Gacos Pharmaceuticals (01167) recently announced that its self-developed SHP2 inhibitor JAB-3312 in combination with the KRAS G12C golerese inhibitor has been approved for phase III clinical trials in China. This incident marks that SHP2, a target that has not yet been developed, has officially entered phase III clinical trials, a critical step until it is approved for marketing.
The clinical trial approved this time was a randomized control. The experimental group was a combination of SHP2 and KRAS G12C, while the control group was the current “gold standard” for first-line non-small cell lung cancer - PD-1 and chemotherapy. This means that the two oral medications are expected to replace intravenous administration as first-line therapy for patients with non-small cell lung cancer with KRAS G12C mutations. Entering the phase III trial also indicates that the drug regulatory department has approved the clinical data previously accumulated by this treatment.
More importantly, the indication for this phase III clinical trial is first-line non-small cell lung cancer with KRAS G12C mutation. In the European and American markets, 13%-15% of patients with non-small cell lung cancer have KRAS G12C mutations. Currently, no KRAS G12C inhibitors have been approved for first-line indications. Gacos is expected to fill this gap and gain more market space.
With its solid fundamentals and expectations for multiple projects, Gacos recently received “buy” ratings from two brokerage firms. Tianfeng Securities recently called Gacos a “dark horse for small molecule innovative drugs that break through unformable targets,” and the company expects the market value to be HK$6.092 billion in 2024, with a target price of HK$7.68 billion, which has room to double the current market value.
Pacific Securities, on the other hand, said that the Gacos Golerese monotherapy had a median progression-free survival period of 9.6 months. “We believe that when using SHP2 inhibitors in combination with the first-line SHP2 inhibitor, we can expect to read progression-free survival data exceeding standard therapy.” Pacific Securities estimated a target market value of RMB 5.371 billion, and the corresponding share price was HK$7.41 (exchange rate 0.914) (up from HK$6.40). Maintain a “buy” rating.
SHP2 R&D: Gacos went from second to number one in the world
Gacos's SHP2 inhibitors began single-drug clinical trials in China and the US in 2018. At the time, the established pharmaceutical company Novartis was ahead of Gacos. Since then, more and more companies have begun to deploy SHP2, and MNC such as Roche, Sanofi, BMS, and Pfizer have successively carried out clinical trials through the license in model, and many domestic companies have also laid out this target one after another.
Similar to other undeveloped drug targets, the development of SHP2 has also experienced twists and turns, from major manufacturers scrambling for high-priced licenses to experiencing various difficulties. Gacos transferred self-developed SHP2 products to AbbVie in a $1 billion BD transaction in 2020, and received a $110 million down payment and milestone payment. Over the next few years, Novartis, Gacos, and Pfizer's research provided direction for SHP2's follow-up research. The results of the phase 1 clinical study announced by Pfizer at ASCO in 2023 show that PF-07284892 can be combined with various drugs targeting different driving genes, such as ALK, BRAF, and ROS1, to effectively reduce intractable tumors.
At ESMO in 2023, Gacos's oral report also used impressive data to find a promising listing path for SHP2 — in combination with KRAS G12C. The ORR (objective response rate) was 86.7% (13/15) and 100% DCR (disease control rate) in the dose group of 800 mg (single drug registration test dose) of 800 mg (single drug registration test dose) and 100% DCR (disease control rate). Compared with the KRAS G12C single drug, the objective remission rate increased significantly.
The release of Gacos SHP2 data changed the current SHP2 development situation because of its lower dosage (only 1-8 mg per day), stronger safety, and lower potential off-target toxicity. Such molecules are more helpful in acting as “sensitizers” in combination medication. In contrast, doses of similar drugs in phase II clinical trials were as high as 20 to 40 mg.
Bank of America Securities has published a series of research reports to inventory the top ten most promising targets in the world. In the SHP2 inventory, Bank of America called Gacos a “global dark horse” and analyzed from a broader perspective that the development of SHP2 inhibitors is currently being led by US companies, and Chinese companies represented by Gacos are becoming an important force in the future.
Combining two major oral medications, the highly definitive phase III trial plan opens up frontline treatment space
Currently, although there are 2 KRAS G12C inhibitors already on the market, the objective response rate of a single drug for non-small cell lung cancer is about 40%. There is room for improvement in both efficacy and safety, and all KRAS G12C are used in second-line treatment and have not yet become first-line treatments.
Currently, almost all companies developing KRAS G12C inhibitors are exploring ways to enter first-line therapy, but the general solution is to combine KRAS G12C inhibitors with PD-1 monoclonal antibodies.
For patients with KRAS G12C mutations, the current first-line treatment is a combination of PD-1 and chemotherapy. The objective response rate of the combination of the two drugs is around 30%-40%, and intravenous injections are required. Gacos' SHP2 inhibitor JAB-3312 and KRAS G12C inhibitor golese are both oral formulations. It is also currently the only double oral drug combination therapy approved for phase 3 clinical trials in first-line clinical trials for NSCLC treatment. The first-line treatment for patients with non-small cell lung cancer (NSCLC) with KRAS G12C mutations initiated by other international companies is an oral KRAS G12C inhibitor combined with intravenous chemotherapy or intravenously injected PD-1 antibodies. Combined use of the two oral medications will bring more convenient administration methods to cancer patients. Patients do not need to be hospitalized; they can be taken orally at home, further improving the quality of life.
With an objective response rate more than double that of standard therapy and better administration methods, JAB-3312 and KRAS G12C will officially enter phase III clinical trials in 2024, and will be randomly compared with standard therapy (chemotherapy and PD-1). Previously, the objective remission rate for a small sample of 15 people was as high as 86.7%. This data has a significant advantage over existing standard treatments. If some of its advantages can be maintained in the phase III trial, approval of SHP2 will become a highly probable event, and will not only target the Chinese market, but also bring a new treatment option to non-small cell lung cancer patients with KRAS G12C mutations around the world, making Gacos a leading global position in the development and marketing of SHP2 inhibitors.
In subsequent development, SHP2 helps to play a role in combination medication due to its “sensitizer” properties. In addition to KRAS G12C inhibitors currently in clinical trials, it is also expected to be treated in combination with the Krasmulti inhibitor JAB-23400 developed in-house by Gacos. Furthermore, SHP2 is also expected to be used in combination with drugs targeting ALK, ROS1, BRAF V600E, etc., to cover a wider range of patients.