Economic Observer reporter Zhang LingOn December 12, Baili Tianheng (688506SH) announced that it will license the global rights and interests of an antibody-drug conjugate (ADC) BL-B01D1 outside Chinese mainland to Bristol-Myers Squibb (BMS), with a potential total transaction value of up to US$8.4 billion, breaking the overseas licensing record for innovative drugs in China.
Licensing fees consist of $800 million upfronts, $500 million in recent contingent payments and $7.1 billion in milestone amounts. Baili Tianheng and BMS will cooperate to promote the development and commercialization of BL-B01D1 in the United States, and BMS will be solely responsible for the development and commercialization of BL-B01D1 in other parts of the world.
At the same time, the two companies will share the global development costs of BL-B01D1, as well as the profits and losses in the U.S. market. BMS will receive a share of the product's sales in Chinese mainlandOutside of the U.S. and Chinese mainland, Baili Tianheng will receive a share of sales.
The structure of the deal, which shares development costs and profits, is similar to the 2017 collaboration between Legend Biotech and Johnson & Johnson on CAR-T (Chimeric Antigen Receptor T Cell Immunity**), when the two companies shared costs and revenues 7:3 in Greater China and 55% in the rest of the world.
This licensing model means that BL-B01D1 may need to invest heavily in R&D in the clinical stage, and once BL-B01D1 is commercialized, Baili Tianheng will obtain higher revenue through sales shares.
The two parties share the profits and losses in the U.S. market, and the two cases of Legend Biotech and Baili Tianheng are discussed in China. Fan Xiaohu, the founder of Legend Biotech, told the Economic Observer that such an amount and cooperation model mainly depend on the safety and efficacy of the drug.
Baili Tianheng also told the Economic Observer that the authorization can set a record for the authorization of going to sea for many reasons, and the main reason is that "both parties are optimistic about drugs".
BL-B01D1 is the first EGFR HER3 bispecific antibody ADC drug developed in China, developed by Systimmune, a subsidiary of Baili Tianheng in the United States, and is currently conducting a global multicenter phase I clinical study to evaluate its safety and efficacy in patients with metastatic or unresectable non-small cell lung cancer (NSCLC). 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**.
With high specificity and safety, ADC has become one of the hottest areas for global new drug research and development, and domestic and foreign pharmaceutical giants have bet on it.
From January to November 2023, a total of 36 cases of external licensing of innovative drugs in China occurred, of which 12 were external authorizations of ADCs, which is the most popular type of authorized drugs. Compared with monoclonal antibody ADC drugs, bispecific antibody and polyclonal antibody ADC drugs are more difficult to develop and clinical trials, which makes them have a lower degree of "involution", which is also considered by the industry to be one of the reasons why Baili Tianheng can go overseas at a "sky-high price".
Biopharmaceutical R&D has the characteristics of high-tech, high-risk, and high value-added, and drugs have a long cycle and many links from early research, clinical trial approval to production, and are easily affected by some uncertainties. Baili Tianheng mentioned that the milestone payment agreed in the cooperation agreement needs to meet certain conditions, and the final milestone payment is still uncertain.
On the day the cooperation was announced, the stock price of Baili Tianheng rose to a limit, with a market value of 525800 million yuan.