To The Moon

$天境生物(IMAB)$ PRICE TARGET (PT) $16.00

GILD just announced a takeout deal of FTSV for $4.9B. Another CD47 player TRIL seesits share rising up substantially following the news (~50%). We see intrigued interest ofCD47-SIRPα landscape and review the current progress from leading programs in thespace. Also, we highlight IMAB's TJC4, a CD47 antibody differentiated on safety. Its Ph1readout in 2H '20 could serve as a meaningful catalyst, and we see 30-40% upside ifsafety plays out in human trials.

CD47-Sirpα Space is Heating Up with Three Companies Leading the Pack:We screened both public and private companies and summarized >20 CD47- or Sirpα-targeting programs in the space (see our report here). Three companies have reported encouraging clinical progress (Exhibit 1). FTSV is a clear leader and provided the most validation data for CD47-targeting drug thesis. FTSV’s Magrolimab sets high bar in 1L MDS and AML and exhibited better than SoC response in 3L DLBCL. However, it has not seen similarly impressive data in solid tumor settings (DCR: 42%; mPFS: 2.1 mos in 24 platinumresistant ovarian cancer pts, ASCO-SITC ’20). TRIL’s TTI-621, a Sirpα-IgG1 fusion protein, has showed single agent activity in DLBCL, PTCL and CTCL despite small sample size. No severe anemia has been observed, however, TTI-621 is prone to killing platelets, leading to thrombocytopenia. Another candidate, TTI-622, is an IgG4-Sirpα fusion protein, and its reduced effector activity would presumably reduce toxicities. TRIL noted better safety has been observed with TTI-622, which could allow higher dosing to drive improved efficacy. ALX oncology’s ALX148, is a Sirpα fusion protein with inactive Fc domain, thereby requiring combo partner to provide macrophages with Fc-receptor driven 「eatme」 signals. The treatment of ALX148 + Herceptin and + Keytruda combo resulted in responses in HER2+ G/GEJ and SCCHN, respectively. ALX Onc believes that inactive Fc domain would enable higher dose not limited by anemia and other hematological toxicities; however, the drug potency of single agent remains to be determined.

Exhibit 1: Clinical Update of Leading CD47-Sirpα Targeting Therapies

TJC4, A CD47 Antibody Differentiated on Safety, Offers Upside for IMAB Shareholders:

---Pharma/biotech companies are pursuing CD47-Sirpα strategy due to its wide market application and well-established biology. However, hematological toxicities associated with the inherent nature of the CD47 protein sets the limit for clinical development.

---CD47's robust expression on RBC can lead to severe anemia. TJC4’s unique property of minimal RBC binding could mitigate the risks. In vitro assays and primate studies have confirmed no significant hematologic changes upon exposure to TJC4. Therefore, TJC4 has the potential to be given at higher doses for maximizing efficacy. TJC4 is currently under development in 2 PhI trials (in US and China). With combination strategies (+Keytruda or Rituximab) the trials were designed to target both liquid and solid tumors.

---Safety and early efficacy readout in 2H '20 should serve as a meaningful catalyst, and we see 30-40% upside if safety plays out in human trials.

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