AdAlta (ASX:1AD) CEO and Managing Director Tim Oldham outlined details of the company’s first in-licensing transaction underpinning its “east-to-west” cellular immunotherapy strategy, centered on co-developing a next-generation CAR T-cell therapy for mesothelioma and other solid tumors. Speaking on a company update call, Oldham said the deal marks the official launch of the strategy through AdAlta’s cellular immunotherapy subsidiary, AdCella, and involves BZDS-901, an “armored” CAR T-cell therapy licensed from Shanghai Cell Therapy Group.
Deal overview and strategy
Oldham described AdCella’s model as sourcing next-generation, clinical-stage CAR T-cell and related assets from Asia and “westernizing” them through Australia to generate phase 1 clinical data suitable for partnering with larger biopharmaceutical companies. The approach, he said, aims to create “capital-efficient” assets with relatively short development horizons and frequent clinical milestones.
According to Oldham, BZDS-901 has been developed to clinical stage through preclinical work and investigator-initiated studies in China and has been administered to 36 patients to date. He said this provided AdAlta and AdCella with “high confidence” in the product’s safety and clinical activity profile.
Development plan: Australia phase 1 under FDA IND
Oldham said AdCella’s roadmap begins with establishing manufacturing at an Australian contract manufacturing organization, followed by running clinical trials under a U.S. Food and Drug Administration Investigational New Drug (IND) approval. The company plans to conduct the first global phase 1 trial in Australia as a “classic escalation and expansion study,” primarily in mesothelioma but also including other solid cancers.
He said the goal is to complete phase 1 with data strong enough that a subsequent study “could potentially be the last study prior to registration” in mesothelioma, though he framed this as an objective for the program rather than a guarantee.
The collaboration will be overseen by a joint development committee with equal representation from Shanghai Cell Therapy Group and AdCella. Operational support will come from AdAlta through a management agreement that Oldham said is designed to provide back-office services efficiently, with AdCella paying management fees that “essentially cover costs.” Shanghai Cell Therapy Group will continue China-based development and retain rights within the Chinese market.
Economics, financing, and R&D rebates
Oldham said the budget to complete phase 1 clinical trials is expected to be between $14 million and $19 million over roughly four years, and he noted that figure includes milestones payable to Shanghai Cell Therapy Group, including the provision of additional clinical data and key manufacturing components.
He also highlighted Australia’s R&D tax rebate system as a key element of the model. In response to a question, Oldham clarified that the total program cost is estimated at AUD 22 million to AUD 31 million, and that the company expects AUD 8 million to AUD 12 million of R&D tax benefits. After accounting for those rebates, he said the resulting cash budget to be raised for the program is AUD 14 million to AUD 19 million.
Under the commercialization economics described on the call, if the product is licensed after phase 1, AdCella would receive 60% of proceeds (including upfront payments, future milestones, and royalties), while Shanghai Cell Therapy Group would receive 40%.
Funding is expected to come from third-party investment directly into AdCella. Oldham said an initial tranche is expected to be approximately $3 million to $5 million and that discussions were underway with investors in Asia and Australia. AdAlta retains an option to co-invest to increase its stake in AdCella over time. Oldham said the company could not yet specify AdAlta’s post-round ownership because pricing negotiations were ongoing, but he expected AdAlta would still own “well over half” of AdCella after the initial round.
On timing, Oldham referenced an ASX release indicating the company expects to commit a minimum of $3 million to the collaboration within 70 days of signing, which he characterized as the “drop-dead timeframe” for at least a first close of the initial funding round.
Clinical and preclinical highlights discussed
Oldham framed mesothelioma as a high unmet-need market, citing poor second-line outcomes and stating that complete responses to second-line therapy are “essentially zero,” with overall survival under nine months. He said the global mesothelioma drug market is forecast to exceed $12 billion by 2034, and he estimated a BZDS-901 addressable market of $4.2 billion based on the relapsed/refractory population and current Western CAR T pricing assumptions.
He also pointed to potential expansion beyond mesothelioma, citing high mesothelin expression across several tumor types and estimating total annual mortality for mesothelin-positive solid cancers at 1.7 million patients.
In describing differentiation, Oldham emphasized that BZDS-901 is designed to counter tumor immune suppression by secreting a PD-1 blocking molecule. He said preclinical data showed stronger affinity and blocking power for the PD-1 molecule versus approved checkpoint inhibitors, and that the mesothelin binder was of moderate affinity, which he said could help protect healthy tissue that expresses mesothelin at low levels. He also highlighted a two-day manufacturing process that does not use lentiviral vectors.
Oldham presented clinical observations from investigator-initiated studies in China, including results he attributed to an early version of the therapy showing more than 63% overall response rate in advanced mesothelioma, including a 9% complete response rate, and 73% of patients surviving more than 12 months. He also cited interim observations from a later version still in dose escalation, stating that at substantially lower doses the program had shown a 42% overall response rate, a 17% complete response rate, a 92% disease control rate, and that one-third of patients had already exceeded 12 months survival with many patients not yet followed that long.
Next steps and Q&A takeaways
Over the next 9–12 months, Oldham said the company expects to finalize AdCella’s initial funding, continue dose exploration in up to seven additional patients in an ongoing investigator-initiated trial in China, complete a pre-IND meeting with the FDA to confirm technology transfer and trial design, commence any remaining non-clinical studies, and begin technology transfer. He also said AdCella was working on adding a second product to the pipeline to increase subsidiary value.
During Q&A, Oldham said investigator-initiated trials in China are not the same as formal phase 1–3 studies elsewhere and should not be considered a substitute for a formal phase 1 trial, though he argued Shanghai Cell Therapy Group had completed “a large part” of what a phase 1 trial would involve. He also said Chinese data could not eliminate the need for a dose escalation phase in Australia, but could allow a higher starting dose and improve efficiency because adverse event management is better understood.
Oldham also outlined dispute resolution mechanisms for the joint development committee, including escalation to senior leaders, use of scientific experts for technical disputes, and arbitration in Singapore if needed.
Oldham concluded by saying AdCella has now been launched with what he described as a highly differentiated CAR T asset supported by early clinical data and a simplified manufacturing approach, and that the company expects further updates on financing and development progress in the coming months.
About AdAlta (ASX:1AD)
AdAlta Limited, a clinical stage biotechnology company, discovers and develops protein therapeutics by its i-body platform in Australia. Its lead product is AD-214, an antibody therapeutic, which is in Phase I clinical trial for the treatment of fibrotic diseases, including idiopathic pulmonary fibrosis and interstitial lung disease, kidney fibrosis, eye fibrosis, and various cancers. AdAlta Limited has collaborative partnerships with GE Healthcare to develop i-body enabled granzyme B PET imaging agents for use in immuno-oncology; and Carina Biotech to develop CAR-T cell products against various solid tumor antigens.
