Biotech's dilemma?

In the past 5 trading days, the stock price of Tianjing Bio has been falling continuously, and the phase II clinical trial (CP-MGA271-06) of its partner MacroGenics' core product B7-H3 monoclonal antibody, ibrutinib, has been terminat.

On July 11, 2019, Tianjing Bio entered into a partnership with MacroGenics to obtain ibrutinib monoclonal antibody with an initial payment of US$15 million, potential development and registration milestone payments of up to US$135 million, and annual net sales revenue sha.

However, with the termination of the Phase II clinical trial of ibrutinib group, it has also cast a shadow over the progress of the joint development of future product pipeline drugs in Chi.

Today, the capital market has fully considered the value of pharmaceutical innovati.

Previously, some star investors thought: "Companies can still tell stories in infants and young children, but when products and companies develop to a certain extent, it will ultimately depend on how much money they can ma.

Today, some Biotechs with differentiated product layout and Biopharma with their own hematopoietic capabilities are beginning to walk out of the trough of the capital mark.

"Clinical less than expected"

Biotech begins a dilemma

On July 11, MacroGenics announced the termination of a phase II clinical trial of its main drug B7-H monoclonal antibody, ibrutinib, CP-MGA271-06 (in combination with PD-1 monoclonal antibody or PD-1/LAG-3 Double antibody, relapsed and refractory head and neck squamous cell carcinoma), the main reason is that a large proportion of deaths occurred in the drug safety verificati.

MacroGenics said that of the 62 patients treated in the program, two study groups identified seven deaths that may have been related to bleeding even.

Last year, Tianjing Bio announced that the NMPA had accepted the application for a Phase II clinical trial of the combination of ibbrutuzumab and pembrolizumab in the treatment of solid tumo.

At present, no product of Tianjing Bio has been successfully launch.

At the beginning of this year, Gilead announced that the clinical trial of its CD47 antibody Magrolimab in combination with azacitidine was suspended by the US Food and Drug Administration (FD.

The "blood toxicity" problem of CD47 drugs further aroused concerns in the capital market about Tianjing B.

Subsequently, it was reported that Tianjing Bio was exploring options including selling the company, but the above news was denied by Tianjing Bio for the first time; at the same time, Zang Jingwu, the founder of Tianjing Bio, made it clear that the company would further accelerate the transition from Biotech Transform to Biopharma and increase investment in global developme.

However, in the eyes of the market, it is not a simple matter for Biotech to become Biophar.

A head of an innovative pharmaceutical company previously said in an interview with the media that not all Biotechs can become Biopharma, and not all Biotechs need to become Biophar.

Further, the rapid changes in the capital market have also caused investors to lose patience with the long-term pursuit of some Biotechs to transform into Biophar.

It's not hard to imagine what will happen if investors lose faith in innovati.

At the ASCO annual meeting held at the end of May this year, Tianjing Bio announced the latest phase II clinical trial of Ulelimumab (CD73) combined with Toripalimab (PD-1) in the treatment of non-small cell lung cancer (NSCL.

research da.

Although the highest response rate data was observed in some patient cohorts, however, the failure of the research and development to fall short of market expectations made investors vote with their fe.

Industry insiders pointed out that the latest phase II clinical data of CD73 monoclonal antibody is not a clinical failure, but "not amazing enough" compared with AstraZeneca's Oleclumab; however, for Biotech, facing AstraZeneca's strong commercial sales Capable MNCs, without huge product innovation advantages, are difficult to retain capital market investo.

Research and development of new drugs "applaud but not"

All the good is bad?

In fact, in the past few years, with the dividends of China's innovative drug policy, domestic Biotech has sprung up in the capital market, and some companies even rely on "piling up R&D pipelines" and "making PPT" enough to attract early investment, innovation caused by savage growth Risks have begun to bui.

The optimism of pharmaceutical innovation driven by the capital market is now taking a sharp turn for the wor.

Listing breaks, trading downturns, falling stock prices, falling valuations, and difficult financing have become the no.

Faced with the large amount of capital that must be invested to promote clinical development, biopharmaceutical q companies can no longer afford to wa.

Fixed growth, refinancing, cutting pipelines, and seeking mergers and acquisitions are all necessary choices to "surviv.

For biopharmaceutical companies that have already entered the secondary market, issuing refinancing plans is obviously the preferred choice for replenishing working capit.

In the first half of this year, Junshi Bio, Betta Pharmaceuticals, Kangfang Bio and other companies have opened the gates to absorb water to supplement working capital:

On May 16, Junshi Bio's fixed increase plan was accepted by the Shanghai Stock Exchan.

After adjustment, Junshi Biotech plans to issue no more than 70 million A shares to no more than 35 specific objects, raising no more than 969 billion yuan;

On June 13, Betta Pharmaceuticals issued a fixed increase pl.

The total amount of funds to be raised is not more than 1 billion yuan, of which 700 million yuan will be used for the Betta Pharmaceuticals (Shengzhou) innovative drug industrialization base project, and 300 million yuan will be used to supplement working capital;

On July 8, Kangfang Bio announced that the company entered into a placing agreement with Morgan Stanley (the placing agent) to place a total of 24 million placing shares to no less than six placees at a price of HK$227 per sha.

After the completion of the placement, the net proceeds from the placement are expected to be approximately HK$577 million, excluding expens.

Whether it is Betta Pharmaceuticals holding lung cancer targeted drugs, Junshi Biopharmaceuticals wearing PD-1's first "halo", and Kangfang Biopharmaceuticals, which has just launched dual-antibody products, facing huge clinical research and development and products With commercial investment and product approval "good", the capital market's "bad" sentiment is fermenting, and cash flow is still stretch.

Taking Junshi Bio as an example, on May 23, Junshi Bio announced that the Phase III registration clinical study of the drug under development had reached the primary research endpoint; however, similar to Tianjing Bio, Junshi Bio’s share price on the Science and Technology Innovation Board was at The next day hit the limit down, H shares fell by more than 12%, and both the stock price and market value "evaporate.

At the same time as open source, throttling has also become a mu.

Due to the situation of layoffs and pipeline cuts, many companies have already begun to take acti.

A few days ago, Watson Bio announced that its holding subsidiary Shanghai Zerun has terminated the research and development of recombinant EV71 vaccine, and will concentrate its advantageous resources to fully promote the bivalent HPV vaccine WHOPQ pre-qualification, clinical research of 9-valent HPV vaccine, and clinical research of recombinant new crown vaccine at home and abroad; Clover Biotech has also issued an announcement saying that in the current macroeconomic environment, in order to extend the company's cash life cycle, the company will prioritize resources to new coronary pneumonia-related products and certain early projects, and reduce non-new crown related mid-term, late-stage projects and projec.

Investment in new infrastructu.

The primary market is also cold and win.

The data shows that in the first five months of 2022, the number and amount of investment and financing events in the primary market have shown a downward tre.

Investment and financing events have decreased by 45% year-on-year, and investment and financing amount has decreased by 37% year-on-ye.

In the past, pharmaceutical innovation companies gathered together "me-to.

, squeezed the anti-tumor "single-plank bridge", causing the innovative drug to fall into the false name of "applaud but not popula.

The threshold for innovation has been greatly increased, and it is hoped that future commercialization channels will be locked in, so that more companies will begin to seek "backed by the big tree", and new drug research and development has also begun to accelerate the division of labor and differentiation among pharmaceutical compani.

CSPC's holding of Mingkang Bio, and Nanxin Pharmaceutical's acquisition of Xingmeng Bio have allowed the industry to see another way for Biotech companies to go publ.

Senior investors said that in the past, the investment ideas of investors in the pharmaceutical field were more like Internet investment-spending money to gamble on the track, burning money to bet on the leading companies in the subdivision track, which still killed competitors and monopolized the market segme.

"Flow Thinkin.

"Pharmaceutical investment still needs to return to the essence of the pharmaceutical industry, whether there are unmet clinical needs, and whether there are real clinical use scenarios, large fields and broad indications are only one aspect, the innovation of the product itself, and whether the core intellectual property barriers are sufficie.

'Hard core', this is the key to pharmaceutical mergers and acquisitions and investme.

" The above-mentioned investors said that there is often only one reason for large overseas companies to acquire Biotech - the patent of the product/platform cannot be bypassed, and for truly innovative products, try to find ways to bypass .

Patents do me-too, it is better to join hands to make innovative drugs, bigger and stronger, this idea is very worthy of domestic thinki.

Today, the primary and secondary markets are still at a trou.

Since July, although the popularity of pharmaceutical innovation has picked up, the overall environment has not fundamentally revers.

The only consolation is that the field of pharmaceutical innovation has clearly begun to bid farewell to impetuousness and become more ration.

Pharmaceutical innovation, from target discovery to new drug launch, is a path with a low success ra.

The "Clinical R&D Success Rate and Its Contributing Factors 2011-2020" report shows that the overall success rate of all development projects from clinical phase I to market approval in the past 10 years is only 9%; When a new drug is launched, which is often referred to as "First-in-class" in the industry, there are very few people who can successfully complete .

On the one hand, the development of new products is not very popul.

On the other hand, there are good pipelines, but no products come o.

The cold winter of the capital market has obviously magnified the contradiction between innovation resources and market val.

As the capital market's investment in local pharmaceutical innovation companies has become more rational, capital market regulation has paid more and more attention to the innovation quality of R&D companies, coupled with the "Chinese national conditions" of medical insurance on the ability to pay for innovative drugs, continue to lead the industry to Biotech companies Concerns about commercialization capabiliti.

The industry generally believes that more and more Biotech innovative companies have been approved for the market, and the market performance of product commercialization further reflects the company's R&D strategies and market choic.

Before the product is approved for listing, it is difficult to objectively estimate the valuation of the company and the value of the produ.

Once it enters the stage of product commercialization, the company not only needs to use the R&D pipeline to demonstrate its innovative strength, but also needs to consider the differentiation of clinical needs on the market side to highlight the commercialization of innovative produc.

val.