The overseas players who came to China to "sweep the goods" have added a new face.
One is called Galapagos Nv.The Belgian company is throwing an olive branch to China's oncology pipeline under development. The company's chief financial officer, Thad Huston, told E-drug manager Ren Rong that the company currently has nearly 4 billion euros in cash and has high hopes for China, has hired BD personnel specifically for the Chinese market, and is evaluating several projects to look for opportunities.
The company is not very large, and most domestic practitioners may not have heard of it. In fact, Galapagos was founded in the last century, and its name is the same as the island that inspired Darwin to write his Theory of Evolution. The challenge is also a common problem for many established biotechs in the current environment: there is no shortage of technology and capital, but due to the unsmooth commercialization process, it is necessary to make trade-offs in the pipeline portfolio, eliminate the old ones, and supplement the new ones.
BD has become the key to this metabolic process.
Its two current leaders have a stellar resume: CEO Paul Stoffels was Johnson & Johnson's chief scientific officer, and during his tenure he brokered the JD deal between Johnson & Johnson and Legend Biotech for Carvykti;Chief Financial Officer Thad Huston was previously senior vice president of finance and corporate operations at Kite Pharma, a Gilead cell-** company.
Can the two join forces to find the next legend in China?
The transformation led by the general of the mnc
A biotech founded in the last century, in the cold winter in the face of unsmooth research and development, the future is unknown, what choice will it make?
In addition to being "forced to sell out", Galapagos proposed another solution: travel lightly, reserve cash, and be led by former MNC executives, carry out a resolute strategic transformation, and move to the next stage of development through BD.
Looking through the history of Galapagos in recent years, there are two key events. The first was the announcement in 2019 of a 10-year global R&D collaboration with Gilead Sciences, which gave the latter an innovative compound portfolio that included six molecules in clinical trials at the time, more than 20 preclinical programs, and a validated drug discovery platform**, in consideration for a sum of 39 from GileadAn upfront payment of $500 million and an equity investment of $1.1 billion. After the acquisition, Gilead's shareholding in Galapago increased from 123% to 22%.
Second, in 2020, the company's only commercial product, JAK1 inhibitor jyseleca (filgotinib), was approved in the European Union, the United Kingdom and Japan, but was rejected by the FDA, resulting in a failure in the most important U.S. market.
The equity and technology platform are tied to the MNC to ensure cash flowThe commercialization of the main product has been hindered, which means that the past R&D direction may need to be adjusted. Coupled with the unfavorable external environment and the rare medical winter in a decade, Galapago urgently needs to re-examine and sort out its past strategy.
Paul Stoffels, former chief scientific officer at Johnson & Johnson, joined Galapagos as CEO last April. Since then, Galapagos has responded decisively, making a radical strategic turn. Two months later, the company announced that it had entered into the CAR-T and antibody space with Cellpoint and AboundBio.
In a third-quarter earnings announcement released that year, Paul Stoffels announced that the company would reduce more than 100 positions across Europe to "create room for reinvestment" in new areas.
A series of actions were quickly reflected in the financial report, and for the full year of 2022, Galapagos had a net loss of more than 200 million euros;In the 2023 semi-annual report, it successfully turned losses into profits, with a net profit of 28.31 million euros. The cash reserves on the books are as high as nearly 4 billion euros.
In July, Galapagos announced a new personnel change: the appointment of Thad Huston, senior vice president of finance and corporate operations at Kite Pharma, formerly Gilead's cell** cell-based company, as the company's chief financial officer (CFO) and chief operating officer (COO).
It is worth noting that the resumes of Paul Stoffels and Thad Huston have quite a lot of overlap: they not only cover the field of CAR-T, but also have a lot of roots in China. During Paul Stoffels' tenure as Chief Scientific Officer at Johnson & Johnson, Johnson & Johnson entered into a BD deal with Legend Biotech, and the following year Carvykti became the first domestic CAR-T immune** to be approved by the US FDAKite Pharma, where Thad Huston worked, is not only the world's first-tier CAR-T company, but also co-founded a joint venture company Fosun Kite with Fosun Pharma in 2017, and Thad Huston himself served as a board member of Fosun Kite.
At the earnings conference earlier this month, Paul Stoffels announced that he had signed a letter of intent to transfer the company's Jyselica (Filgotinib) business to Alfasigma. This means that the company has basically completed the strategic adjustment work and moved towards a new stage of light travel.
Two generals from MNC have led the transformation of a biotech. After a complex series of divestitures and acquisitions, Galapagos has completed the first phase of its strategic transformation: it is ready to move on to the second phase: high-quality assets to complete the next piece of the technical puzzle.
China has become the key to this puzzle.
Complement each other
The reason why Galapagos attaches so much importance to China's R&D pipeline is due to multiple considerations.
The first is quality. Thad Huston told Ren Rong**, manager of e-drug, that he also served as president of Xi'an Janssen before joining Kite Pharma. I have witnessed the rapid progress and development of China's biopharmaceutical industry in the past ten years. Whether it is the ability of scientists, or the quantity and quality of R&D pipelines, China is at the forefront of the world. In recent years, more and more pipelines in China have been developed in the global market from the beginning of the project, which is very attractive to international buyers.
This is followed by **. Thad Huston believes that under the premise of similar quality, China's R&D pipeline has a great advantage.
In turn, what can GalapaS offer Chinese companies?
First of all, of course, there is funding, with an ample cash of almost 4 billion euros, which is enough to withstand the risks of the next few years;The second is commercialization – the European market has its complexities, but the EU's role as a single market also facilitates the commercialization of innovative medicines. In addition to the application of the EU's Harmonized Market Rules, each member state market also has its own access rules. For commercialization in the European market, priority can be given to several key markets, including Germany, France, and the Benelux market. The latter is also home to the headquarters of Galapagos. "GalapaOs has been deeply involved in Europe for many years and has deep experience in policy and market access, which can help Chinese companies explore the European market. Thad Huston said.
Thad Huston and the rest of the world outside of Europe, particularly in the United States, can expand through partner Gilead's commercialization network.
In addition to the hard conditions, there are some unique advantages: Paul Stoffels and Thad Huston both have excellent professional resumes and successful experience in MNC, and Galapagos has a deeper understanding of the pain points and difficulties that may be faced in the development process based on past experience. The combination of positive and negative experiences will be of great benefit in advancing future cooperation.
On the other hand, Chinese companies are gradually opening their arms to foreign investment. At the recent enlightenment meeting, the chairman of a large domestic pharmaceutical company announced the change in the direction of its marketization strategy in public: "In the past, the focus was not on BD, but on wanting to do it abroad, but in the last year or two, I have made some adjustments, focused on BD, and enriched the BD team." In the future, BD will be increased, and license-out will become the main way of internationalization. ”
The same turn is not limited to one company, but has gradually become the consensus of most players in the industry. In the first two years of the capital boom, biotechs were keen on storytelling, and they often wanted to lay out the whole industry chain, build their own laboratories, production workshops and commercialization teams, and sprint to IPO, resulting in huge overcapacity and waste, so that investors' funds were precipitated in thousands of different companies, large and small, and failed to form a complete commercialization closed loop.
Nowadays, more and more biotechs realize the importance of seeking cooperation with foreign countries, and give up the idea of building their own laboratories and factories, and only retain the R&D team. And in order to reserve winter grain in advance, the stage of external authorization has been advanced. The whole industry is slowly starting to let go of impetuousness and become pragmatic.
Towards the end of this year, there has been good news that many companies such as Hengrui, Hutchison, Yifan, and Baili Tianheng have successfully gone to sea. In China, there are more and more cases of cooperation between Biotech and Pharma.
The time and place are right, and the next thing is to rely on personal efforts.
Thad Huston told Ren Rong**, manager of E drugs, that the company is currently mainly focusing on the field of oncology and is very interested in excellent CAR-T and small molecule drugs. In terms of pipeline stage, it is biased towards the early stage, and pays more attention to the assets in the stage stage, and excellent preclinical products are also among the selections. The form of cooperation is generally a licensing of a single asset, but if there is a good team and technology platform, it is not excluded that the company as a whole will be considered.
Thad Huston also told E-drug manager Ren Rong that he has a deep connection with China, in addition to spending most of his key career in China, his wife is also Chinese. Whether from the perspective of the company's operation or from the perspective of personal emotion, we look forward to the cooperation between the two parties to jointly help the development of the global pharmaceutical industry.
As Paul Stoffels set at the beginning of this year, he wanted to have one or two drugs on the market by 2028.