Junshi Bio and AstraZeneca "break up", is it time for local innovative drugs to be self-operated?

At the end of the year and the beginning of the year, rumors about the "breakup" of the local innovative pharmaceutical company Junshi Bio and the multinational giant AstraZeneca once circulated in the industry

On February 28, 2021, Junshi Bio announced that it had signed an exclusive promotion agreement with AstraZeneca, granting AstraZeneca the exclusive promotion rights for the subsequent approved urologic oncology indications in mainland China, and Exclusive promotion rights for all approved indications in non-core urban areas

This blockbuster drug commercialization cooperation, which once attracted the attention of the industry, lasted less than a year

Is Leveraging Big Pharma a "Elixir"?

The combination of Biotech and Big Pharma has always been a hot topic in the industry.

Although Junshi Bio did not separately list the sales amount of PD-1 in various publicly disclosed reports in 2021, according to informal statistics of various third-party institutions in the industry, among the first four domestic PD-1 companies to be approved Among R&D pharmaceutical companies, Junshi Bio’s sales amount may rank last

According to the previous cooperation agreement between Junshi Bio and AstraZeneca, in addition to the indications in the field of urological oncology, AstraZeneca has also obtained the exclusive promotion rights for all the approved indications of Junshi Bio's PD-1 in "non-core urban areas"

AstraZeneca has always regarded sinking into the grassroots market as one of its core strategies, and has established a county-level market team since 2013

Over the past few years, AstraZeneca has achieved great success in the market with this strategy

  Throughout 2021, AstraZeneca's sales team has also undergone several adjustments and staff turmoil
.
In the second half of 2021, the general manager of AstraZeneca's China Oncology Division, the vice president of China, the head of the retail division, and the head of the county business have resigned one after another, and the county team has undergone a reorganization
.

  When its own products are under pressure, the person in charge of the core sales team has left, and its business in China is facing difficulties, how much resources AstraZeneca can invest in the products of its partner, Junshi Bio, is unknown
.
This may be one of the reasons why the cooperation between Junshi Bio and AstraZeneca did not meet expectations
.
For Junshi, it is a wise move to withdraw the authorization in time and adjust quickly
.

  There are big problems, and Big Pharma is not a panacea
.

What are the odds of independently advancing commercialization?

  There is a popular opinion in the industry: Biotech builds its own sales force, and it is not economical to commercialize its own products independently.
The cost of building and maintaining a capable sales force is often too large
.
But for Junshi Bio, this view may not hold
.
The termination of the cooperation with AstraZeneca is considered a "trial and error" in the commercialization of Junshi Bio
.
At present, the time for Junshi Bio to independently promote the commercialization of the domestic market is ripe
.

The R&D pipeline is beginning to show Big Pharma weather

  The reason why the industry is not optimistic about the commercialization of Biotech companies is that small Biotech companies generally have relatively single products and maintain a certain scale of sales system for limited products, which often outweighs the gains
.

  As a leading enterprise in China's new generation of Biotech, Junshi Biotech has covered five major disease fields including tumor, chronic metabolism, autoimmunity, anti-infection and nervous system through the method of "independent research and development + cooperative introduction" for many years, involving monoclonal antibody, dual The breadth and depth of the 45 pipelines in the drug forms such as antibodies, ADCs, and peptides are not inferior to those of Big Pharma.
Junshi Bio is making steady progress towards a platform-based Big Pharma
.

  Toripalimab, the flagship product of Junshi Bio, is the first self-developed anti-PD-1 monoclonal antibody approved for marketing in China
.
At present, toripalimab has been approved for 4 indications in China, and a number of blockbuster indications including lung cancer, liver cancer, esophageal cancer, etc.
are in a leading position in clinical progress, most of which are first-line/adjuvant/neo-adjuvant The next 12 to 18 months will enter the outbreak period of heavy indications declared in China and overseas
.

  In addition to toripalimab, Junshi Bio's adalimumab is in the market review stage, and other blockbuster drugs such as PARP inhibitors, bevacizumab, and PCSK9 inhibitors are in the phase III clinical stage; At this stage, a new generation of immunotherapy targets such as BTLA, CD112R, CD39, IL-21, etc.
will be widely deployed
.

  From the point of view of product reserves, Junshi Bio has fully established the foundation to become Big Pharma.
In the future, as many blockbuster products are launched one after another, it is obviously not an optimal way to place all commercialization prospects on external cooperation.
strategy, which requires innovative enterprises to upgrade their independent commercialization capabilities to a higher strategic level while maintaining certain external cooperation
.

Cash flow sufficient to support R&D and commercialization

  The first difficulty that Biotech companies face in promoting commercialization is the lack of the huge amount of capital required to operate a sales system of sufficient scale
.
At present, Junshi Bio has the ability to provide sufficient financial support for commercialization
.
The successful capital market operation in the past has made Junshi Biotechnology the first company to be listed on the Hong Kong Stock Exchange from the New Third Board to the Science and Technology Innovation Board, and has the ability to refinance in the secondary market when necessary
.

  On the other hand, the products already on the market have considerable hematopoietic ability
.
In addition to the approval of Toripalimab for 4 indications in China, the commercialization rights in North America have been authorized to Coherus, with an initial payment of US$150 million, and subsequent milestone payments of no more than US$380 million, plus a 20% sales share
.
In addition, the new crown treatment drug ectelvizumab (JS016) is also an important cash flow product of Junshi Bio
.

  In May 2020, Eli Lilly introduced atezvirumab from Junshi Bio, and obtained an exclusive license for the clinical development, production and commercialization of the product outside of Greater China
.
Eli Lilly paid Junshi a $10 million down payment and agreed to pay the company up to $245 million in milestone payments, plus a double-digit percentage of sales for the product
.

  In February 2021, the FDA formally granted emergency use authorization for the dual-antibody therapy of eltemirumab and another Eli Lilly antibody drug, banivirumab
.
Since then, the double-antibody therapy has been authorized for use in more than 15 countries and regions, including the United States authorized for COVID-19 treatment and pre-exposure prophylaxis in high-risk groups of all ages
.
At present, the number of public orders in Europe and the United States has exceeded 1 million doses, and the sales have exceeded 1 billion US dollars
.

  Even without considering the future revenue from new product launches, the company's follow-up financing and the cash flow from the above two blockbuster products are enough to support Junshi Bio's investment in building a R&D and commercialization system for a long time.

.

Emphasis on commercialization strategic arrangements

  In fact, no matter how the external cooperation is carried out, the construction of the commercialization system of Junshi Bio has never stopped
.
According to the company's annual report, at the end of 2018, Junshi Bio had 106 on-the-job sales staff, 360 at the end of 2019, and 921 at the end of 2020
.

  In November 2021, Junshi Biosciences issued an announcement announcing the appointment of Li Cong as co-CEO to be fully responsible for related work in the field of commercialization
.
Li Cong has worked in Novo Nordisk and Tonghua Dongbao successively.
He has worked in Tonghua Dongbao for about 15 years.
During this period, his impressive achievements have established Li Cong's "status" in the Chinese pharmaceutical industry
.

  Li Cong joined Tonghua Dongbao in 2004 and was appointed general manager in 2007
.
Tonghua Dongbao's market, R&D, and business cooperation strategies are all carried out under the leadership of Li Cong.
During Li Cong's tenure, the market share of Gansulin series products continued to expand, and the sales exceeded the 2 billion yuan mark.
An ordinary traditional Chinese medicine health product company has been transformed into a company that plays an important role in the domestic diabetes drug field
.

  In Junshi Bio, Li Cong, as the co-CEO, is solely responsible for commercialization, which is not a routine arrangement in the industry, which also reflects Junshi Bio's emphasis on commercialization strategy
.
Under the leadership of such a professional manager who has both the sales background of multinational companies and the successful commercialization experience of local companies, there is reason to believe that Junshi Biotechnology has the opportunity to develop a more suitable commercialization path
.

How to measure the success or failure of commercialization of innovative drugs?

  Many people like to rank the PD-1 drug sales of Junshi, Baiji, Hengrui, and Innovent, and even use this to demonstrate the success of their respective PD-1 drug commercialization
.
I have to say, this is a kind of impetuousness for a layman to watch the fun
.
Short-term sales figures are not enough to measure the success of the commercialization of an innovative drug
.

  For the commercialization of innovative drugs, Junshi Bio has repeatedly emphasized that the real commercialization is to make more patients who can benefit from it
.
The initial pricing of toripalimab refers to the investigator's clinical KOLs and patient questionnaires, giving a "world's lowest price"
.
Deploying the clinically urgent diseases of Asian population, winning the world's first marketed nasopharyngeal cancer treatment immune checkpoint inhibitor, the first "PD-1 + anti-vascular inhibitor" treatment of mucosal melanoma research, in liver cancer, lung cancer, esophageal cancer , Adjuvant/neo-adjuvant therapy research in the field of gastric cancer is in the first echelon
.

  In addition, Junshi is also working hard to promote the globalization of the drug
.
At present, toripalimab has been granted 2 breakthrough therapy designations, 1 fast track designation, 1 priority review designation and 4 orphan drug designation granted by the FDA
.
Various special channels will greatly accelerate its clinical and commercial progress in the United States
.

  In 2021, the marketing application of toripalimab in the United States will also make substantial progress
.
With the policy benefits of rolling submission under breakthrough therapy, toripalimab has become the first PD-1 drug in China to submit a marketing application to the FDA
.
In October 2021, the FDA accepted its two BLA indications for the treatment of nasopharyngeal cancer, and the target time for the end of the review is April 2022
.

  Regarding the process of "going overseas", Junshi Bio responded that it is currently waiting for the FDA to verify the production site, the marketing application is proceeding as planned, and the Phase III clinical trial is an international multi-center study, and everything is progressing normally
.

  The commercialization of innovative drugs in the Chinese market is still a new thing on the whole.
There is no paradigm to follow, and there is not much experience to learn from.
Everything requires the unremitting trial and exploration of the entire industry
.

  As a leader in the new generation of Biotech, Junshi Biotech has achieved certain achievements on the road of commercialization based on its strong R&D strength and product layout.
Of course, it will experience necessary twists and turns.
, The baptism that must be passed from weak to strong
.

  The road to commercialization of innovative drugs is long and stagnant.
From the continuous trials and strategic adjustments of Junshi Biosciences, we can see the unswerving spirit and determination to come even if we are far away.
It is believed that after the new commercialization strategy sets sail, the company will There is a day when we reach the sea of ​​stars
.