IntoCell is on the verge of signing a definitive technology transfer agreement with Samsung Bioepis. The first outcome of the research collaboration agreement (RCA) signed in Dec. 2023 has entered the clinical stage. The research collaboration is expected to face its first test of turning into an actual commercialization deal.
According to Samsung Bioepis on the 13th, the company plans to start a phase 1 trial within the first half for its Antibody-Drug Conjugate (ADC) drug candidate SBE303 targeting Nectin-4. SBE303 is the first new drug candidate independently developed by Samsung Epis Holdings, with the initial indication being bladder cancer.
A Samsung Bioepis official said, "The definitive agreement is scheduled to be signed simultaneously with phase 1 entry, and we are currently fine-tuning the detailed terms."
In the industry, some say the definitive agreement could be signed as early as the first quarter. Chung Yoo-kyung, a researcher at Shinyoung Securities, said, "If the definitive agreement is signed, IntoCell will receive stepwise milestone payments."
◇ "SBE303" has already received the upfront… all eyes on the size of the clinical entry milestone
The RCA signed by the two companies includes a "development option" clause. If a candidate is derived through joint research, Samsung Bioepis chooses whether to sign a definitive agreement for that target. If the option is exercised, Samsung Bioepis acquires the development and commercialization rights. Up to five targets are eligible.
Typically, options are exercised after completing preclinical studies and around the submission of the investigational new drug (IND) application. SBE303 is also said to have wrapped up related talks ahead of its IND filing.
Market attention is naturally turning to the size of the milestones. IND submission or phase 1 entry are key development stages where milestone payments occur. However, the specific terms and amounts are determined by the term sheet agreed upon when the two companies signed the RCA and were not disclosed.
IntoCell explained, "The initial upfront payment and target selection expense will be recognized upon the completion of research obligations through partitioning, and the material manufacturing expense will be reflected at the time of transfer," adding, "Additional target-specific upfront payments and milestones will be recognized as one-time revenue when the respective stages are reached."
Joint research related to SBE303 has already been completed, and the initial upfront has been received. IntoCell has the "OPAS" platform, designed so that the anticancer drug linked to the antibody separates and acts only when it reaches cancer cells. The strategy is to enhance efficacy while reducing damage to normal cells.
◇ Nectin-4 validated by Pfizer… if additional targets are secured, a revaluation of corporate value
The two companies are also said to be in additional talks on two targets besides Nectin-4. This aligns with Samsung Bioepis' strategy to add at least one new clinical-stage candidate each year starting next year.
If both SBE303 and the additional targets lead to definitive agreements, IntoCell's revenue mix could quickly improve toward milestone payments. A company official said, "Our goal next year is to lay the groundwork for a turnaround through expanded technology transfer."
In particular, Nectin-4 targeted by SBE303 is a target whose commercial potential has already been proven in the global market. Pfizer's ADC Padcev is a prime example. In Dec. 2023, Padcev won FDA approval in combination with the immunotherapy Keytruda and has since expanded its indications. Industry watchers say, "Targets with prior success cases have advantages in clinical design and market entry strategy."
IntoCell posted sales of 1.99912 billion won last year, down 31.1% from a year earlier. Operating loss and net loss expanded 7.9% and 9.6% to about 10.6 billion won and 10.9 billion won, respectively.
The company said the delay was due to postponed additional technology commercialization deals. Although it pursued talks on one to two candidates after SBE303, the timeline was pushed back. A company official explained, "It was affected by a gap in business development (BD) staff and prolonged legal review of prior patents held by a Chinese company."
ABL Bio returned IntoCell's payload platform "Nexatecan" in July last year. This came after confirming that China's Phrontline Biopharma had filed a patent for a similar structure.
In Oct. of the same year, Samsung Bioepis signed a joint research agreement with Phrontline for ADC candidates, resolving the patent risk tied to pipelines associated with IntoCell.
◇ Room to discover up to five targets by 2028… Samsung's "multi-partner" strategy is a variable
The RCA between the two companies can be extended for two years from the contract expiration date, potentially running through 2028. In that case, up to five targets could be discovered.
However, the fact that Samsung Bioepis is pursuing a parallel strategy with multiple partners is a variable. With Phrontline, it has finalized the joint development of the ADC candidate TJ108.
Inside IntoCell, there is a sense that Samsung's additional collaborations should not be viewed as competitive. A company official said, "Samsung has traditionally kept multiple options open in managing partnerships," adding, "Our platform has a broad application range and a different development strategy, so the direct impact on the existing collaboration should not be significant."
IntoCell's technology can be applied not only to monospecific antibodies but also to bispecific antibodies, but the company said it is placing more emphasis on developing ADCs based on monospecific antibodies. In contrast, Phrontline is known to have strengths in designing bispecific antibody-based ADCs.
Some in the industry say TJ108 is still in the target validation stage and will need more time to yield a candidate. An industry official said, "For now, Samsung Bioepis appears more intent on advancing the candidates discovered with IntoCell."
IntoCell, which listed on KOSDAQ in May last year, is aiming to complete 10 technology transfer deals and achieve a market capitalization of 10 trillion won by the 2030s. As of the close on the 12th, IntoCell's market cap was 779.1 billion won.