Week In Review: Frontage, A U.S.-China CRO, Stages $205 Million Hong Kong IPO

Includes: BMRN, BMY, LLY, SNY
by: ChinaBio Today

Frontage Holdings, a US-China CRO, raised $205 million in a Hong Kong IPO at a market capitalization of $820 million.

China announced plans to audit 77 major pharmaceutical companies over the next two months.

BioMarin reported China's NMPA approved Vimizim to treat patients with mucopolysaccharidosis type IVA (MPS IVA), a rare disease also known as Morquio A syndrome.

Deals and Financings

Frontage Holdings, a US-China CRO, raised $205 million in a Hong Kong IPO at a market capitalization of $820 million. It moved 4.5% higher on its first day of trading. According to Frontage, it will allocate 20% of the proceeds to meet increased demand, 40% for organic expansion; and approximately 30% for acquisitions. Frontage provides integrated research, analytical, and development services with operations in the US and China. Three cornerstone investors signed up for 41.5% of the total.

EpimAb Biotherapeutics, a Shanghai bi-specifics company focused on cancer and immunotherapies, closed a $74 million Series B financing. The company uses its FIT-Ig® (Fabs-In-Tandem Immunoglobulin) platform to generate bi-specific molecules with antibody-like properties. EpimAb is developing its own portfolio of bi-specifics and licenses its discovery technology to other pharmas. The Series B was co-led by SDIC Fund and Sherpa Healthcare, and included investments from SCVC and other investors. So far, EpimAb has raised a total of more than $100 million.

Chengdu's HitGen announced a drug discovery collaboration with Gilead Sciences (NSDQ: GILD) to identify small molecule leads against targets specified by Gilead. HitGen will use its technology platform, based on DNA-encoded library design, synthesis and interrogation, to discover novel leads. The company says its DNA encoded chemical libraries (DELs) contain 400 billion highly diverse, drug-like small molecules and macrocycles. HitGen will receive an undisclosed upfront payment and will be eligible for milestone payments from Gilead.

Industry Insights

One year ago, the Hong Kong Exchange started its pre-revenue track for China biopharma IPOs. In its first twelve months of activity, the exchange hosted IPOs for ten biopharmas, including seven pre-revenue firms, and raised over US$4.2 billion. That made the HKEX the world's second largest exchange for biopharma IPOs. Charles Li, Chief Executive of the Exchange, told the more than 1,000 attendees at the Second HKEX Biotech Summit, held last week, that ten more biopharmas have already filed for future IPOs with a "very strong" pipeline following them. However, as Mr. Li noted in his Keynote Address, the future for Hong Kong and biotech has more than its usual share of uncertainty.

Government and Regulatory

China announced plans to audit 77 major pharmaceutical companies over the next two months, including the China operations of three multinationals, Bristol-Myers Squibb (NYSE: BMY), Sanofi (NYSE: SNY) and Lilly (NYSE: LLY). The 77 companies were chosen randomly, not because China suspects any specific company of wrongdoing. The audits are a government response to a surprise announcement from Kangmei Pharma (SHA: 600518), a TCM company, that it had "overstated" its cash reserves by a jaw-dropping $4.4 billion. Apparently, Kangmei filed false invoices to inflate its sales and cash position.

Trials and Approvals

BioMarin (NSDQ: BMRN), a San Francisco area rare disease biopharma, reported China's NMPA approved Vimizim® (elosulfase alfa) to treat patients with mucopolysaccharidosis type IVA (MPS IVA), a rare disease also known as Morquio A syndrome. In 2018, China issued its first national list of rare diseases that have no treatment in China (including MPS), promising expedited review of any drugs that addressed these rare conditions. Vimizim is one of the first rare disease drugs from the list to be accepted for China use.

Suzhou Innovent Biologics (HK: 01801) reported Phase III data showing its Avastin® (bevacizumab) biosimilar matched the original drug in safety and efficacy. IBI305 was tested in a large China trial as a first-line treatment in patients with non-squamous NSCLC. The data was announced over the weekend at the ASCO meeting underway in Chicago. Using the data, Innovent completed a NDA filing to China's NMPA in January 2019, which is being reviewed under priority rules.

Suzhou CStone Pharma (HK: 2616) was approved to start China trials of its anti-PD-L1 candidate CS1001 in combination with BLU-554 (CS3008) in patients with locally advanced or metastatic hepatocellular carcinoma (HCC). CStone in-licensed China rights to BLU-554, a fibroblast growth factor receptor 4 (FGFR4) inhibitor, from Blueprint Medicines in a three-drug deal last year. The trial will be a multi-center, open-label, and multi-dose Phase Ib/II study that aims to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics and efficacy of the combination in advanced HCC.

RemeGen, a Yantai biologics company, reported its HER2-targeting antibody-drug conjugate produced a 51% objective response rate in a China Phase II trial of patients with HER2-positive urothelial cancer. The candidate, RC48, was developed to treat HER2-positive solid tumors. It includes a novel HER2-monoclonal antibody, a cathepsin cleavable linker and a cytotoxic payload. Compared to the current standard of care, the monoclonal antibody has a higher affinity for HER2 and, in animal models, showed higher anti-tumor activity. RemeGen said RC48 is the first ADC drug approved in China for human clinical trials.

Xynomic Pharma (NSDQ: XYN), a Raleigh-Shanghai clinical stage oncology company, has dosed the first patient in a Phase I/II trial that combines its lead drug, abexinostat, with Imbruvica (ibrutinib), a Janssen BTK inhibitor. The combination will be tested in patients with relapsed/refractory mantle cell lymphoma or relapsed/refractory diffuse large B-cell lymphoma at Memorial Sloan Kettering Cancer Center. Imbruvica is already approved for these indications. Abexinostat is a novel HDAC inhibitor in global pivotal trials against NHL and renal cell carcinoma.

Ascentage Pharma of Shanghai announced new clinical trial data from two apoptosis-targeted drug candidates, APG-115 (a novel MDM2-p53 inhibitor) and APG-1387 (a novel IAP inhibitor). In a small trial, APG-115 produced a confirmed partial response in one patient with liposarcoma, a soft-tissue sarcoma for which there is no approved treatment. The other candidate, APG-1387, produced stable disease in three of ten patients with metastatic pancreatic cancer, which generally has a survival time of three to six months. Ascentage is developing a portfolio of apoptosis drugs for cancer and other diseases.

Innovent Biologics (HK: 01801) of Suzhou released data at the ASCO meeting for four trials of its China-approved anti-PD-1 antibody, Tyvyt (sintilimab):
• In a Phase II trial of 96 patients with relapsed/refractory classical Hodgkin's lymphoma, Tyvyt produced an objective response rate of 85.4% and a complete response in 29.2% of the patients;
• In a Phase Ib trial of Tyvyt and CAPOX in 20 patients with gastric cancer, objective response rate was 85.0% and disease control rate 100%;
• In patients with resectable squamous non-small cell lung cancer, eight of nine patients with > 30% decrease in standardized uptake values in PET/CT scans had a major pathologic response while those with ≤ 30% decrease in SUV did not achieve MPR.
• Genomic profiling of baseline circulating tumor DNA in Hodgkin's lymphoma patients revealed a potential ctDNA biomarker for Tyvyt.
The Hodgkin's lymphoma trial was the basis for China approval of Tyvyt.

Disclosure: none.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.