China Healthcare:More CAR-T investment in China
What’s new?On 23 Nov 2017, according to Yaozh.com, ImmunoChina (艺妙神州公司) hadreceived a new round of funding at RMB50m, from a consortium consisting ofLegend Capital (君联资本), Thiel Capital and Shengjing360.com (盛景网联).
Founded by three PhD doctorates from Tsinghua University, ImmunoChina focuseson developing the latest science and technology in immunotherapy (CAR-T), inapplication to various types of cancer treatment.
Established in April 2015, ImmunoChina focuses on its research in plasmidgeneration, Lentiviral Expression Vector preparation, CAR-T cell science &technology, and other related areas. The company has treated over 40 patients,including those with multiple recurrence of cancerous condition post bone marrowtransplantation, and cases with high level of tumour burden. These also coveredcertain cases of Pakistanis seeking for CAR-T therapy.
Based on the clinical research data from its collaboration with Ludaopei Hospital(陆道培医院) which is an expert hospital for blood diseases, the company’s CAR-Tdrug work showed 95% of complete remission (mostly disappeared) rate for thetreatment of acute lymphoblastic leukemia (ALL) 急性淋巴细胞白血病 (a form ofblood cancer). This figure is known to have surpassed to the remission rate studiedin the US, albeit of more data is needed to prove their efficacy. In furthercollaboration with Peking University Third Hospital (北京大学第三医院(北医三院)), the company’s CAR-T work also had one patient with completeremission in the case of diffuse large B-cell lymphoma (弥漫性大B 细胞淋巴瘤), akind of white blood cell cancer due to B-cell problems for producing antibodies.
In this round of funding, the Dean of Ludaopei Hospital indicated that they willcontinue to collaborate with ImmunoChina on CAR-T drugs, given that the hospitalhave had numerous successful remission cases on late-stage blood cancerconditions including the usage of CAR-T therapy. The work will also extend toimprove their CAR-T drug’s indication for usage, efficacies, toxicity and safeness.
Our view: Positive to biodrug makers and biotech services with CAR-T researchChina has over 70K new patients per annum for white blood cell cancer, with 50KChinese people died from it every year. The market expects the global and Chinablood cancer drug market would be USD12bn and RMB11bn respectively in thenext few years. As we flagged in our 26 Oct 2017 report, following the US’s FDAapproval for the second CAR-T drug, YescartaTM, this will (1) draw more interestsand fundings to CAR-T drug-makers (biodrug); and (2) have reasonable CAR-T drugprices to patients on more new medicines available.
HK Stock impact: In the same report on 26 Oct 2017, we expect GenscriptBiotech’s (1548.HK, Neutral, TP:HKD7.00 – under review) CAR-T drug to be (1)granted the US Investigational New Drug (IND) status by end-1Q18, and (2) pricedat USD200K and RMB50K in US and China therapy respectively, below the pricingsof KymriahTM and YescartaTM of USD475K and USD373K. Our Genscript’s R&Dvaluation on CAR-T (Nanjing Legend), based on 10-year DCF but not included in ourTP, stands at HKD8.17/s, consisting of HKD7.10/s (or HKD14.2bn) and HKD1.07/s(or HKD2.1bn) for US and China sales respectively. Other HK-listed stock that willbenefit from this include: (1) 3SBio (1530.HK, BUY, TP:HKD:22.00) for its beingChina first mover and largest monoclonal antibody producer as well as a pioneer inblood market drug; and (2) BBI Life Science (1035.HK, NR), for its services tosupply DNA products and related life science consumable products.