Innovative drugs these years: pioneers, subversives, nostalgic people

Countless people are nostalgic for 2019 without the epidemic, but for the pharmaceutical industry, the best "past" may be 2017

This year, the fixed asset investment in the domestic pharmaceutical manufacturing industry was 598.

This year, the output value of biological drugs reached 331.

It is the fastest

This year, China officially joined the ICH

This year, Eli Lilly dissolved the R&D Center in China, GSK announced the closure of the R&D Center for Neurological Diseases, and AstraZeneca's China R&D Center changed its office and renamed Itachi pharma

This year, WuXi Biologics was listed on the Hong Kong Stock Exchange, and the market value of the day rushed to HK$30 billion; Zaiding Pharmaceutical landed on nasdaq, with a market value of 3 billion US dollars; Baekje and Xinji reached a partnership on PD-1 overseas physical tumor rights, receiving $980 million, and the stock price rose by 26%

This year, the Fed welcomed its new head, Jerome Hayden Powell, and the United States also raised interest rates three times, but this year the XBI index rose 32%

This year, the world's first Car-T product Kymriah (Novartis) was launched, the third double anti-Emicizumab (Roche) was successfully landed, and the first RNAi drug Patisiran (Alnylam) has just received the FDA's priority review and breakthrough therapy certification

The journey of bio-innovative medicine seems to have just begun, and the endless sea of stars seems to be in front of us

Whether it is the strategy department of pharmaceutical companies or the local government investment bureau, whether it is capital or upstream and downstream, all decision-makers related to the pharmaceutical industry, the first line of the proposal is written with the word

But no one would have thought that there would be such a day in five years: the market that was originally thought to have a market of 10 billion PD-1 was shrinking, the soul bargaining was constantly staged, the biomedical IPOs were frequently broken, the trading volume of Hong Kong stock 18A and the fifth set of enterprises in science and technology innovation was like a freezing point, and the negative growth of Hengrui.

Bio-innovative drugs, no matter how brilliant they once were, will experience a downward adjustment of the shock cycle

Let us reminisce, but not remember

-01-

-01-

The first fans of biomedicine

The first fans of biomedicine

2017 is the tenth year

This year, BioBAY basically spun off its nanomaterials and semiconductor industries and turned to biomedicine, and the name was renamed from "Suzhou Biological Nano Park" to "Suzhou Biomedical Industrial Park"

This year, thanks to the deep cultivation of China's biomedical industry for many years, the Management Committee of Suzhou Industrial Park finally completely stripped off some of the nanomaterial properties of BioBAY and focused on the professional development of biomedicine, and the name was officially renamed from "Suzhou Biological Nano Park" to "Suzhou Biomedical Industrial Park"
.

"Suzhou Biological Nano Park" "Suzhou Biomedical Industrial Park"

The pharmaceutical industry looks at the policy, and the policy implementation depends on the implementation
of the local government.
If "semiconductor 10 trillion" and "carbon neutrality" were mentioned five years earlier, I don't know if BioBAY would change its name
in this way.

Although there is Zhongguancun in the north and a biomedical innovation industrial park in the south, the local government engaged in biomedicine in China basically cannot avoid the two places of Suzhou and Zhangjiang, whether it is a double venture company that returns to China or a branch of a multinational pharmaceutical company, the
first step in coming to China will be to visit these two places.
Suzhou and Zhangjiang are two roles that industry people are keen to put together for comparison, but in fact, these two "medicine valleys" are completely different development paths
.

Zhangjiang's biomedical industry originated from a concept
by Zhao Qizheng, then vice mayor of Shanghai and director of the Pudong New Area Management Committee.
At that time, all parts of the country were vying to be "China's Silicon Valley", and under the aesthetic fatigue, Zhao Qizheng thought of the concept of "Medicine Valley", giving Pudong, which was vigorously engaged in development at that time, but could not start a clear direction
.

And once a group with strong subjective initiative has a common goal, it will burst out of infinite vitality
.

And once a group with strong subjective initiative has a common goal, it will burst out of infinite vitality
.

As soon as the concept of "Medicine Valley" was proposed, Zhangjiang's investment advertisement hit northern Europe, and since then it has poured all its resources into making Roche the first foreign-funded enterprise
to settle in Zhangjiang.
In order to ensure the formation of the Medicine Valley, Shanghai moved zhangjiang to a research institute, a university, a hospital and so on
.
In this way, all the resources were smashed together, software and hardware were on the same time, and in less than a decade, half of the world's top 15 pharmaceutical & device companies had established a home
in Zhangjiang.

However, the full name of Yaogu is "China Yaogu", and Zhangjiang cannot only have foreign-funded pharmaceutical companies
.
It is also based on this that this "mnc pharmaceutical company gathering place" has also begun to consider the incubation of
local new drug companies.

However, if local governments want to develop an industry, positioning is very important: do they want an industrial zone, or an industrial park, or an incubator?

Do you want an industrial zone, an industrial park, or an incubator?

Industrial zones are more reflective of a "brand" effect; The industrial park pays attention to "aggregation", and the core lies in the integrity of the supply chain; Incubators, on the other hand, do all work from zero to one, focusing on "incubation services", which is a world of difference in the KPIs of local governments: the former pays more attention to "visible" figures such as output value and taxation, while the latter prefers the number of patents, talents, laboratory area, innovation models and other things that
"represent the future".

At that time, foreign-funded pharmaceutical companies had Jinshan Yinshan that could never be completed, and it was inevitable that the market, supply chain and talent would have a great siphon effect
on the newly started companies.
Zhangjiang hatching on such land is tantamount to raising sheep in a forest of lions and tigers, which is difficult to operate and a test
for the KPI of the manager.
If there is a lack of policy continuity, for the long-term industry of biomedicine, it is basically a rice cooker
.

However, Zhang Jiang still did it
hard.

If Zhangjiang explores the incubation path of local pharmaceutical companies from a mature pharmaceutical industrial park, suzhou industrial park is completely an industrial park
that is amplified by subdivisions.

As another test field of reform and opening up and the first stop of Singapore's entry into China, in the late 1990s, China and Singapore jointly formulated a development project with a scale of 20 billion US dollars
.
In this context, the tone of Suzhou Industrial Park is not low
.
However, Suzhou is not Shanghai, there is a lack of universities, hospitals, markets, and what is more lacking is Shanghai's historical accumulation and administrative status
.

However, it is geographically close to Shanghai, in the words of Zhang Dazheng, the developer of the industrial park at that time: "Starting from Jinji Lake, as long as you drive on the Shanghai-Nanjing Expressway, you can reach downtown Shanghai in
less than an hour.
" Connecting Shanghai is connecting airports, seaports, international metropolises, Shanghai's talents, and then the world
.
”

Connecting Shanghai is connecting airports, seaports, international metropolises, Shanghai's talents, and then the world
.

Under this kind of exaltation, Suzhou Industrial Park began, and like the industrial parks around the world, vigorously visited one Fortune 500 company after another, for which the industrial park prepared a team of more than 500 people
.

The park's investment is mainly based on traditional manufacturing, but emerging technologies are also needed
.
However, in the 15th and 11th Five-Year Plans, the so-called "emerging technologies" are not as diverse as today's semiconductors, photovoltaics, biomedicine, etc.
, and there is only one unified name called "advanced manufacturing"
.
But in those years of China, there were too many "PPT companies" like LeTV, who cheated money and land in various local governments in the name of "technology companies", which forced industrial parks to constantly cultivate their own vision
.

"Advanced Manufacturing"

Therefore, in the investment team of Suzhou Industrial Park, a team began to appear, specifically to learn what kind of manufacturing industry is truly advanced
.
Shanghai, which happens to be next door, is developing in full swing, and it has naturally become the place where
Suzhou has learned the most.
Lujiazui's finance, Jinqiao's Internet, and Lingang's shipping have no soil for development in Suzhou, leaving only Zhangjiang's semiconductors and medicines, and in those years, there were still some voices
in the pharmaceutical industry.

In those years, the executives of Suzhou Industrial Park were increasingly mixed in the small meetings of Zhangjiang pharmaceutical circles, from technology to regulations, from operation to investment and financing, from the place with the highest density of medicine in China at that time to learn the underlying logic
of the operation of this industry.
This professionalism has played a great role
in attracting investment in Suzhou Industrial Park.

Therefore, in the face of traditional manufacturing investment, Suzhou does not have much advantage, but the emerging manufacturing industry with high scientific and technological content of biomedicine has slowly become the mainstream
of the entire industrial park.
This group of people with high professional quality and the most understanding of the industry language have gradually entered the center of the stage of park development and construction, specifically responsible for the incubation of innovative enterprises, which has been highlighted by the later statement of BioBAY
.

Emerging projects naturally need a good soil for growth, BioBAY also for these entrepreneurs to prepare the most granular and meticulous service platform, in 2011 to integrate all the technical service resources, the establishment of a wholly-owned subsidiary called Baituo, over the years with the growth of enterprises and industries, to provide CRO, import and export supply chain, talent training and title recognition, industrial approval and other fields of cutting-edge services, is now recognized in the circle of the fastest project promotion, the highest service quality of the comprehensive public service platform
。

Now, biomedicine has become the most beautiful business card in Suzhou, and Zhangjiang has become a veritable birthplace
of pharmaceutical innovation.
This is inseparable from the two local governments' in-depth understanding of various segments in the pharmaceutical industry, and even more inseparable from the manager's tolerance
of this "long cycle, high investment, slow return" industry.

This is inseparable from the two local governments' in-depth understanding of various segments in the pharmaceutical industry, and even more inseparable from the manager's tolerance
of this "long cycle, high investment, slow return" industry.

A senior person in charge of attracting investment in the park mentioned: "Many local governments are now also vigorously engaged in the pharmaceutical industry, in addition to the requirements of the diversification of local industries, there is a very interesting reason, that is, some small local officials usually have the opportunity to meet academician-level figures, and biomedicine is one of the few industries
that can gather a large number of high-level talents in a very short period of time.
" ”

Indeed, many second- and third-tier cities are now willing to give anonymous intermediary companies a large amount of marketing expenses through various channels in order to invite academicians to stand, and it is understood that this number has risen to 300,000
.
However, many pharmaceutical companies, with the natural advantages of high technology, can invite a bunch of academicians to stand at any listing meeting
.
Not to mention that some academicians personally started their own businesses and directly used them as the target of introduction - this is something that local governments
like to hear.

Now many second- and third-tier cities are willing to give anonymous intermediary companies a large amount of marketing expenses through various channels in order to invite academicians to stand, and it is understood that this number has risen to 300,000
.

Only now, when the expectation of biomedical returns is becoming more and more unclear, when the competition is becoming more and more intense, and when "output" begins to gradually replace "freshness" and becomes the main KPI of local governments, as a park, how much patience and energy can we have to persevere in learning and serving the track of bio-innovative drugs? Willing to continue to use a large number of administrative resources to promote the innovation of the industry's institutional mechanisms?

-02-

-02-

BioBAY's advisors

BioBAY's advisors

How to invite this batch of biomedical talents from the international metropolis of Shanghai to the "countryside" of Suzhou is also a test
for the investment personnel in the park.

In addition to impressing with the more attractive investment policies and professional services of local governments, what remains is to compete with the traditional Chinese set - the annual New Year's greetings, the specialties of the east and west mountains on the shores of Taihu Lake, and the picking of bayberry are all good tools
.
In addition, it is said that several people in charge of investment promotion in Suzhou at that time have trained a huge amount, relying on a meal of wine bureau, and forced the executives of foreign companies to drink to Suzhou to start a business
.

It seems that the old saying in the secondary market will never go out of fashion: China's core technology will eventually have to rely on Moutai in the
end.

China's core technology ultimately depends on Moutai
.

At the beginning of the 21st century, China did not have any medical entrepreneurship environment, first, it lacked experience, and second, it had no soil, and capital and policies were in a state
of absence.
However, with a large number of MNC pharmaceutical companies stationed in Beijing and Shanghai, the talent sector is the first to gather strength
.

When BioBAY first landed in 2007, even if the investment investors in the park were more enterprising, all they could do was shuttle through industry activities such as the Biological Industry Cooperation Forum, the Innovation and Investment Conference, and the Qike Health Investment Forum to do sponsorship
.

Taking advantage of this opportunity, the guests of these medical conferences, including Du Ying, former director of Pfizer Global BD and later founded Hehuang, Li Yiping, former medical director of Merck Asia Pacific, Jin Kewen, former deputy director of Wyeth's global marketing department, Li Ge, founder of WuXi AppTec, and other industry and fund executives, some of whom began to become BioBAY consultants
.

These people have some similar experiences: they are the first batch of international students after the reform and opening up, they entered the industrial industry after coming out of the laboratory in the late 90s, they have achieved the level of director/VP of multinational pharmaceutical companies, and began to contact the Business
in China after entering the 21st century.

The directors and VPs of foreign companies in that era did not have any title bubbles, and they were all solid gold content
.

This pharmaceutical talent with mature pharmaceutical industry management experience, together with the park, helped some scattered endogenous innovation forces in China at that time, in addition to daily work, one of the things they did the most was to be invited into the government to point out the country
.
When the domestic innovative drug industry gradually rises, they have also become the first wave
of biomedical innovation.

Du Ying stayed in the well-known VC institution Red Shirt for less than two years, and then went down to do Zaiding Medicine; After Li Yiping became tired of being the boss of the Chinese region in Anjin, he pulled Li Ge along to land on the yaoming junuo; Jin Kewen himself did not go down to do innovative drugs, but he became an entrepreneurial mentor on the shore of Jinji Lake, "batch delivery" of double creative talents
in the pharmaceutical industry.

The first batch of Chinese executives of these foreign companies has opened a wave of biomedical innovation in
China.
Immediately after, the innovative drug reform landed, the industry became clearer and clearer, so their colleagues and successors also began to leave
.
Later, the wind of capital began to blow, the fire of innovation continued to rise, and their subordinates and suppliers also threw themselves into the wave of
entrepreneurship.

The first Batch of Chinese Executives of Foreign Companies, their colleagues and successors, subordinates and suppliers

Today, the first entrepreneurs have basically landed, and a large number of latecomers continue to struggle for valuation and exit channels
.

The first entrepreneurs have basically landed, and a large number of latecomers continue to struggle for valuation and exit channels
.

Since local pharmaceutical companies have gradually entered the center of the stage of innovation, under the dual pressure of efficiency and competition, the investment of foreign pharmaceutical companies in China has been shrinking day by day, and the overseas input of talents in the entire pharmaceutical industry has gradually declined
.
Especially in the past two years, the scale of the innovative drug industry has begun to shrink, and the complex international environment and uncertain collection policies have become more and more conservative
.

A very real question is, where do the entrepreneurs in the back come from? How do they go from an increasingly discerning VC for a large amount of startup money? In the future, these incubators of local pharmaceutical innovation, who should they look for to drink?

A very real question is, where do the entrepreneurs in the back come from?

However, an industry insider did give four directions to this problem: 1) Executives of local companies, companies with mature pharmaceutical businesses in recent years have basically participated in this wave of innovation and have a complete experience; 2) Transformation from universities; 3) Doctors, they are the group of people who know the clinic and the market best; 4) The quality of scientific research institutes within the system and the national team is guaranteed
.

-03-

-03-

CRO: From hitman to capitalist

CRO: From hitman to capitalist

In 2021, the best rise in the pharmaceutical secondary market is CRO
.

In 2011, the only thing that can be regarded as a good life in the local innovation industry chain is also CRO
.

When Zhangjiang and Suzhou first hatched, they would face a dilemma, the IND of the new drug was handed over for two years without results, which was fatal to a pharmaceutical company starting from scratch, there was no revenue, the salary had to be paid, but the project could not be
pushed.
This is a problem
that neither the service platforms in Suzhou nor Zhangjiang can solve.

However, the same is research and development, to do their own projects need to spend money, but to do projects for others can make money
.

When Eli Lilly's R&D center had just moved into China, Xu Yaochang, then head of Eli Lilly Chemical, received a request from the headquarters: to help the R&D department find an outsourcing service team in China, find 6 people, and budget 230,000 US dollars
per year.
However, at that time, the average monthly salary of domestic doctors was just over 5,000 yuan, and the difference was as high as 6 times, so Hui Yongzheng, who was also an executive in the Eli Lilly Chemical Department, directly founded Pioneer Chem and undertook the project
one-on-one.

Later, Pioneer Chemistry gradually extended to pharmacokinetics and biological services, and after three years of wandering on the New York Stock Exchange with the name of Shanghua Pharmaceutical, it was renamed Wise Chemical, and finally installed into Quantum Hi-Tech, becoming today's small molecule CRO leader, Wise Medicine
.

The same story happened to Medessee and Kelly Young
.
However, because foreign companies are in Zhangjiang, these CROs serving foreign pharmaceutical companies are only around Shanghai, and there are very few in
Suzhou.
The outsourcing service companies in Suzhou, from the beginning, all came from public service platforms, such as Jima Gene, from the very beginning, provided scientific research reagents and technical services
to pharmaceutical companies and related institutes in the park.

But Suzhou also has its own way of playing
.

In 2011, Tonghe Capital, a shareholder in Suzhou Industrial Park, landed together with Cinda Bio
under the leadership of the famous international venture capital Fuda Asia.
The original idea was to copy a "biological version" of WuXi AppTec (wuxi biologics was not yet on fire at that time), and had signed a number of biopharmaceutical production capacity orders
with Pfizer.

Since then, in Cinda's Series B financing, Eli Lilly Asia Fund, which represents Eli Lilly, has also successfully become the majority shareholder of Cinda with US$30 million, with the purpose of directly using Cinda's major molecule CDMO services
.
But later, Pfizer gave up playing with them for some reasons, and Eli Lilly's ra, Alzheimer's and other large molecule projects had problems
one after another.

At the same time, the domestic biomedical entrepreneurial wave has started, Yu Dechao, who just joined Cinda, also wants to try to make some drugs out of his own, and Eli Lilly seems to have given up some macromolecular projects and chose to develop
with Cinda instead.
So, from Adimab to get a PD-1 product, and in the pipeline stuffed with several well-known monoclonal antibody biosimilar, Innovent Biotech officially started
.

Cinda, which once wanted to be a large molecule CDMO, later transformed into a drug, and WuXi Biologics, which once transferred a bunch of projects, has always adhered to CXO, and now has a market value of 48 billion yuan and a market value of 320 billion.

It seems that the story of CXO is still easy to tell
.

It seems that the story of CXO is still easy to tell
.

Twenty years ago, when these CROs who were eating the dividends of Chinese engineers had just jumped out of foreign companies to start a business, their former colleagues and superiors and subordinates had become their own customers
.

Since then, local innovative drugs have ushered in the spring, and this group of "colleagues from foreign companies" have begun to start a business, and the services used are still this batch of CROs
.
However, these CROs have grown into industry giants and have set up industrial funds, so that in biotech listed after 2020, it is almost difficult to find companies
that do not have WuXi and Tiger fund in the shareholder list.

Twenty years later, the CROos who carried their school bags around calling customers' fathers have now become the financial fathers
of these entrepreneurs.

Medicine is a circle
.

Medicine is a circle
.

-04-

-04-

Who has helped innovate biopharmaceuticals?

Who has helped innovate biopharmaceuticals?

It took less than a decade for China's biomedicine to catch up with
Europe and the United States for half a century.

It is said that biomedicine is a money-burning industry, so where does this money come from?

Government subsidies seem unrealistic
.
In the past two years, the pharmaceutical management department led by the Food and Drug Administration and the National Development and Reform Commission has always given more policies, except for some scientific and technological projects that can allocate a little money, and the remaining subsidies are lackluster
.

Take the support funds of local governments
.
Although various localities have a lot of investment in biomedicine, often millions of subsidies, but this subsidy does not mean direct payment, a large part of it is in the form of housing subsidies, equipment leasing, public service platforms and rent to the entrepreneur team (if there is no relevant qualifications can not get).

That is to say, the vast majority of such "industrial subsidies" are not from
the table.

The vast majority of such "industrial subsidies" do not come from within the
table.

It is even more impossible
to rely on hematopoiesis.
In addition to Hengrui, CSPC, Tianqing, Kelun and other well-established traditional pharmaceutical companies can come up with double-digit funds to do research and development, the vast majority of innovative pharmaceutical companies have not come out of the breakeven situation until today
.

The answer is only capital
.

Before 2010, there were two main types of money that domestic bio-innovation pharmaceutical companies could get: one was real estate, such as when Beida just landed, the first money was given by Wang Xuechao of the new lake department, and the same was a song.

The other is a US dollar fund, such as IDG (Kanangji Pharmaceutical), KPCB (Mindray), and Vertex Investments (Microchip
).

In the early days, local venture capital funds basically only revolved around the Internet, and paying attention to biomedicine has been a matter of Eli
Lilly Asia Fund since its establishment.
Although some local government funds have begun to intervene very early, because they are state-owned assets, they are stable and do not match the word "risk" in venture capital, not to mention the biomedicine
with a longer cycle and higher risk.

However, because it is a state-owned asset background, the word is stable, and the matching degree with the word "risk" in venture capital is not high, not to mention the biomedicine
with a longer cycle and higher risk.

But there is one fund that has to be mentioned, that is, Morningside Venture Capital
.

As the controlling shareholder of Hang Lung Properties, Morningside Group, like many Hong Kong Island Masters, began its business layout
in the Mainland very early.
Morningside Ventures began looking for projects
in Shanghai as early as 1992.
Although most of Morningside's projects are overseas, it has basically grown up
in the same period as Zhangjiang's pharmaceutical companies.

Mengke Biological, Zesheng Technology, Qianyu Technology.
.
.
These pharmaceutical technology companies hatched from Zhangjiang Yaogu before 2010 lacked policy support and capital irrigation when they needed development the most, so in those years, in addition to participating in the selection of projects, they were more often doing post-investment services for
innovative drugs.
Morningside even participated in the early construction
of the Zhangjiang public service platform.

Morningside even participated in the early construction
of the Zhangjiang public service platform.

However, premature entrepreneurship did not give these first-movers a first-mover advantage
.
In Morningside's portfolio, most of the pharmaceutical projects
that came out were founded after 2012.

Investing at the bottom of an industry and the absence of all roles is often cruel and requires more
.

Today, although China's innovation power has risen, once the top-level design gives wrong expectations, the KPIs of local governments begin to drift from "the number of patents and laboratory area" to "taxation, output value and bigger and stronger"; Industry and capital lack a clear direction, and the whole system will inevitably slide in the direction of sinking
.

The KPIs of local governments began to drift from "the number of patents and laboratory area" to "taxation, output value and bigger and stronger"

Being in the industry, it is difficult to feel the change in the general
environment.

And when the dismal price of PD-1, the soul bargaining staged, the biopharmaceutical IPO break, the Hong Kong stock 18A and the fifth set of science and technology innovation enterprise freezing volume-like trading volume, Hengrui's negative growth.
.
.
Everything will come out, everyone will sigh, and when these points slowly converge into the face, everyone begins to realize that the downturn in the industry really happened
.

After the establishment of Zaiding, someone once asked Du Ying, how long is the road to independent innovation in Biomedicine in China? Du Ying replied, "Go all the way, there is no end
.
" ”

Someone once asked Du Ying, how long is the road to independent innovation in Biomedicine in China? Du Ying replied, "Go all the way, there is no end
.
" ”

The end of medicine is not just about getting old and healing
.
People with pain need a better treatment experience, those who seek care need better course management, and patients with malignant diseases need a longer survival period
.

There is no end to research and development, and there is no end to
innovation.

-05-

-05-

End

End

When Zhangjiang was still a wasteland, hope filled every link
of the pharmaceutical industry.

At that time, the construction of Zhangjiang Park, the concrete on the fourth floor had just been poured, and the water and electricity decoration on the second floor had followed, just like the rolling application for new drugs, and the enthusiasm was written on the face of
every practitioner.
In the words of Zhang Yantao, later Eli Lilly China R&D president, "Optimism and confidence spread like the flu in the population, regardless of gender, age or nationality
.
" ”

Today, the high-rise buildings in Yaogu have been dazzling, and BioBay's ventilation ducts have become a landscape
.
The upstream and downstream of the entire pharmaceutical industry are basically in place, and the innovation system has begun to take shape
.

But what contagious among practitioners is no longer the passionate optimism of the past, but is replaced
by a rational, prudent and calm.

Of course, every downturn in the industry is a process of returning to rationality after the bubble, and I only hope that this "rational return" event can no longer be like before, often five to ten years
.

References:

The 2017 pharmaceutical industry economic operation report, how the China Pharmaceutical Enterprise Management Association "Zhangjiang Medicine Valley" got its name, the CPPCC past figures | Xu Yaochang: Pouring the dream of new medicine that cannot be extinguished, chopping the continuous Zhangjiang love Pengcheng Wanli Starting from Zhangjiang, Qu Bo is like water years, fireworks bloom, Zhang Yantao