SHANGHAI – Alpha Biopharma Inc., of Shanghai, closed the first tranche of its $65 million series A fund, having received $37 million from Qiming Venture Partners, TF Fund and Lyzz Healthcare Venture Fund. According to Alphabio's chief operating officer, James Liu, the remaining $28 million is expected to close in the next few months.

Alphabio will use the funds to kick off a phase II trial in China for its lead asset, AZD-3759, a small-molecule tyrosine kinase inhibitor (TKI) for lung cancer patients with brain tumors. It treats EGFR mutation-positive non-small-cell lung cancer (NSCLC) patients with central nervous system metastases.

The firm also is seeking to license-in other late-stage assets with the funds.

As a biotech startup, Alphabio's origin story is one that is becoming increasingly common in China. Venture financiers with deep pockets – seeking to make hefty returns on China's growing drug market – can't find enough innovative drug companies to invest in. So, they seed their own with assets, and grow the team later.

But instead of licensing an asset from overseas, as is most commonly done, Lyzz Healthcare Venture Fund acquired AZD-3759 from the Astrazeneca Innovation Center China at a point when the multinational corporation (MNC) was divesting to shore up its balance sheet. In fact, the entire R&D center was spun off as a joint venture that became Dizal Pharmaceutical, but AZD-3759 was apparently not part of the deal. (See BioWorld, Nov. 30, 2017.)

"Lyzz is another character in our company story; they helped to incubate the asset," said Liu.

Alphabio is also the product of another trend: the MNC brain drain that has become the startup brain gain. In China, this talent challenge is happening across many industries but biopharma is being hit particularly hard. Liu said that of the 17-person team at Alphabio, more than half have left secure MNC pharma roles to be part of something new.

"At an MNC, we are an employee, we follow directions. Here, we can combine our interests, our dreams, and our experience," explained Liu.

In Liu's case, he previously worked for Roche Holding AG and left a job as head of business development and strategy for Asia Pacific at Takeda. It was a former colleague from Roche, now working at Lyzz, that reached out to Liu to be a part of Alpha. And it is those same networks that Liu said the team will use to identify other promising late-stage assets.

Breaking the BBB

A phase I study of AZD-3759 in 67 patients with EGFR-mutant NSCLC and brain metastasis was completed, covering 11 clinical trial sites in Australia, South Korea, Taiwan and the U.S.

The study determined that 200 mg twice daily showed a tolerable safety profile in patients with NSCLC and CNS metastases who had either never received a TKI or who had been pretreated with a TKI. Moreover, there was promising clinical activity from the penetration of the blood-brain barrier (BBB), which is the key differentiating point.

TKIs have largely been unable to get past the BBB. That leaves the high number of lung cancer patients that develop CNS metastases without an effective treatment, as tumors proliferate unchecked in the brain. The patient prognosis for the disease is very poor, and the rate of lung cancer is very high in China.

Liu estimated there could be as many as 100,000 to 150,000 patients a year in China that could benefit from AZD-3759. And Liu predicted that Alphabio's drug might not face any rivals in the near future.

"For the next two to three years, we can see no direct competition in our judgment," he said. "We have not found any candidate with this profile under development."

One example of a drug that has had success in lung cancer patients with brain metastases is Roche's Alecensa (alectinib). But Alecensa is for patients with a different genetic mutation: anaplastic lymphoma kinase (ALK)-positive NSCLC. (See BioWorld, June 7, 2017, and May 23, 2018.)

Yet, a more serious contender might be right in the company's backyard. Epitinib, being developed by Hutchison Medipharma Co. Ltd. (Chi-Med), of Shanghai, completed a phase I trial in China in December 2016, almost a year before AZD-3759. (Astrazeneca published the findings in The Lancet in October 2017). (See BioWorld Today, Dec. 14, 2016.)

Epitinib is also an EGFR inhibitor for NSCLC patients with brain metastases that can pass the BBB. The early results showed the drug was well-tolerated with a 62 percent overall response rate in patients who had not been treated with an EGFR inhibitor.

But the company has been slow to move forward in that indication, announcing on its website it intends to conduct a pivotal phase III study of epitinib in China sometime this year.

But Chi-Med has already moved ahead with epitinib in a slightly different direction. In March, it filed for a phase Ib/II study of epitinib as a monotherapy for glioblastoma in patients with EGFR amplification.

China-first strategy

At the moment, Alphabio is gearing up to study AZD-3759 in China in a phase II trial. That is part of the plan to put China at the core of the company's strategy.

What sets Alpha apart is a strategy to do clinical development first in China, and use that as a springboard for international markets. Until recently, the regulatory hurdles would have made that impossible. But now, Liu said he sees an opening.

"Our strategy is to develop in China for the world. We will do the clinical development in China first. We have a different very big patient population and have several unmet medical needs," Liu said.

"We must re-evaluate China's potential," he added. "In the past, we always followed the west for drug approvals, but if we start in China first to get approval, we have a lot opportunity."