[Special Stock] Appclon, Keytruda Sales of 13 Trillion Won in H1... The Path to Becoming the Best First-Line Drug for Stomach Cancer

[Asia Economy Reporter Hyungsoo Park] Abclon is showing strong performance. The news that the mid-term results of the Phase 2 clinical trial of the gastric cancer targeted therapy AC101, licensed to Shanghai Henlius Biotech, confirmed superior efficacy indicators compared to existing treatments appears to be influencing the stock price.

At 10:16 AM on the 19th, Abclon was trading at 19,850 KRW, up 6.72% from the previous trading day.

Henlius is developing AC101 as a first-line treatment for HER2-positive advanced and metastatic gastric cancer. According to Henlius, in the clinical trial combining AC101 with Herceptin biosimilar and chemotherapy, the objective response rate (ORR) for both the low-dose (15mg/kg) and high-dose (25mg/kg) AC101 groups was predicted to be over 85%.

Among currently approved first-line treatments for HER2-positive advanced and metastatic gastric cancer, the combination of the immune checkpoint inhibitor Keytruda with Herceptin and chemotherapy showed the highest ORR at 74.4%. The prediction that AC101 will show a higher ORR has raised expectations for it to become the best-in-class drug within its category. Keytruda alone generated sales exceeding 13 trillion KRW in the first half of the year.

AC101 was developed through Abclon's proprietary antibody drug development platform, NEST (Novel Epitope Screening Technology). NEST is a technology that discovers antibodies binding to new epitopes on disease-related proteins.

Abclon developed AC101 as a treatment for gastric and breast cancer. In 2016, it licensed the technology to Henlius, the largest pharmaceutical group in China and a global partner. Henlius began Phase 1 clinical trials in China in 2019, started Phase 2 in 2021, and recently announced its global clinical plans in its investor semiannual report.

An Abclon representative explained, "The mid-term results of the Phase 2 clinical trial of AC101 confirmed superior efficacy indicators compared to existing treatments," adding, "This has increased the possibility of developing a best-in-class gastric cancer treatment."

According to a report by market research firm DelveInsight in October 2021, the major HER2-positive gastric cancer treatment markets, including the five major European countries, the United States, Japan, China, and South Korea, form a market worth approximately 11 billion USD. It is expected to grow at a compound annual growth rate (CAGR) of 3.11% until 2030.

Earlier, Kyobo Securities anticipated that following the positive interim results of the CAR-T therapy Phase 1 trial, Abclon would also disclose Phase 2 results of its antibody therapy in October. According to the NCCN guidelines, the current first-line standard treatments for HER2-positive gastric cancer include combination therapies of Trastuzumab (hereafter T) + Pembrolizumab (P) + Chemotherapy (C) or T + C.

Researcher Junghyun Kim of Kyobo Securities analyzed, "Henlius, Abclon's partner in Shanghai, aims to surpass the efficacy of T+P+C through the combination of its T biosimilar and AC101 (HLX22)." He added, "At the end of last month, Henlius first announced that an ORR of over 85% is expected in the Phase 2 trial (AC101 + Herceptin + Chemo combination)."

He further explained, "This estimate is based on efficacy data from the entire dosing group before unblinding (ORR 77.3%) and partially disclosed low-dose group (ORR 100%). Henlius plans to release data after unblinding the Phase 2 trial in October this year."

Researcher Kim added, "They plan to enter global Phase 3 trials next year," and "Since Henlius' Herceptin biosimilar is its top-selling product, they aim to grow biosimilar sales based on AC101 while also developing new drugs."

Abclon successfully raised 22 billion KRW in capital from institutional investors at the end of July. Concerns about additional capital raising for the next two years have been alleviated. Abclon's annual cash burn is in the 10 billion KRW range, which is relatively low compared to other biotech companies. Researcher Kim judged that Abclon's lean structure and sound financial management will significantly reduce unexpected risks for investors.