Strategic value is shifting toward de-risked, differentiated and scalable TCE platforms

TCE Market Map

TCE Proposed Mechanism: Immune Reset

Autoimmune therapy is shifting from chronic pathway suppression toward deeper depletion of disease-sustaining immune cells. Conventional immunosuppressants and pathway-specific biologics can control disease activity but typically require chronic administration. TCE represent a different therapeutic approach by recruiting endogenous T cells directly to pathogenic B cells or plasma cells.

Limitations of Conventional Anti-CD20 Depletion

Rituximab and other anti-CD20 antibodies can effectively deplete circulating B cells but may leave residual B-cell populations in lymphoid tissues and other disease-relevant compartments. CD20 also does not cover early B-cell precursors, plasmablasts or plasma cells, allowing these populations to persist, repopulate the B-cell compartment or continue producing pathogenic autoantibodies.

B-Cell Differentiation Creates Different Therapeutic Windows

A simplified disease-relevant B-cell lineage can be viewed as:

Early B-cell precursor → naïve B cell → mature B cell → memory B cell → plasmablast → long-lived plasma cell

CD19, CD20 and BCMA cover different parts of this continuum, making target selection a key determinant of depletion breadth and the residual immune-cell populations that may continue to sustain or regenerate disease.

TCEs redirect endogenous T cells against CD19-, CD20- or BCMA-expressing cells to drive deeper B-cell and/or plasma-cell depletion, with the goal of healthier immune reconstitution and sustained treatment-free benefit.

TCE Target and Molecular Architectures

CD19, CD20 and BCMA cover different stages of B-cell differentiation, while molecular format and engineering strategy determine how TCEs balance depletion depth, tissue penetration, pharmacokinetics and systemic T-cell activation.

Molecular and Safety-Engineering Formats

TCE development is increasingly focused on improving the therapeutic index along with maximizing cytotoxic potency.

• BiTE-like constructs use smaller molecular formats that may improve tissue diffusion but typically require half-life extension to support practical dosing.

• Full-length IgG-like TCEs offer longer systemic exposure, conventional antibody pharmacokinetics, structural stability and established manufacturing, but require tighter control of prolonged systemic T-cell activation.

• Trispecific and multispecific TCEs add a second disease-cell target or an additional activation/costimulatory signal to broaden lineage depletion, reduce antigen escape or strengthen target-cell killing, while increasing molecular complexity and potentially immune activation.

• Masked or conditionally active TCEs restrict CD3 engagement until the molecule reaches the intended target environment, aiming to preserve local cytotoxicity while reducing systemic cytokine release.

• CD3 affinity-detuned TCEs weaken CD3 binding so T-cell activation becomes more dependent on target-cell engagement, with the goal of reducing CRS while maintaining depletion.

• mRNA/LNP-encoded TCEs produce the engager in vivo rather than administering recombinant protein directly. Potential advantages include smoother exposure, lower peak concentrations, flexible redosing and differentiated manufacturing and delivery, although clinical validation remains earlier.

BCMA-containing approaches provide the strongest direct plasma-cell depletion but can increase hypogammaglobulinemia and infection risk as depletion broadens. CRS and ICANS are being addressed through CD3 detuning, masking, subcutaneous administration and slower exposure. BiTE-like formats generally require half-life extension, IgG-like constructs provide longer conventional PK, and encoded approaches may enable more gradual endogenous exposure.

Outpatient feasibility is increasingly linked to lower peak exposure, SC dosing and fewer step-up requirements, while manufacturing complexity generally rises across multispecific, masked and encoded platforms.

Clinical Endpoints in Autoimmune TCE Development

Primary endpoints remain indication-specific, while steroid withdrawal, treatment-free remission and durability after finite therapy provide more differentiated TCE readouts.

• SLE

  • Core efficacy endpoints: SRI-4, BICLA

  • Disease-control / remission measures: LLDAS, DORIS remission

  • Supporting measures: glucocorticoid reduction, complement normalization, anti-dsDNA decline

  • Potential immune-reset readout: sustained remission with reduced or discontinued steroids/background immunosuppression

• Lupus nephritis

  • Key efficacy endpoint: Complete Renal Response (CRR), with definitions varying by trial

  • Core measures: proteinuria (typically UPCR), preserved/stable eGFR and protocol-defined glucocorticoid limits

  • Supporting measures: sustained renal response, proteinuria reduction and kidney-function preservation

  • Potential immune-reset readout: durable renal response with reduced need for chronic immunosuppression

• Rheumatoid arthritis

  • Core efficacy measures: ACR20/50/70, DAS28, CDAI and clinical remission

  • Supporting measures / biomarkers: RF, ACPA/anti-CCP and, for TCEs, depth of B-cell depletion

  • Potential immune-reset readout: sustained remission after finite treatment with persistent disease control after background therapy reduction

• Systemic sclerosis

  • Core efficacy measures: mRSS for skin disease, FVC for pulmonary involvement, CRISS/rCRISS composite measures

  • Supporting measures: ILD progression, qHRCT, DLCO, patient-reported outcomes and autoantibody changes

  • Potential immune-reset readout: durable stabilization or improvement with reduced background immunosuppression

• Myositis

  • Core response endpoint: ACR/EULAR Total Improvement Score (TIS)

  • Component / supporting measures: MMT-8, muscle enzymes including CK, physician/patient global assessments and extramuscular disease activity

  • Potential immune-reset readout: durable major clinical improvement following finite treatment

• ITP

  • Core efficacy measures: platelet response and sustained/durable platelet response

  • Supporting measures: bleeding, rescue-therapy use and reduction/discontinuation of concomitant therapy

  • Potential immune-reset readout: sustained platelet control after finite therapy without ongoing treatment

• AIHA

  • Core efficacy measures: hemoglobin response, normalization of hemoglobin and transfusion independence

  • Supporting measures: normalization of hemolysis markers, response durability and reduction of corticosteroid requirements

  • Potential immune-reset readout: sustained hematologic response without ongoing immunosuppressive therapy

Oncology as the Clinical Precedent

Approved CD19-, CD20- and BCMA-directed TCEs have validated rapid and deep target-cell depletion across heavily pretreated hematologic malignancies. Oncology has also established the key class liabilities—CRS, neurotoxicity, infection, hypogammaglobulinemia, step-up dosing, intensive monitoring and, in some cases, hospitalization. These risks may be acceptable in refractory cancer, but set a materially higher therapeutic-index and treatment-logistics bar for autoimmune disease.

Teclistamab demonstrates the biological power of BCMA-mediated plasma-cell depletion, but was associated in oncology with approximately 90% hypogammaglobulinemia and 41.6% Grade 3/4 infections, alongside high CRS frequency.

Similarly, SC delivery alone is not sufficient to solve class toxicity: epcoritamab still requires step-up dosing and steroid prophylaxis, while CRS remained common in the oncology experience.

Clinical Bar for Emerging and Preclinical TCEs

Emerging programs will increasingly be assessed across five areas: depth, breadth, safety, convenience and durability.

• Depth: Depletion should extend beyond peripheral blood into lymph nodes, bone marrow or disease-relevant tissue where pathogenic immune cells may persist.

• Breadth: Target coverage should match disease biology, whether the relevant compartment is B cells, plasma cells or both.

• Safety: Autoimmune programs need a materially better therapeutic index than oncology TCEs, particularly around CRS, ICANS, infection, hypogammaglobulinemia and cytopenias.

• Convenience: The preferred profile moves toward SC or simple IV dosing, fewer step-up doses, outpatient administration and a short or finite treatment course.

• Durability: The most differentiated durability signal would be sustained treatment-free remission after therapy stops, particularly if maintained after B-cell reconstitution.

The bar is shifting toward deep, disease-relevant depletion with autoimmune-appropriate safety and durable benefit after finite treatment.

_{Source: Public Filings, Wall Street Equity Research}

Macro Theme

• Higher rates are re-emerging as a biotech valuation headwind: Renewed inflation concerns and higher Treasury yields are increasing duration risk for development-stage biotech, with valuations vulnerable if financial conditions tighten further.

• FDA / Regulatory — Leadership stabilization is reducing policy uncertainty: Recent CDER and CBER appointments are shifting attention back toward review consistency, scientific standards, and a more predictable regulatory environment.

• Clinical Development — Biomarker validation is becoming a larger underwriting risk: Recent failures highlight that biomarker modulation alone is insufficient, increasing the burden of proof and potentially raising development costs where large outcomes studies are required.

• Clinical Trials — Endpoint design is becoming as important as target biology: Investors are placing greater weight on validated biomarkers, assay reproducibility, and clinically meaningful endpoints before assigning value to early efficacy signals.

• M&A — Pharma underwriting may move toward a barbell strategy: Buyers may increasingly favor either earlier-stage assets acquired at lower valuations or later-stage programs with substantially de-risked clinical profiles, while avoiding expensive assets with unresolved Phase III risk.

• M&A — De-risked revenue may command a higher strategic premium: Phase III-validated, near-commercial, and revenue-generating assets could attract stronger demand, widening the valuation gap versus programs with unresolved translational or endpoint risk.

• Competitive Markets — Product differentiation is becoming more important: As standards of care improve, clinical value is increasingly defined by relative efficacy, tolerability, dosing convenience, and treatment burden rather than efficacy versus placebo alone.

• China — Strategic relevance continues to rise despite policy uncertainty: China is becoming a more structural part of global biotech R&D, licensing, and partnering, rather than simply a source of lower-cost assets.

Recent Venture Transactions

• Healthcare venture activity is accelerating: 1H 2026 investment reached $31B across 1,101 deals, with Q2 representing the strongest quarter in the dataset and marking the best back-to-back quarterly performance of the current cycle.

• Capital allocation remains barbelled: Investors are backing select early-stage companies while concentrating substantial capital into later-stage, momentum-driven rounds, even as first-time financings remain difficult.

• Round structures are beginning to normalize: After the mega-round-heavy environment of 2024–2025, improving risk appetite and stronger M&A activity are supporting a partial return to more traditional round sizes and tighter syndicates, although capital remains concentrated in larger financings.

• Biopharma continues to dominate healthcare venture: Biopharma captured 50% of healthcare venture dollars in 1H 2026, reinforcing its position as the largest recipient of healthcare venture capital.

Recent Biotech IPO Tracker

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Market Conditions

The biotech market continues to recover, supported by stronger public market performance and improving financing activity. The XBI has materially outperformed the broader S&P 500, while recent IPOs show renewed investor appetite for high quality clinical stage assets

Capital Formation

Healthcare venture investment reached approximately $31 billion across 1,101 deals in the first half of 2026, with Q2 representing the strongest quarter in the dataset. Capital remains concentrated around later stage and clinically validated programs, reflecting continued selectivity toward early scientific risk.

Strategic Activity

M&A activity remains active, particularly in the $500 million to $3 billion range, with a broader group of mid sized and specialty biopharma companies emerging as buyers. This expanding buyer universe is helping support valuations for differentiated clinical stage assets.

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In vivo CAR-T seeks to move cell therapy from individualized ex vivo manufacturing toward direct immune-cell engineering inside the patient. Genetic payloads are delivered systemically to program endogenous immune cells in situ, potentially reducing manufacturing complexity, treatment delays and the need for lymphodepletion. The principal technical challenge shifts from manufacturing the cell product to achieving selective delivery, sufficient transduction, expansion and persistence in vivo.

Recent In-Vivo CAR-T Deals

Technology Landscape: Trade-Offs Between Durability, Safety, and Manufacturability

The emerging landscape is splitting across several delivery architectures, each making a different trade-off between persistence, genomic integration, re-dosability, manufacturing complexity, and clinical maturity.

Targeted Lentiviral Vectors

Engineered lentiviral vectors deliver a DNA CAR cassette directly to T cells, enabling durable, potentially permanent expression. They currently have the strongest clinical maturity, but face concerns around off-target transduction, genomic integration, long-term genotoxicity, and limited re-dosing.

Targeted LNP + Linear mRNA

Targeted lipid nanoparticles deliver CAR-encoding mRNA directly to immune cells. The approach is non-integrating, transient, and potentially repeat-doseable, with attractive manufacturing scalability. The main challenge is whether short-lived expression can generate sufficiently deep and durable clinical responses.

LNP + Circular / Endless RNA

Circular or endless RNA aims to extend CAR expression while remaining non-integrating. The approach could offer a middle ground between transient mRNA and permanent integration, but remains less clinically validated and carries manufacturing and immunogenicity uncertainties.

Integrative Non-Viral Systems

These platforms use non-viral delivery of gene-editing systems to achieve durable genomic integration. They could combine long-term expression with non-viral manufacturing, but remain earlier stage with unresolved questions around editing efficiency, specificity, immune activation, and genotoxicity.

Alternative Delivery Systems

Virus-like particles, extracellular vesicles, AAV, direct protein, and other carriers offer different targeting and payload strategies, including potential access to T cells, NK cells, and myeloid cells. Most are earlier stage and remain highly dependent on platform-specific biodistribution, persistence, payload, and manufacturing performance.

Clinical Evidence

Legend Biotech – LB2501

LB2501 is an integrating, CD19/CD20 dual-targeted in vivo CAR-T for relapsed/refractory B-cell non-Hodgkin lymphoma.

LB2501 has generated the most developed clinical dataset of the three programs shown. In a Phase 1 study of 12 heavily pretreated patients with relapsed/refractory B-cell NHL, the higher dose cohort achieved 100% ORR (6/6) and 83% CR (5/6), with responses observed across DLBCL, mantle cell lymphoma, and follicular lymphoma.

The program also demonstrated single-dose in vivo CAR-T expansion without lymphodepletion, with CAR-T cells detectable in peripheral blood for up to 116 days. Early safety appears manageable, with no DLTs, serious adverse events, ICANS, or deaths reported; CRS and infusion reactions were limited to Grade 1–2. Translational data also showed broad T-cell integration without evidence of unintended transduction in the non-target lymphocyte populations tested.

Lilly / Kelonia – KLN-1010

KLN-1010 is an integrating, BCMA-targeted in vivo CAR-T delivered through Kelonia’s CD3-targeted lentiviral platform for relapsed/refractory multiple myeloma (rrMM).

KLN-1010 has shown a strong early efficacy signal in relapsed/refractory multiple myeloma. All 4 of the first treated patients, each with at least three prior lines of therapy, achieved MRD-negative responses at Month 1.

Importantly, these responses were achieved without lymphodepleting chemotherapy. The platform also demonstrated substantial in vivo expansion, with engineered CAR-T cells reaching as much as ~85% of circulating T cells, supporting the ability of the CD3-targeted lentiviral platform to generate and amplify CAR-T cells directly in patients.

EsoBiotec / AstraZeneca – ESO-T01

ESO-T01 reprogram a patient’s T cells directly in vivo into BCMA-directed CAR-T cells for r/r multiple myeloma.

ESO-T01 has also demonstrated early clinical activity in relapsed/refractory multiple myeloma. In the first treated patient, the therapy produced strong CAR-T expansion with no detectable residual myeloma in bone marrow by Day 28.

Across the initial 5 patients, preliminary Phase 1 data showed an 80% ORR (4/5) with 3 complete responses, again without preparative chemotherapy. However, the safety profile is more concerning: all five patients experienced Grade ≥3 adverse events, including three cases of Grade 3 CRS.

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