【Company Research】I-Mab BioPharma (IMAB US) – Global strategic partnership with AbbVie

• Global strategic partnership with AbbVie on TJC4 and other transformative therapies. I-Mab reached a broad, global collaboration agreement with AbbVie for the development and commercialization of TJC4 (lemzoparlimab), an innovative anti-CD47 monoclonal antibody internally discovered and developed by I-Mab. The two partners have the potential to expand the collaboration to additional transformative therapies. I-Mab retains all rights to develop and to commercialize lemzoparlimab in mainland China, Macau and Hong Kong. Under the terms of the agreement, AbbVie will pay I-Mab US$180mn in an upfront payment to exclusively license lemzoparlimab, along with US$20mn in a milestone payment based on the phase 1 results, for a total of US$200mn. In addition, I-Mab will be eligible to receive up to US$1.74bn in success-based milestone payments for lemzoparlimab, of which US$840mn are based on clinical development and regulatory approval milestones, with the remainder based on commercial milestones (i.e. net sales). Upon commercialization of lemzoparlimab, AbbVie will also pay tiered royalties from low-to-mid teen percentages on global net sales outside of greater China. Going forward, I-Mab will work closely with AbbVie to facilitate clinical development of lemzoparlimab both globally and in China. We see potential significant synergies between I-Mab's lemzoparlimab and AbbVie's Venclexta (Venetoclax, a Bcl-2 inhibitor) in treating AML and MDS.

 

• Topline safety data of lemzoparlimab proved its differentiation. Lemzoparlimab is a highly differentiated CD47 antibody as it was designed to minimize inherent binding to normal red blood cells while preserving its strong anti-tumor activity. I-Mab disclosed the topline results of the recently completed phase 1 dose-escalation clinical trial in the US. Lemzoparlimab is well tolerated as a single agent at a dose range of up to 30 mg/kg without introducing any priming dosing strategy. In all DLT-evaluable patients, no dose-limiting toxicities or severe hematologic adverse events were observed. Full data will be presented at an appropriate scientific conference, probably at the SITC Annual Meeting this year.

 

• US$418mn private placement. I-Mab also announced that it has entered into definitive subscription agreements with a consortium of institutional investors to raise approximately US$418mn through a private placement with Hillhouse Capital-Led Consortium. As of June 30, 2020, I-Mab had cash and equivalents of US$221mn. Upon the completion of the placement and receiving the initial payment from AbbVie, I-Mab will have more than US$800mn cash on hand, providing sufficient funding for future R&D investments.

 

• Maintain BUY. Given the recent progresses, we upgrade our TP from US$41.30 to US$52.57 based on 15-year risk-adjusted DCF model (WACC: 10.6%, terminal growth rate: 3.0%).