HONG KONG – Looking for an immunotherapy approach against hepatitis B virus (HBV), Chinese liver disease specialist Ascletis Pharma Inc. identified a target more familiar to those working in oncology. The company licensed rights to subcutaneously administered PD-L1 antibody KN-035, developed by Suzhou Alphamab Co. Ltd., to develop for use in HBV and other viral diseases in greater China.

"We believe that PD-L1 could be the first-in-class revolutionary immunotherapy that may lead to a potential clinical cure for HBV," Lindi Tan, chief financial officer at Ascletis, told BioWorld Asia. The compound will be known as ASC-22 in Ascletis' pipeline.

Under the terms of the deal, Ascletis will pay Alphamab undisclosed cash up front. Alphamab will also be eligible for payments upon achieving regulatory and commercial milestones. Both sides remained tight-lipped on specific figures.

"The main financial terms that have been disclosed are that Ascletis will pay Alphamab tiered royalties between 15 and 20 percent of the sales of ASC-22 in greater China for viral indications," she added.

For territories outside greater China, Ascletis will be eligible for economics from Alphamab on up-front, regulatory and commercial milestones for ASC-22 in viral indications, Tan noted.

As part of the collaboration, Alphamab will manufacture and supply Ascletis with ASC-22 for clinical trials and commercialization in viral indications in greater China. Ascletis will be responsible for the clinical development, regulatory filing and commercialization in the licensed territory.

"We plan to initiate the clinical trial for ASC-22 in China in the second half of this year," Junhong Zhang, vice president at Alphamab, told BioWorld Asia.

"Ascletis' experience in clinical trials and commercialization complements with Alphamab," she added.

The only suitable candidate

While PD-L1 has been well-validated in the immuno-oncology space, liver disease experts have pointed to its potential as an immunotherapeutic approach in viral diseases such as HBV.

"As T-cell exhaustion in hepatitis B virus infections is an important factor in immune tolerance, blocking the PD-1/PD-L1 pathway could be an effective immunotherapy approach to improve specific T-cell function and lead to a clinical cure for chronic hepatitis B," said Guiqiang Wang, director of Center for Liver Diseases at Peking University First Hospital.

While there are a number of anti-PD-L1/PD-1 drugs being launched and developed in China, Tan said Alphamab's asset, as the only subcutaneous PD-L1 in late-stage clinical trial, is the only suitable candidate for the collaboration.

"Its subcutaneous route of administration will be critical for patient compliance, and its room temperature stability was a key consideration in our selection of KN-035 as our preferred PD-1/PD-L1 candidate," she explained.

KN-035 is a fusion protein of a PD-L1 single domain antibody with Fc (fragment crystallizable). As an injectable drug, it is less invasive and makes it ideal as an HBV therapy.

Besides the partnership with Ascletis, Alphamab is also working with another Chinese biotech, 3D Medicines Inc., to develop the drug candidate to treat tumors.

Currently, KN-035 has been studied in multiple clinical trials in more than 500 patients in the U.S., China and Japan. Alphamab said it has demonstrated a good safety profile and preliminary efficacy in two pivotal trials.

In October, the company said KN-035 entered late-stage clinical development, including phase III testing for bile tract carcinoma and phase II for microsatellite instability-high solid tumors in China.

Assuming positive results, Alphamab expects to launch KN-035 in the fourth quarter of 2019, Zhang previously told BioWorld Asia. (See BioWorld, Feb. 15, 2018.)

Meanwhile, Ascletis' CEO, Jinzi Wu, called the pact with Alphamab "another major step forward for the company to expand its pipeline and platform with biological drugs," after the company's recent deal with pharma giant Roche Holding AG.

In November, Roche transferred to Ascletis the sales and promotion rights to Pegasys (peginterferon alfa-2a) for treating HBV and hepatitis C virus (HCV) in China. That made Pegasys the second marketed product for Ascletis, after Ganovo (danoprevir).

Ganovo is known as the first China-developed treatment for HCV, which has earned Ascletis recognition in the liver disease space. The marketing clearance came in June, two months before the company became the first pre-revenue biotech to list on the Hong Kong Stock Exchange. (See BioWorld, June 20, 2018.)

Promising as it sounds, the announcement of the Alphamab collaboration with Alphamab has not helped lift Ascletis' share price (HK.1672), which continues to hover at around HK$6 (US76 cents) this week, closing last week at HK$6.28. In six months, its share price has fallen by more than half from its IPO price at HK$14.