With the competitive layout of pharmaceutical companies at home and abroad, the blue ocean track of nuclear medicine has been increasing in popularity since 2023.
Recently, Bristol-Myers Squibb (BMS) announced that it has completed the acquisition of Rayzebio, a nuclear biotech company. Under the terms of the previous merger agreement, BMS was priced at 62US$5 in cash** to acquire Rayzebio, a nuclear biotech company, with a total share capital value of approximately US$4.1 billion (approximately RMB 29.2 billion).
In China, Dongcheng Pharmaceutical, a leading nuclear drug company, first marched into the upstream industrial chain of nuclear medicine last year, and then introduced diagnostic nuclear drug products twice in February this year. In addition, there are many pharmaceutical companies such as Grand Pharmaceutical, Hengrui Pharmaceutical, Xiantong Pharmaceutical, and Zhihe Biotechnology have been deployed.
High-barrier blue ocean track.
Nuclear medicine is a preparation that uses radionuclides or compounds and biological products labeled with radionuclides to diagnose and improve diseases. According to the specific use, it can be roughly divided into diagnostic nuclear drugs and ** nuclear drugs, the former uses the radioactivity of drugs to record their position changes in the human body, so as to obtain the image or functional parameters of the target organs or diseased tissues in the body; The latter makes the radioactive isotope reach the diseased tissue through oral administration or injection of nuclear drugs, and then achieves the effect of inhibiting or destroying the diseased tissue.
According to the research report of China Securities Construction Investment, the global nuclear drug market will usher in rapid growth. According to market research publisher Fortune Insights, the global nuclear medicine market is expected to increase from US$8.4 billion in 2023 to US$29.4 billion in 2030, with a compound annual growth rate of 20%, compared with only 11% in 2019-2023. The rapid growth of the overall nuclear drug market will bring opportunities.
In terms of the domestic market, the data shows that the compound annual growth rate of radiopharmaceuticals in China is second only to biological drugs, and it is expected that the compound annual growth rate of the market size of China's radiopharmaceutical industry will reach 21 in the next five years4%, reaching 78100 million yuan, which is 263 times. In the global market, the Chinese market accounts for only 6%, and the North American market reaches 40%. Compared with developed countries, the use rate of radiopharmaceuticals in China is still low, and the market space is very considerable.
But at the same time, there are high barriers to entry for the entire industry. The Blue Book on the Status and Future Development of China's Radiopharmaceutical Industry (hereinafter referred to as the "Blue Book") released by Frost & Sullivan pointed out that nuclear medicine raw materials are unique, and the overall regulatory system is special, complex and strict. Due to the particularity of its raw materials, the nuclear medicine industry is much more complex and strict than ordinary drugs.
Centralized mergers and acquisitions of multinational pharmaceutical companies.
At present, the global nuclear drug market is still dominated by leading multinational pharmaceutical companies. Among them, Novartis has become a leader in the industry through mergers and acquisitions. In 2018, Novartis acquired Endocyte for US$2.1 billion and acquired two blockbuster radiopharmaceuticals, lutetium [177lu]-oxoctreotide (trade name: lutathera) and lutetium [177lu]-vipivotide traxetan (trade name: pluvicto).
Lutathera was approved by the EMA in September 2017 for patients with gastroenteropancreatic NETT** and subsequently approved by the FDA in January 2018. In 2018, Lutathera's sales reached 1$6.7 billion, which grew to $4 the following year$4.1 billion, in the latest 2023 earnings report, lutathera has achieved 6$0.5 billion in sales.
Novartis' other star nuclear drug, Pluvicto, was approved by the FDA in March 2022 for patients with prostate cancer. In its first year of listing (2022), Pluvicto achieved global sales of 2$7.1 billion. Novartis' 2023 financial report shows that Pluvicto continued to increase its volume last year, achieving 9$800 million in revenue, up 261% year-over-year.
Novartis told the International Financial News that the company is currently planning to establish a nuclear medicine base in Haiyan, Zhejiang. Judging from the information it shared, the production base will be located in the Nuclear Technology Application (Isotope) Industrial Park in Haiyan County, Zhejiang Province, with a total investment of more than 600 million yuan. The site will be built to the highest quality standards for safe and efficient operations, and is expected to be in production by the end of 2026, subject to regulatory approvals for the relevant drugs.
In 2023, multinational pharmaceutical companies will continue to increase their financing and mergers and acquisitions in the nuclear drug track. In March 2023, Novartis announced a more than $1.7 billion collaboration with Bicycle Therapeutics to develop bicycline-based radioconjugates. In April, Novartis reached a cooperation of more than US$400 million with 3B Pharmaceuticals to obtain certain rights to the latter's peptide-targeted radiopharmaceuticals; In May, Bayer and Bicycle entered into a more than $1.7 billion collaboration to develop bicyclic peptide radioconjugates for several undisclosed oncology targets. In October, Eli Lilly acquired Point Biopharma Global, a radiopharmaceutical company, for $1.4 billion.
Global Data, a market research agency, released a report that venture capital deals in the radiopharmaceutical sector increased by 550% to 40.8 billion US dollars. In 2017, that figure was only $63 million.
Domestic entrants are racing to catch up.
Although domestic pharmaceutical companies entered the market late, many pharmaceutical companies have laid out pipelines in the field of nuclear drugs and marched into the upstream industrial chain to solve the problem of raw materials. The "Blue Book" believes that the dilemma faced by the domestic nuclear medicine industry lies in the dependence on imports of raw materials, the shortage of raw materials, and the lack of radiopharmaceutical manufacturers. Most of the medical isotopes obtained by irradiation of reactors in China rely on imports, and overseas radioisotope suppliers generally tend to cooperate with existing customers rather than establish new business relationships, otherwise it may bring additional first-chain risks. Ensuring that radioisotope feedstocks are reasonably stable becomes a major challenge for new entrants.
Everbright's research report has also pointed out that most of the nuclear prerequisites for the R&D and production of nuclear drugs, nuclides, rely on imports. For this problem, Dongcheng Pharmaceutical in China has entered the field of nuclides. In November 2023, its wholly-owned subsidiary, Dongcheng Nuclear Medical, increased its stake in Qikangyuan Medical Technology (Changzhou), a wholly-owned subsidiary of EZP, and will hold 50% of the latter's equity after the completion of the capital increase. The two parties will make use of their respective technology and resource advantages to reach a comprehensive cooperation in the research and development, production and sales of various medical isotopes such as 225AC, 177LU, 68GE and 68GA generators. In February this year, Dongcheng Pharmaceutical also successively introduced lung cancer imaging diagnostic nuclear drug products and liver function test diagnostic nuclear drug products.
Grand Pharma said in its 2023 semi-annual report that the nuclear drug anti-tumor diagnosis and treatment sector is one of the most globalized sectors of the group, and around the concept of integration of tumor diagnosis and treatment, it has reserved 13 innovative products, covering 6 radionuclides including 68GA, 177LU, 131i, 90Y, 89ZR, and 99MTC, covering 8 cancer types including liver cancer, prostate cancer, brain cancer, etc. Tianjin Radiopharmaceutical Innovation Consortium, led by Tianjin Hengrui, a subsidiary of Hengrui Pharmaceutical, was listed on the "News Network" as a typical case of Tianjin accelerating the transformation of scientific and technological achievements, which attracted the attention of the industry. Hengrui Pharmaceutical said in an interview with the reporter of "International Financial News" that Tianjin Hengrui, a wholly-owned subsidiary of the company, was established in 2020 and is committed to building a platform for the R&D and transformation of integrated radionuclide drugs for tumor diagnosis and treatment. Recently, Tianjin Hengrui has also ushered in a new breakthrough in the field of medical nuclide preparation, through independent project establishment and technical research, the independent mass production of copper chloride [64cu] solution, the quality is stable and controllable, and the small animal PET imaging effect of the labeled drug is good. Hengrui Pharmaceutical's breakthrough lays the foundation for the development of 64cu-labeled diagnostic drugs, and can also provide the nuclide to the industry for the R&D and production of such drugs.
Since 2023, Hengrui Pharmaceutical has four nuclear drug products approved for clinical trials, lutetium [177lu] oxyoctreotide injection is Hengrui Pharmaceutical's first nuclear drug product, and the radionuclide diagnostic drug gallium [68ga] isotreotide injection is the company's first pair of radioactive precision diagnosis and treatment products in the field of nuclear medicine, HRS-4357 injection and HRS-9815 injection are the company's first innovative drugs in the field of radionuclide ** and the first innovative drug in radiodiagnostic categories approved for clinical use, respectively. Among them, lutetium [177lu] oxoctreotide injection, HRS-4357 injection and HRS-9815 injection have all completed the enrollment of the first subject last year.
According to the statistics of the "Blue Book", as of October 2023, 42 radiopharmaceuticals have been approved for marketing by the National Medical Products Administration in China, of which 24 radiopharmaceuticals are only used for diagnosis and 15 radiopharmaceuticals are only used for both diagnosis and **; There are also 32 radiopharmaceuticals in clinical trials and marketing applications.
Some industry insiders told the "International Financial News" reporter that the current cycle of new drug research and development has been shortened from the past 10 years to 6-7 years, but at the same time, the research and development cost of innovative drugs is increasing and the life cycle is shortening, so the cost performance of innovative drugs is not high for some pharmaceutical companies, which is why multinational pharmaceutical companies have chosen to enter the market through mergers and acquisitions. It is worth noting that the treatment of hot tracks needs to be viewed rationally, and the establishment of the project does not mean that it will be approved, let alone that it will bring benefits to pharmaceutical companies, and there are a series of issues such as huge cost investment and future commercialization that need to be considered.