Headquartered in Singapore with offices in Taiwan, China and Australia, ASLAN has raised $100 million since its inception in 2010. The company is now getting ready for an initial public offering in Taiwan in May, and CEO Carl Firth says that Taiwan stands out because of its strong interest in biotech, good political support and an investor base that likes the industry.
One of the things ASLAN has done well, he said, is understanding that aside from good science you need to understand commercially aligned clinical development. "You need to figure out how a clinical development pathway will deliver a product that a physician will want to prescribe, a patient will want to take, and a payer will want to pay for," he says.
A former banker at Merrill Lynch, Firth also worked for AstraZeneca in various commercial and R&D roles, and two of his senior team members were also at AstraZeneca and have deep experience in taking drugs to the market. As market access continues is grow in importance, knowledge of the various markets becomes critical, he says, making Asia quite a complex place.
How has the ecosystem evolved since ASLAN entered the space in 2010, and how does ASLAN fit within that ecosystem?
Firth: We’re seeing the emergence of a number of companies, particularly out of China. With the amount of capital that’s now available in China, we’ve seen a significant number of financings taking place in the last couple of years, in some cases with relatively early-stage companies. There is also an increased interest in biotech and drug development, which was there before but it was a small number of specialist investors, and now that’s expanded to a much larger group.
I think you’ve seen some of those trends in other countries outside of China. Here in Singapore, the city has tried for many years to invest in the industry but has had mixed success. They’ve done very well in terms of building up institutions but not so well in terms of commercial success. Over the last few years, there have been a couple of companies emerging: obviously ourselves, as well as a new biotech called Hummingbird that got off the ground a few years back, and there’s also Lion TCR, so there are a few biotech companies now getting up and running in Singapore.
The other place that we’re looking at very carefully is Taiwan. The capital market there started getting excited about biotech in 2012-2013. What’s been interesting is that in the early days there were some generalist and retail investors that pumped up the market, but over the years the market has become a bit more refined in understanding the industry better.
What’s most notable is that in Taiwan there have been a number of significant drug failures — late-stage products that failed — and the first time this happened, it took the market by storm. Investors, particularly retail investors didn’t know what to make of it, and it took the market down for a while. That was Medigen, a Taiwanese drug development company, but then last year there was another incident with a company called OBI Pharma that had a late-stage failure, which of course hit OBI, but it didn’t really have a broader impact on the industry. I think investors there are realizing that yes, drug development is a risky business, but if one drug goes down, it doesn’t mean the industry is a bad industry. It just means that company needs to find more value drivers. That’s a good sign for Taiwan and certainly gives us a lot of encouragement on how that market is developing.
As a company focusing on Asia-prevalent cancers, can you tell us about your business model? Is it still your model to in-license products, de-risk them and then out-license them?
Firth: The model has evolved over the years. When we started the company, we found that the quickest way to build a portfolio was to license drugs in, and we built a broad portfolio. We brought in four drugs – one from Array Biopharma, one from Bristol-Myers Squibb, one from CSL, and one from Almirall. In the last couple of years, we’ve also started to look at earlier-stage collaborations, and we’ve started to enter into partnerships with academic institutions with earlier-phase assets, such as ASLAN 005, and more recently a technology collaboration called Modybodies, which is our way of building a more proprietary pipeline.
Because we’re going earlier, we can get a much larger share of the value of the drug. Also, the research has been directed by us but conducted externally, so we’ve stayed true to the no in-house research model. That just sort of evolved. We still look at opportunities to in-license — it could be something that we think is a great target or a great pathway, and we work with our collaborators to develop something against it.
In terms of taking these drugs forward, we want to commercialize them ourselves in some geographies and then partner and out-license in others. The countries we are particularly keen to retain commercial rights in are the U.S. and some selected smaller Asian markets such as Singapore, Taiwan and Australia. But when it comes to some of the larger Asian markets such as Japan and China, it helps to have a strong local partner, particularly when it comes to diseases like gastric cancer. There are roughly half a million gastric cancer patients in China, so to cover a patient population of that size, you need a well-established commercial presence with several hundred or even a thousand sales reps on the ground to sell your drugs.
So we’ll work with partners in Japan and China, and probably Europe as well due to the complexity of Europe, so we can focus on the U.S. and these other smaller Asian countries.
BMS recently reacquired ASLAN002. Will you retain rights in some geographies?
Firth: In that deal structure when we first licensed the drug from BMS, it was done in such a way that even though we were only getting Asian rights, BMS had to buy it back to develop it in the U.S. and Europe. The thinking behind the deal was always that if this works out, they’ll want it back. This drug hits two targets, cMET and RON, and the cMET story we knew pretty well, but it was the work around RON that was particularly exciting and attracted BMS interest.
When we licensed it, we didn’t know what this did, and we were working with a collaborator in the States, Professor Alana Welm, who helped us understand that RON was a novel immune checkpoint inhibitor expressed on the macrophage acting as a regulator for macrophages in a similar way that PD-1 acts as a regulator on the T-cell. And, given BMS’ inherent interest in this area, they of course got a lot more excited in the molecule and made the decision to reacquire it. As part of that deal, they bring back all the rights to the drug, so going forward we don’t retain any rights to the drug but we enjoy economics in terms of the upfront payment we received last year and future milestone and royalty payments.
Your lead compound, pan-HER inhibitor varlitinib, which you in-licensed from Array, has received orphan drug designation in the U.S. and Korea for biliary tract cancer and is now in pivotal trials. What is your timeline for this drug, and what other indications are planned for the compound?
Firth: We just started pivotal trials, called the TREETOPP study, a global study being run in the U.S., Japan and China. Our primary focus is biliary tract cancer, a disease of the bile ducts for which there are no approved therapies anywhere in the world. It’s a relatively rare disease in the west – about 8,000 patients a year in the U.S. market, but about 220,000 in Asia. That’s our number one focus, and because there’s no approved therapies, our hurdle for approval is a little bit lower.
Given the size of the study, we expect to complete it in 2019, and of course we’ve had discussions with the FDA to make sure it would be acceptable as a registration study. There are a number of other Asian markets where we could try to accelerate the approval, such as Singapore, Korea and Australia. In countries like Japan, you need a local study, so we opened our Japanese phase I study there last year, and we’ve got data generating there now and they’ll be part of the pivotal study. China is another place where we have to think about generating local data. We’ve been working with local manufacturers to generate local material, and we’re planning on running a number of China-specific studies in biliary tract cancer to complement our global study.
What is your vision for the company going forward?
Firth: We’ve raised $100 million since we started the company. I was a former banker with Merrill Lynch, and I used to always tell my clients that the IPO is not the end of the story — it’s just the beginning of a new phase and just another way of raising capital. Typically, it’s more efficient to raise money in the public markets compared to the private markets, but obviously it’s a lot more work to maintain your company and abide by all the regulations. We made a decision about 18 months ago to pursue a public listing, and we looked at a few different options. And when we looked around Asia, Taiwan stood out with very strong interest in biotech, a lot of publicly listed companies already, good political support, and an investor base that likes this industry.
When we looked at Singapore, investors aren’t really interested in biotech; there are no publicly listed biotech companies. Hong Kong has requirements for profitability, which is difficult for a biotech company to meet. We decided to start off in Taiwan, and think about a U.S. listing later if the environment improves. We got approval for our listing from the Taiwan exchange, and we became the first foreign biotech to secure that approval. We expect to conduct our IPO in late May and start trading at the beginning of June.