Domestic innovative drugs are about to survive the long season of Jiazi light years

Mondo Finance Updated on 2024-01-31

In the cold winter, domestic ADCs have become a bright color when they go to sea.

Author July.

Edited by Bo Wang.

On December 12, the strongest cold wave of this winter began to affect our country.

On the same day, the domestic innovative drug industry ushered in the strongest "warm current" this year.

Baili Tianheng announced on the same day that the company's wholly-owned subsidiary, Systimmune, and Bristol-Myers Squibb (hereinafter referred to as BMS) reached an exclusive license and cooperation agreement on the BL-B01D1 project.

BL-B01D1 is a bispecific antibody ADC (antibody drug conjugate) drug that targets both EGFR and HER3, and has demonstrated efficacy signals in multiple epithelial tumor indications.

Under the terms of the agreement, BMS will make an upfront payment of US$800 million to Baili Tianheng, with a potential total transaction value of up to US$8.4 billion.

This transaction is the highest amount of domestic innovative drug license out so far this year, and set a new record for the down payment of China's innovative drug authorization to go overseas. BL-B01D1 is also the first new domestic bispecific antibody ADC drug to successfully go overseas.

An investment banker in the pharmaceutical field told Jiazi Lightyear :"For the first time in history, China's innovative drug companies have done so well and so quickly in the field of new drugs. ”

With the continuous shrinking of the overall valuation of biopharmaceutical companies, the primary market of biomedicine has fallen to the freezing point in the past two years, and the bio-innovative drug industry, which is highly dependent on capital support, has entered a cold winter.

In the cold winter, ADC going to sea is undoubtedly a bright color. With high specificity and high lethality, ADC is becoming one of the hottest areas for global new drug development.

Why is this autumn so long?It's like I've lived a lifetime. This is Wang Xiang's exclamation at the end of the story in the TV series "The Long Season", and many innovative drug practitioners also have similar feelings.

Can domestic innovative drugs go overseas with the help of ADC and survive this long season?

In the minds of new drug developers, ADC drugs are like a "magic bullet" that combines chemotherapy and precisely targeted molecules, which can target all kinds of malignant tumors.

This "bullet" is smart. It allows the antibodies carrying the "warhead" of chemotherapy drugs to bypass the normal cells of the human body, accurately hit the cancer cells, eliminate the "double kill" drawbacks of traditional chemotherapy drugs, and greatly eliminate the pain of complications during chemotherapy.

Schematic diagram of the three-dimensional structure of ADC drugs, **nature

Since 2021, BMS, Pfizer, Merck, AbbVie and other global pharmaceutical giants have increased their layout in the ADC field through mergers and acquisitions, licensing and introduction, and while strengthening their position in the oncology field, they are also constantly seeking new business growth points.

Although domestic ADC started late, with the increase of domestic policy R&D and innovation support and the continuous enhancement of the R&D strength of domestic innovative pharmaceutical companies, the ADC technology platform and pipeline under development have quickly been widely recognized by foreign pharmaceutical companies, and the overseas licensing transactions of domestic ADCs are hot.

According to incomplete statistics, as of now, there will be 15 domestic ADC overseas transactions in 2023, with a total amount of about 233$700 million.

In 2023, domestic ADC overseas transactions (incomplete statistics), data**: Pacific Ocean**, arterial network, etc., collation and mapping: Jiazi light year.

Another set of data is also worth referencing, according to incomplete statistics from the Pharmaceutical Times, as of December 23, 2023, there will be 66 new drugs in China going overseas, and the total amount disclosed is as high as 436600 million US dollars, of which there are as many as 19 ADC-related transactions, accounting for 288%, and the total amount disclosed is as high as 233300 million US dollars, accounting for 534%。

This time, Baili Tianheng reached a cooperation with BMS, which was called the "nuclear bomb level" news in the domestic innovative drug industry by some **, although this is only a pipeline under development in clinical phase I.

The last domestic ADC project that received widespread attention was two years ago. In August 2021, Remegen announced that it had reached an exclusive global license agreement with SeaGen to authorize Seagen to develop and commercialize vedicitumab (RC48), with a total transaction value of US$2.6 billion at that time, kicking off the prelude to the overseas expansion of domestic ADCs.

In recent years, batches of outstanding players have emerged one after another, and the amount of domestic ADC overseas transactions has been continuously "rolled" to a new height, reshaping everyone's imagination of the value of ADC drugs again and again.

Due to the influence of trade secrets, the specific clinical data of many ADC drugs are not disclosed, but the market can still roughly judge the value of ADC companies and pipelines through their overseas frequency, the amount of external authorization, and especially the amount of down payment.

For example, in this year's domestic ADC license out transaction, the highest down payment that has been disclosed comes from Baili Tianheng, which is as high as 800 million US dollars;Last year, the total amount of Kelun Pharmaceutical's three overseas transactions and the total down payment were the highest in the industry, with a total amount of about 118$2.1 billion.

And these two cases have also become typical cases of BD (business development) people often talking about domestic ADCs going overseas.

From buying foreign patents in the past to selling innovative drugs to international pharmaceutical companies, the role of buying and selling is not only a transformation and upgrading of domestic pharmaceutical companies in response to the shrinking profit margins in the domestic market. "Imitation, imitation and innovation, innovation", "good and bad, only the best wins", and "domestic going overseas" have become the development path of China's biomedical industry.

All of this started with a storm in 2015.

In January 2015, Bi Jingquan was appointed as the director of the State Food and Drug Administration and secretary of the party group.

At that time, Bi Jingquan was about to turn 60 years old, if nothing else, this graduate from the Department of Economics of Peking University, who had worked in the State Price Bureau, the State Planning Commission, the National Development and Reform Commission, ** and other units, will complete his career in the State Food and Drug Administration.

Some people in the pharmaceutical industry were not optimistic about him at first, thinking that he was a "layman". In addition, how to solve the problem of "backlog of drug applications" is also what Bi Jingquan needs to face. It is estimated that the backlog of drug applications at that time will take at least ten years to digest, and in this case, pharmaceutical companies have no incentive to develop new drugs.

Shenwan Hongyuan's industry research data shows that from 2011 to 2014, China's 1The average review time for a Category 1 new drug application has increased from 26 months to 42 months, and the waiting time for pharmaceutical companies is more than three times that of the United States.

After half a year of investigation, Bi Jingquan made a move.

In July 2015, the State Food and Drug Administration issued the "Announcement on Carrying out Self-inspection and Verification of Drug Clinical Trial Data", setting off a "storm of counterfeiting" of clinical drug trial data.

In August 2015, the "Opinions on Reforming the Review and Approval System for Drugs and Medical Devices" (hereinafter referred to as the "Opinions") was issued, which opened the prelude to the reform of the drug review and approval system. The "Opinions" put forward a series of new reform policies, such as improving the quality of review and approval, improving the transparency of review and approval, and improving drug approval standards to promote the development of innovative drugs, create a good policy environment for innovative drugs, and encourage the development of innovative drugs.

Pharmaceutical companies see hope, and the funds previously invested in marketing have also been invested in research and development.

Before 2015, the annual approval of innovative drugs in China was in single digits. Nowadays, there are 30-40 innovative drugs approved for marketing in China every year, and their development speed is obvious to all. Xia Lin, a former drug reviewer at the Center for Drug Evaluation of the National Medical Products Administration, said.

"There are only two drugs in the world: generic drugs and innovative drugs. Zhu Yi, founder, chairman and chief scientific officer of Baili Tianheng, said at an industry annual meeting in 2015 that ten years later, countless companies that make generic drugs will compete together, and profits will be as thin as a blade.

At the beginning, Baili Tianheng relied on generic drugs such as ribavirin granules, and the annual sales were stable at more than one billion yuan, and life was prosperous, but Zhu Yi smelled the industry trend early: the profits of generic drugs are shrinking, and continuing to follow the old path is a chronic death, and innovative drugs must be transformed.

This post-60s founder has shown amazing courage and forward-looking vision. In 2011, Baili Tianheng invested one-tenth of its operating income in research and development, and Zhu Yi personally led the team to establish a complete system of drug research and development, production and marketing, and established the route of raising innovative drugs with generic drugs.

Zhu Yi is well aware of the importance of international R&D, and in 2013, he flew to the United States for field investigation, and the following year established a subsidiary in Seattle Systimmune, focusing on innovative anti-tumor antibody drugs. At that time, China was still rolling PD-1, and Zhu Yi firmly chose the ADC field.

It's been ten years before there is the "nuclear bomb" message at the beginning of the article.

According to the early clinical study data presented by Baili Tianheng at the 2023 American Society of Clinical Oncology Annual Meeting (ASCO), BL-B01D1 has demonstrated promising anti-tumor activity in patients with non-small cell lung cancer and breast cancer whose disease has progressed after standard**.

Systimmune, Inc., Baili Tianheng.

Why has ADC drugs become one of the hottest areas for new drug research and development in the world, attracting domestic and foreign pharmaceutical giants to bet?

In the battlefield of tumor anti-cancer drugs, looking for the next "blockbuster" may be one of the reasons.

Take ADC's "star anti-cancer drug" detrastuzumab DS-8201 as an example, which is considered to be the most breakthrough drug for breast cancer in recent years, with a control rate of 72%.

Soon after the drug was launched, it became a "blockbuster" with annual sales of more than 1 billion US dollars, and Daiichi Sankyo, who is more expensive than her child, also took advantage of the trend to attack the goal of "the top 10 pharmaceutical companies in the global oncology field".

As of the end of 2022, the number of ADC drugs on the market was 15, corresponding to 11 popular development targets such as HER2, CD30, and EGFR. In addition, in 2022, more than 200 ADC products will enter clinical trials worldwide, which is twice the number three years ago.

In addition to innovative pharmaceutical companies such as Seagen, Immunogen, ADC Therapeutics, Bristol Myers Squibb Co, Synaffix, etc., there are also established multinational pharmaceutical companies such as AbbVie, Roche, Merck & Co., and Pfizer, which are buying ADC assets in order to occupy a place in the field of tumor anti-cancer drugs.

In addition to the consideration of enriching pipelines, for multinational pharmaceutical companies, the "patent cliff" makes the research and development of ADCs a battle that cannot be lost.

The "patent cliff" refers to the phenomenon that after the expiration of the patent protection period of the drug, generic drugs enter and occupy the market at a lower level, resulting in a sharp decline in the sales of patented drugs.

In the next 4 years, Pfizer will have 6 drugs facing a "patent cliff". These include Pfizer's five flagship products, Eliquis, Ibrance, Xtandi, Xeljanz and Inlyta, which generated more than $15 billion in revenue for Pfizer in 2022. Merck's most-talked-about drug K (pembrolizumab) generated more than $17 billion in revenue in 2021, but the patent for drug K will expire in 2028.

In order to speed up the layout, Pfizer and Merck have simultaneously set their sights on Seagen, a leading company in the ADC field. In the end, Pfizer succeeded in cutting off Hu. In March 2023, Pfizer acquired Seagen for $229 per share in cash** for $43 billion. This move not only amazed the industry, but even netizens ridiculed "Pfizer moved the Federal Reserve's dollar bill treasury in?"”。

Pfizer acquires Seagen, Pfizer.

Not to be outdone, Merck decisively turned to the Chinese pharmaceutical company Kelun Pharmaceutical, introducing 9 ADC projects in batches (two ADC projects were subsequently terminated and returned), with a total cooperation of 11.6 billion US dollars and a total down payment of 2$5.7 billion.

The secret contest between the two sides has not stopped, and the rhythm of "buying, buying, buying" has not ended. On October 20, Merck acquired the global rights to Daiichi Sankyo's three ADCs with an initial payment of $4 billion and a total amount of $22 billion. On December 15, Harbour BioMed in Suzhou Industrial Park announced that its wholly-owned subsidiary, Nona Biologics, had signed an exclusive license agreement with Pfizer for the global clinical development and commercialization of human slurin (MSLN) antibody drug conjugate (ADC) HBM9033.

According to Debang**, the number of global ADC transactions has continued to rise in the past five years, reaching 48 in 2022, a significant increase of 50% from the previous year. In the same year, the global ADC transaction value reached 251$9.7 billion, an all-time high;In 2022, compared with 2021, the number of ADC projects entering the clinic has basically doubled.

Previously, about 50%-60% of the licence ins in the United States came from the United Kingdom, but now China has undoubtedly become an important one. Previously, the CEO of Pfizer had issued a document saying that it would vigorously introduce innovative drugs from China.

A battle that pharmaceutical giants cannot lose, to the midfield, the outcome is undecided, no one is willing to show weakness easily, and China's innovative drug companies began to appear on the battlefield.

In the PD-1 era, Hengrui, Innovent and other "kings of the king" finally stood out in the Red Sea War and became the leader of China's innovative drug companies in one fell swoop.

Nowadays, the tuyere has changed, and ADC has become a new battlefield of involution, with a great trend of "thousands of sails competing for the current".

However, unlike PD-1, which is a single target, ADC drugs are composed of many parts such as antibodies, linkers, and toxins, each of which has room for innovation, so pharmaceutical companies can achieve symbiotic coexistence through differentiated design, permutation and combination.

Compared with monoclonal antibody ADC drugs, bispecific antibody and polyclonal antibody ADC drugs are more difficult to develop and clinical trials are more difficult.

There are only two tertiary antibodies (GT Biopharma, Sanofi) that have entered clinical trials in the world, and only one quadruple antibody that has entered clinical trials, which is Baili Tianheng, and has three quadruclad antibody pipelines (GNC-038, GNC-039 and GNC-035).This is also considered by the industry to be one of the reasons why Baili Tianheng can go to sea at a "sky-high price".

For a long time, domestic innovative drugs have always seemed to be considered to be "moving forward in the same way". Why has ADC drugs repeatedly set records for going overseas in recent years?

Guo Lei, director of Yaodu Smart Consulting Division, explained that because ADC has many elements, its drug development is more of a technology-oriented research and development, rather than the innovation of targets or mechanisms. In the field of ADC, there is a large space for combinatorial innovation, and combinatorial innovation is more emphasis on efficiency and chemical drug capabilities, while China is good at engineering transformation.

Looking at the cooperation amount of up to $8.4 billion, it is worth $800 millionDown paymentup to $500 millionRecent contingent payments;Up to $7.1 billion after development, registration, and sales milestones are metAdditional paymentsThree-part composition.

That is to say, in addition to the determination of the down payment of 800 million yuan, whether the other two amounts can be recorded is closely related to the progress of the pipeline, and there is great uncertainty. After all, the successful signing of the cooperation agreement does not mean the end of going to sea, and the risk of "being returned" still exists.

In October, Merck withdrew two of Columbotai's ADC drugsIn November, BeiGene's partner Zymeworks also said it had regained the rights to a HER2 bispecific antibody ADC.

Industry insiders believe that in order to successfully "go overseas", it is either extremely difficult to carry out multi-center clinical trials around the world as required, or to achieve product innovation or clinical trial uniqueness, and take the route of differentiated competition.

In Guo Lei's view, the overall drug design and target combination of Baili Tianheng have "a feeling of being on the wrong side".

After going through the stage of rapid imitation and follow-up, the stamina and potential of China's innovative drugs have gradually begun to appear. Domestic innovative drugs are about to survive the long season.

On July 15, 2018, a message on the official website of the National Medical Products Administration triggered a shock in the domestic vaccine industry.

According to the news, Changchun Changsheng Biotechnology Co., Ltd. (hereinafter referred to as "Changchun Changsheng") has been ordered by the State Food and Drug Administration to stop production, withdraw the GMP certificate of the drug, and file a case for investigation of related violations of laws and regulations due to violations such as falsification of records in the production of a rabies vaccine for human use.

After the Changchun Changsheng vaccine case, the ** investigation team rushed to Jilin to carry out the investigation, of which Bi Jingquan served as the leader of the investigation team. On August 16, Bi Jingquan was asked to resign.

Later, some people in the industry were worried about whether the reform in favor of innovative drugs would be affected

The answer is, no.

Recently, this familiar face of the biomedical industry appeared at the 2023 China Medical Science and Technology Forum, and Bi Jingquan is now the deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference and the executive vice chairman of the China Center for International Economic Exchanges. He believes that in recent years, China's biomedical industry has begun to embark on the road of high-quality development, but it is still in the stage of "climbing over hurdles" and faces many problems to be solved.

It is necessary to make efforts in the same direction from six aspects, give support to the whole chain of biomedical innovation in R&D, transformation, access, production, use, and payment, and strive to create an institutional environment that encourages biomedical innovation and promote the high-quality development of the industry. In an exclusive interview with the Economic Information Daily, Bi Jingquan still emphasized biomedical innovation.

The rise of domestic innovative drugs has benefited from the strong support of the national medical reform policy. Although there is a long way to go, domestic innovative drugs are still running wild on the road of innovation.

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Merck & Pfizer on the edge of the patent cliff did the same thing", Beijing Business Daily.

When health science popularization is in progress丨Experts talk about the road of innovation of China's innovative drugs", Xinhuanet.

Multinational pharmaceutical companies intensively "purchase" and blockbuster licensing transactions are frequent, why is the road of domestic ADC "going overseas" getting smoother and smoother?Economic Observer.

Bi Jingquan: Six aspects of "working in the same direction" to support biomedical innovation in the whole chain", Economic Information Daily.

In-depth interpretation of the ADC R&D trend report, the latest application opportunities of the hot**ADC", Pharmaceutical Times.

The Past of China's Innovative Drugs", Deep Blue View.

Behind the blowout development of innovative drugs, it is inseparable from the drug review storm in 2015", Health Knowledge Bureau.

Nurmaimat (wheat) also contributed to this article.

Cover image**: TV series "The Long Season").

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