What is the hottest segment of the pharmaceutical industry in 2024? TCE is definitely on the list. The frequent occurrence of heavyweight transactions, large-scale financing, mergers and acquisitions, NewCo, and other events fully demonstrates the extraordinary vitality and heat of this track.

On December 16th, the hot TCE once again became a key betting track for the pharmaceutical industry. Within a day, Candid Therapeutics announced consecutive TCE partnerships with three companies: Nona Biotech, Anmai Biotech, and Ab Studio. It is known that the total amount of cooperation is as high as 1.32 billion US dollars (approximately 9.614 billion yuan).

Candid has partnered with Nona Biotech, Anmai Biotech, and Ab Studio respectively, as shown on Candid's official websiteOn December 16th local time, Candid announced that it has reached a research cooperation and authorization agreement with Novo Biologics, a subsidiary of Happyl Pharmaceuticals, for the development of the next generation T cell adaptor (TCE). According to the terms of the agreement, Nona Biotech is entitled to receive a down payment and potential milestone payments of up to $320 million. Candid will be responsible for all subsequent development work of the product.

On the same day, Candid announced a strategic research partnership with Anmai Biotechnology to discover and develop novel TCE candidate drugs for autoimmune indications. According to the terms of the agreement, if multiple candidate drugs can successfully enter the commercialization stage, Anmai Biotechnology is entitled to receive a down payment and development and sales milestone payments totaling over $1 billion, as well as royalties based on net sales. Candid has exclusive global rights to develop and commercialize collaborative projects.

On the other hand, Candid announced a strategic research partnership with Ab Studio to discover and develop novel TCEs suitable for treating autoimmune diseases. According to the terms of the agreement, Ab Studio will receive undisclosed payments. Candid has exclusive rights to develop and commercialize collaborative programs.

1. Candid prefers Chinese elements

Behind the three collaborations Candid achieved in one day, there are strong Chinese elements. As two Chinese biotech companies, Nona Biotech and Anmai Biotech need not say much. Although Ab Studio is a biotechnology company located in the San Francisco Bay Area of the United States, it still has strong Chinese elements behind it.

Ab Studio was founded in 2017 with the participation of Chinese scientist Dr. Liu Yue, who served as its president. Dr. Liu Yue has over 20 years of experience in antibody drug development, with his earliest research on antibodies being in 1992. After graduating from the Biology Department of Nanjing University, Dr. Liu Yue entered Suzhou Medical College to study for a master's degree. His supervisor was Professor Ruan Changgeng, an academician of the CAE Member. Professor Ruan is one of the earliest scientists in China to use hybridoma technology for antibody development, and his laboratory is also one of the earliest laboratories in China to produce recombinant antibodies.

At present, Ab Studio has multiple computer-aided design based technology platforms, including a series of multispecific antibody platforms, endocytic antibody platforms, and antibody enzyme platforms for protein aggregation diseases. In 2019, Ab Studio successfully transferred several anti-tumor dual antibody projects to Jiahe Biotechnology and spun off Ab Therapeutics, a therapeutic antibody company. ABT licensed ABS's dual antibody platform patent and developed new anti-tumor dual antibodies with investment support from Jiahe Biotechnology. Since its establishment, Ab Studio has licensed multiple bispecific and tertiary antibodies and has achieved high impact, Published multiple research papers in peer-reviewed journals.

In addition to these three TCE collaborations being related to China, Candid itself is also a TCE enterprise with strong Chinese elements. Candid announced its establishment in September this year and also announced the acquisition of biotechnology company Vignette Bio TRC004。 It is worth noting that the two companies acquired by Candid, as well as the two core pipelines obtained with them, are all from Chinese Biotech.

Vignette Bio is a NewCo company authorized by Anmai Biotechnology to establish EMB-06 and Foresite Labs. The core trading pipeline EMB-06 is a novel BCMA × CD3 bispecific TCE. This dual antibody binds to BCMA on the surface of tumor cells and activates T cells, mediating T cell specific killing of BCMA expressing tumor cells. It is mainly used for the treatment of recurrent or refractory multiple myeloma. TRC 2004 is a NewCo company established by GB261, Two River, and Third Rock authorized by Jiahe Biotechnology. The core trading pipeline GB261 is a novel differentiated CD20/CD3 bispecific TCE. GB261 is a highly promising bispecific therapeutic antibody for B-cell malignancies, with significant competitive advantages over other CD3/CD20 inhibitors, and is expected to become a better and safer TCE drug.

2. TCE has gone viral, with a total transaction volume of nearly billions of dollars

From various aspects such as BD, mergers and acquisitions, clinical practice, financing, and NewCo model, the TCE track presents a situation of multiple points blooming.

In terms of BD, in addition to the Chinese companies mentioned above, several domestic pharmaceutical companies such as Enmu Biotechnology, Tongrun Biotechnology, Kangnuo, and WuXi Biologics have also obtained BD authorization for TCE therapy this year, with a total transaction amount exceeding 4 billion US dollars. In terms of transactions, according to incomplete statistics from Arterial Network, there were nearly 23 TCE transactions worldwide in 2024, with a total amount exceeding 9.8 billion US dollars. Among these transactions, the two transactions involving the highest domestic project amount are the CD3/CD19 dual antibody TCE transaction between Tongrun Biotechnology and Merck (1.3 billion US dollars), and the new TCE candidate drug transaction between Anmai Biotechnology and Candid (1 billion US dollars).

In terms of acquisitions, in January of this year, Merck announced the acquisition of Harpoon for a total of $680 million at a price of $23 per share. Through this acquisition, Merck not only acquired the promising DLL3/CD3 antibody currently in clinical practice, but also obtained multiple Harpoon bispecific antibody platforms, including the next-generation bispecific antibody platforms ProTriTAC and TriTAC XR activated specifically in the tumor microenvironment, thus quickly entering the TCE track.

In terms of clinical research, currently, there are over 120 T cell adapter drugs in clinical trials worldwide. Through arterial network analysis, it was found that nearly half of the TCE drugs in the clinical stage were developed with the participation or leadership of Chinese pharmaceutical companies. In addition to the several biotech companies that have already completed transactions mentioned earlier, domestic biotech companies are at the forefront of global new drug research and development in TCE drug development targeting CD19/CD3, CD20/CD3, CD3/CLDN-18.2, CD3/DLL3, and other targets.

In terms of financing, Candid, which focuses on TCE therapy, announced in September this year that it had received $370 million in Series A funding, setting a record for the largest single round funding in the life sciences field in Europe and America this year. In the TCE field, NewCo's capital operation model is also becoming increasingly popular. According to incomplete statistics from Arterial Network, TCE pipeline transactions will account for 5 out of 6 NewCo transactions in 2024.

Why has TCE become a battleground for major enterprises? Probably because TCE has broad application scenarios in the fields of hematological malignancies, solid tumors, and autoimmune diseases.

In the field of hematological malignancies, there are currently seven TCE bispecific antibodies approved for market worldwide, mainly from Amgen, Roche, and AbbVie, covering targets such as BCMA, GPRC5D, CD20, and CD19. They have been approved for multiple myeloma, diffuse large B-cell lymphoma, and other hematological malignancies.

In the field of solid tumors, in May of this year, Anjin's trastuzumab was accelerated by the FDA for the treatment of third line small cell lung cancer, becoming the first TCE drug for the treatment of solid tumors, paving the way for TCE to shine in the field of solid tumors. In addition, TCE bispecific antibodies targeting PSMA, STEAP-1, and other targets are continuously releasing excellent early data for prostate cancer.

What is even more remarkable is the rise of TCE in the field of self exemption. At present, more than 20 active TCE drugs worldwide have undergone self immunization related clinical studies, mainly focusing on target combination types such as CD3 × CD19, CD3 × CD20, CD3 × BCMA, etc. In China, companies such as Xinda Biotechnology, Kangnuo, Zhixiang Jintai, Zhengda Tianqing, New Era Pharmaceutical, Yikeste, Yiyi Biotechnology, Green Bamboo Biotechnology, Aisimai, Kangnuo, Yitengjiahe, Tianguangshi, Junshi Biotechnology, and Shenzhou Cell have all entered the clinical research stage with related products.

It is not difficult to see that with the optimization of technology and the accumulation of research, the application scope of TCE drugs will increasingly expand, extending from oncology to multiple fields such as autoimmune diseases. In these segmented fields, there are Chinese pharmaceutical companies everywhere, and Chinese pharmaceutical companies will also be written into the history of TCE new drug development. We look forward to the accelerated development of the TCE field under the collaborative efforts of the industry chain, bringing more accessible therapies to patients