While trying to commercialize CAR-T therapies has so far largely focused on the US, Kite’s (NASDAQ:KITE) grab for attention at this week’s JPMorgan conference concerned a pair of deals to license its lead asset, KTE-C19, to local players in China and Japan.
The highly competitive Chinese market is very receptive to gene therapies, but the novelty is Japan, which aside from its heavy investment in regenerative therapies has seen relatively little advanced cell therapy work. By licensing KTE-C19 to Daiichi Sankyo (OTCPK:DSKYF) (OTCPK:DSNKY) for Japan and Fosun for China Kite shows that it is not taking its foot off the gas.
Kite’s main focus remains on reporting data from KTE-C19’s registrational trial and completing its rolling US filing, which was initiated last month in relapsed/refractory B-cell lymphoma. With the last patient in the registrational cohort completing six-months’ follow-up on January 7, all-important six-month data are unlikely to be reported until later this month.
Hence the focus on business development, which has seen two deals involving development and commercialization, under which Kite will receive up front $50m from Daiichi and $40m from Fosun, plus an initial $20m clinical funding commitment from the China partner.
Of the big Western CAR-T players only Juno has tried to make inroads into China, backing JW Biotechnology, a 50/50 joint venture with the local player Wuxi Apptec (Juno looks east, April 8, 2016). Clinical development has yet to begin, according to the study registry Clinicaltrials.gov.
However, China already comprises numerous local companies and hospitals that, with a favorable regulatory tailwind, are developing CAR-T therapies targeting a wide array of cellular targets. Indeed, as of two months ago 42% of the world’s registered 163 CAR-T trials – there could be more that are not on study registries – were in China, trailing only the US.
As such Fosun will already be up against stiff competition, though clearly the backing of a company like Kite should help. Kite said China studies would likely be required, based on regulatory discussions; the US biotech will provide technology transfer support to its Fosun joint venture, which will manufacture KTE-C19.
Caution in Japan
In contrast to China, Japan has no clinical CAR-T activity apart from a study of a Takara Bio asset and two hospitals participating in Novartis’ (NYSE:NVS) pivotal Juliet trial of CTL019; as for deals, there has been little beyond last year’s early-stage tie-up between Ono and Celyad for an allogeneic CAR technology.
This is perhaps the result of greater regulatory caution relative to the rest of the world, as well as Japan’s aggressive moves to curtail drug spending. Still, a legal framework implementing an accelerated pathway for cell and tissue-based therapies came into force in 2014, and could drive investment decisions.
Daiichi, representing what could be Japan’s biggest bet on CAR-T to date, will be responsible for developing KTE-C19 in line with this new cell therapy pathway, with Kite similarly providing tech transfer to enable local manufacturing.
The initial focus for KTE-C19, in both China and Japan, will be aggressive non-Hodgkin’s lymphoma. Both deals have built-in options for rights to additional Kite assets – the anti-Mage A3/A6 engineered T-cell receptor project KTE-718 in the case of Daiichi, and KTE-718 as well as KTE-439, targeting HPV 16 E7, for Fosun.
Obviously opting in would trigger additional up-front and milestone fees, and there are further milestones and royalties associated with the original KTE-C19 tie-ups. Downstream payments to the NIH – ultimately the originator of KTE-C19 – will be due, but Kite described these as “nominal”.
The group’s foray into the East is still early, but the bets its two partners are making should not be underestimated.