Since the beginning of 2024, there has been a remarkable surge in the interest surrounding T cell engagers (TCEs) within the field of autoimmune diseasesMajor pharmaceutical companies from around the globe have been investing heavily in this sector, paving the way for domestic biotechs to ride this wave of opportunityThis year, the Chinese biotech sector has seen two substantial transactions that mark significant milestones in its venture into international marketsOne noteworthy collaboration was between Tongrun Biotech and Merck, which involved the acquisition of a CD3/CD19 bispecific antibody with an initial payment of $700 million, coming in second only to the collaboration between Bristol-Myers Squibb and Iovance Therapeutics regarding bispecific ADCs.

Another remarkable deal involved GlaxoSmithKline (GSK) acquiring a partnership with Enmuo Biotech for its CD3/CD19/CD20 tri-specific antibody CMG1A46, with an initial payment of $300 million

Clearly, the escalating interest in autoimmune TCEs is undeniable, but this burgeoning field is not without its uncertainties.

On January 10th, 2024, IGM Biosciences, a company transitioning from oncology to autoimmune research, faced a significant setback when its core pipeline CD20xCD3 bispecific antibody, IGM-2323, failed to show the desired levels of B-cell depletion in the autoimmune arenaConsequently, IGM was compelled to halt the development of IGM-2323 as well as another TCE, IGM-2644. The rationale behind these decisions stemmed from their similarities in design, utilizing IgM antibodiesAfter observing the disappointing performance of IGM-2323, IGM came to doubt the potential success of either candidate.

This news sent IGM's stock tumbling by nearly 70%, resulting in a market capitalization that plummeted to only $124 millionThough IGM's experience may not be widely reflective of the entire industry, it serves as a cautionary signal, suggesting that while this golden opportunity might be profitable, there will certainly be casualties along the path to success.

As the success stories of TCEs in the autoimmune space continue to mount, numerous biotech companies traditionally focused on cancer research have shifted gears towards autoimmune applications, driven by the promising prospects and lucrative possibilities

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IGM was no exceptionOnce a celebrated star in oncology biotech, IGM saw its market value soar to more than $6 billionYet with its clinical studies failing to meet expectations and a fallout with key partners like Sanofi, a strategic pivot became imperative.

In December 2023, as cash dwindled, IGM began testing the waters of self-immune disease research; it abandoned its hematological oncology programs, focusing instead on autoimmune drug developmentAt that moment, IGM had two TCEs in its arsenal: the CD20xCD3 bispecific antibody, IGM-2323, targeting non-Hodgkin lymphoma, and the CD38xCD3 bispecific antibody, IGM-2644, aimed at multiple myelomaHowever, IGM ultimately chose to terminate both projects in blood cancers due to unsatisfactory competitive conditions.

This pivot in strategy doesn't preclude IGM from continuing to explore oncology; it still has an IgM antibody, aplitabart, in the works for colorectal cancer

However, it’s clear that the decision made at the end of 2023 was far from ideal, with cash consumption exceeding expectationsIn late September 2023, IGM reported a cash balance of $387 million, but just a year later in September 2024, that figure had fallen to $219 millionWith cash flows deteriorating further, IGM was compelled to refine its approach in October 2024, intensifying its focus on their autoimmune disease research portfolio.

This meant that the resources of this biotech company would now be directed towards developing its TCE pipeline in autoimmune diseasesIGM-2323 is currently under evaluation in clinical trials for rheumatoid arthritis, systemic lupus erythematosus, and myositis, with clinical data expected to be reported in 2025. IGM-2644 is slated to commence trials for autoimmune-induced myasthenia gravis by the end of 2024. IGM may embody the broader narrative of biotechs grappling with the chilling winds of capital scarcity, continually reassessing their focus areas to maximize the chance of successful outcomes.

The full-throttle emphasis on autoimmune TCEs by IGM is, however, not entirely surprising

Given the surge in interest towards TCEs targeting autoimmune conditions over the past year, multinational corporations have rallied to acquire these promising solutions, often willing to pay hefty upfront feesFor IGM, substantial returns are contingent upon early positive results in clinical phases, potentially allowing the company to engage in external partnerships that could revitalize it.

IGM’s approach to antibody technology underpins this hopeTheir vision diverges from the mainstream focus primarily on immunoglobulin G (IgG) antibodies, which have predominated the approval landscape for nearly four decadesInstead, IGM aims to develop IgM-type antibodies, which possess ten binding domains compared to the two found in IgG antibodies, theoretically allowing for enhanced overall binding capacity to target cellsThis heightened affinity could translate into significant advantages, from vastly improved efficacy in killing cancer cells to broadening the scope of targetable points, addressing historically difficult targets.

Based upon this logic, IGM built its TCEs

IGM-2323 leverages the affinity-matured IgG antibody binding domain grafted onto the multimeric structure of IgM, subsequently linking the single-chain Fv domain targeting CD3 to J chain, taking full advantage of IgM's propensity for greater affinityIGM maintains that IGM-2323 could significantly amplify T-cell cytotoxicity while substantially mitigating the risk of cytokine storm (CRS) traditionally associated with IgG bispecific antibodiesThe dual promise of enhanced efficacy and improved safety inherently renders IGM's TCE candidates more competitively viable in the autoimmune landscape.

Nevertheless, aspirations must often confront the harshness of realityOn January 10th, IGM disclosed disappointing results from phase Ib studies in treatments for rheumatoid arthritis and systemic lupus erythematosus, failing to meet their high standards for successful B-cell depletionCEO Mary Beth Harler noted, “The depth and consistency of B-cell depletion were insufficient to meet our high standards for success.” Undoubtedly, IGM's approach to antibody development does not guarantee the anticipated outcomes—at least not for IGM-2323, which has failed to provide the company a pathway towards success.

Consequently, IGM opted to terminate the development of IGM-2644 as well, suggesting a troubled path ahead as it fully transitioned into autoimmune research

Following this announcement, the company’s stock experienced a staggering decline of 66.29% on January 10thIGM’s experiences reflect the common realities of innovative drug development, which often resembles a game of chance, especially pronounced in the dynamically evolving TCE landscape.

The evolution of TCE technology continues apaceBispecific TCEs in hematological malignancies have undergone three generations of enhancement thus farThe first-generation TCEs, like Amgen's BiTE, were hampered by a lack of a half-life, necessitating continuous intravenous infusions, as well as considerable CRS responsesTo address these challenges, second-generation bispecific TCEs introduced Fc fragments, extending the half-life significantly while employing priming doses, thus further reducing CRS risks and enhancing patient forecasts.

Currently, ongoing explorations into third-generation bispecific TCEs aim to further minimize CRS by employing lower-affinity CD3 antibodies

The efficacy of this approach remains to be fully validated over time, yet it undoubtedly carries greater promiseBroadly speaking, there are still numerous hurdles that the bispecific TCE landscape must tackle, including compliance and assembly efficiency, which will be central issues in the burgeoning autoimmune marketUnlike oncology drugs, autoimmune therapies demand rigorous safety and compliance standards.

Moreover, the thriving autoimmune field is marked by distinct competitive designs, as illustrated by GSK's recent acquisitionGSK highlights that the CMG1A46 molecule possesses a unique design with high affinity for CD19 and CD20 positive B-cells while maintaining low affinity for CD3, thus reducing toxicity commonly associated with TCEsPreclinical studies indicate that “rapid and deep B-cell depletion in blood and tissues may lead to more durable responses in patients.” Consequently, GSK has high ambitions for CMG1A46, envisioning its application in B-cell-driven autoimmune conditions such as systemic lupus erythematosus (SLE) and lupus nephritis (LN), with potential expansions into other related autoimmune diseases.

However, before achieving market success, these aspirational concepts must withstand the rigorous testing of human response to therapy, a trajectory that IGM’s journey starkly underscores for all the company stakeholders entering the TCE autoimmune space