Deals
Deal with AbbVie, PIPE triples I-Mab’s cash, positions biotech to be among China’s CD47 leaders
Immuno-oncology company I-Mab nearly tripled its cash position on Friday, adding more than $600 million to its coffers through a CD47 licensing deal with AbbVie and a PIPE financing led by Hillhouse Capital.
The deal between Shanghai-based I-Mab Biopharma (NASDAQ:IMAB) and AbbVie Inc. (NYSE:ABBV) is one of the largest upfront payments for a Chinese licensing deal, and the first substantial cross-border deal for I-Mab according to CFO Jielun Zhu.
“We have done out-licensing deals with Korean companies and domestic Chinese companies, but we haven’t done a real cross-border deal before, not to this magnitude,” Zhu said.
I-Mab will receive $180 million up front and already received a $20 million milestone payment for announcing top-line Phase I data for the licensed asset, CD47 inhibitor lemzoparlimab (TJC4).
The PIPE raised $418 million, bringing Friday’s capital haul for the company to $618 million. The financing had “significant” participation from Singapore sovereign wealth fund GIC, and included nine other Asian and U.S. investors, according to I-Mab.
“We haven’t done a real cross-border deal before, not to this magnitude.”
The deal gives AbbVie exclusive rights to lemzoparlimab outside greater China, where I-Mab retains rights. The Chinese company is eligible for $1.7 billion in milestones, including $840 million tied to development and regulatory events and $900 million linked to sales thresholds, plus tiered royalties in the low-to-mid teen percentage of ex-greater China sales.
Gilead Sciences Inc. (NASDAQ:GILD) has the most advanced CD47 mAb in magrolimab, which it gained in April via the $4.9 billion acquisition of Forty Seven Inc. Magrolimab is in Phase III for myelodysplastic syndrome (MDS) and Phase II for acute myelogenous leukemia (AML) (see “Gilead Shows Deal Appetite,”; “Gilead’s 2020 Cancer Deals”).
Zhu told BioCentury that the upfront payment and financing will enable I-Mab to accelerate lemzoparlimab’s development in China, where it could become the first to reach the National Medical Products Administration.
“In China where we have the home advantage, we are in a good position to be first-in-class,” he said. “Now with the upfront payments and the advice and experience from AbbVie, we think we can move even faster.”
I-Mab is conducting a Phase Ib/IIa trial in China for lemzoparlimab to treat AML and MDS, where data are expected from the Phase IIa portion of the trial early next year. Zhu said depending on regulatory discussions, I-Mab could seek conditional approval based on those data.
The deal also gave AbbVie right of first negotiation to license two CD47-related bispecific mAb programs: one targeting CD-47 and PD-L1, and another against CD47 and GM-CSF. Zhu said a deal for either programs, which are about six months from entering the clinic, would have a minimum of $500 million in upfront payments and milestones.
The partners will also evaluate combinations with lemzoparlimab, including AbbVie’s AML drug Venclexta venetoclax.
Zhu said that as I-Mab looks to additional partnerships TJD5, the company’s anti-CD73 mAb, is the next most likely candidate for a deal. TJD5 is in a U.S. Phase I trial in solid tumors and a Chinese Phase Ib/IIa combination trial with a PD-1 inhibitor. AstraZeneca plc (LSE:AZN; NYSE:AZN) has the most advanced CD73 inhibitor, oleclumab, which is in Phase II testing for various solid tumors.
Binding best?
Zhu said that lemzoparlimab’s binding properties could make it a best-in-class CD47 inhibitor.
One of the challenges for the class has been on-target, off-tissue toxicity. Red blood cells also express CD47 to prevent their destruction by the immune system, and CD47 therapies have run into dose-limiting hematological toxicities (see “Eat This, Don’t Eat That”).
Lemzoparlimab binds a specific epitope on CD47 that is blocked by glycosylation on red blood cells, resulting in increased binding to tumor-expressed CD47.
And like magrolimab, lemzoparlimab also has an IgG4 Fc domain, which is thought to trigger phagocytosis but not antibody-dependent cellular cytotoxicity (ADCC), making it less likely to cause off-tumor toxicity.
So far, the potential benefits of the molecule’s design have panned out early in the clinic. In a Phase I trial, patients were dosed up to 30 mg/kg lemzoparlimab without a priming dose, and no dose-limiting toxicity or hematological toxicities were observed. Full data are expected to be presented at the Society for Immunotherapy of Cancer (SITC) conference in November.
PIPE dreams
In the PIPE, I-Mab sold about 12.7 million ADSs at $33 per share, an 8% discount to its close of $35.77 on Thursday, but a 4% premium to the biotech’s 30-day volume weighted average price. Investors also received warrants to purchase an additional 2.3 million ADSs at an exercise price of $45 per share over the next year, which, if exercised in full, would raise an additional $104.5 million.
At June 30, I-Mab had $221.1 million in cash and restricted cash.
Other investors in the PIPE included Avidity Partners, OrbiMed Advisors, Octagon Capital Advisors, Invus, Lake Bleu Capital, Perceptive Advisors, Cormorant Asset Management, Sphera Healthcare and Alyeska Investment Group.
TARGETS
CD47
CD73 (NT5E) – Ecto-5’-nucleotidase
GM-CSF (SCF2) – Granulocyte macrophage colony-stimulating factor
PD-1 (PDCD1; CD279) – Programmed cell death 1
PD-L1 (B7-H1; CD274) – Programmed cell death 1 ligand 1
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