AdAlta prioritises ‘East to West’ cellular immunotherapy strategy to drive value creation

AdAlta prioritising East to West cellular immunotherapy strategy
Company now has three products in exclusive due diligence after executing two non-binding term sheets
Strategy expected to allow for value realisation in relatively short time periods from modest investments

Special Report: AdAlta has ranked its East to West cellular immunotherapy strategy as its core growth priority, saying that it is the key driver of future pipeline growth and value creation.

Highlighting this, the company has executed two non-binding term sheets to in-licence clinical stage CAR-T products, bringing total products in advanced, exclusive due diligence to three.

The East to West cellular immunotherapy strategy is part of AdAlta’s (ASX:1AD) push to gain a strong foothold in the rapidly growing market of cellular immunotherapies – living drugs based on engineered human cells – which are already transforming outcomes in blood cancer and are on the cusp of doing the same for the much larger solid cancer market.

In-licencing highly differentiated cell therapies for solid cancers from Asian originators grows the company’s opportunity pipeline and positions it to be quickly reshaped into a leader in cellular immunotherapy for solid cancer patients.

This strategy is also aligned with the trend where innovation emerging from China and Asia more broadly is reshaping the global biopharma landscape.

Supporting this strategy, 1AD in the December 2024 quarter appointed Dr Kevin Lynch MD as consultant CMO and is working with specialist partners such as Cell Therapies Pty Ltd and Dark Horse Consulting to bring market leading expertise to the opportunity.

Further highlighting the company’s focus on the East to West growth strategy, it has decided, following a strategic review, that internal discovery R&D on new targets will be halted. As it has previously stated, AdAlta’s its first in class antifibrotic molecule, AD-214, will only be advanced via third-party transactions.

New term sheets

With the new term sheets, 1AD now has three products in advanced, exclusive due diligence.

These are:

An armored CAR-T for lung, mesothelioma, ovarian, pancreatic and colorectal cancers, with clinical data from 32 patients showing efficacy substantially superior to current second line care and a rapid, non-viral vector manufacturing process
A first-in-class CAR-T for advanced colorectal, lung and gastric cancers, with clinical data from 9 heavily pre-treated colorectal cancer patients including two cases of completely resolved malignant ascites, a safety “kill” switch and potential for multi-dosing without lymphodepletion; and
A first-in-class CAR-T for gastric and gynaecological cancers with clinical data from ten patients suggesting superiority over current third line care.

Under the term sheets, 1AD has between 90-120 days of exclusivity to complete confirmatory due diligence and negotiate definitive licensing agreements.

Quick value realisation

“Our decision to accelerate AdAlta’s “East to West” strategy represents a substantial opportunity for the company,” managing director Tim Oldham said.

“This strategy is already providing us access to “Eastern” advances in cellular immunotherapies and will, in turn, help drug candidates flowing from biotech innovation in that region reach “Western” regulated markets.

“We believe AdAlta can make a series of modest investments, leveraged with third party capital and focused on single clinical trials per asset, that could see value realisation in relatively short time periods.

“The strategy is already receiving positive feedback from strategic and financial investors who are potential sources of nondilutive funding and from our Asian in-licensing partners.

“The alignment of the strategy with industry growth trends was validated at JPMorgan Week and by the signing of these two new term sheets.”

East to West strategy

The East to West strategy leverages Asian health care innovation by in-licencing clinical stage, highly differentiated cellular immunotherapies for solid cancers from Asia and providing a pathway for these products to access Western markets by establishing manufacturing and conducting first clinical trials under a USA FDA IND in Australia.

This then prepares these products for on-licensing to larger biopharmaceutical companies at substantially enhanced valuations.

Currently, 41% of global cellular immunotherapy developers and 61% of all clinical trials are located in Asia.

1AD had inked its first non-binding term sheet with a Chinese company for a CAR-T cell therapy product in October 2024. The company believes these two additional term sheets validate the strategy and justify prioritising it for future growth.

This article was developed in collaboration with AdAlta, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.