CAR-T welcomes the DeepSeek moment

After achieving technological breakthroughs, universal CAR-T is also welcoming a warming trend in investment and financing, as well as payment environments.

In the field of cell therapy, a transformation similar to DeepSeek is taking place, with CARsgen Pharmaceuticals driving the shift of CAR-T towards a high-efficiency, low-cost model through continuous milestone progress.

On February 25, CARsgen Pharmaceuticals announced a partnership with SoftBank in Zhuhai to jointly invest in universal CAR-T Biotech Youkaize. After the investment, CARsgen Pharmaceuticals still holds 92% of the shares and has control over Youkaize.

According to the terms of the agreement, Youkaize is valued at 1 billion yuan, with pipeline assets including universal BCMA CAR-T and universal CD19/CD20 CAR-T. It is important to note that both pipelines are in the early stages, with almost no clinical data, and the rights are limited to mainland China, with indications restricted to hematological malignancies (the CD19/CD20 CAR-T also targets autoimmune indications, but this project does not involve that). Nevertheless, it has received such a high valuation from SoftBank-related capital.

This marks a warming trend in CAR-T investment and financing.

Everything is a natural result following technological breakthroughs. In early November 2024, clinical trial (IIT) data initiated by researchers for CARsgen Pharmaceuticals' universal CAR-T CT0590 made a stunning appearance at the ASH annual meeting, with 2 patients achieving complete remission and maintaining durable remission for 20 months or more, which is unprecedented in previous reports of universal CAR-T.

After breaking through technological bottlenecks, CARsgen Pharmaceuticals has entered an accelerated evolution phase, launching the upgraded THANK-u Plus™ platform, with clinical data for universal CAR-T developed on this platform being even more impressive. At the same time, the number of CARsgen Pharmaceuticals' universal CAR-T pipelines has significantly expanded, now exceeding the number of autologous CAR-T pipelines.

In addition, the payment environment for high-value drugs in mainland China has also seen a turnaround, with CAR-T expected to be included in the Class B medical insurance catalog that was implemented in September this year.

With multiple factors resonating, the logic of exorbitantly priced cell therapies is expected to be reshaped, and universal CAR-T will provide clinical benefits to patients that are comparable to or even surpass those of autologous CAR-T at a lower cost.

01 Barometer

According to data from YaoYuan and Evaluate Pharma, in 2024, the number of CAR-T pipelines from innovative pharmaceutical companies in China accounts for about half of the global total. The breakthrough in the durability of universal CAR-T efficacy by CARsgen Pharmaceuticals also represents that Chinese companies are at the forefront of innovation in cell therapy.

SoftBank China Capital not only has legendary investments in the information technology sector but also heavily invests in healthcare, playing an important role in promoting early-stage innovation in China's biopharmaceuticals.

The partnership between the two parties has attracted significant attention.

On February 25, CARsgen Pharmaceuticals announced that it had reached an agreement with the fund managed by Zhuhai Hengqin SoftBank Xinchang Equity Investment Management Enterprise (Limited Partnership) to jointly invest in Youkaize Biopharmaceuticals (Shanghai) Co., Ltd., a biotech company focused on using universal CAR-T cell therapy to treat hematological malignancies in China According to the terms of the agreement, Youkaize has obtained exclusive rights for the research and development, production, and commercialization of a universal BCMA CAR-T cell product for the treatment of multiple myeloma and plasma cell leukemia, as well as a universal CD19/CD20 CAR-T cell product for the treatment of B-cell tumors in mainland China. The fund under SoftBank Zhuhai plans to subscribe to Youkaize's newly registered capital with an investment of 80 million yuan, thereby holding 8% of Youkaize's registered capital after the transaction is completed. The equity of CARSGEN in Youkaize will be diluted from 100% to 92%.

At the investor communication meeting, Dr. Li Zonghai, Chairman of the Board of CARSGEN, stated: "SoftBank Zhuhai is an outstanding venture capital company, and we are pleased to collaborate with them. The universal CAR-T is expected to be widely used in hematological tumors, solid tumors, and autoimmune diseases. CARSGEN hopes to promote the landing of more innovative products by building an open and collaborative ecological model."

Jiang Min, a partner at SoftBank China Capital, expressed confidence in CARSGEN's leading position in the global CAR-T cell therapy field, stating that the universal CAR-T product, as an innovative treatment solution, demonstrates tremendous potential and advantages, and looks forward to bringing more benefits in the future.

This cooperation has a significant indicative meaning.

First, it promotes the integration of domestic universal CAR-T technology and capital.

CARSGEN's introduction of SoftBank Zhuhai lays a solid foundation for advancing the research and development, production, and commercialization of the universal CAR-T pipeline in mainland China. Against the backdrop of abundant domestic engineering talent, rich doctor-patient resources, and efficient clinical trial progress, this investment and financing will boost high-cost performance innovation, allocate specialized resources to high-potential early pipelines, enabling the company to advance new drug listings at a faster pace and lower cost, maintaining a leading position in its professional field.

At the same time, CARSGEN retains overseas rights for the aforementioned two CAR-T products, leaving room for future international business development opportunities.

Second, the valuation and investment financing value of CAR-T are recovering.

According to an article titled "Bio tech financing: darkest before the dawn" published in Nature Biotechnology in August 2024, there were a total of 16 transactions in the global CGT field in the first eight months of 2024, with a total amount of only 500 million dollars. In contrast, during the peak of the CGT sector in 2021, there were 121 transactions involving a total amount of up to 8.2 billion dollars. The investment and financing in the domestic CGT field are also quite sparse, with much less enthusiasm compared to ADC.

As a primary market biotech, Youkaize enjoys a valuation of 1 billion yuan based on its domestic rights for two early pipeline hematological indications with limited clinical data, providing a positive value anchoring for the industry.

As the prospects for the commercialization and marketability of universal CAR-T become clearer, the CAR-T industry is also experiencing a rebound

02 Acceleration Phase

The underlying logic of CAR-T welcoming the DeepSeek moment lies in the breakthrough of core technology, leading to a turning point and a clear understanding.

The core reason for the poor efficacy of previous universal CAR-T products is that they did not fully address the host graft-versus-host reaction (HvGR) issue, resulting in poor durability of the product's efficacy after being administered to patients.

Domestic biotech companies have made painstaking efforts and persistent explorations in the field of universal CAR-T, ultimately achieving breakthroughs in solving the core issue of HvGR, and continuously reporting positive clinical data.

CARsgen Therapeutics' CT0590 is a universal dual-target CAR-T cell therapy that utilizes the THANK-uCAR® technology, targeting BCMA and NKG2A, with triple knockout of TRAC/B2M/NKG2A to avoid HvGR. At the 2024 ASH Annual Meeting, the IIT data on the durability of CT0590 attracted widespread attention. Preliminary results indicate that CARsgen Therapeutics' universal CAR-T therapy has controllable safety and comparable, if not better, durability of efficacy than autologous CAR-T.

The boat has passed through thousands of mountains.

CARsgen Therapeutics quickly upgraded its original THANK-uCAR® universal CAR-T technology to the THANK-u Plus™ platform to overcome the potential impact of NKG2A expression levels on efficacy. Under the presence of NK cells with different NKG2A expression levels, THANK-u Plus™ can sustain expansion, with significantly improved expansion levels compared to THANK-uCAR®. Animal experiments show that THANK-u Plus™ exhibits significantly superior anti-tumor efficacy in the presence of NK cells compared to THANK-uCAR®. Universal BCMA or CD19/CD20 dual-target CAR-T under this platform shows strong anti-tumor efficacy in the presence of NK cells, indicating that this platform can be widely used for the development of various universal CAR-T cells.

On February 10, CARsgen Therapeutics announced that the efficacy assessment of the first enrolled patient on day 28 based on the THANK-u Plus™ platform developed universal BCMA CAR-T was a strict complete response (sCR) and minimal residual disease (MRD) negative.

The patient had relapsed/refractory multiple myeloma IgA-λ type (R-ISS stage II), previously received third-line combination therapy and autologous hematopoietic stem cell transplantation, and experienced disease progression after the last treatment, subsequently enrolling in the clinical trial. After receiving CAR-T cell infusion from the minimum dose group in the clinical trial protocol, the patient experienced grade 1 CRS, which was resolved with antipyretics and tocilizumab treatment, with no ICANS or other CAR-T treatment-related immune adverse reactions, indicating overall good safety The minimum dose achieves sCR for end-stage patients, and CAR-T expansion has been observed.

Eucure Biopharma's two universal CAR-T pipelines are developed based on the THANK-u Plus™ platform.

As the platform upgrades, the number of universal CAR-T pipelines at Eucure Biopharma has rapidly surpassed that of autologous CAR-T, with catalysts coming in succession.

On January 13, Eucure Biopharma announced that its universal CD19/CD20 CAR-T product completed the first subject dosing in an IIT. Based on the THANK-u Plus™ platform, it is planned for the treatment of hematologic malignancies and autoimmune diseases, with BIC potential. CD19 and CD20 are effective targets for CAR-T cells against B-cell malignancies, and dual-target CAR-T cell therapy has the potential for higher complete remission rates, longer duration of remission, and lower incidence of neurotoxicity.

On January 20, Eucure Biopharma's universal CD38 CAR-T product completed the first subject dosing in an IIT, indicated for relapsed/refractory acute myeloid leukemia (R/R AML). CD38 is known as a crown target, highly expressed not only in multiple myeloma (MM) but also a potential target for AML. Johnson & Johnson's CD38 monoclonal antibody Darzalex is expected to achieve global sales of USD 11.67 billion in 2024, demonstrating strong market potential.

The marginal improvement in the payment capability for innovative drugs has been bolstered by recent favorable policies, with significant moves brewing in commercial insurance payments, Category B catalog, payment standards, investment funds, and hospitalization speed. Coupled with the low-cost advantage of universal CAR-T, the accessibility issues of what was once an aristocratic therapy are expected to be completely resolved. Universal CAR-T can be pre-prepared in bulk, stored frozen in batches, and patients do not need to match; it can be used immediately. After obtaining cells from a healthy donor, it is expected that a single preparation can produce CAR-T cell therapy products for 100 patients, so the per capita cost is expected to be reduced by over 90% compared to autologous CAR-T.

In 2024, overseas CAR-T cell therapy sales have exceeded USD 4.5 billion, while domestic CAR-T has been struggling since its commercialization began in 2021.

However, innovation never sleeps. With breakthroughs in core technologies, along with a warming investment and payment environment, the commercial logic of universal CAR-T has basically been established, leaving the rest to clinical trial validation. It is believed that the flowers of emerging therapies will bloom over time.

Source: Archimedes Biotech, original title: "CAR-T Welcomes the DeepSeek Moment"

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