Third Arc Bio Partners with Adagene for Novel T Cell Engager Development

Third Arc Bio, a California-based biotech company, has announced a significant partnership with Suzhou-based Adagene to develop two novel T cell engagers targeting unique cancer antigens. This collaboration marks another step in the growing trend of pharmaceutical companies looking to China for innovative assets and partnerships.

Deal Structure and Financial Terms

The licensing agreement, announced on Thursday, involves a $5 million upfront payment from Third Arc to Adagene, with the potential for up to $840 million in developmental and commercial milestones. Adagene will also be entitled to royalties on net sales. The deal grants Third Arc worldwide rights to the two cancer candidates, while Adagene retains a no-cost option to lead development and commercialization in the Greater China region, Singapore, and South Korea.

Technology and Development Focus

At the core of this partnership is Adagene's SAFEbody technology, a precision antibody masking platform that enables selective activation of antibodies in specific tissues. This approach aims to improve safety and prolong clinical activity by targeting the tumor microenvironment.

Third Arc plans to leverage this technology to develop T cell engagers targeting CD3 and CD28 markers on T cells. These markers play a crucial role in stimulating the immune system's anti-cancer activity. Peter Lebowitz, CEO of Third Arc, emphasized that the SAFEbody technology will enable the development of "highly innovative molecules with a superior therapeutic index."

Third Arc's Existing Pipeline and Strategy

Third Arc, which launched in July 2024 with a $165 million Series A round, is already advancing its proprietary ARCStim technology. This platform co-stimulates CD3 and CD28 proteins to elicit a strong anti-cancer immune response while minimizing side effects.

The company's lead candidate, ARC101, is currently in Phase I development for ovarian and endometrial cancers. ARC101 targets CD3 and CLDN6, a marker common in these indications. Third Arc is also exploring the combination of ARC101 with another candidate, ARC151, which binds to CD28.

Broader Industry Trends

This partnership contributes to the significant flow of biopharma investments into China. According to IQVIA, the first half of 2025 saw $48.5 billion in Chinese contracts, surpassing the total payments made in the entirety of 2024. Notable deals this year include Kite's $1.5 billion cell therapy partnership with Pregene and Pfizer's $6 billion PD-1/VEGF collaboration with 3SBio, underscoring the pharmaceutical industry's growing interest in Chinese innovation and market potential.