Pharmaron Collaborates with Celltrion to Secure Major Overseas ADC Contract Just Two Months after Going Public

Pharmaron, a prominent player in the pharmaceutical industry, has made significant strides in the development and production of antibody-drug conjugates (ADCs). In a remarkable achievement, the company recently announced a strategic collaboration with South Korean biopharmaceutical firm Celltrion Inc. (068270.KS) to provide comprehensive services for the development and manufacturing of bi-specific antibodies, including ADCs. This groundbreaking partnership comes a mere two months after Pharmaron's successful spin-off and listing on the Hong Kong Stock Exchange. Let's delve into the details of this exciting venture.

The Collaboration:
Pharmaron and Celltrion have signed a memorandum of understanding (MOU), solidifying their collaboration in the field of bi-specific antibody development and production. Under the terms of the MOU, Celltrion will entrust Pharmaron as its primary service provider, offering process development and Good Manufacturing Practice (GMP) production services for comprehensive projects on a global scale. Pharmaron, as Celltrion's strategic service partner, will provide end-to-end services, ranging from process development to one-stop GMP production, to accelerate the high-quality development of Celltrion's ADC pipeline. Although specific details of the collaboration have not been disclosed, this partnership marks a significant milestone for Pharmaron's growth trajectory.

Pharmaron's Spin-off and Listing:
Pharmaron's journey towards becoming an independent entity began in July 2023 when it announced its spin-off from parent company Pharmaron Biological and subsequent listing on the Hong Kong Stock Exchange. Prior to the spin-off, Pharmaron Biological held a direct ownership stake of 60% in Pharmaron, while Pharmaron Kangde indirectly held a 40% stake. Following the spin-off, Pharmaron continues to operate as a subsidiary of Pharmaron Biological. On November 17, 2023, Pharmaron successfully debuted on the Main Board of the Hong Kong Stock Exchange, making it the third-largest IPO transaction in the Hong Kong market in 2023 and the largest in the healthcare sector since 2022.

Securing a Major Overseas Client:
Within just two months of going public, Pharmaron has secured a significant client, demonstrating its commitment to establishing itself as a leading research, development, and production organization in the ADC sector. Celltrion, a leading biopharmaceutical company headquartered in Incheon, South Korea, specializes in research, development, and production of innovative therapies. With a robust portfolio that includes world-class monoclonal antibody biosimilars like REMSIMA®, TRUXIMA®, and HERZUMA®, Celltrion offers a broader range of treatment options for patients worldwide. Furthermore, Celltrion's VEGZELMA® and YUFLYMA® have received approvals from the U.S. FDA and EMA, while ZYMFENTRA™ has gained FDA approval, and REMSIMA®SC has obtained EMA approval. Leveraging its expertise and products accumulated through successful biosimilars business, Celltrion aims for sustainable growth by developing new drugs and healthcare platform technologies.

The ADC Boom:
The explosive growth of ADCs in recent years is undeniable. In 2023, ADC transactions reached new heights, with Pfizer and AbbVie's multibillion-dollar acquisitions of traditional ADC pharmaceutical companies and numerous billion-dollar collaboration and licensing agreements. The momentum for ADCs continues in 2024. Roche, for instance, acquired the global rights to c-Met ADC drug YL211 from Genor Biopharma for over one billion dollars. Similarly, BeiGene announced an exclusive option and licensing agreement with Radiance, granting the latter the rights to develop, produce, and commercialize a first-in-class bispecific antibody-drug conjugate (bispecific ADC) for the treatment of any human disease globally. Johnson & Johnson also made headlines by announcing its acquisition of Ambrx Biopharma for two billion dollars, which includes an ADC for prostate cancer and other pipeline assets.

Pharmaron's CEO, Li Jincai, expressed confidence in the ADC field, stating that the CRDMO (Contract Research and Development Manufacturing Organization) capacity for ADCs is far from saturated. He also highlighted that many Chinese ADC companies are among the world's top tier, with several drugs available for licensing. Pharmaron's revenue primarily comes from the development-stage bi-specific antibody projects, which can be broadly categorized as pre-IND projects (covering drug discovery and preclinical development) and post-IND projects (encompassing clinical and commercial stages). ADC projects are a significant part of their portfolio. Upon going public, Pharmaron announced that a substantial portion of the IPO proceeds would be allocated to constructing production facilities in Wuxi, China, and Singapore, aiming to enhance their comprehensive operational capabilities and capacity from antibody intermediates to drug products.

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