This is a Phase 1b/2 study to identify the recommended dose of M7824 for further study with weekly paclitaxel, and to assess the safety and clinical efficacy of this combined treatment in advanced gastric cancer after first line treatment. The study will be conducted in two parts: Part 1 (Phase 1b) dose escalation study to determine the MTD and RP2D of weekly paclitaxel in combination with fixed dose M7824, Part 2 (Phase 2) to further evaluate the safety and tolerability of the combination of M7824 and paclitaxel at the RP2D and determine anti-tumor activity.

Inclusion Criteria:

1. Able and willing to give written informed consent and has signed the informed consent form (ICF), prior to performance of any trial activities.
2. Eligible male and female subjects aged ≥19 years.
3. Histologically or cytologically proven metastatic or locally advanced HER2 negative gastric cancer after 1st line failure.
4. ECOG performance status of 0 to 1 at trial entry.
5. Life expectancy ≥12 weeks as judged by the Investigator.
6. Adequate hematological function defined by white blood cell (WBC) count ≥3×109/L with absolute neutrophil count (ANC) ≥1.5×109/L, lymphocyte count ≥0.5×109/L, platelet count ≥100×109/L, and Hb ≥9 g/dL (in absence of blood transfusion).
7. Adequate hepatic function defined by a total bilirubin level ≤1.5×ULN, an AST level ≤1.5×ULN, and an ALT level ≤1.5×ULN. For subjects with liver involvement in their tumor, AST ≤5.0×ULN, ALT ≤5.0×ULN, and bilirubin ≤3.0 is acceptable.
8. Adequate renal function defined by an estimated creatinine clearance >50 mL/min according to the Cockcroft-Gault formula or by measure of creatinine clearance from 24-hour urine collection.
9. Adequate coagulation function: normal international normalized ratio (INR), PT ≤1.5×ULN and activated partial thromboplastin time (aPTT) ≤1.5×ULN.
10. HIV patient must be stable on ART for at least 4 weeks, having documented evidence of multi-drug resistance, viral load of <400 copies/ml and CD4+ T-cells ≤350 cells/µL.
11. HBV/HCV positive participant must be on a stable dose of antiviral therapy, having HBV viral load below the limit of quantification (HBV titer <2000 IU/ml) and HCV RNA is not detected.
12. Has measurable or evaluable disease as determined by RECIST 1.1.

Exclusion Criteria:

1. Concurrent treatment with non-permitted drugs.
2. Prior therapy with any antibody/drug targeting T cell coregulatory proteins (immune checkpoints) such as anti-PD-1, anti-cytotoxic T lymphocyte antigen-4 (CTLA-4) antibody, or anti-4-1BB antibody, is not allowed.
3. Prior therapy with any antibody/drug targeting TGFβ or TGF receptor.
4. Anticancer treatment within 21 days before the start of trial treatment, e.g., cytoreductive therapy, radiotherapy (with the exception of palliative bone-directed radiotherapy), immune therapy, or cytokine therapy.
5. Major surgery within 28 days before the start of trial treatment (excluding prior diagnostic biopsy).
6. Systemic therapy with immunosuppressive agents within 7 days before the start of trial treatment; or use of any investigational drug within 28 days before the start of trial treatment.
7. Has persistent ≥Grade 2 toxicity that was not resolved from previous anticancer treatment, such as neuropathy (exceptions are alopecia and anemia).
8. A WOCBP who has a positive urine pregnancy test within 72 hours prior to allocation.
9. Has received a live vaccine within 30 days prior to the first dose of study drug.
10. Has a diagnosis of immunodeficiency or is receiving chronic systemic steroid therapy (in dosing exceeding 10 mg daily of prednisone equivalent) or any other form of immunosuppressive therapy within 7 days prior to the first dose of study drug.
11. Has a known additional malignancy that is progressing or has required active treatment within the past 5 years.
12. Has known active CNS metastases and/or carcinomatous meningitis.
13. Has active autoimmune disease that has required systemic treatment in the past 2 years (i.e. with use of disease modifying agents, corticosteroids, or immunosuppressive drugs).
14. Has a history of (non-infectious) pneumonitis that required steroids or has current pneumonitis.
15. Has an active infection requiring systemic therapy.
16. Has uncontrolled or severe cardiovascular disease, as per following criteria: Myocardial infarction within 180 days before the start of trial treatment; Uncontrolled angina pectoris within 180 days before the start of trial treatment; New York Heart Association (NYHA) Class III or IV congestive heart failure; Uncontrolled hypertension despite appropriate treatment (systolic blood pressure ≥150 mmHg or diastolic blood pressure ≥90 mmHg lasting 24 hours or more); Arrhythmia requiring treatment
17. History of bleeding diathesis or recent major bleeding event.
18. Has a known history of Human Immunodeficiency Virus (HIV) without treatment.
19. Has an active of Hepatitis B (defined as Hepatitis B surface antigen [HBsAg] reactive and HBV titer >2000 IU/ml) or known active Hepatitis C virus (defined as HCV RNA is detected) infection.
20. Has an active TB (Bacillus Tuberculosis) with treatment.
21. Has known history of hypersensitivity to one or more of the study treatments or their substances, or known severe hypersensitivity to monoclonal antibodies (≥Grade 3), history of anaphylaxis, or uncontrolled asthma within 5 months before start of trial treatment.
22. Has a history or current evidence of any condition, therapy, or laboratory abnormality that might confound the results of the study, interfere with the subject's participation for the full duration of the study, or is not in the best interest of the subject to participate, in the opinion of the treating investigator.
23. Have received more than 2nd line of chemotherapy.
24. Has known psychiatric or substance abuse disorders that would interfere with cooperation with the requirements of the trial.
25. Otherwise inappropriate for this study in the investigator's or sub-investigator's opinion.