A nearly $2 billion global development and commercialization deal with Abbvie Inc. and a $418 million private placement have bolstered I-Mab Biopharma Co. Ltd.’s position globally. I-Mab framed the deal as being the largest out-licensing and global partnership transaction ever executed by a China-based biotech.
Abbvie and I-Mab plan to develop and commercialize the anti-CD47 monoclonal antibody lemzoparlimab for treating multiple cancers globally, with the exception of China. Lemzoparlimab, also called TJC-4, is Shanghai-based I-Mab’s discovery and its lead cancer therapy. The company will get an up-front $180 million by licensing the highly differentiated antibody to Abbvie, along with a $20 million milestone payment based on phase I results.
The biggest payoff is the $1.74 billion in success-based milestones, $840 million of which is pegged to achieving clinical development and regulatory approval milestones. The remainder is based on commercial milestones. Should lemzoparlimab be commercialized, Abbvie will pay I-Mab tiered royalties from the low- to midteen percentages on global net sales outside of China.
The agreement also allows for a potential partnership on future CD47-related therapeutic agents, such as lemzoparlimab-based bispecific antibodies. Abbvie has the right of first negotiation to in-license further development and commercialization of two additional lemzoparlimab-based bispecific antibodies discovered and currently at the chemistry, manufacturing and controls and preclinical development stages at I-Mab.
The potential value of the two bispecific programs is a minimum $1 billion up front and in milestone payments, a minimum of $500 million each, Jielun Zhu I-Mab, I-Mab’s chief financial officer, said on a Sept. 4 conference call with investors.
Also, I-Mab said it entered definitive subscription agreements with a consortium of institutional investors, led by Hillhouse Capital Group, to raise about $418 million in a private placement. The company said it will use the money for ongoing and planned research for clinical programs and to develop its commercialization capability in China.
In early trading Sept. 4, I-Mab’s stock (NASDAQ:IMAB) climbed to $41.87 per share but had settled to close at $37.07, a rise of 3.63% on the day. On Jan. 17, shares went for $12.50 and have been on a steady 196% rise since then.
It’s been an eventful year for I-Mab, starting with its $104 million IPO on Nasdaq in January. The company has made progress in developing nearly all its clinical-stage assets. TJC-4 is the first. It received an IND approval from the FDA in January 2019. In early April, the first participant was dosed in I-Mab’s phase I/II study of TJC-4 in relapsed/refractory acute myeloid leukemia and myelodysplastic syndrome.
This isn’t the first deal I-Mab has cut for TJC-4. Nearly year ago, on Sept. 23, I-Mab and Merck & Co. Inc. (MSD) agreed to evaluate the combination of TJC-4 and MSD’s anti-PD-1 therapy, Keytruda (pembrolizumab), in patients with multiple cancer types.
North Chicago-based Abbvie’s stock (NYSE:ABBV) was calm about it all, ending trading at $91.87 per share on Sept. 4, exactly where it opened earlier that day. However, stepping back, the stock is about 50% stronger than it was on Sept. 5, 2019, when shares went for $61.03 each.
SVB Leerink analyst Geoffrey Porges wrote Sept. 4 that the deal is a positive for Abbvie as the company extends and strengthens its hematological franchise while addressing its need for long-term growth.
“We expect Abbvie to continue to focus on growing its I/O pipeline through external collaboration or small tuck-in deals in the near term, and the company should be prepared for more substantial transactions after deleveraging in 2021-2022,” Porges wrote.
Abbvie’s also been busy. On June 10, it signed on to a deal to pay Genmab A/S, of Copenhagen, $750 million up front with up to $3.15 billion in development, regulatory and commercial milestones for up to seven next-generation antibody-based therapeutics.
For Abbvie, the deal is part of its general strategy of diversifying the business, which has long been overly dependent on its lucrative Humira (adalimumab) franchise. Its $63 billion acquisition of Dublin-based Allergan plc, which closed in May, was a major step in that direction.
There are only a few anti-CD47 treatments in early clinical stage. Among the Chinese players, Jiangsu Hengrui Medicine Co. Ltd.’s SHR-1603 won IND approval to initiate a phase I trial in patients with advanced solid tumors or relapsed/refractory malignant lymphoid diseases. Immuneonco Biopharmaceuticals (Shanghai) Co. Ltd. said in May 2019 that its IMM-01 was granted IND approval in China to investigate its efficacy for leukemia.