SHANGHAI – Neostem Inc. (NASDAQ:NBS) has signed an exclusive license agreement with Cellular Biomedicine Group (OTCQB:CBMG), of Shanghai, for its patient-specific immunotherapy (DC-TC) to treat late-stage hepatocellular carcinoma (HCC) in China, home to more than 45 percent of the world's HCC patients.

The deal will kick off phase II trials in China. After the first patients are enrolled, Neostem stands to collect a $1 million up-front payment with an additional $30 million in licensing and milestones should the project be successful. There is further possibility of payments in royalties and sublicense fees.

The partnership is a legacy from New York-based Neostem's recent acquisition of California Stem Cell (CSC), which closed earlier this month, and shows the deal is already beginning to earn its keep. (See BioWorld Today, April 15, 2014.)

"The recent acquisition of CSC allows us to add this platform technology in immunotherapy, which we believe is one of the hottest areas in biotechnology. The idea is that if you can create the target for your particular cancer cells towards the particular cancer cells that will replicate and metastasize – you can help your body destroy those cells," Robin L. Smith, chairman and CEO of Neostem, told BioWorld Asia.

CSC developed the relationship with the Chinese partner, CBMG, having collaborated on the phase I together. It has now become a wholly owned subsidiary, Neostem Oncology LLC, to develop targeted immunotherapies for cancer.

CBMG will assume the costs of the trial and will take on the responsibility for all clinical, marketing and possible commercialization activities in China. It is expected that it will have the rights to China and as well as surrounding countries.

Neostem, which runs a U.S.-based contract management organization as well as conducts cellular therapy discovery, will be responsible for the regulatory filings and controlling the manufacturing process.

"The manufacturing will be done in China; we are sort of controlling the manufacturing. Collaborating yet controlling, but it will all be done in China," said Smith.

DC-TC treatment is based on recent findings that a small number of cancer initiating stem cells may be the cause of the rapid proliferation of cancer in the body. The technology in question has refined the isolation and expansion of these cancer-initiating cells, which are combined with autologous dendritic cells. These are then introduced into the patient with subcutaneous injections to bolster the immune system, enabling it to fight the cancer stem cells.

In addition to being home to 45 percent of the world's HCC patients, China reported 395,000, or roughly 50 percent, of new cases in 2012.

"There is a huge population with liver cancer," said Smith, "a huge unmet need where we believe we can create a therapy for those diseases."

"The planned phase II study in China is seeking to assess the efficacy and safety of our new DC-TC platform technology in treating hepatocellular carcinoma, and we look forward to working with CBMG to develop this indication in Asia," explained Smith.

CBMG reported its successful phase I trials in December last year which was the first immune cell clinical trial of its kind in China.

"We are very pleased with the positive results of this [phase I] trial, which show the TC-DC therapy to be safe and are now in a position to plan a phase II trial," said William Cao, CEO of CBG.

The treatment is particularly valuable for patients with late-stage liver cancer who are not eligible for curative resection or transplantation. Currently, the most common therapies used to treat most HCC patients are surgery and local chemotherapy, with a two-year recurrence rate of 51 percent.

The phase I trial was an open-label, single-center trial conducted on eight primary hepatocellular carcinoma patients following resection. The trial was conducted at PLA85 Hospital with Chengwei Chen, MD, as principal investigator.

Each patient received patient-specific TC-DC therapy. Patients received weekly injections for three consecutive weeks and were evaluated over a two-month period for the therapy's safety.

The last patient received treatment in December 2013 and after a two-month follow up, the safety data from the trial showed no adverse events related to the injection site, a few transient adverse events mitigated with drug treatment and one serious adverse event deemed to be a pre-treatment tumor recurrence.