"Substance 3 (NxT3), which has a structure similar to that of the materials included in the patent filed first in China, is only one of about 30 substances that can be developed into the IntoCell platform. This substance, as well as the development of antibody-drug conjugates (ADCs) using the IntoCell technology, poses no problems."
Park Tae-kyo, CEO of IntoCell, a domestic ADC drug development company, met on the 17th in Yeouido, Seoul, and said, "There have been many claims that deviate from the facts regarding the termination of the contract with ABL Bio, so I determined that it was necessary to correct them."
ADC is a therapy that attaches drugs (payloads) to antibodies that bind to cancer cells, delivering them accurately to the cancer cells. ABL Bio announced on the 9th that it would terminate the technology transfer agreement for the ADC anti-cancer drug 'Nexatecan' introduced from IntoCell.
ABL Bio stated, "We discovered that the patent filed by the Chinese company contains a structure identical to Nexatecan," and noted, "We decided to return it due to the possibility of patent disputes if we develop new drugs using this technology."
The core technology of ADC is the antibody, the payload (drug), and the linker that connects the two. IntoCell has the linker platform OHPAS, the payload platform PMT that reduces the influx of drugs into normal cells, and the anti-cancer payload platform optimized for OHPAS called Nexatecan. The contract with ABL Bio was mainly about transferring the ADC linker-payload technology combining Nexatecan analog drugs with the OHPAS linker.
ABL Bio pointed out the possibility of a 'submarine patent' as a reason for terminating the contract. A submarine patent is a method whereby the applicant intentionally delays the disclosure of the patent to claim rights later when competitors begin using the relevant technology. ABL Bio claimed, "At the time of the contract, we did not find any issues, but later confirmed hidden patents and requested action from IntoCell, but there was no appropriate response."
CEO Park Tae-kyo responded a week after ABL Bio announced the termination of the contract. Due to the fallout from the termination, concerns about 'patent risk' spread throughout the domestic biotech industry, and this controversy extended to other partners who adopted IntoCell technology.
CEO Park noted, "I did not want to respond to every speculation in the market, but since the foundation of the company is in doubt, I decided to clarify our position to prevent investor damage," and added, "I apologize for causing concern to shareholders and partners due to this patent application issue."
IntoCell, co-founded by CEO Park Tae-kyo, who is also a co-founder of domestic ADC specialist LigaChem Biosciences, was established in 2015 and was listed on the KOSDAQ through a technology exception in May. CEO Park led the development of the core technology of LigaChem, the precision conjugation platform 'ConjuALL.' The following is a Q&A with CEO Park.
- I am curious about the background of this patent issue.
"Since Nexatecan is included in the major contracts with our clients, we have been sharing regular patent infringement analysis (FTO) with our clients since the application at the end of 2023. During the FTO process conducted in early May, we first discovered a Chinese patent overlapping with the structure of IntoCell's substance 3. We immediately requested a review from the U.S. patent firm and shared the situation with our clients.
We also began to prepare countermeasures internally, and while we were collaborating with the contracting company on measures, the notice of contract termination was announced. We hoped to proactively detect and share risk factors and resolve them together, but we are very disappointed."
- What technology is involved with the Nexatecan that ABL Bio returned?
"To create an ADC, you need antibodies, drugs, and linker technology that connects the two. ABL Bio agreed to receive the linker-payload technology combining Nexatecan drugs with the OHPAS linker technology from IntoCell as per the contract.
Nexatecan is a drug based on an existing anti-cancer agent (camptothecin class), modified in structure to bind well to the linker. It is characterized by the addition of a phenolic structure to enhance its binding power with OHPAS. IntoCell has directly designed and synthesized over 30 analogs based on Nexatecan, of which the candidate substance in question, substance 3, was being tested as a priority by ABL Bio."
- If a substance similar to substance 3 has been patented first, can it no longer be used?
"Absolutely not. Even if another company filed the application first, there is no problem developing ADCs with substance 3 and obtaining patents. This has been confirmed through global patent firms. While the substance of the Chinese company that filed first also contains a phenolic structure, it cannot be directly attached to the linker, so a separate derivative must be created. The published patent data indicates that this results in reduced activity (efficacy). The technology for stably attaching phenolic structures to create ADCs is unique to IntoCell's OHPAS.
Even if the patent of the Chinese company is registered, the likelihood of IntoCell being sued for infringing that patent is low. The company has a shorter history than IntoCell and its pipeline (drug candidates) is unclear. There are very few actual registrations among the patents filed by that company recently."
- Are the other substances safe aside from substance 3?
"IntoCell has already designed and synthesized over 30 Nexatecan derivatives, including the controversial substance 3, and has completed applications for U.S. patents and the Patent Cooperation Treaty (PCT). Some of these are preparing to enter individual countries based on the PCT. This issue is limited to substance 3, and there are no problems regarding the patentability or securing of rights for the other substances."
- What alternatives did you suggest to ABL Bio?
"The alternatives we proposed consisted of two major points. First, we said we would provide a more excellent priority substance than substance 3. The technology we transferred is not just for substance 3 but the entire Nexatecan platform, but that company seems to think that substance 3 is the best for now. We also said we would redesign a substitute substance that has better efficacy than substance 3. Secondly, we proposed the option of completely purchasing substances filed first in China."
- The international search report (ISR) also raised concerns about the technology.
"The ISR is only a reference material for determining the novelty and inventiveness of a patent, and it does not directly influence the likelihood of registration. In fact, IntoCell received some critiques from the ISR during the process of registering the U.S. patent for the self-sacrificing linker technology (BGal SIG) that controls the activation of ADCs, but completed registrations in all five major countries, including the U.S., without any issues."
- There were also criticisms that you transferred technology and listed without patents.
"Such misunderstandings are the most regrettable. IntoCell currently holds 11 original patents based on core technologies such as OHPAS and the payload platform PMT, as well as 29 registered patents (33 including confirmed ones) besides Nexatecan. This controversy pertains to a very small part of the overall technology portfolio.
If one does not understand the patent system well, they might think that technology transfer is only possible when a patent is registered. In the case of ADCs and biopharmaceuticals, technology transfers are frequent at the patent application stage. In fact, many domestic biotech corporations that have entered into global technology transfer contracts have similar cases. Furthermore, IntoCell's contracts with its clients are composed of registered technologies like OHPAS and drugs in the application or registration stage, together with PMT technology."
- There were claims that the patent filed by the Chinese company was a submarine patent.
"This claim shows a misunderstanding of the concept of a submarine patent. A submarine patent is a method of artificially delaying the timing of patent disclosure to block competitor entry. However, since the U.S. patent law was amended in 1995, such methods have become virtually impossible.
Prior to this change, the validity period of a patent was based on the 'registration date', and it was possible not to disclose the application details. However, now the patent validity period is based on the application date, which is 20 years. Also, in most countries, the contents are automatically disclosed 18 months after filing. It does not make sense that either the Chinese company or IntoCell intentionally hid information or attempted to use patent rights as leverage.
However, there is one regret. The Chinese company filed their patent in February 2023, which was not disclosed until 18 months later in August 2024. During that time, we had already completed a secondary patent infringement analysis during the non-disclosure period based on that, and the contract with ABL Bio was signed in October 2024. The timing of when to conduct patent infringement analysis varies by company, and unfortunately, this time it missed that period."
- What about contracts with other partners?
"There are no issues with contracts with major partners. The joint research contract signed with Samsung Bioepis in December 2023 is progressing without any delays according to the planned schedule. Discussions about technology transfers with various domestic and foreign corporations are also ongoing.
Speculative content undermining the company's technological capabilities and patents has emerged due to this incident, causing great distress to shareholders and employees. I want to assure you that there are absolutely no issues with the company's core technologies and patentability."