Eli Lilly, Cinda PD-1 product "broke up"? Cinda's exclusive response: friendly negotiation to recover overseas rights and interests

Eli Lilly said in its recently released third-quarter securities filing that it terminated the agreement for Tyvyt (Sintilimab) outside China and re-handed the drug to Innovent Biologics
.
"Eli Lilly announced that it officially abandoned its cooperation with Innovent Biologics on PD-1 product Tyvyt", which was recently disclosed by the media
.

As one of the representative products of China's domestic innovative drug research and development and internationalization, the product progress of Cindilimab has always attracted huge attention and interest
from large pharmaceutical companies in the industry.
At the same time, Eli Lilly's third quarter report also clearly mentioned that Cindilimab is also an important part of
the company's product growth.

The market view is that with the "involvement" of innovative drug segments, the domestic PD-1 price ceiling has been continuously lowered, and the overseas market has become an opportunity and hope
for domestic new drugs.
As the first domestic PD-1 to break through the US FDA, the sindilimab in the spotlight suffered a setback at the beginning of this year, and Lilly seems to have begun to retreat
.

As soon as the news came out, the performance of Innovent Biologics' Hong Kong stock fell
in response.

In fact, Innovent and Eli Lilly reached a licensing agreement in 2015 to announce the joint development of Cindilimab, a "milestone" event that is also regarded by the industry as one of the landmark events in the development of
China's Biotech.
Is the setback at sea the main reason for the "breakup" of the two parties? The New Media Center of "Medical Economics News" asked Innovent Biologics about the relevant situation
.

Innovent confirmed the changes in this cooperation and said that the "breakup" between the two parties is actually a recent initiative by Innovent to actively negotiate with Eli Lilly, and the two parties decided to recover the overseas rights and interests
of Cindilimab by Innovent for the sake of business decisions and future development.

The two sides are "friendly consultations"

"No need to return $200 million down payment"

The collaboration between Eli Lilly and Innovent on Cindilimab began in 2015
.
In March and October of that year, Eli Lilly and Innovent signed two strategic cooperation agreements to reach strategic cooperation
for the development of three monoclonal antibodies (including sindilimab) and three bispecific antibody projects.

In August 2020, the two parties expanded their global strategic cooperation with Cindilimab, and Eli Lilly obtained an exclusive license for the drug outside of China, with plans to market it in the United States and other regions
.
Innovent received an upfront payment of $200 million and an $825 million development and sales milestone payment, in addition to receiving a double-digit net sales commission
.

The cooperation situation, which seemed to be a happy one, took a
sharp turn in 2022.
In March 2022, Innovent Biologics announced on the Hong Kong Stock Exchange that the US FDA has not approved the new drug application
for Cindilimab in combination with pemetrexed and platinum-based chemotherapy for the first-line treatment of patients with non-squamous non-small cell lung cancer.
At previous regulatory meetings, the FDA had stated that Cinda/Eli Lilly submitted the application without consulting the regulatory agency before the end of the trial, and did not have ongoing communication
with the regulatory agency (FDA) during the application process.

Immediately, Innovent Biologics said that it will evaluate the next move
of Cindilimab in the United States with Eli Lilly.
Obviously, the obstruction of this overseas application and listing has caused more uncertainty
in the overseas market layout of Cindilimab.

For the recovery of the overseas market rights of Cindilimab, some signals
are obviously revealed.
Innovent said that the recovery of the overseas rights of Cindilimab will be beneficial to the comprehensive layout of the company's tumor pipeline, PD-1 as the most important tumor immunotherapy drug, in addition to the approved indications, has the multi-faceted potential of combination with other tumor pipelines, LAG3, TIGIT and other targets are exploring indications in combination with PD-1, the comprehensive layout of the future tumor pipeline will have more initiative and flexibility
.

In fact, around the sales promotion of Cindilimab, even in the Chinese local market, Cinda and Eli Lilly have been adjusted
.
As early as the end of 2021, Eli Lilly revealed that it would shrink the company's PD-1 sales team in China, and transfer all sales of Cindilimab back to Innovent in January 2022
.

This "breakup" incident has made the capital market speculate: Is the cooperation between Lilly and Cinda on Cindilimab products completely terminated? Will there be an impact on other collaborations between the two sides? In this regard, Innovent made it clear that this decision will not affect the cooperation between Innovent and Eli Lilly in the Chinese market, nor will it affect the long-term strategic cooperation between the two partners, nor will it affect the cooperation on other products.
In the Chinese market, Eli Lilly continues to maintain a high level of cooperation
with Innovent Biologics.

In addition, Lilly paid an advance payment of $200 million to Innovent during 2020, and after the "breakup" incident, the financial treatment of both parties has also become the focus
of attention.
Innovent responded that the "breakup" was a friendly negotiation between the two parties, so Innovent did not need to pay any fees to Eli Lilly for the recovery of rights and interests; In addition, the $200 million authorized down payment previously received by Cinda does not need to be returned
.

Innovent did not give a direct conclusion
on how to view the prospects of Cindilimab going abroad, whether to go overseas independently or find a new overseas partner.

Innovent said that after recovering the overseas interests of PD-1, the company will actively consider PD-1's overseas strategy
.
Several principles are mainly considered: first, PD-1, as the cornerstone of tumor immunotherapy, has important clinical value; Second, whether any market is developed or not, it should consider whether the input and output can bring positive returns to the company; Third, any company's R&D resources and funds are limited, from the perspective of investment return, the layout of R&D resources should be invested in the innovation molecular pipeline with more potential and higher potential return
.

It's time for homegrown innovation

Biotech partners with MNC to accelerate

It is not difficult to see that although Innovent has recovered the overseas rights and interests of PD1 from Eli Lilly, other cooperation between Cindilimab products and Lilly, such as combination therapy and the exploration and development pipeline of new indications
, is still advancing.

In addition, up to now, there are many more cooperation between Cinda and Eli Lilly:

In August 2019, Innovent and Eli Lilly entered into a collaboration to jointly develop and commercialize the GLP1/GCGR dual agonist IBI362 in China, a research-ready glucagon-like peptide-1 receptor (GLP-1R) and glucagon receptor (GCGR) dual agonist developed by Eli Lilly for type 2 diabetes and weight
loss.
As of the data disclosed in Cinda's 2022 half-year report, the product is in the process of advancing from Phase 2 clinical to Phase 2/Phase 3 critical clinical stage
.

In October 2020, rituximab injection (trade name: Dabohua), jointly developed by Eli Lilly and Innovent Biopharma, was approved for marketing for the treatment of diffuse large B-cell lymphoma, follicular lymphoma and chronic lymphocytic leukemia
.
This is the second rituximab biosimilar approved for marketing in China
.

In March 2022, the ramoximumab (trade name: Xiranzhi) developed by Lilly was approved in China, and Innovent Biologics also obtained the exclusive commercialization rights of the product in China from Lilly, and was fully responsible for the pricing, import, marketing, distribution and sales promotion
of Seezen (ramoximumab).
At the same time, Eli Lilly granted Innovent exclusive commercialization rights
to import, sell, promote and distribute the world's first and only unrestricted cancer type of RET inhibitor Selpercatinib for the treatment of RET gene-fusion solid tumors in Chinese mainland.

Although the cooperation between the two sides continues to deepen, it is not difficult to see that with the FDA setbacks of the two parties' Cindilimab products and other domestic PD-1 products, the market as a whole is not very optimistic
about the prospects for the restart of domestic PD-1.

Similarly, EQRX also previously announced that it will no longer seek FDA approval for CStone PD-L1 sugemalimab plus chemotherapy for the treatment of stage IV NSCLC; When Novartis announced its financial results for the second quarter of 2022, it disclosed their plans for the submission of new drug policy applications, and Novartis decided not to proceed with the marketing authorization application originally scheduled to submit tislelizumab in the United States for the second-line treatment of non-small cell lung cancer (NSCLC) in the second half of this year
.

Some industry views pointed out that this may be because of the problems caused by the serious clustering of domestic PD-1 products, the phenomenon of product homogenization is serious, for the US market, if the clinical demand for indications in the subdivision field is basically met, the market competitiveness is not high, it will be difficult to cut into the US market
.

However, with the continuous enhancement of domestic Biotech/Biopharma innovation strength, MNC's industrial chain cooperation is also deepening
.

According to incomplete statistics, BeiGene has reached cooperation with domestic and foreign national enterprises such as Novartis, Merck, Amgen, BMS, BioAtla and Zymeworks, involving PD-1, BTK, CD3, CD19, HER2 and other target products
.
These include overseas licenses with Novartis, Nanolek, Merck and other companies; Sanofi also invested in Innovent Biologics at a 20% premium in August 2022, making waves in the pharmaceutical industry
.
Some people in the capital industry believe that although China's pharmaceutical environment is now at a trough and Biotech's stock price has fallen to a trough, the brand endorsement of MNC this time is like "a shot in the cold winter"
.

With the wave of innovative drugs sweeping through traditional pharmaceutical companies in recent years, License-out is also becoming a stepping stone
to the internationalization of traditional pharmaceutical companies in transition.
Kelun cooperated with Merck Sharp & Dohme for US$1.
4 billion, Elevation Oncology with US$1.
2 billion in Petrochemical, and Genentech with US$600 million in Jimin, and more and more hundreds of millions of dollars or even more than a billion US dollars of license-out were born from traditional pharmaceutical companies
.

For local biopharmaceutical companies, the strategy of "In China For Global" is of course important, but how to cultivate R&D talents, base on the fundamentals of innovation, target unmet clinical needs, and form differentiated competitiveness from the perspective of long-term development is the foundation
of basing on the global market.