A few days ago, Zhejiang Tongyuankang Pharmaceutical Co., Ltd. (hereinafter referred to as "Tongyuankang") launched the IPO process on the Hong Kong Stock Exchange, the company founded in 2017 mainly focuses on lung cancer, breast cancer and other targets, with more than 10 clinical pipelines. As no products have yet been commercialized, the company remains in the red, with a cumulative net loss of 57.8 billion yuan, and the "launch" time of the first product is expected to be 2025, and the IPO of Tongyuankang, which is still losing money and "burning money", will continue to live.
The core product has not yet been commercialized.
Tongyuankang's core business model includes the discovery, development and commercialization of small molecule drugs and other related innovative drug classes (e.g., PROTACs) in-house to address unmet needs in the field of cancer, particularly lung cancer. By fully integrating these elements, the company is confident that it will be able to smoothly transition its drug candidates from the experimental to the clinical stage in an efficient manner.
TY-9591 is the core product of Tongyuankang. According to the prospectus, TY-9591 is a potential best-in-class third-generation EGFR-TKI with anti-tumor effects against EGFR (epidermal growth factor receptor) mutations, and the company is studying the role of TY-9591 in EGFR-mutant NSCLC (non-small cell lung cancer) and NSCLC brain metastases.
Currently, Tongyuankang is conducting a pivotal Phase II clinical trial of TY-9591 as a single agent** as the first-line treatment of EGFR-mutated NSCLC brain metastases**. The company plans to complete patient enrollment in the clinical trial in the third quarter of 2024 and submit an application to the NMPA for conditional marketing approval in the first quarter of 2025.
Tongyuankang has also conducted a registrational Phase III clinical trial with TY-9591 as a single agent** as the first-line treatment for locally advanced or metastatic NSCLC with EGFR exon 21 L858R mutation**, which is expected to complete patient enrollment in the fourth quarter of 2024 and submit an NDA (New Drug Application (NDA) in the second half of 2026.
Tongyuankang currently has a pipeline of 11 drug candidates, including TY-9591, none of which are commercialized. In response to the reasons for listing in Hong Kong and business development, a reporter from Beijing Business Daily contacted Tongyuankang, but did not receive any reply as of press time.
The cumulative loss exceeded 500 million.
New drug R&D has the characteristics of long cycle and high investment. From 2022 to September 2023, Tongyuankang has invested more than 400 million yuan in R&D. Currently, the company has 100 R&D members, about 60% of whom have master's or doctoral degrees, and holds 34 granted patents as well as 109 patent applications.
Since no product has yet been commercially sold, Tongyuankang is still losing money. In 2022 and January-September 2023, the company's net loss was 31.2 billion yuan, 26.6 billion yuan. Compared with 90.8 million yuan in 2022, Tongyuankang's cash and cash equivalents are only 803060,000 yuan. Some industry insiders have said that Biotech's cash reserves determine its margin of safety, and the shortage of cash flow will also lead to a slowdown in R&D.
Tongyuankang's main liquidity** includes cash and cash equivalents, which the company has obtained mainly through equity financing in the past. The company said it expects near-term cash requirements to be primarily related to advancing drug candidate development to obtain regulatory approval, commence commercialization and expanding the portfolio of drug candidates. As the business continues to expand, the Company may need to obtain additional funding through public or private offerings, debt financings, partnership arrangements, licensing arrangements or other**.
Once the drug is on the market, Tongyuankang needs more capital. Tongyuankang said in the prospectus that in the long run, if the company intends to distribute its products globally, it will need to develop and expand its internal marketing organization and sales team, which will require a lot of expenses, management resources and time. Companies also need to compete with other pharmaceutical companies to recruit, hire, train and retain marketing and sales personnel.
Beijing Business Daily reporter Yao Qian.