On the morning of January 22, Lepu Biopharma (02157.HK) announced a global exclusive licensing agreement with ArriVent BioPharma, Inc. (AVBP.O, hereafter referred to as ArriVent) for an antibody-drug conjugate (ADC) called MRG007, aimed at gastrointestinal cancers. The company’s stock opened over 13% higher in the morning, and as of the time of publication, it rose 7.95% to HKD 2.58/share.

According to the agreement, Lepu Biopharma grants ArriVent the global exclusive license to develop, manufacture, and commercialize MRG007 in regions outside Greater China (which includes mainland China, Hong Kong, Macau, and Taiwan). Lepu Biopharma will receive a total upfront payment of $47 million, with upcoming milestone payments, and up to $1.16 billion for development, registration, and sales-related milestone payments, as well as tiered royalties based on net sales outside Greater China.

Lepu Biopharma announced that MRG007 showed strong anti-tumor activity in preclinical models of gastrointestinal cancers and demonstrated a high therapeutic index in IND-supportive studies. The first application for clinical research (IND) is planned to be submitted in the first half of 2025, focusing initially on colorectal cancer, pancreatic cancer, and other gastrointestinal malignancies. Information from their official website indicates that Lepu Biopharma currently has seven ADC pipelines under investigation.

This year, ADCs remain a hot trend in the niche market of innovative drugs going overseas. Previously, Innovent Biologics and InnoCare Pharma also completed two overseas transactions centered on ADC drugs. Insight database statistics show that over the past three years, the transaction volume for domestic ADC drugs has surpassed chemical drugs to become the leading valuable hot sector globally.

This marks the second collaboration between ArriVent and Chinese innovative pharmaceutical companies regarding ADC drugs in the past year. In June 2024, ArriVent announced a research and collaboration agreement with Kanghong Pharmaceutical (09966.HK), where both parties will work together using Kanghong's proprietary linker payload platform (Alphatecan) and glycosylation point conjugation platform to discover and develop new ADC drugs. This collaboration is expected to have a total value of $616 million.

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