Recently, Lepu Biotech released a profit forecast, expecting a profit of no less than 24 million yuan in the first half of 2025 (compared to a loss of 197 million yuan in the same period of 2024). This seven-year-old leading ADC pharmaceutical company has crossed the break-even point for the first time.
Two major engines driving profitability
Two major engines driving profitability
Founded in 2018, Lepu Biotech is an innovative biopharmaceutical company focusing on targeted therapy and tumor immunotherapy. After seven years of accumulated R&D investment, it has finally begun to translate into financial returns. The core driving factors behind this breakthrough come from two major engines:
Commercialization growth of PD-1 monoclonal antibody: Although Pucotenlimab (trade name: Puyouheng) is the 14th approved PD-1/PD-L1 monoclonal antibody in China, it has successfully gained a foothold in the field of immunotherapy. Currently, the drug has been approved for two indications: melanoma and MSI-H/dMMR solid tumors. Its sales exceeded 300 million yuan in 2024, and its revenue maintained steady growth in 2025.
Surge in international licensing revenue: In recent years, Lepu Biotech has made a series of breakthroughs in international cooperation, forming the second growth engine for the company's performance.
In January this year, Lepu Biotech reached a licensing agreement with ArriVent BioPharma for CDH17 ADC (MRG007), obtaining a total of 47 million US dollars in one-time upfront payment and recent milestone payments, up to 1.16 billion US dollars in development, registration, and sales milestone payments, as well as tiered royalties based on net sales outside the Greater China region. The upfront payment and recent milestone payments from this cooperation contributed significantly to the company's cash flow in the first half of this year.
Prior to this, the CLDN18.2 ADC product CMG901, co-developed by Lepu Biotech and Konoya, was licensed to AstraZeneca in 2023 for a total of 1.188 billion US dollars, demonstrating that the ADC technology platform has been recognized by multinational corporations (MNCs).
In August this year, Lepu Biotech reached another important transaction, entering into a NewCo cooperation with Excalipoint on two preclinical TCE assets. This not only brought 10 million US dollars in upfront payment and a potential total transaction value exceeding 850 million US dollars but also a 10% equity stake in the joint venture company. The value of the NewCo model lies not only in upfront and milestone payments but also in obtaining equity in the joint venture to share in asset appreciation dividends as a shareholder.
These three transactions not only demonstrate that Lepu Biotech's innovative molecules have gained industry recognition but also mark the company's successful realization of diversified transaction models and diversified value realization paths.
Seven major ADC pipelines ready to launch
Behind Lepu Biotech's profitability is its profound technical accumulation and differentiated R&D layout. Currently, the company's research pipeline has formed three major directions: "ADC + Immunology + Oncolytic Virus".
Among them, ADC is Lepu Biotech's core area. In July 2018, Lepu Biotech acquired Shanghai Meiyaoke, obtaining an ADC technology platform and multiple ADC pipelines. Since then, Lepu Biotech has developed an innovative Hi-TOPi ADC platform, based on which it has developed globally first-in-class potential molecules such as the GPC3-targeted ADC candidate MRG006A.
Currently, the company has 7 ADC candidates in clinical stages, covering high-potential targets such as EGFR, HER2, TF, CLDN18.2, GPC3, and CDH17, involving areas with highly unmet clinical needs such as nasopharyngeal cancer, pancreatic cancer, and liver cancer.
The core drug MRG003 (Becotatug Vedotin) is the first EGFR ADC to apply for marketing in China. EGFR and HER2 belong to the epidermal growth factor family, but the R&D progress of EGFR-targeted ADCs lags far behind that of HER2-targeted ADCs. Currently, there is only one EGFR ADC on the global market, Akalux (cetuximab saratolacan), a photoimmunotherapy ADC developed by Rakuten Medical of Japan, but it is only marketed in Japan.
In addition, MRG003 is the fastest-progressing EGFR ADC. The drug is conjugated with MMAE toxin via a vc linker. Currently, its first indication for advanced nasopharyngeal carcinoma (NPC) has been submitted to the NMPA for NDA application and has been included in the priority review channel.
At this year's ASCO annual meeting, Lepu Biotech announced the results of the key registrational study of MRG003, showing excellent efficacy and good safety.
Specifically, in patients with recurrent/metastatic nasopharyngeal carcinoma who had failed ≥2 lines of systemic chemotherapy and PD-(L)1 inhibitors, the ORR in the MRG003 group was 30.2%, compared to only 11.5% in the chemotherapy group, an almost threefold increase. As of December 30, 2024, the median OS in the MRG003 group and the chemotherapy group was 17.08 months vs. 11.99 months (HR=0.73). After excluding the impact of cross-treatment, the OS HR of the two groups was 0.59 (95%CI 0.37-0.93), showing significant survival benefits.
More promisingly, in R/M-NPC patients who failed immunotherapy and platinum-containing chemotherapy, the ORR and DCR of the MRG003 + Pucotenlimab combination therapy were as high as 66.7% and 93.3%, respectively, demonstrating the potential to move forward in nasopharyngeal carcinoma treatment regimens. Currently, Lepu Biotech has initiated a phase III clinical study of MRG003 combined with Pucotenlimab in R/M-NPC patients who have failed at least one line of previous immunotherapy, and the results are highly anticipated.
Meanwhile, the clinical trial application for the phase II study of MRG003 + Pucotenlimab versus MRG003 monotherapy in locally advanced head and neck squamous cell carcinoma (HNSCC) has been approved by the European Medicines Agency (EMA). This is the world's first clinical study of EGFR ADC combined with PD-1 monoclonal antibody in locally advanced head and neck squamous cell carcinoma. A phase III clinical study of MRG003 monotherapy in advanced head and neck squamous cell carcinoma is also underway.
For ADC + IO combination therapy, Lepu Biotech is also advancing the phase II trial of MRG002 (HER2 ADC) + Pucotenlimab for the treatment of HER2-expressing solid tumors, with promising data observed in the treatment of UC: for HER2+ patients, the ORR and DCR of evaluable patients were 70.6% and 94.1%, respectively; the longest PFS of patients receiving treatment exceeded 26.5 months and is still ongoing.
Lepu Biotech's ADC drugs that have entered phase III clinical trials also include MRG004A (TF ADC) and CMG901 (CLDN18.2-targeted ADC). MRG004A focuses on "the king of cancers" - pancreatic cancer (PC). CMG901 has been licensed to AstraZeneca for global rights, and an international multi-center phase III study for advanced or metastatic CLDN18.2-expressing gastric and gastroesophageal junction adenocarcinoma has been initiated.
Among next-generation ADC products, MRG006A and MRG007 have the potential to be "first-in-class" or "best-in-class".
MRG006A is the world's first GPC3 ADC to enter the clinical stage. Developed by Lepu Biotech based on its Hi-TOPi platform, this novel topoisomerase I inhibitor GPC-3 ADC candidate has first-in-class potential globally and is currently in phase I clinical trials.
GPC3 is a molecular marker related to growth and development. It is not expressed in healthy liver tissue or cirrhotic tissue in adults, but approximately 72% of hepatocellular carcinomas (HCC) are GPC3-positive, which is associated with the growth and invasion of liver cancer, and is regarded as the "golden target" for HCC. Preclinical studies have shown that MRG006A exhibits strong dose-dependent tumor growth inhibition in various CDX models and HCC PDX models. At the same time, MRG006A also showed good tolerance in exploratory toxicology studies. MRG007 targets gastrointestinal cancers as a CDH17-targeted ADC drug. The drug has shown strong anti-tumor activity in preclinical models of gastrointestinal cancers. Currently, Lepu Biotech has initiated a phase I/II clinical trial to evaluate MRG007 in patients with unresectable locally advanced or metastatic solid tumors.
In addition to its advantages in the ADC field, Lepu Biotech has also laid out in the field of tumor immunotherapy (IO): its PD-1 monoclonal antibody Pucotenlimab has been approved for marketing and contributes stable revenue. At the same time, the company is actively developing multi-specific T cell engagers (TCE) and oncolytic virus drugs, which are expected to form synergistic effects in the future and overcome existing treatment bottlenecks.
In the TCE field, Lepu Biotech has developed the proprietary technology platform TOPAbody. Based on this platform, Lepu Biotech has developed the tri-specific T cell engager CTM012 and has submitted an IND application in China. Moreover, the company has licensed two preclinical assets (CTM012, CTM013) developed on this platform to Excalipoint Therapeutics through the NewCo model, obtaining 10 million US dollars in upfront payment, a potential total transaction value exceeding 850 million US dollars, and a 10% equity stake in the joint venture company.
In the field of oncolytic viruses, Lepu Biotech has licensed the rights to CG0070 in the Greater China region from CG Oncology. The drug is undergoing phase III clinical research in the United States and is in phase I clinical stage in China.
Conclusion
BD-driven profitability is becoming a common path for Chinese innovative pharmaceutical companies. Companies such as Kelun-Biotech, Harbour BioMed, and Alphamab Oncology have taken the lead in verifying this model. In the first half of this year, with the support of BD upfront payments, Lepu Biotech also successfully achieved profitability.
Standing at a new starting point, with the upcoming launch of the blockbuster ADC product MRG003 and the initiation of the phase III clinical trial of MRG004A for pancreatic cancer, Lepu Biotech is evolving from a Biotech to a Biopharma and will face more severe challenges in the future.
References:
1. Lepu Biotech announcements
2. https://mp.weixin.qq.com/s/neNJGhZHrRFcTGSpz7If9Q
3. https://mp.weixin.qq.com/s/hLI_HxxYehFSm8u-aPCuGQ
4. https://mp.weixin.qq.com/s/l9fK1VnQSufMdUMUZVYMag
