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Biotech Survive Broken Tail! Stone Medicine, Zhongsheng, GSK, BMS, Pfizer throw olive branches! Is it time to dig the bottom?

 Last Update: 2022-10-25
 Source: Internet
 Author: User

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New drug research and development has always been characterized by high investment, high risk, long cycle, and there is no guarantee of high returns
.
If you have to find a shortcut on this road full of thorns and nine deaths, it is to choose to follow in the footsteps of successful people and use the Fast-follow strategy to do Me-too drugs
.
Compared with making original innovative drugs, the difficulty and risk of making Me-too drugs are indeed greatly reduced
.
In the past few years, many pharmaceutical innovation companies in China have achieved leapfrog development with this strategy, such as the much-concerned PD-1 target drug as an example, a number of companies successfully jumped from biotech to biopharma
.
Time also, life also
.
With more and more pharmaceutical companies taking the Me-too "shortcut", what was once a "shortcut" has now become an extremely cruel track
.
Under pressure, more and more biotech companies doing Me-too drugs choose to license the commercialization rights of drugs to big pharmaceutical companies
.
"The phenomenon of Chinese innovative drugs is serious!" According to industry insiders, the total number of therapeutic drug targets discovered so far is more than 500, and there are about 20 with the most concentrated drug development in China, such as EGFR, VEGFR2, HER2, PD-1, etc
.
China will present a new pharmaceutical industry chain pattern in the future, and Biotech will focus on early research and development, and cooperate with big pharmaceutical companies in the form of authorization when the project is promoted to the cooperation stage
.
In addition to alleviating the pressure on late-stage R&D expenses, the revenue generated by licensing cooperation and future sales share can also support the company's operations and improve Biotech's monetization capabilities
.
01 Go in both directions, each take what you need

Biotech joins hands with Big Pharma to survive the winter

On April 1 this year, Nature Reviews Drug Discovery published a statistical article on the field of innovative drugs in China, and the content analysis pointed out that as of July 1, 2021, there were 2,251 drugs (including drugs and biological products) under development in all therapeutic areas in China, including 418 first-in-class, 473 fast-follower, and 923 me-too
.

In recent years, the national pharmaceutical reform policy process has accelerated, from the consistency evaluation of generic drugs to the procurement of volumes, which is a big challenge
for pharmaceutical companies keen on fast-follow and me-too drugs.
Under the background of low clinical research standards and serious homogenization competition in domestic drug innovation, on November 19, 2021, the National Center for Drug Review issued the Guidelines for Clinical Research and Development of Clinical Value-oriented
Antitumor Drugs.
The Principles point out that the establishment of R&D topics and clinical trial design should be guided by clinical needs to maximize patient benefits
.
Participants should be provided with the best treatment/drug in clinical practice as much as possible, rather than choosing treatments with uncertain safety and efficacy or replaced by better drugs
in order to improve the success rate and efficiency of clinical trials.
This means that Me-too drugs not only have to race against time, but also need to find differentiation in the dimension of clinical value
.
Genor Biopharma has a deep understanding
of this.
Genor Biopharma has built a powerful "Fast-follow/Me-too" pipeline, involving popular targets such as PD-1, HER2, CDK4/6, and CD20
.
On October 7, 2020, Genor Biopharma officially landed on the Hong Kong Stock Exchange, and under the circumstance that the Hong Kong stock Biotech broke through the sky, Genor Biopharma once rose by more than 30% on the first day of listing, and finally closed up 16.
46%, and the company's market value on the first day was HK $13.
4 billion, making a lively start
.
However, what is surprising is that the stock price of Genor Biotech, which was originally star-studded and full of halos, fell incessantly
after its listing.
Today, the total market capitalization is less than HK$
1 billion.
What happened to Genor Bio is also the epitome of
all companies that focus on Fast follow and Me-too strategies.
In the context of innovative drug involvement, domestic biotech must make a trade-off
between product development and commercialization.
According to the data collected by Meibai Capital, in the first half of 2022, domestic enterprises have frequent cooperation transactions, and according to the disclosed information, commercial cooperation is the main form
.
For example, on April 25, China Biopharma announced that its subsidiary CP Tianqing and Anyuan Pharma have signed an exclusive licensing and transfer agreement for the development and commercialization rights of AP025 and AP026, novel biologics for the treatment of nonalcoholic steatohepatitis (NASH) and type II diabetes mellitus (T2DM), in China and certain Asian regions
。
On June 16, Sihuan Pharmaceutical announced that its subsidiary Xuanzhu Biotech entered into a licensing contract with Shanghai Pharmaceutical subsidiary Shanghai Medicine New Asia to reach an exclusive license with Shanghai Medicine New Asia for Biopharma New
Asia's two new anti-infective drug products, Bainapenem and Plazomicin APIs and preparations, in Greater China.

On June 23, Sunshine Guojian licensed the global rights and interests of initumab (cyptin) antibody sequence for the development and commercialization of antibody conjugate drugs (ADCs) to Chengdu Kelingyuan Pharmaceutical, a wholly-owned subsidiary of Chengdu Xilingyuan Pharmaceutical
.

On October 10, Enbip Pharmaceutical, a subsidiary of CSPC Group, signed an exclusive licensing agreement with Harbour Bio Pharmaceuticals, under which Enbip Pharmaceuticals obtained the development, production and commercialization rights
of Harbour Medicine's bartolimab (HBM9161, HL161) in Greater China (including Chinese mainland, Hong Kong, Macau and Taiwan).
In addition to commercial authorization, in the past two years, traditional pharmaceutical companies have also started a major move to buy the bottom of Biotech (such as mergers and acquisitions, equity investment, etc.
).

Innovative research and development capabilities are the key to the sustainable development of a biotech company, and commercialization capabilities are the key to
whether a drug can be implemented and profitable.
Industry insiders pointed out that traditional large pharmaceutical companies have broad sales channels, mature production, research and marketing capabilities and considerable capital scale, but lack research and development capabilities; Biotech has self-developed product pipelines and technical advantages, but its commercialization capabilities are insufficient
.
Under the capital winter, there are many biotech companies with tight cash flow, and at this time, choosing to join hands with traditional big pharmaceutical companies may be a wise move
to ride through the "cold winter".
02M&A integration, how to achieve a win-win situation by making breakthroughs
? Biotech's icebreaker in partnership with Big Pharma is underway
.
As Biotech gradually returns to rational growth, and big pharma companies with cash flow have been seeking innovation and transformation, the "ice-breaking" between Biopharma and Biotech parties began with the BD transaction of R&D
commercialization.
What kind of biotech will catch the "olive branch" thrown by big pharmaceutical companies? Which type of product will sell for a good price? At this time, buying biotech or cooperating with biotech is already a good opportunity for big pharmaceutical companies to open the "shopping cart"? In recent years, with the high enthusiasm for global innovative drug research and development, the comprehensive strength of pharmaceutical companies has been continuously improved, and more and more diseases are being overcome
.
However, factors such as patent expiration, increased R&D costs, and declining success rates for new drugs have also created an innovation gap
in the pharmaceutical industry.
According to a previous report released by Evaluate Pharma, the expiration of drug patents is expected to put $214 billion of prescription drugs in the world at market sales risk
between 2022 and 2026.
Some of the biggest brand drugs, such as AbbVie's adalimumab, Merck's pembrolizumab, and Johnson & Johnson's ustekinumab, will face biosimilar competition
within a decade.
Bristol-Myers Squibb's current blockbuster product, lenalidomide, will also expire in the U.
S.
this year, and the drug has sold more than $10 billion for three consecutive years
.
At the same time, Big Pharma is facing rising time and cost of new drug development, while approval rates are declining
.
The percentage of new molecular entities (NMEs) approved by the FDA for large pharmaceutical companies decreased from 77 percent in 2011 to 49 percent in 2020, while the percentage of approvals for smaller biotech companies rose from 20 percent to 45 percent
over the same period.
Big Pharma multinationals are looking for "blockbuster" alternatives to fill the gap, so small biotech companies are becoming a lifesaver for Big Pharma
.
The same is true of domestic large pharmaceutical companies, since 2015, domestic generic drug companies have gradually increased their investment in research and development, and domestic pharmaceutical companies have entered the "arms race"
in the research and development stage.
Biopharma wants to buy, Biotech is selling, so what kind of innovative drugs can sell for a good price? Some investors have analyzed that mature listed companies should calculate three accounts when doing investment and mergers and acquisitions: the first is the industrial account, whether the merged pharmaceutical pipeline can improve the industrial chain or fill the technical gap; The second is the financial account, such as whether the innovative drug has entered the second and third phases of clinical trials and can achieve sales as soon as possible; The third is whether the brand account formed based on the first two can comprehensively enhance the value of the enterprise and gain the recognition of investors, and it is more likely to survive the entire market cycle
while achieving major milestones.
The big pharma companies have begun to "wave money" to acquire Biotech, which largely confirms this reasoning: in April 2022, GSK announced that it would acquire Sierra Oncology
for about $1.
9 billion.
Sierra Oncology's innovative JAK inhibitor, momelotinib, recently met all primary and critical secondary endpoints in a pivotal Phase 3 clinical trial
in patients with myelofibrosis.

In May 2022, Pfizer announced the acquisition of pharmaceutical company Biohaven for US$11.
6 billion in cash (a premium of 33%) to acquire its blockbuster migraine (CGRP) listed drug and pipeline under investigation
.
Biohaven's most important product is Nurtec, which has been officially commercialized since March 2020 and has sold $526 million
by the end of 2021.

In June 2022, BMS acquired Turning Point, whose core asset is ROS, for $4.
1 billion1/NTRK inhibitor Repotrectinib, a new generation of oral tyrosine kinase inhibitors (TKIs) with best-in-class (BIC) potential worldwide, is currently in phase II clinical trials
.
In general, for MNC to sell, it must meet one of three clear conditions: first in class (the first in the industry), best in class (the best in class) and other innovative drugs; Products that complement and link with existing pipelines; Cutting-edge technology platform
.
Large local pharmaceutical companies have also begun to sell: in February this year, CSPC completed the acquisition of 100% equity interest in Zhuhai Zhifan, the parent company of WINCOM Biotech, thereby owning a 51% stake in Biotech WINCOM Biotech and injecting 154 million yuan into it, becoming the controlling shareholder
of WINCOM Biotech In June this year, China Biopharma acquired F-star, a NASDAQ-listed company, for US$161 million, acquiring three clinical-stage bispecific antibodies;
in July this year, Nanxin Pharmaceutical announced the acquisition of a 51% stake
in Biotech Xingmeng Biopharmaceutical through capital increase and cash payment.

.
.
.
.
.
.
Cheap, or maybe one of
the reasons big pharma buys out.
According to public data, in 2020, there were a total of 376 financings for innovative drugs in China, with a total disclosed financing amount of RMB85.
8 billion.
In 2021, a total of 519 financings were raised, a year-on-year increase of 38%, but the total amount of disclosed financing decreased by 21% year-on-year to RMB68.
1 billion.
In the first half of 2022, there were only 156 innovative drug financings, and the disclosed financing amount was only RMB20.
9 billion, which continued to decline
significantly from the previous two years.
"For traditional pharmaceutical companies, biopharmaceutical companies have been too expensive in the past two years
.
" An investor in the medical field said that a large amount of financing has poured into the biotechnology and pharmaceutical industries, pushing up the amount of financing in related fields, and there have also been problems of overvaluation and repeated innovation.

In recent years, driven by a number of favorable policies, China's pharmaceutical industry has accelerated to achieve high-quality development, but at the same time, pharmaceutical companies are also facing the impact of market adjustment brought about by the new medical reform policies and the repeated impact of the epidemic, and the income of many enterprises has a clear
downward trend.
Based on the present, in order to cope with the current severe and complex competitive environment and industrial changes, Biopharma and Biotech work together to "cooperate" to seek a better living environment, in order to achieve a win-win situation
.

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