ADC field layout, there is great potential for overseas authorization in the future.
Despite frequent transactions, the phenomenon of ADC target clusters is gradually emerging. According to Southwest Securities Research Report, there is currently fierce competition among global ADC research products on HER2 targets, while innovative targets are scattered everywhere. Data shows that as of June 8, 2022, there are 60 ADC drugs targeting HER2 that have been launched or are currently being studied worldwide. Secondly, Trop-2 and Claudin-18.2 are also targets with more layouts.
A pharmaceutical industry insider who refused to be named told Times Finance, Although many ADC drugs have the same target, the expandable space of ADC drugs is much more than that of small molecule and antibody drugs. It is not that they share the same target with other companies, so this company's research and development cannot continue, such as optimizing linkers (connectors) and PK/PD (pharmacodynamics) Optimization on. I think the concept of 'roll not roll' is a relative one. For some latecomers, although there is limited room for development, there are still some enterprises that can leverage their own research and development advantages and emerge from the 'inner roll'