---
title: "The most coveted Biotech by the next generation of drug kings"
description: "LAEKNA-B announced its 2024H1 performance report on August 19, highlighting efficient capital utilization and a focus on core pipeline strategies. The cash and deposit balance is sufficient to support"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/212091021.md"
published_at: "2024-08-21T00:47:06.000Z"
---

# The most coveted Biotech by the next generation of drug kings

> LAEKNA-B announced its 2024H1 performance report on August 19, highlighting efficient capital utilization and a focus on core pipeline strategies. The cash and deposit balance is sufficient to support operations for the next two years. Both clinical pipelines, LAE102 and LAE002, have made progress beyond expectations. LAE102 has become the world's first ActRIIA antibody to enter clinical trials, while LAE002 has also made significant progress in Phase III clinical trials, demonstrating the company's growth potential in a competitive market

Where is the next destination for GLP-1?

Against the backdrop of continuous product iteration and the popularization of market competition, Novo Nordisk's semaglutide has clearly felt the pressure from Lilly's product portfolio led by tirzepatide. This inevitably makes investors think, when people become desensitized to the granularity of weight loss, how will giants consolidate and compete for this huge metabolic market share?

Almost all opinions point to "how to lose weight more healthily." Among them, muscle protection has become the "eye of the storm" of innovation, as Lilly's acquisition of Versanis and investment in BioAge Labs herald this trend.

On the distant shores of the ocean, the performance of a Chinese biotech company is also attracting the attention of GLP-1 giants and even global market investors.

On August 19, LAEKNA-B (02105) announced its 2024 H1 performance report and held a mid-term performance briefing. The company has implemented a strategy of efficient capital utilization and focusing on core pipelines, with cash and deposit balances currently sufficient to support the company's operations for the next two years.

Describing LAEKNA-B as "small but complete, gradually growing wings" is appropriate. Although the company's market value is currently small, it has the pipeline strength to grow into an eagle. This includes ActRII antibody LAE102, which has entered the clinical stage and is expected to become the best weight loss partner for GLP-1, and AKT inhibitor LAE002, which is in Phase III clinical trials targeting breast cancer and prostate cancer.

Under the efficient execution of the pipeline-focused strategy in 2024 H1, LAEKNA-B's two pipelines made better-than-expected progress during the reporting period. LAE102 completed the first subject dosing in June 2024 and became the world's first ActRIIA antibody to enter clinical trials, while LAE002 enrolled the first patient in a Phase III clinical trial for HR+/HER2- locally advanced or metastatic breast cancer in May 2024, with both pipelines progressing much earlier than the company's original plan.

What's even more eye-catching for investors is that LAEKNA-B, with its deep research accumulation in the ActRII field, not only advanced LAE102 into clinical trials but also built a new drug development platform around the ActRII pathway, with a product portfolio including LAE103 (ActRIIB antibody) and LAE123 (ActRIIA/IIB dual-target inhibitor).

## **01**  **The Rising Value of the "Weight Loss Partner"**

![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240821/1724199246351960.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Looking back over the past 60 trading days, LAEKNA-B's stock price/market value has experienced significant volatility due to the progress of the ActRIIA antibody LAE102 pipeline, indicating that market investors have a high sensitivity to the expectations, progress, and success of this pipeline Undoubtedly, this is largely due to the powerful coverage and rapid growth of GLP-1 drugs, indirectly driving the soaring value of the "weight loss companion" drug pipeline.

GlobalData points out: The GLP-1 receptor agonist market is growing at an "unprecedented" pace, with sales of GLP-1 receptor agonists in the seven major markets of the United States, France, Spain, Germany, Italy, Japan, and the United Kingdom reaching $25 billion in 2023, and its market value is expected to exceed $111 billion by 2033.

**How terrifying is the market tension of GLP-1?**

It took K drug 3 years to increase sales from $10 billion to $20 billion, while semaglutide achieved this leap in just 1 year. At the same time, its potential has not been fully developed. As of May 2023, the prescription penetration rate of GLP-1 drugs is only 5.5%, indicating huge development potential.

However, for Novo Nordisk and Eli Lilly, the side effects brought by GLP-1 drugs cannot be ignored. Overseas analysts predict that by 2024, Novo Nordisk and Eli Lilly will each hold a 50% market share in the GLP-1 weight loss market. Whether it is semaglutide or tirzepatide, muscle loss in patients was observed during the 68-week long-term clinical follow-up, with an average fat weight loss of 8.36kg accompanied by a lean weight loss of 5.26kg for semaglutide, and a 33.9% fat weight loss accompanied by a 10.9% lean weight loss for tirzepatide, meaning that approximately 25% to 40% of muscle loss is always accompanied by weight loss using GLP-1 drugs.

**The harm of muscle loss is posing a significant challenge to the two main user groups of GLP-1.**

Healthline reported in May this year: GLP-1 drugs lead to rapid weight loss, causing muscle loss, decreased bone density, resulting in sarcopenia, which was previously associated with aging. It is worth noting that from the perspective of diabetes (obesity is a high-risk factor for diabetes), there are 537 million adults worldwide with diabetes, with foreign studies showing that 65.3% of diabetes patients are overweight/obese. Among them, approximately 20% of global elderly diabetes patients, which can be estimated to be over 70 million elderly diabetes patients with obesity (not considering elderly patients at high risk of diabetes but potential obesity), taking GLP-1 for rapid weight loss will increase the risk of osteoporosis, fractures, immune system suppression, and even life-threatening conditions for this group of people.

Another negative feedback of muscle loss caused by rapid weight loss using GLP-1 is the recently discussed "semaglutide face". During the weight loss process, the content of elastic protein in the face decreases, while subcutaneous fat and muscle decrease significantly, causing the face to lose support, resulting in wrinkles and sagging skin. Nowadays, a large number of women and even some men use GLP-1 drugs for "medical aesthetics" or "improving appearance" purposes, with the aftermath of the "semaglutide face" in the United States leading to an approximately 8% increase in facial lifting surgeries compared to the previous year; Asking who would be willing to undergo surgery if they could avoid it through the combination of "GLP-1 + companion X"?

It is not difficult to see that the middle-aged and elderly obese population, beauty-conscious women, and a significant number of men are among the global obese population, making them the primary target group for weight loss companions, with enormous potential.

**Already established giants like Novo Nordisk, as well as numerous MNC giants**, will become important forces driving education in the weight loss companion market in the future.

Promoting companion drugs targeting the ActRIIA/B receptor in combination with GLP-1 will greatly benefit Novo Nordisk in increasing the total volume of GLP-1 products and expanding the reach of GLP-1 products.

Currently, there is a wealth of clinical data supporting the rebound prevention of semaglutide and liraglutide withdrawal, with a large population repeatedly using GLP-1 for weight loss, inadvertently not only increasing body fat percentage but also accelerating muscle loss. Therefore, the combination of GLP-1 + ActRII is expected to better address the issue of rapid muscle loss. Furthermore, clinical data has shown that the use of GLP-1 + ActRII combination can truly achieve fat loss and muscle gain, which is very attractive to existing GLP-1 users and individuals concerned about the potential health risks of using GLP-1.

GLP-1 has become a super heavyweight bomb, and "packaging" and promoting weight loss companion drugs is a win-win situation for MNCs like Novo Nordisk; weight loss companions can consolidate the market position and lifecycle of GLP-1 drugs, and fully utilize the influence of existing GLP-1 drugs to promote combination drugs, likely resulting in a new billion-dollar blockbuster. The most typical example is Merck's Keytruda, which, after taking the lead in various frontline immunotherapy drugs for major tumor indications, used the influence of Keytruda as an immunotherapy cornerstone to combine various chemotherapy drugs and ADC drugs to occupy more indications. This not only extends the lifecycle of Keytruda and extracts sufficient value during the patent period but also generates sales from other combination drugs, as evidenced by the rapid growth of ADC drugs.

**With multiple factors at play, the market is awakening to the value of weight loss companion molecules.**

Weight loss companion molecules have recently shown early asset digging and high premiumization in market transactions. The former is due to the global lack of relevant molecules entering the clinical stage, while the latter reveals the awakening and recognition of the value of this field by MNC giants and capital. For example, in May, AstraZeneca invested in SixPeaksBioAG, a core pipeline targeting ActRII, in a Series A round, with plans to provide an additional $80 million in non-dilutive financing and exclusive acquisition rights for SixPeaks.

**As a result, Versanis, which owns the globally leading pipeline Bimagrumab**, **was acquired by Novo Nordisk for nearly $2 billion, and LAEKNA's ActRIIA monoclonal antibody LAE102, which quickly enrolled patients after entering the clinical stage, stands out remarkably.**

## **02**  **The validated ActRII** **target, LAEKNA has it all**

**Why is ActRII the Target in the Field of Weight Loss Partners?**

In the field of weight loss partners, there are currently various targets being developed globally, including ActRII, Apelin, HIF2 for fat loss and muscle gain, NLRP3 to address GLP-1 withdrawal rebound, and appetite suppressants targeting Amylin.

ActRII is considered the crown jewel in the field of weight loss partners for several reasons. It is not only one of the top-tier targets in terms of accumulated BD transactions and investment amounts, but also a leading target in global clinical progress for weight loss partners. Bimagrumab, for example, has entered the late stage of phase II clinical trials, with significant efficacy validation in a large sample of patients during phase II clinical trials and minimal drug-related issues.

According to data from a 48-week phase II clinical trial published by Versanis earlier, involving 75 overweight or obese patients with type 2 diabetes, the Bimagrumab treatment group showed a 6.5% decrease in body weight compared to the placebo group. This led to a loss of approximately 22% fat content and an increase of 4.5% in lean body mass. Importantly, unlike typical GLP-1 drugs, patients in the Bimagrumab treatment group did not experience weight gain within 12 weeks of treatment cessation.

In the near future, the phase IIb clinical results of Bimagrumab in combination with semaglutide may bring about synergistic effects, and the long-term safety of combined use needs to be closely monitored.

**Currently, globally, only Bimagrumab from Eli Lilly and LAE102 from LAEKNA-B have entered clinical trials targeting the ActRII receptor. The rapid progress of Bimagrumab will significantly enhance the intrinsic value of LAEKNA-B.**

LAEKNA-B is actively advancing the clinical development of LAE102. From the approval of the IND for the weight loss clinical trial of LAE102 to the completion of dosing for the first patient enrolled, the time span is only about 40 days, much faster than the typical clinical enrollment speed.

Of particular note is LAEKNA-B's strategic layout for the ActRII target. LAE102 is an antibody targeting ActRIIA, while Bimagrumab is an antibody targeting both ActRIIA and ActRIIB (strong B, weak A). This indicates that LAEKNA-B is not merely following others but has its own strategic considerations.

Starting with Bimagrumab, its distinctive feature lies in its higher activity in antagonizing ActRIIB compared to ActRIIA. Considering the functions of both receptors, ActRIIB is believed to be the primary receptor for myostatin during muscle growth inhibition in the body's equilibrium, while ActRIIA plays a more crucial role in muscle regeneration and lipid metabolism Combining Bimagrumab's past failures in multiple indications such as inclusion body myositis, COPD, etc., it is not ruled out that Bimagrumab may require a large dose to achieve the intended weight loss and muscle gain effects due to the "heavy B light A" issue. Additionally, the most common adverse events in Bimagrumab's existing Phase II clinical trials are diarrhea and muscle spasms, which also raise concerns among some investors about the safety risks of Bimagrumab being compounded with GLP-1 gastrointestinal adverse reactions.

**Dr. Lv Xiangyang, the founder of LAEKNA**, **who was one of the research and development leaders of Bimagrumab at Novartis**, is highly likely to have noticed this detail about Bimagrumab. Therefore, in LAEKNA's first ActRII pipeline targeting ActRIIA antibodies, the influence of ActRIIB is eliminated to enhance the purpose of weight loss and muscle gain.

The preclinical studies of LAE102 presented at the Monday briefing also partially confirmed this. In a three-week trial in obese mouse models, LAE102 as a monotherapy showed muscle gain and fat loss effects. Furthermore, when used in combination with semaglutide, more fat reduction and significant muscle protection effects can be observed.

Of course, there is still no clinical data on how the two receptor subtypes ActRIIA and ActRIIB work together, and the impact of separately antagonizing these two receptor subtypes on efficacy and adverse reactions. LAEKNA has implemented a "multi-pronged layout" in its pipeline system, not only deploying the ActRIIA-targeting monoclonal antibody candidate drug LAE102 and the ActRIIB-targeting monoclonal antibody candidate drug LAE103, but also a dual-target inhibitor LAE123 that strongly inhibits ActRIIA/ActRIIB. Multiple pipeline layouts provide the company with the opportunity to expand into other muscle or metabolic disease areas.

Moreover, the benefit of this combination strategy is a significant increase in the probability and value of successful external business development (BD). By packaging BD through target molecule combinations, the transaction value is increased, enhancing the bargaining power of the licensor.

## **03**  **Value Enhancement, Small and Beautiful Biotech** **Combination of Short and Long**

Perhaps some investors may think that early-stage assets like LAE102 cannot be priced into LAEKNA's market value or worth. Clearly, LAEKNA has a pipeline layout system that combines short and long-term strategies. In addition to providing a continuous stream of BD expectations from cutting-edge pipelines like LAE102, there are also near-commercialization AKT inhibitors LAE002 and late-stage CYP17A1/CYP11B2 dual-target inhibitors LAE001 to provide more short to medium-term commercialization catalysts.

**In the two major indications of breast cancer and prostate cancer, the AKT inhibitor LAE002** **is progressing much faster than expected and is expected to become the potential Best in Class and First in Class in the corresponding indications.**

LAEKNA plans to announce the Phase Ib data of LAE002 in combination with fulvestrant for second-line treatment of locally advanced or metastatic HR+/HER2- breast cancer patients at the 2024 ESMO conference in September. This includes a population of 31 total subjects, as well as a subgroup of individuals with PIK3CA/AKT1/PTEN alterations The therapy has shown positive anti-cancer effects and good tolerability; based on the previous clinical data of LAE002 and Capivasertib, the small sample data released by LAE002 showed better ORR compared to AstraZeneca's Capivasertib Phase III data, especially in patients with PIK3CA/AKT1/PTEN mutations. As a result, LAEKNA-B initiated the Phase III clinical trial AFFIRM-205 for HR+/HER2- locally advanced or metastatic breast cancer with PIK3CA/AKT1/PTEN alterations in China in May. **Currently, the clinical trial is progressing rapidly and efficiently, with smooth progress in patient enrollment, significantly ahead of the original plan.**

In May this year, LAEKNA-B's Phase III clinical trial protocol for the combination of LAE002 and LAE001 in the treatment of metastatic castration-resistant prostate cancer (mCRPC) received FDA approval. LAE001, as the world's first dual-target inhibitor of CYP17A1/CYP11B2, in combination with LAE002, has shown remarkable efficacy in the second-line mCRPC field, significantly improving rPFS in second-line mCRPC patients, providing patients with substantial clinical benefits. Compared to the treatment combination of Capivasertib Phase III mCRPC (combined with docetaxel), the innovative combination of LAE002 and LAE001 in mCRPC's Phase III large sample efficacy is more anticipated, differentiating from Capivasertib in the future and expected to capture market share differentially.

LAEKNA-B holds two globally leading potential pipelines, with LAE002 deeply cultivating two major oncology indications in late-stage clinical development, and LAE102 and combination target assets accompanying GLP-1 strategically positioned at the forefront, both with magnificent BD expectations. The company is not stagnant in its development strategy, possessing both offensive and defensive capabilities.

**Conclusion:** LAEKNA-B is a unique landscape in the domestic Biotech industry, firmly grasping its fate by focusing on the two major trends of metabolism and oncology. In the future, the company can choose the right timing and favorable conditions to license out its two products, reaping substantial profits. Additionally, the combination of short and long-term clinical catalysis and ongoing BD cooperation expectations will reshape the company's value.

**Source: Dingle Society; Financial Communication Editor: Chen Xiaoyi.**

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
