I-Mab’s CEO is hoping its recent reorganization — splitting its US and China operations — will simplify its investment thesis by shifting the risk profile and focusing its resources, after the biotech struggled to win over investors.
Speaking at an investor conference since announcing the China divestiture, CEO Raj Kannan said I-Mab was keen to reduce its cash burn significantly as part of the transition to a US-based company.
Raj Kannan“One of the advantages of separating the China operations was we believe that a majority of our operating expenses were driven predominantly in China,” he said, per an AlphaSense transcript from the Needham healthcare conference. “[The China arm] had late-stage assets. They had a full-fledged discovery operation and a manufacturing footprint.”
The Nasdaq-listed biotech is currently trading below cash, with a market cap under $150 million compared to $321 million in cash, cash equivalents and short-term investments reported at the end of 2023.
The move to carve out Chinese operations into a new, China-based company led by I-Mab founder Jingwu Zang entitles the surviving, US-based I-Mab to $80 million in milestone payments. It also extinguishes $283 million worth of repurchase obligations.
Kannan has also revamped the leadership team, with three resignations earlier this month that the company confirmed to Endpoints News were “all related to the divestiture of China operations.” That said, I-Mab is committed to a “continued partnership” with the Chinese entity, Kannan noted, as reflected by the less-than-10% stake it still holds in that company.
“There are many things that we could potentially leverage with each other in terms of cost efficiencies and data generation as we advance the development of our clinical portfolios to bring treatments to patients globally,” said the CEO, who previously led and sold Aerie Pharmaceuticals and Chiasma Pharmaceuticals before joining I-Mab last June.
For now, I-Mab is focusing on three oncology programs: the Phase 2 CD73 drug uliledlimab; the Phase 1b Claudin 18.2 x 4-1BB bispecific antibody givastomig; and the Phase 1 PD-L1 x 4-1BB bispecific antibody ragistomig.
Conspicuously absent from I-Mab’s refreshed pipeline is lemzoparlimab, the CD47 antibody AbbVie paid $180 million upfront to partner on but punted last September.
Kannan suggested that the company has the cash to in-license candidates that complement its portfolio. “Specifically what would be ideal is to look for assets that potentially could have an earlier value inflection point, or potentially a post-proof of concept asset with a commercial potential that provides us with a positive EBITDA,” he said.