This year, bispecific antibodies are undoubtedly the most outstanding products in the field of domestic Innovative Drugs.

At the WCLC conference in September, AKESO, with its positive Phase III clinical research results for the PD-1/VEGF bispecific antibody, outperformed Merck's K drug, winning strong backing from the Capital Markets; AKESO's stock price has risen by 142% since the low on May 24, becoming a leader in the Innovative Drugs industry.

In mid-November, several overseas pharmaceutical giants showed interest in four domestic Biomedical companies: Orange Sail Pharmaceutical, KEYMED BIO-B, Lixin Pharmaceutical, and Purmis Biotechnology, focusing on each company's new bispecific antibody drugs, reigniting enthusiasm for domestic bispecific antibody projects.

Recently, another bispecific antibody drug development company submitted its application to the Hong Kong Stock Exchange.

On November 24, the Hong Kong Stock Exchange website showed that Hantian Aitai Biomedical Technology (Wuhan) Co., Ltd.-B (hereinafter referred to as 'Hantian Aitai') has submitted its application to the Hong Kong Stock Exchange, with Industrial and Commercial Bank of China International as the sponsor.

01

Top students from Wuhan University venture into entrepreneurship, supported by industry funds.

Hansai Aitai was established on December 19, 2014, headquartered in Wuhan. It is an innovative biotechnology company with independent professional technology and experience in structural biology, translational medicine, and clinical development, dedicated to developing the next generation of immunotherapies to ultimately help patients worldwide.

Dr. Zhang Faming is the chairman and executive director of the company, currently 60 years old. He graduated with a bachelor's and master's degree from Wuhan University, later obtained a Ph.D. in Biochemistry from the Institute of Biophysics, Chinese Academy of Sciences, and in August 2003 earned a Master's degree in Business Administration from the Kelley School of Business, Indiana University.

Dr. Zhang has over 30 years of rich R&D experience in the Medical and Biotechnology industry, having worked or taught for many years at the University of Texas Southwestern Medical Center, Eli Lilly and Co, Indiana University, and Wuhan University. In addition to Hansai Aitai, he also co-founded Sino-US Crown Biotechnology (Beijing) Co., Ltd., and Sino-US Huashitong Biomedical Technology Company.

Since its establishment, Hansai Aitai has completed three rounds of financing, attracting investments from well-known institutions including TIGERMED, Peking Longpan, Betta Pharmaceuticals, and funds under GENSCRIPT BIO; the prospectus shows that in June 2024, the post-investment valuation of Hansai Aitai reached 1.615 billion yuan in its most recent financing round.

Company financing history, source: Prospectus.

Hansai Aitai is committed to discovering, developing, and commercializing first-in-class and/or best-in-class products for the precise treatment of cancers and autoimmune diseases to address unmet medical needs globally.

Since 2016, the company has been building an innovative pipeline, having developed a pipeline consisting of 10 candidate drugs, including the core product HX009 and two main products HX044 and HX301, among which there are eight candidate drugs targeting oncology and two candidate drugs targeting autoimmune diseases.

Except for HX301, which is authorized by Onconova Therapeutics, Inc., all other pipeline candidate products are independently developed.

02

Company's research products and industry situation.

As of the last feasible date, the company's core products and main products are undergoing clinical trials in China and Australia. The following chart shows the development status of the company's pipeline products as of the last feasible date and the commercialization products transferred prior to the performance record period.

The company's main research product, sourced from the prospectus, is the core product - HX009.

The core product of Hanshi Aitai, HX009, is an independently developed PD-1/SIRPα dual-function antibody fusion protein. During the performance record period and until the last feasible date, HX009's Phase I clinical trial has been completed in Australia and China; currently, two clinical plans for HX009 are underway in China, namely HX009-I-01 China Study (Phase Ib) for the treatment of advanced melanoma, and HX009-II-02 China Study (Phase I/II) for the treatment of R/R EBV+ non-Hodgkin lymphoma.

Main product - HX301.

HX301 is a multi-target kinase inhibitor with unique kinase inhibition characteristics, representing a significant advancement in cancer treatment. As an investigational multi-kinase inhibitor, HX301's mechanism of action is to combat various cancers by targeting key pathways such as CSF1R, ARK5, FLT-3, and CDK4/6.

The company has completed Phase I clinical trials of HX301 and plans to conduct Phase II clinical trials of HX301 in combination with temozolomide for treating glioblastoma.

Main product - HX044

HX044 is a dual-function anti-CTLA-4 antibody/SIRPα fusion protein that can be used for the treatment of various advanced solid tumors, particularly for PD-1 resistant solid tumors (including but not limited to non-small cell lung cancer, melanoma, renal cell carcinoma, and gastrointestinal cancer).

As of the last practicable date, the company is launching Phase I/IIa clinical trials in Australia for the treatment of advanced solid tumors and has received the acceptance notification from the National Medical Products Administration regarding its clinical research in China.

In addition, Hansai Aitai also has seven preclinical candidate drugs, covering antibody-drug conjugates (ADC), bispecific antibodies (BsAb), and monoclonal antibodies (mAb). The development of these drugs will further enrich the company's product pipeline and enhance its competitiveness in the fields of oncology and autoimmune diseases.

Due to various factors such as lifestyle habits, environmental changes, and advancements in screening methods, the incidence of tumors continues to rise, providing significant market space for related therapeutic drugs. According to a Frost & Sullivan report, the market size of tumor immunotherapy in China has grown from 1.1 billion USD in 2019 to 3.5 billion USD in 2023, and is expected to reach 14.2 billion USD and 41.5 billion USD by 2027 and 2031, respectively, with a compound annual growth rate (CAGR) of 42.0% from 2023 to 2027 and a CAGR of 30.8% from 2027 to 2031.

In addition, the share of the global tumor immunotherapy market in the global tumor drug market increased significantly from 20.2% in 2019 to 26.5% in 2023. It is expected that by 2031, the global tumor immunotherapy market will account for 50.6% of the global tumor drug market share.

However, it is worth noting that the competitive landscape of the PD-1 sector in which the company operates is not optimistic. As of now, nearly 20 types of PD1/PDL1 have been approved for marketing in China. Even in the more challenging dual-antibody sector, there are also quite a few research pipelines. According to Frost & Sullivan data, besides HX009, there are currently 7 PD-1/CD47 and PD-L1/CD47 bispecific antibodies/bifunctional fusion protein pipelines being researched in China, while 4 similar products are under development in other regions globally.

In any case, it is still necessary to focus on the clinical data of the drugs under development.

03

Currently, there are no products on sale, and there is an urgent need for market approval to supplement funds.

It is worth noting that Hansai Aitai once licensed a product to Lepu, namely HX008, which is a humanized PD-1 monoclonal antibody with human IgG4 isotype. HX008 was conditionally approved for marketing in 2022 for the treatment of microsatellite instability-high/mismatch repair deficient solid tumors and unresectable or metastatic melanoma.

Thanks to the successful commercialization of HX008, as of the last feasible date, the company received approximately 0.7 million yuan and 4.4 million yuan in annual license fees for HX008 for the years 2022 and 2023, respectively.

In terms of financial data, except for the HX008 that was transferred to Lepu before the performance reporting period, the company currently has no products approved for commercial sale, thus there are no product sales revenues during the reporting period, and an operational loss was recorded.

In 2022, 2023, and January to June 2024, the company's total comprehensive losses were 25.11 million yuan, 84.62 million yuan, and 43.13 million yuan respectively, mainly due to R&D costs and administrative expenses; among them, R&D costs reached 58.68 million yuan, 46.66 million yuan, and 42.03 million yuan.

As of June 30, 2024, HanSate's cash on hand is 0.15 billion yuan. If only considering research and development-related expenses, the existing funds can approximately support R&D activities for the next 2-3 years.

The company's main financial data, source: prospectus. HanSate stated that the funds raised from this Hong Kong stock listing plan will be used for the research and development of core product HX009, the research and development of main products HX301 and HX044, research and development of other important products, and to provide funding for commercialization and business development activities, etc.