Recently, Northeast Pharm announced its plan to acquire a 70% stock equity in Dingcheng Taiyuan for a total cash consideration of approximately RMB 187 million, thereby obtaining controlling stake in the company.
Dingcheng Taiyuan, founded in 2014, is a R&D enterprise focused on the development and transformation of solid tumor cell therapy products. According to available information, it has established a complete technical platform and product transformation system for TCR-T (T-cell receptor-engineered T-cell therapy) and CAR-T (chimeric antigen receptor T-cell therapy) cell therapy products.
Founded in 1946, Northeast Pharm is one of China's "four established pharmaceutical companies" and is renowned as the "cradle of the new China's national pharmaceutical industry". Starting from API, its current R&D pipeline has covered traditional pharmaceutical preparations. However, the company had no plans to venture into innovative drugs for many years. The purpose of this acquisition is to target TCR-T, and the company's responsible person stated that if the acquisition is successfully completed, sufficient funds will be allocated for scientific research and transformation, with "no upper limit". This represents a significant shift for Northeast Pharm, which has historically allocated less than 1% of its revenue to R&D.
So, what is the appeal of TCR-T?
R&D funds with "No Upper Limit": Established Pharmaceutical Company Seeks Opportunities for "Overtaking on the Curve"
Listed on the Shenzhen Stock Exchange in 1996, Northeast Pharm is a traditional pharmaceutical company whose main business is divided into pharmaceutical manufacturing and pharmaceutical commerce. In pharmaceutical manufacturing, the company focuses on API and preparations, producing a range of products including vitamins, anti-infectives, reproductive system medications, nervous system medications, digestive system medications, and biological diagnostic preparations.
In recent years, due to factors such as the in-depth advancement of national centralized procurement and the comprehensive implementation of generics consistency evaluations, competition in APIs and generics has intensified, prompting Northeast Pharm to undergo a transformation. The company aims to strengthen its R&D efforts in innovative drugs and high-tech generics.
In September 2022, Northeast Pharm announced an agreement with MedAbome in the United States, under which the latter will transfer its original antibody MAb11-22.1 to the former for the joint development of ADC and CAR-T cell therapy products. For this purpose, Northeast Pharm invested RMB 500 million of its self-owned funds to establish a wholly-owned subsidiary to advance the cooperation project for the introduced ADC drugs and CAR-T cell therapy technologies.
The acquisition of Dingcheng Taiyuan will give Northeast Pharm access to the latter's independently built core technical platform, enabling the development of TCR-T, TCR protein drugs, and CAR-T cell therapy products. It is reported that Dingcheng Taiyuan has developed 3 TCR-T cell therapy candidate drugs, DCTY1101, DCTY1102, and DCTY1103, targeting solid tumors such as pancreatic cancer and colorectal cancer.
In August of this year, DCTY1102 injection received a clinical trial implied permission from NMPA for the treatment of patients with advanced solid tumors positive for KRAS G12D mutation and the HLA-A*11:01 genotype.
Northeast Pharm stated that DCTY1102 has the potential to become the world's second and China's first TCR-T cell drug targeting KRAS-G12D to enter Phase I clinical research.
Furthermore, supported by Dingcheng Taiyuan's core technical platform, the TCR sequence discovery platform, the company has a reserve of over 30 sequence libraries, laying the foundation for future product transformation.
Whether Northeast Pharm's approach of taking a shortcut to introduce early TCR-T business will enable it to achieve overtaking on the curve in the ...
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