NextCell

[Mauski]

I looked into what kind of shortcut Hong Kong might offer. Take this with a grain of salt, as I don’t really understand this operating environment.

1. “1+” mechanism: Hong Kong recently reformed its pharmaceutical legislation in late 2023

• Previously, marketing authorization was required from two reference countries (e.g., USA and EU) before Hong Kong would even consider the matter. Now, marketing authorization from one reference country + local clinical data/expert assessment is sufficient.

• If this mechanism is used, Nextcell could quickly obtain marketing authorization in Hong Kong after Western trials are completed. For example, Amgen received accelerated approval from the FDA for the drug Imdelltra in May 2024. They immediately utilized the Hong Kong 1+ pathway, bringing the drug to Hong Kong hospitals just a few months after the US launch.

2. GBA shortcut (Greater Bay Area)

This is likely the biggest thing NextCell is aiming for.

• Drugs approved for use in Hong Kong can be used in certain large hospitals on the Mainland China side (Greater Bay Area), even if they do not yet have national Chinese (NMPA) marketing authorization → this allows the collection of “Real World Data” from paying patients in China significantly earlier.

• Phase 3 reduction? Chinese authorities apparently often accept this “Real World Data” as part of the final marketing authorization application. It can radically reduce the size and cost of the actual required Phase 3 trial.

3. Bridging Studies

• In China and Asia, a full Phase 3 trial starting from scratch is not always required if Western data already exists. Instead of conducting a new massive 500-patient trial, Hong Kong/China may accept a so-called “Bridging Study” model. This involves a smaller, cheaper study to simply ensure that the drug works in Asian patients the same way it does in Westerners.

With a little research, for instance, the Chinese drug Fucaso was approved and received marketing authorization in China in 2023 based on a small Chinese Phase 1b/2 study. The authorization was thus granted conditionally without Phase 3, based on Orphan Drug status and a good response. Last year, based on this Chinese reference study, it also received marketing authorization in Hong Kong. It seems Nextcell’s path would be in the opposite direction. Some level of study is required in Hong Kong or China, but it could be significantly lighter than a Western Phase 3.

[Johannes]

Very interesting research, which may well provide an explanation for Nextcell’s expansion into the East. Among the Chinese population, the incidence of T1D is significantly lower than in Western countries, at 3.6/100,000 per year, but within Hong Kong’s population base, this equates to 250 new cases annually. This would certainly be sufficient for conducting a study.

The stem cell therapy business is growing and of interest to investors. According to one estimate, the volume in the US will grow from $14 billion in 2023 to $49 billion by 2033, with a CAGR of 13%.

[Mauski]

ProTrans-Repeat (7-year follow-up) results are now out! These were promised “shortly,” but I thought we wouldn’t see them until closer to summer.

In practice, the results are excellent, but at the same time, I have to remind you that the sample size is almost negligible. The original study was designed for 18 people including a control, and after 7 years, it is difficult to get everyone to participate annually. It is encouraging, however, that the effect seems to be “dose dependent,” meaning it increases as the dose increases.

The fact that the effect is still visible over 7 years after the first dose and for some, insulin production is near baseline levels, is a really, really good result: in practice, the probability of that happening with a regular T1D patient is very small. Usually, at the diagnosis stage, the autoimmune reaction is already very advanced, and after 7 years, insulin production is practically non-existent. Despite the small sample size, these results also speak to the efficacy of Protrans.

As a small critique, we don’t know what the baseline insulin production level was at the start of the study. If it was already negligibly low, the “same level” after 7 years might not be as good as it sounds.

Stock up 20% so far.

[Mauski]

The end of the press release describes the commercialization goals:

Based on the strength and durability of the clinical effect observed after a single infusion, NextCell’s primary objective is to bring ProTrans to patients as a single-infusion treatment, where the Company’s data is most extensive, and to pursue market approval on this basis.

In Finnish: Although the repeated dose seems to work, Nextcell aims to enter the market through a single dose first, as it is regulatorily easier and cheaper. Repeated treatments offer growth opportunities for later stages.

Following market approval, NextCell intends to extend its label with the addition of paediatric patients. The Company will also explore the possibility to further optimise the treatment regimen by evaluating repeated ProTrans infusions as a strategy to maximise and prolong the therapeutic effect in selected patient populations.

But wait a minute! Did Nextcell just radically change its strategy?

Previously, Phase 3 was intended to include a wide age distribution, which is why the “young” results must be awaited before Phase 3. According to the CEO’s Q&A section, this was also the EMA’s wish.

Now there is talk that “After obtaining market approval, NextCell intends to extend the market approval to also cover pediatric patients.”

Isn’t this in conflict with the previous statement? I think there is a good explanation for this: market approval is being sought first in Hong Kong or China, where it has been proven that conditional market approval could be obtained already with Phase 2 results.

However, the problem in Hong Kong is that you cannot apply for the first market approval there. Hong Kong does not have its own drug regulatory authority capable of evaluating a permit application, which is why they use the +1 mechanism. But according to information I just received, this is changing: the Hong Kong government has set a goal for “Primary Evaluation” capability in 2026. The goal is most likely to be an agile counterpart to Western bureaucracy that speeds up access to innovative drugs. (And honestly, the goal is surely to steal Western intellectual property rights).

‘The Chief Executive’s 2025 Policy Address’ announced that the Government will set up the Hong Kong Centre for Medical Products Regulation (CMPR) in 2026, and implement the ‘primary evaluation’ mechanism for new drug registration in phases starting from that year, enabling Hong Kong to independently assess and approve the safety and efficacy of medical products based on clinical data’

Recently, Nextcell even visited the Hong Kong embassy. Could it be that Nextcell is one of the first pilots for Hong Kong’s newly established CMPR?

If true: an interesting question is, could it be possible that Nextcell does not need to separately demonstrate the drug’s efficacy in the local population? And could Nextcell receive “orphan drug” status from the Hong Kong authority, which would allow it to apply for market approval with Phase 2 evidence, as was done in the case of the drug Fucaso? In that case, the first market approval could be very close indeed.

[Mauski]

Apologies for the self-replying; I try to avoid excessive walls of text and separate different topics into different posts.

I recently realized that the real breakthrough for Nextcell might lie in this:

Regarding the phased implementation of “primary evaluation”, the initial phases will cover applications for the registration of products containing registered chemical entities with extended applications (e.g. new indications, new strengths, new posology, new dosage forms, etc).

At this point, let me remind you: Protrans is not strictly a new drug or a new drug substance. It is based on a patented new way to select, process, and use MSCs (Mesenchymal Stem Cells).

If the MSC cell is already considered a “known biological component,” NextCell could perhaps apply for ProTrans as a new indication (the previously mentioned “new Indication”). In theory, if the Phase 2 adult data were deemed sufficient, this would enable a conditional marketing authorization application among the very first as early as 2026.

Disclaimer: This message contains a great deal of enthusiasm-fueled speculation, so I warn against taking it too seriously. No Western drug has ever received its first approval in HK, so it would be quite a historic event for the entire biotech scene if this were to happen. I also don’t actually know if the criteria applied by the Hong Kong drug regulatory authority in its own approval process are any easier than in the West.

[Mauski]

Good vibes in the air. The stock ended up 21% yesterday, and today it’s already up +6% on the board.

@Clark_kent and other professionals: Could we hear your views on my Hong Kong hypothesis, which I’ll outline as follows:

“Hypothesis: Nextcell aims to apply for a first drug approval based on Phase 2 adult data through Hong Kong’s recently launched primary evaluation track. It seeks to leverage the established position of MSC products and applies for approval primarily under a “new indication” interpretation, which would enable a marketing authorization application for the adult population using existing data. In Hong Kong, a partner is certainly needed, for example, to license the local and Chinese markets.”

One stumbling block for this hypothesis is that, as far as we know, there is no actual commercial approval for MSC stem cell therapies in HK yet that Nextcell could reference. Perhaps that’s not necessary, though, because MSC stem cells are otherwise so extensively studied, and it’s not a chemical drug.

Secondary Hypothesis: Nextcell aims to find an Asian partner to establish a local laboratory under a holding company in Hong Kong’s new biotech scene. Locally, they would start Phase 3, which, however, would be significantly lighter, faster, and cheaper than in the West. This would allow them to seek first drug approval through Hong Kong’s recently launched primary evaluation track faster than in Western countries.

The stumbling block for this hypothesis is that it doesn’t explain why they would talk about seeking marketing authorization first for the adult population only, when the results for young people are just six months away. What is so critical that they can’t wait half a year if they’re facing a time-consuming and labor-intensive Phase 3 and approval process requiring financial investment?

One possibility, of course, is that Nextcell perceives its “big brother” Diamyd as a threat to its own business potential, as Diamyd could reach the market soon with Stage 3 treatment. Furthermore, it has a strategic lead in Stage 0–2 treatments. If treatment responses, costs, and prices are on the same level, Diamyd could take the whole game in the West. One could also think that an aggressive focus on Asia using “fast tracks” is the best chance for long-term commercial success.

It is also possible that Nextcell has not succeeded in finding a partner in the West and feels it is necessary to rush a marketing agreement before Diamyd’s results are released and potentially lower Nextcell’s chances, hence the hurry to try for Hong Kong.

Since “Primary Evaluation” is a goal declared at the HK government level, it surely has a far-reaching strategic purpose. I would assume it relates to the Northern Metropolis plan, at the heart of which is specifically a biotechnology and high-tech cluster. For instance, it has invested 10 billion in InnoHK Research clusters, one of which relates specifically to biotech and where it has sought to attract laboratories from MIT and Stanford. Additionally, it is building the massive Hong Kong-Shenzhen Innovation and Technology Park, where a special life sciences and health technology hub will be established, focusing specifically on drug development, genomics, and cell therapies.

It would seem that Hong Kong is trying to attract foreign companies and create an advanced medicine business hub. There is, of course, a high risk that intellectual property and trade secrets might leak “under the table”. To offset that risk, Hong Kong must offer significant benefits to companies. My gut feeling is that it consists of two factors:

1. The previously mentioned fast, limited access to the Mainland China market. This has existed before if approval was obtained from another country’s drug authority. It was previously facilitated by the “+1 mechanism”.
2. Now, Hong Kong, with 7.5 million inhabitants, is establishing its own drug authority. Why? Because it wants to be the entity that can grant the world’s first approval, thereby attracting companies. How do they achieve this? By offering a shortcut to success—meaning significantly easier first approval for selected firms compared to what Western countries offer. This could mean smaller and shorter sample sizes, higher tolerance for complications, faster processes, and, for example, acceptance of Phase 2 data on a broader scale, if treatment response and safety are tolerable.

Hong Kong does follow, at least on paper, internationally accepted ICH standards regarding clinical data, and at least on paper, it also wants to make its drug authority internationally recognized. So, it’s unlikely to be a total “Wild West” there. But drug authorities do have a lot of their own discretion regarding conditional marketing authorizations. Thus, even while following international standards, it is possible to lower the barrier significantly by interpreting the grounds for conditional marketing authorizations more freely.

Even though things in the US might be easing slightly, Europe and the US emphasize certainty and safety and love bureaucracy more than the East, which forces early-stage companies to the door of Big Pharma, hat in hand, by Phase 3 at the latest, as it easily requires hundreds of millions in investment with uncertain results. At the same time, the majority of future cash flows are given to pharmaceutical giants in return. There would certainly be demand for a light regulatory path.

If the currently uncertain hypotheses above prove to be true, Nextcell could be in an interesting position among the first applicants. Surely, the Hong Kong authorities also have an incentive to show successful success stories from their strategic project.

[Johannes]

I think that your thoughts on Nextcell’s potential projects in Hong Kong, which might have seemed a bit high-flying at first, could actually progress.
Aktiespararna organized a Life Science theme evening on 26.1.26, where Nextcell’s plans for the Far East were outlined. The idea is to combine Nextcell’s expertise with Hong Kong’s developing infrastructure in the field.
From Nextcell’s side, its cell bank expertise and MCB (master cell bank) operations would also be included.
Under the local joint venture partner, the slide listed mentions of, among other things, local production, direct sales (estimated potential pre-market market value 30M USD/year, apparently in Hong Kong), pivotal phase II trial, single CT for approval, and distribution.
The CEO mentioned expanding operations to mainland China as one possibility.
Interesting plans.

[Mauski]

Great that the hypothesis is proving to be on the right track. Look, here’s a stream

A few highlights:

• Hong Kong has built up several eh systems and organizations to help foreign companies enter the Chinese market. It is an extremely capital-rich and we see good opportunities to eh together with local investors and eh companies be able to conduct a clinical trial to treat type one diabetes in Hong Kong and then spread it to the greater part of China.
• Eh the setup is like this that Nexel has eh IP, we have knowhow, we have the entire clinical trial package and we eh now need a partner in the area to finance the study.
• “A phase two study is enough to get approved in Hong Kong.”
• “So that it is simply a way to save it, yes, in Europe we are actively working on Pro Trans Young. In the US we are waiting until we have our Pro Trans Young study. It is possible that we can even get conditional approval in Europe for it , and then we want to start a bridging study in the US instead of starting a phase three study. So that it is a way to work more cost-effectively without selling anything.”
• We have eh we have already started a holding company in Hong Kong. It’s called Nexel Hong Kong.
• Eh, and the idea is to transfer the rights from Nextcell Pharma to this holding company for Hong Kong and China and that you then eh do it together with a local partner.

I interpret this to mean that they are trying for conditional market entry with Phase 2 data, but it requires that funding for the Phase 3 implementation is in place, for which a partner is needed. Conditional (early) marketing authorization in Europe is also considered a possibility.