Liver cancer drug makerawaits key product outcome

money-glitz | Staff reporter 29 Jun 2020

Immunotech Biopharm, a loss-making mainland biotech company, is set to launch its initial public offering today, to raise up to HK$1.1 billion.

The Beijing-based company is a cellular immunotherapy biopharmaceutical company, featuring its core product candidate EAL, a multi-target cellular cancer immunotherapy product that has been approved for application in phase two clinical trials for solid tumor treatment.

It has a number of product candidates, including CAR-T cell series and TCR-T cell series, both under research stage.

Immunotech started EAL-related research in 2006, and EAL has demonstrated efficacy in preventing tumor recurrence and maintaining long-term survival of patients.

The company selected the prevention of postsurgical recurrence of liver cancer as the clinical indication for the clinical trial of EAL. In China, newly diagnosed patients with liver cancer exceeded 400,000 in 2018, accounting for 44.9 percent of the global liver cancer incidence. In addition, the five-year survival rate for liver cancer in China is as low as 12.1 percent, far lower than the overall five-year survival rate of 40.5 percent for cancer on average.

Immunotech said the regulatory environment in China's cellular immunotherapy industry saw a major shift in 2016, when new rules were promulgated requiring all cellular immunotherapy products to go through the authorization process under National Medical Products Administration of China, just like other pharmaceutical products.

Immunotech submitted the investigative new drug application for EAL in 2015 ahead of competitors and obtained the IND approval document in October 2017.

On the financial side, Immunotech did not generate any revenue from product sales.

Its other income mainly came from cell cryopreservation business, interest income, and government grants.

Cell cryopreservation is the process whereby cells are preserved by cooling to very low temperatures. In general, the company entered into 10-year agreements with individuals to help them preserve at laboratories immune cells extracted from their bodies. Immunotech's income from cell cryopreservation business was 710,000 yuan (HK$779,388.69) for 2019, on par with that in 2018.

However, the company has ceased to enter into new cell cryopreservation engagements since November 2017 when it obtained the IND approval for EAL and decided to focus efforts on the development of product candidates, especially EAL.

The company partly relies on government grants to finance research and development activities, but it warns it may be liable to repay government grants if the company ends the research of a product candidate. As of December 31 last year, Immunotech had government grants repayable of 1.8 million yuan.

Immunotech's net loss increased from 34.89 million yuan in 2018 to 109.05 million yuan in 2019, and it is expected to further rise given more research and development programs for product pipeline.

The company intends to use the net proceeds in the ongoing clinical trial and commercialization of EAL. Some will be invested in the clinical trial for CAR-T-19 and TCR-T product candidates, and other product candidates in the product pipeline.

The rest will be for working capital and other general corporate purposes.

Immunotech said the Covid-19 pandemic resulted in a suspension of some enrolment and the administration work for the phase two clinical trial for EAL since late January 2020, so data from no more than 35 subjects may be excluded.

But it does not expect the pandemic to have other material impacts on the clinical trial for EAL, as well as its financial condition. The company projects it can remain financially viable at least for the period throughout June 30, 2021 in case operation continues to be affected by the pandemic significantly.

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