Authorization to introduce the dilemma again! The product has been approved for listing but was broken up by US$20 million

Although domestic authorized introduction projects have become a trend, with the advancement of authorized introduction projects, various predicaments have begun to be exposed.

01 20 million US dollars break-up fee

Recently, in a 2018 authorized introduction project, the introduced party terminated the cooperation with 20 million U.

The introducer is Beihai Kangcheng, a star company in the development of rare disease drugs in my country, and the introduced party is Puma Biotechnology.

According to media reports, when lenatinib was listed in the United States, it was very optimistic about the market.

The rights that Beihai Kangcheng acquired at the time was an exclusive license agreement for the development and commercialization of lenatinib in mainland China, Taiwan, Hong Kong and Macau.

For Beihai Kangcheng, the introduction of lenatinib, which had been approved for listing in the United States at that time, was expected to "bring opportunities for leaping development for Beihai Kangcheng" and accelerate the commercialization of Beihai Kangcheng.

It is understood that the cooperation negotiation between Beihai Kangcheng and Puma Biosciences took only three months to reach an agreement.

The progress of Beihai Kangcheng after the introduction of lenatinib also seems to be smooth.

Now this cooperation between the two parties has been announced to be suspended.

Data show that in February 2020, Beihai Kangcheng completed a $98 million Series D financing.

02 Beware of the predicament of authorized introduction

This terminated authorized import project deserves attention and vigilance in two points.

It is understood that the project cooperation was suspended halfway, and the two parties broke up for many reasons.

For example, in 2017, BeiGene and Celgene Corporation launched a global strategic cooperation with the anti-PD-1 antibody tislelizumab.

Also, in November 2015, Zai Lab authorized the introduction of Korea-US third-generation EGFR inhibitor HM61713 exclusive development rights in China (including Hong Kong and Macau).

Regarding the specific reasons for the termination of the cooperation between Beihai Kangcheng and Puma Bio, the manager of E medicine contacted Beihai Kangcheng and has not received a reply.

This has also sounded the alarm for enterprises to introduce projects.

Xu Jiaxi, managing director of Industrial Securities, deputy dean of the research institute, and chief analyst of the pharmaceutical industry, also mentioned this situation at the 2021 China Pharmaceutical Industry New Year Outlook meeting recently launched by E-pharmaceutical managers.
Their research found that the annual cost of the drug price after medical insurance negotiations did not exceed 150,000 yuan.
If it is a conventional and highly competitive product, fortunately speaking, the price of 150,000 yuan, but the cost of producing one serving may be 30,000-40,000 yuan.
, Plus the sales share of 30,000 and the sales expenses of 60,000 to 70,000, it is basically unprofitable.
What's more, before that, the company invested tens of millions, hundreds of millions of dollars in down payment for this product.
Such a calculation must be a loss.

Sheng Zelin, chairman and general manager of Zejing Pharmaceuticals, is also very worried about the occurrence of this problem.
He said that if a more reasonable fee and future market share can be paid during the project introduction process, this authorized introduction transaction model is very good.
However, due to the complexity of the Chinese pharmaceutical market, low drug prices and high costs, the future profitability of manufacturers may be greatly affected by paying too high a share ratio.

The above-mentioned industry insiders also said that the current pharmaceutical environment in my country often undergoes major changes.
It is recommended that companies reserve some space when signing contracts and put these related clauses in the contract, even if the cooperation cannot be maintained due to environmental changes.
There is also room for negotiation so that both parties can return to the negotiating table.

Xu Jiaxi proposed two methods that can overcome the "License-in" dilemma:

First, the selection of varieties is accurate enough to have differentiated competitiveness.
Make investors feel worth it or make it beyond the reach of other competitors.

The second is to negotiate a good deal.
If the sales share can be discussed very little, or localized production can be realized, then there will be profits.