Background: Novel treatments for patients with acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (HR-MDS) with relapsed or refractory (R/R), or measurable residual disease are urgently needed. Targeting of the surface antigen CD123 expressed on both leukemic blasts and stem cells (LSCs) of most patients allows for depletion of both compartments, which is considered a prerequisite for deep anti-tumor responses and induction of prolonged remission. AFM28 is a novel bispecific Innate Cell Engager (ICE®) designed for bivalent high-affinity binding of CD16A on natural killer (NK) cells, redirecting effector cell cytotoxicity to CD123+ tumor cells. Allogeneic NK cell therapy is emerging as a next-generation treatment with demonstrated activity in R/R AML and a very benign safety profile. Retargeting of NK cells with AFM28 may be a particularly effective treatment strategy in patients with CD123+ AML and HR-MDS. Aims: 1. Preclinical characterization of AFM28 pharmacology and toxicology in vitro and in vivo to support clinical development. 2. Assessment of binding and activation of NK cells by AFM28 to test suitability for combination development with allogeneic NK cell therapy. Methods: Flow cytometry (FC) was used to assess binding and retention of AFM28 on NK cells, NK cell activation (degranulation, IFNγ expression) and depletion of leukemic cells from AML and MDS patient specimens. Quantification of secreted cytokines in leukocyte cultures employed bead-based luminex methodology. In vivo efficacy data were acquired by BLI measurement from a murine AML model. Cynomolgus data were acquired from non-GLP dose range finding and a GLP toxicology study using standard methods (ELISA, IHC, FC). Results: AFM28 induced NK cell activation at low picomolar concentrations and mediated efficacious depletion of CD123+ tumor cell lines and primary leukemic cells, including cells with low CD123 expression. NK cell activation was induced more potently than by an effector-enhanced IgG1 and was accompanied by more pronounced degranulation and IFNγ production. Similarly, AFM28 induced depletion of leukemic cells in patient bone marrow samples, without lysis of CD34+/CD123− cells, suggesting sparing of healthy hematopoietic progenitors. Potent anti-tumor activity was confirmed in vivo in a murine tumor model. In preclinical toxicology models, AFM28-induced target cell depletion was associated with minimal release of inflammatory cytokines, including IL-6, TNFα and IFNγ from leukocytes in vitro, and only low-level release of IL-6 in cynomolgus monkeys, despite efficacious depletion of CD123+ basophils and plasmacytoid dendritic cells (pDCs). Characterization of NK cell binding revealed high-avidity interaction, long cell surface retention, and potent induction of NK cell-mediated tumor cell lysis with no impact on NK cell viability. Summary/Conclusion: These data demonstrate that AFM28 exhibits potent pharmacological activity in vitro and in vivo and efficaciously induces NK cell-mediated depletion of primary leukemic cells. Further, toxicology data suggest good tolerability with a low risk of cytokine release syndrome. Together, these findings support the clinical investigation of AFM28 as a potential novel treatment of CD123+ AML and HR-MDS. A first-in-human trial investigating safety and activity of single agent AFM28 in patients with R/R AML is currently in preparation. In addition, these data support the combination of AFM28 with allogeneic NK cell therapy, which holds potential as an effective, novel treatment strategy.