What significant developments have occurred at Transcenta over the last five years?

XUEMING QIAN (XQ): We have made substantial progress. Most importantly, in Summer 2020 we initiated the clinical trial for our lead compound, a second-generation antibody targeting Claudin 18.2.

We advanced this program rapidly and are now entering phase III trials. This trial focuses on firstline gastric cancer, a condition affecting approximately 1.1 million people globally. Notably, China accounts for about 40 percent of the global gastric cancer population. The five-year survival rate for gastric cancer patients remains relatively low at around 30 percent. We aim to revolutionize treatment for patients with the Claudin 18.2 expression by integrating our antibody with the standard care regimen.

Our treatment approach involves combining the standard of care, which currently includes immuno checkpoint inhibitors and chemotherapy, with our antibody. This combination aims to provide broader coverage for patients with HER2-negative gastric cancer. Our antibody, Osemitamab (TST001), is added to a PD-1 plus chemotherapy regimen.

Recently, we presented our phase two trial data at ASCO. This trial included 82 patients and demonstrated significant improvements. For patients without the Claudin 18.2 expression, the progression-free survival (PFS) was about seven months with a response rate of 50 percent. However, for those with a high or medium Claudin 18.2 expression, adding our antibody increased the overall response rate to 68 percent and the PFS to 12.6 months.

How does this molecule differ from current standards of care?

XQ: We have brought together top global leaders in the gastric cancer field to join our global phase III trial for which we have seen quite promising results. Currently, we are the only company, apart from one competitor, to combine Claudin 18.2 with chemotherapy in a global regulatory setting. However, our competitor is only combining with the older standard of care chemotherapy. In contrast, we are combining Claudin 18.2 with the current standard of care, creating a triple combination therapy that leverages the synergistic effects of targeted therapy, immunotherapy, and a chemotherapy backbone.

Treatment methods will always require chemotherapy to eliminate resistant tumour cells. We found that adding Claudin 18.2 targeted therapy to these patients upregulates PD-L1. Initially, most patients with Claudin 18.2 do not benefit significantly from checkpoint inhibitors combined with chemotherapy. By adding a Claudin 18.2 antibody, we can upregulate PD-L1, making these tumours responsive to checkpoint inhibitors.

What additional indications are you exploring?

XQ: Our molecule also holds promise for perioperative gastric cancer, both before and after surgery. This accounts for another 30 to 40 percent of gastric cancer patients who initially undergo surgery but eventually experience progression. By adding the Claudin 18.2 antibody along with chemo or checkpoint inhibitors, we can potentially shrink tumours pre-surgery and eliminate residual tumour cells post-surgery, leading to longer disease-free survival. Additionally, there is significant potential in pancreatic cancer, where about 50 percent of tumours express Claudin 18.2.

Another major indication is lung cancer. Our competitor, who has developed CDx assays with another company, cannot distinguish between Claudin 18.2 and 18.1 due to their antibody binding to a shared intracellular domain. However, our antibodies target an epitope near the therapeutic antibody binding site specific to Claudin 18.2. This specificity allows us to accurately screen for Claudin 18.2 positive lung cancer, which constitutes about 10 percent of lung cancer cases.

As you transition from early development to commercialization, how are you approaching manufacturing and pricing strategies in international markets?

XQ: At this vital stage, our approach to manufacturing and pricing strategies is pivotal. The pricing dynamics can potentially differ by 20 or 30-fold between markets like the US and China. While this phenomenon might also affect Claudin 18.2, the extent of price erosion depends on market competition. Unlike PD-L1 therapies with numerous players, Claudin 18.2 has fewer competitors in first line setting—currently around four globally and only Astellas in the US—reducing immediate pricing pressures.

Moreover, we have strategies in place to maintain robust profit margins even if price adjustments are necessary. Regarding manufacturing, the scale is substantial, particularly in China where 70 percent of newly diagnosed gastric cancer patients (around 280,000) express Claudin 18.2. Our antibody can potentially benefit 80 percent of these patients, equating to significant demand. Despite this, our efficient manufacturing process, based in Hangzhou, is equipped to handle this volume.

Our manufacturing capability is supported by an innovative continuous manufacturing process, approved by the FDA and China’s NMPA for both Phase III trials and commercial production. Unlike traditional Fed-batch methods, which have a fixed production cycle, our process allows for continuous harvesting starting from day 11 up to day 30, adapting production to demand seamlessly. This flexibility ensures we can meet market needs without requiring additional regulatory approvals.

We began investing in these capabilities back in 2019, converting our manufacturing from Fed-batch to perfusion-based processes. This strategic move allowed us to expand production efficiently without the upfront capital expenditure typically associated with large-scale manufacturing facilities. While we are pioneers in China with this approach, it is gaining traction globally among multinational firms for its cost-effectiveness and scalability.

Additionally, we will continue investing in our own R&D projects. Unlike commercial manufacturing, which requires continuous production, R&D projects typically involve fewer batches. This approach optimizes our facility’s potential by dedicating specific spaces for different needs, thereby enhancing overall facility utilization.