How innovative drugs extend the golden years

The addition of 18A models to the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Growth Enterprise Market of the Shenzhen Stock Exchange, the SME Board of the Beijing Stock Exchange and the Hong Kong Stock Exchange has brought strong capital support
for the development of innovative drugs and innovative medical devices.
In 2015 and beyond, a series of policies to support innovative drugs, especially the establishment of four drugs for special approval, breakthrough therapy drugs, conditional approval, and priority review and approval to accelerate the marketing process, have brought great opportunities
for the development of innovative drugs.
The rest, including attracting capital, establishing innovative drug projects, commercialization, and internationalization, is what pharmaceutical companies should do
.

Follow-up commercialization is difficult

Analysis of the seven years of innovative drug development practice of Chinese pharmaceutical companies, especially innovative pharmaceutical companies, from 2016 to 2022 shows that commercialization, including internationalization, is still being explored, mainly reflected in insufficient preparation, lagging commercialization starting point and insufficient
experience in the marketization of original innovative drugs.
Many pharmaceutical companies think that they have experience in commercializing new drugs, but in fact, most of them are "follow-up commercialization" of "follow-up new drugs"
.
Once the product market environment changes, especially entering a market with different cultures, the previous follow-up commercialization will encounter difficulties
.

Junshi Biologics has begun commercialization in 2019, but the 2021 annual report shows that after its PD-1 product teripulimab was reduced in price by 60% and entered medical insurance, its sales revenue plummeted to more than 400 million yuan, and it lost more than 700 million yuan
in 2021.
High-priced innovative drugs that medical insurance cannot yet cover or in a suitable way face a more difficult situation
.
It is also an indisputable fact
that CAR-T, a cell therapy that claims to "can overcome cancer with one shot", has been cold in the Chinese market due to a cost of one million yuan.
According to Fosun Pharma's 2021 annual report, only about 100 patients entered the treatment process, contributing RMB120 million to the company's revenue, accounting for 0.
31%
of Fosun Pharma's revenue in that year.
During the same period, JW Therapeutics' CAR-T usage was less, only 54 prescriptions were issued, and the revenue was more than 30 million yuan
.

Cherish the golden period and do your homework

We should face up to the fact that
the golden period of innovative drugs is limited.

The new version of the Patent Law, which came into effect on June 1, 2021, adds a compensation system
for the term of pharmaceutical patent rights related to pharmaceutical intellectual property rights.
Paragraph 3 of Article 42 of the new Patent Law refers to the compensation system for the term of pharmaceutical patent rights, which provides a compensation period of not more than 5 years for invention patents related to new drugs that have obtained marketing authorization in China, and at the same time, the total effective patent term after the approval of the new drug after the compensation is satisfied shall not exceed 14 years
.
The system compensates for the time occupied by the market review and approval of new drugs, so that innovative drugs can extend the market monopoly time after marketing, thereby improving the profit margin of innovative drug R&D entities and encouraging pharmaceutical innovators to actively and sustainably carry out new drug research and development
.

On the one hand, the 5-year patent compensation period is increased, and on the other hand, the CDE new drug review and approval time is greatly shortened, and the two play a combined role, which can be said to give innovative drugs a very large golden market period
.
Together, the two items can add about 5~8 years to the innovative drug market
.

The golden period is very valuable, and pharmaceutical companies can focus on the following aspects to extend the golden period of the market
.

First, whether it is Biotech, Biopharma, or even Bigpharma, when making innovative drugs, it is necessary to take into account the balance
of innovative drug targets, R&D teams, funds, markets and internationalization from a strategic height.
We can neither care about one or the other, nor can we "treat the head with a headache and the foot with a pain in the foot"
.

Second, the marketization of innovative drugs should be grasped
from an early date.
A large part of the project materials should be the investigation and design
of the drug market capacity, potential, affordability and marketing methods.
At present, there are still many pharmaceutical companies that set up projects for the sake of project establishment, and most of the market data is "compiled" and cannot be implemented
.
In advance, when the project completes preclinical research, it is necessary to start market preparation
.

Third, improving the efficiency of R&D and declaration is particularly important and necessary
in increasing the golden period of the market.

Fourth, in view of the high elimination rate of innovative drug R&D, the market preparation of innovative drugs should be promoted in parallel with R&D and review and approval, and the sunk cost
of early market investment after the project is rejected must be minimized.
This "balancing technique" reflects the accumulation of experience of
pharmaceutical companies.

Fifth, if the new drug project under development is a new track in the owner's product group, many pharmaceutical companies often use the commission method to expand the market
by experienced pharmaceutical companies.
For the international market, many pharmaceutical companies will adopt a license-out approach to enter the international market, and it is a realistic way
to use their strength.

Sixth, in the process of marketization, according to the characteristics of specific drugs, many drugs extend the gold market period by increasing indications, upgrading standards or self-iteratively upgrading technical grades, which is also a mature practice
.
This operation is often prepared
at a later stage in drug development.

Of course, in terms of specific operations, in order to complete the marketization, but also reduce the risk and sunk cost, there are still many ways
to explore.