Reporter Chen Ting and Cao Xueping report from Shenzhen.
Yahong Pharmaceutical(688176.)SH), which is expected to fill the gap in the bladder cancer drug market, has failed in its research direction of combining with chemotherapy perfusion.
According to the announcement, APL-1202 is an orally administered reversible MetaP2 inhibitor, and in the pivotal clinical trial of medium- and high-risk non-muscle-invasive bladder cancer (NMIBC) in combination with chemoperfusion, the main efficacy measure, event-free survival (EFS), did not meet the preset statistical assumptions, and Yahong Pharma decided to terminate the further development of APL-1202 in combination with chemoperfusion in this indication.
The above product pipeline was originally expected to be approved for marketing in 2023 and is expected to become the first NMIBC oral ** drug in China. As of the day after the announcement (February 5), the share price of Yahong Pharmaceutical fell by 20%.
Yahong Pharmaceutical, which has adopted the fifth set of listing standards of the Science and Technology Innovation Board to land in the capital market, is still in a loss-making state, and its stock price has been "broken" for a long time. According to the announcement, the company's net profit in 2023 is expected to be -44.3 billion — -37.1 billion yuan, the loss margin further expanded. At present, Yahong Pharmaceutical's performance mainly relies on two commercial products imported from outside.
On February 21, Yahong Pharmaceutical said in an interview with the reporter of "China Business News" that there are risks and challenges in the research and development of innovative drugs. "Although the development of APL-1202 in combination with chemotherapy perfusion did not meet expectations for the time being, the company has not given up on the follow-up development of APL-1202, and its determination to continue development in the field of urological oncology has not wavered. ”
Billions of dollars "flatbread".
With the development of APL-1202 as the top priority, AMIBC is the first oral targeted drug of NMIBC in the world to enter a pivotal phase III clinical trial.
On the evening of February 4, Yahong Pharma announced that a randomized, double-blind, controlled, multi-center pivotal clinical trial of APL-1202 in combination with chemoperfusion for medium- and high-risk NMIBC with chemoperfusion has been completed. The results of the statistical analysis showed that although it showed a certain trend of efficacy in some patient populations, the primary endpoint was not met, and the company decided to discontinue further development.
As of December 31, 2023, approximately 1300 million yuan. Yahong Pharmaceutical stated in the announcement that the above-mentioned R&D expenses have been included in the profit and loss of the corresponding accounting period when they are incurred, and will not have a significant impact on the company's current performance.
In the original expectation, APL-1202 is very commercial imagination, and it is also expected to bring better choices for bladder cancer patients.
According to Yahong Pharmaceutical, in the prospectus, at present, the standard means of NMIBC is transurethral bladder tumor resection, and postoperative adjuvant is intravesical infusion of drugs to reduce the rate of tumors. However, patients with NMIBC have multiple strong unmet clinical needs, including the failure of bladder infusion drugs, there is no good second-line regimen option, and can only undergo ** total cystectomy; The safety of intravesical drugs is not satisfactory, and both bladder chemoperfusion and BCG (BCG (Bacillus Calmette-Guérin ) perfusion can cause 30%-50% of urethral irritation and 20% of systemic adverse reactions; Intravesical infusion is an invasive mode of administration with poor patient compliance. Up to now, there has not been any oral drug of **NMIBC on the market worldwide.
In January 2022, Yahong Pharma knocked on the door of the Science and Technology Innovation Board with a number of core products under development, including APL-1202, and finally raised up to 252.8 billion yuan, more than the original plan of 20700 million yuan.
According to the prospectus, APL-1202 is expected to be approved for marketing in 2023, and is expected to become the first approved drug for chemotherapy perfusion **NMIBC (second-line**), with efficacy and safety advantages, and considering that there are no other clinical stage products for chemotherapy perfusion **NMIBC in the domestic market, APL-1202 will face a relatively relaxed market competition environment after its launch.
According to Yahong Pharmaceutical's calculations, under the optimistic scenario, APL-1202 will be included in the medical insurance, the company's commercialization is progressing smoothly, and the peak penetration rate of APL-1202 in the medium- and high-risk NMIBC (second-line**) of chemotherapy perfusion** can reach 50%, and the domestic sales scale will reach 46 by 20308.5 billion yuan. Under the cautious situation, the elasticity calculation is carried out in the range of 30%-50% peak market penetration, and the total market space of APL-1202 in the second-tier and first-tier ** domestic market can reach 28 by 20303.8 billion—468.5 billion yuan. Even in the case of a small probability of not being included in the medical insurance catalogue in the end, the market space of APL-1202 can reach 16 based on the peak market penetration rate of only 10%.3.9 billion yuan.
Now, the development direction of APL-1202 combined with chemotherapy perfusion has been terminated, what is the impact on the market share and market size of Yahong Pharma in the field of bladder cancer in the future?
Yahong Pharmaceutical said that the company did not give up the indication of NMIBC, and the suspension was combined with chemotherapy perfusion. Based on years of accumulation in the field of urological oncology, especially bladder cancer, Yahong Pharma deeply understands the unmet clinical needs in this field, and the company continues to deploy in the fields of diagnostic screening, NMIBC, preoperative neoadjuvant for muscle-invasive bladder cancer (MIBC) and advanced metastatic bladder cancer. "In the field of screening diagnostics, we have disposable portable cystoscopes and bladder tumor contrast programs; In terms of NMIBC, in addition to the clinical trial of APL-1202 oral drug, we also have an investigational immuno-oncology drug for bladder infusion; In terms of preoperative neoadjuvant for MIBC, the Company expects clinical results of APL-1202 oral in combination with anti-PD-1 in 2024. ”
Up to now, Yahong Pharma is conducting two other clinical trials of APL-1202, namely the Phase III clinical trial of APL-1202 as a single agent**untested** intermediate and dangerous NMIBC, and the Phase II clinical trial of APL-1202 orally combined with PD-1 tislelizumab as a neoadjuvant for MIBC.
According to the research report released by Southwest ** in October 2023, there are currently only 12 products under development for **NMIBC in the world, and leading domestic companies include Yahong Pharmaceutical, Lepu Biotech (2157.).HK) and Hengrui Pharmaceutical (600276sh）。
The margin of the loss widened further
The setback in the research and development of APL-1202 is undoubtedly another shock to Yahong Pharmaceutical, which is under pressure on its performance.
On the evening of January 30, 2024, Yahong Pharmaceutical released the 2023 annual results pre-loss announcement. The company expects a loss of 37.1 billion—44.3 billion yuan, an increase of 12.4 billion — 19.6 billion yuan.
According to the announcement, in 2023, Yahong Pharmaceutical's revenue will mainly be based on the sales revenue generated by pazopanib tablets and neratinib maleate tablets in the fourth quarter of 2023 and the license fee income generated by the company's external licensing data, both of which are introduced from the outside. The company expects revenue of 1279 in 2023060,000—1526620,000 yuan, and the annual revenue in 2022 will be 2610,000 yuan.
In terms of self-development, including APL-1202, Yahong Pharmaceutical's core products are still under development, resulting in a continuous increase in R&D expenses, and the company expects R&D expenses to be 33.7 billion — 40.2 billion yuan, an increase of 9280 over 2022280,000 yuan—15.8 billion yuan.
Yahong Pharma revealed that the synergistic effect of APL-1202 in combination with chemotherapy is not significant, but it can provide data support for the development direction of the other two trials. The company's current clinical trial in China and the United States is APL-1202 oral combined with tislelizumab as a neoadjuvant for MIBC**, the phase II trial of this clinical trial has completed the enrollment of all subjects, and the phase II topline data is expected to be read out in the third quarter of 2024; The marketing application of APL-1706 for the diagnosis and management of bladder cancer was accepted by the NMPA in November 2023; The international multi-center Phase III clinical trial of APL-1702 for high-grade cervical squamous intraepithelial lesions reached the primary endpoint in September 2023, and the company is actively communicating with the NMPA and expects to submit a new drug application in the second quarter of 2024.
It is worth noting that part of the technology of APL-1202 and APL-1702 was purchased by Yahong Pharmaceutical, and the company will need to pay relevant fees after the products are marketed. Among them, for the right to use, manufacture and sell the relevant products of APL-1202 in Chinese mainland and Hong Kong, Yahong Pharma will pay the license fee, annual royalty and milestone payment (including milestones such as new patent application, R&D progress and sales amount) and sales commission to Johns Hopkins University (JHU) in the United States, of which the license fee is US$1,000 and the annual royalty is US$2,000-7,500 (increasing over time), with a total milestone payment of approximately 393$50,000.
In July 2019, Yahong Pharma signed a license agreement with Photocure, a Norwegian company, to obtain the global development rights and interests of APL-1702, which stipulates that the patent transferee will pay PhotoCure a down payment, R&D milestone payment, sales milestone payment and sales commission, of which the down payment is US$5 million, the total R&D milestone payment is about US$70.25 million, and the total sales milestone payment is about US$190 million.
Yahong Pharmaceutical pointed out in the prospectus that the company signed the above-mentioned material contract on the future distribution of interests, involving post-commercialization payment arrangements and sales sharing arrangements, which will have an uncertain impact on the company's future capital expenditure and profitability.
Since 2018, Yahong Pharmaceutical has continued to lose money, and the range of losses has expanded. As of the end of the third quarter of 2023, Yahong Pharmaceutical has about 165.2 billion yuan, the book funds are mainly obtained from IPO fundraising. Up to now, the actual investment in the company's two major IPO fundraising projects, namely the production project of drugs, medical devices and supporting creams and the new drug research and development project, has been behind the planned schedule. In April 2023, Yahong Pharma announced a two-year postponement of the production project of drugs, medical devices and supporting creams.
Yahong Pharmaceutical's share price performance was also unsatisfactory, as it fell to an all-time low on February 6, 2024 after a sharp "break" on the first day of listing61 yuan shares). Recently, Yahong Pharmaceutical threw out a plan to repurchase the company's shares, and intends to use part of the over-raised funds obtained from the IPO (not less than 50 million yuan and not more than 100 million yuan) to repurchase, ** is not more than 128 yuan shares, the repurchased shares will be used for equity incentives or employee stock ownership plans at an appropriate time in the future. According to the announcement, on February 8, Yahong Pharmaceutical paid about 100,000 yuan to repurchase the company's shares18280,000 shares, the most ** is 552 yuan shares, the lowest price is 5$33 shares.