Ascentage Pharma, a drug development company based in China with aspirations for global impact, has successfully raised $126.4 million from its initial public offering (IPO) in the United States. This capital infusion is primarily aimed at advancing the late-stage clinical development of two innovative medications, which could potentially offer significant advantages over existing cancer treatment options currently available in the market.
Since 2019, Ascentage has been publicly traded on The Stock Exchange of Hong Kong. Earlier this week, in anticipation of its debut on the U.S. stock market, the company had set preliminary financial terms, planning to issue over 7.3 million American depositary shares (ADS) priced at $20.34 each. However, late Thursday, the final offering price was adjusted to $17.25 per ADS. These shares will be listed on the Nasdaq under the ticker symbol “AAPG,” marking a significant step in Ascentage’s journey toward expanding its presence in the global pharmaceutical landscape.
The sole commercialized product from Ascentage is olverembatinib, which has received approval in China as a treatment for specific patients suffering from chronic myeloid leukemia (CML). This medication functions as a small molecule inhibitor targeting tyrosine kinases, which are enzymes that play a critical role in cancer progression. While there are existing tyrosine kinase inhibitors, such as Novartis’s Scemblix and Gleevec, CML can develop resistance to these treatments, as highlighted in Ascentage’s IPO filing. Moreover, earlier generations of these inhibitors have not effectively addressed CML cases with T315I mutations, which are linked to aggressive disease progression and reduced survival rates.
Ascentage positions olverembatinib as a next-generation therapeutic option for CML, particularly for patients with T315I mutations who have shown resistance to first- and second-generation TKIs. The company cites compelling real-world data from China that indicates positive outcomes for patients whose cancers have developed resistance to established Novartis therapies. This data underscores the potential of olverembatinib to redefine treatment standards for CML.
According to Ascentage’s IPO filing, a five-year follow-up study on patients with chronic phase CML treated with olverembatinib revealed that 73% remained on therapy, with increasing response rates and a decrease in treatment-related adverse events (TRAEs) over time. This compelling evidence suggests that olverembatinib could serve as a transformative global therapy for CML, reinforcing Ascentage’s belief in its therapeutic potential.
An ongoing Phase 3 clinical trial for olverembatinib is currently enrolling patients across the U.S., Canada, Australia, and China. One pivotal study is assessing the drug’s efficacy as a standalone therapy for CML, with the trial designed to support a future FDA new drug application that Ascentage intends to submit in 2026. Additional Phase 3 trials are also underway to evaluate olverembatinib in patients newly diagnosed with Philadelphia chromosome-positive acute lymphocytic leukemia and gastrointestinal stromal tumors.
For Ascentage, olverembatinib represents a strategic asset that could facilitate its global aspirations, particularly in collaboration with major pharmaceutical firms. In June, Ascentage entered into an agreement with Takeda Pharmaceuticals International, granting them an exclusive option to license olverembatinib for development and commercialization outside of greater China and Russia. Takeda has invested 0 million for this licensing option, with potential milestones and exercise fees possibly bringing Ascentage’s total revenue from this deal to approximately $1.2 billion, as elaborated in the IPO filing.
The next promising candidate in Ascentage’s portfolio is lisaftoclax, a small molecule inhibitor targeting Bcl-2. The overexpression of this protein is known to contribute to tumor growth and drug resistance. Ascentage is focusing on developing lisaftoclax for various blood cancers, with a new drug application currently under regulatory review in China for advanced cases of chronic lymphocytic leukemia (CLL) and small lymphocytic leukemia (SLL).
Should lisaftoclax receive approval, Ascentage aims to launch it in China by 2025 and subsequently seek regulatory approvals in multiple international markets. The primary competitor for this medication will be Venclexta, a Bcl-2 inhibitor marketed by AbbVie and Genentech. Notably, Venclexta is not yet approved in China for treating CLL or SLL, which could provide Ascentage a strategic advantage in entering the market. Additionally, Ascentage’s pipeline includes several other small molecules currently in earlier stages of development, primarily focused on various cancer types.
Ascentage’s co-founder, Edward Ming Guo, holds the largest share of the company, maintaining a post-IPO stake of 17.5%, as specified in the prospectus. Takeda also holds a 7.1% stake in the company. For the nine-month period ending September 30, 2024, Ascentage reported revenues of 876.8 million Chinese yuan (approximately $124.9 million), with the majority of these earnings derived from the agreement with Takeda. By the end of the third quarter of 2024, the company reported a robust cash position of $210.8 million.
With the proceeds from the IPO, Ascentage has earmarked between $30 million and $40 million for the clinical development of olverembatinib in the U.S. and other regions, as well as for expanding the drug’s indications to earlier lines of CML treatment. Additionally, the company plans to allocate $50 million to $60 million for the regulatory approval and potential commercial launch of lisaftoclax in China for relapsed or refractory CLL. Ascentage also intends to conduct clinical trials that will support the drug’s approvals in the U.S. and other markets. Furthermore, between $10 million and $20 million is set aside to fund research and development of other promising drug candidates.
For the latest updates on litigation, regulatory changes, financial trends, and significant deals, subscribe to Finance Docket, a collaboration between Breaking Media publications Above the Law and Dealbreaker.
