CARsgen Therapeutics, mainland pre-profit biopharmaceutical company, has passed the listing hearing of its Hong Kong initial public offering recently.
The Shanghai-based company is seeking to raise US$400 million to US$500 million (HK$3.1 billion to HK$3.8 billion) from the public sale, IFR has reported. It started premarketing for the deal last week.
CARsgen is focusing on innovative cell therapies to treat blood and solid tumor cancers. The company is one of the major domestic players in the field of chimeric antigen receptor T-cell therapy, known as CAR-T. The treatment takes patients' immune cells, namely T cells, out of their blood and alters them in the laboratory to help attack cancer.
The global CAR-T market has been expanding rapidly since 2017, the year when the first two CAR-T products were approved. The market has grown from US$10 million in 2017 to US$700 million in 2019 by sales, and is expected to reach US$6.6 billion in 2024, representing a compound annual growth rate of 55 percent from 2019 to 2024, according to Frost & Sullivan.
The company has raised US$287.63 million through six rounds of financing since 2014. The latest round, led by Hillhouse Capital, valued it at US$1.61 billion in January. Singapore sovereign wealth fund GIC holds 8.44 percent of stakes.
The clinical-stage company incurred a net loss of 1.06 billion yuan (HK$1.29 billion) in 2020, rising more than three times from a year ago, due to increasing administrative and research and development expenses, and fair value changes of preferred shares and convertible loans. CARsgen also projects significant operating losses in 2021, as it is not expected to commercialize any products before 2023.
Research and development expenses grew by 34.04 percent to 281.75 million yuan.
CARsgen has 11 product candidates in its pipeline. Ten of them are CAR-T cell therapies with half at the clinical stage. The only core candidate, fully human BCMA CAR-T, also called CT053, is used for treatment of refractory/relapsed multiple myeloma, a cancer of white blood cell that produces antibodies. The candidate is in phase I/II clinical trials in China and is preparing the pivotal phase II clinical trials in North America. The global phase III trial is scheduled for the third quarter of 2022.
CARsgen said it plans to submit a new drug application to the National Medical Products Administration in the first half of 2022 and file a biologics license application (BLA) to the US Food and Drug Administration (FDA) in the first half of 2023.
The company has got seven investigational new drug clearances for CAR-T therapies in China, the United States and Canada, ranking first among all domestic players, according to a Frost & Sullivan report. But its core product lags some foreign peers for the treatment of relapsed/refractory multiple myeloma. Abecma, developed by Bristol Myers Squibb and bluebird bio, has received marketing approval from the US FDA in March. Legend Biotech and Janssen had submitted the BLA to the authority.
CARsgen warns that governments' regulation of drug pricing may have material adverse effects on its business.
China has launched centralized drug purchases to further cut down healthcare costs. The US has enacted federal legislation to improve transparency of drug pricing and reform reimbursement methods.
China has not approved CAR-T cell therapy so far. Five CAR-T products have been allowed by the US FDA, costing more than US$370,000 each.
CARsgen plans to use the net proceeds to fund research and development of product candidates and develop manufacturing and commercialization capabilities.
Goldman Sachs and UBS are joint sponsors of the deal.
