Run away from the PD-L1 and the $10 billion double-resistant market Corning Jerry's IPO in Hong Kong today

191.1 times over-purchased, the stock price rose more than 30% on the day of the listing ... At least in terms of a series of data reactions, capital markets remain enthusiastic about the PD-L1 and dual resistance sectors. PD-1 and other single-resistance research and development of the time, PD-L1 as the first products to be launched and dual-resistance as the focus of research and development direction of Corning Jerry from the beginning to choose a differentiated competitive path. But at a time when multinational pharmaceutical companies and local biopharmaceutical upstables are all over the place, time may be the most important factor in determining market success or failure.On December 12, 2019, there was a buzz in the trading floor of the Hong Kong Stock Exchange. With the clock falling in the hands of Xu Wei, chairman of Corning Jerry, another local unprofitable biopharmaceutical company successfully listed on the Hong Kong Stock Exchange.In quantitative terms, Corning Jerry is already the 11th local unprofitable biopharmaceutical company to successfully list under Section 18A in the year and a half since the launch of the HKEx Biopharmaceuticals New Deal, and is likely to be the last to successfully ring the bell in 2019.But judging by the reaction in the capital markets, there is still a lot of enthusiasm for Corninger. Corning Jerry has already received an oversell of about 191.1 times during the Hong Kong public offering phase. In dark trading the day before the IPO, Corning Jerry closed at 12.76 yuan, up 25.1 percent. On the day of the IPO on the 12th, Corninger's share price rose all the way through the trading hours. As of the first hour of trading, its share price was HK$13.56 per share, with a total market capitalisation of more than HK$12 billion.It should be said that the recognition given in the capital market is largely due to the fact that Corninger has taken a path of differentiated competition from the start, compared with most biopharmaceutical companies that focus on mono-drug research and development. Corning Jerry has always prided itself on its fully integrated proprietary biologics platform for dual-specificity and protein engineering, and from its pipeline research, it is not difficult to find that PD-L1 product KN035 is its fastest-growing product, has been carried out to critical clinical phase II/III, is expected to be submitted to BLA by the end of 2020, and a series of dual-specific antibody drugs, is the core product that Corning Jerry in the pipeline reserves.In recent years, significant progress has been made in the field of cancer immunotherapy, especially immunosupergent inhibitors and CAR-T cell therapy. But with the ability to combine two or more antigens at the same time to explore treatment opportunities untouchable by single-specific antibodies, enthusiasm for dual-specific and multisexual antibody development is also growing year by year. But at a time when multinational pharmaceutical companies and local biopharmaceuticals are eddying, time may be the most important factor in determining market success.01 Double Resistance Race: Another UpcomingAccording to the previously disclosed prospecto, Corning Jerry's current product pipeline includes eight tumor candidate drugs, four of which are in the clinical stage, with progress from Clinical Phase I to Critical Phase II/III. Four are still in the preclinical stage, two of which are in the preliminary preclinical research stage and two are in the leading compound optimization stage.Among them, the dual anti-product KN046 is defined as the core product of the current stage. This is a BsAb immuno checkpoint inhibitor, while targeting two clinically validated immune checkpoints PD-L1 and CTLA-4, and its adaptive range includes solid tumors, non-small cell lung cancer, triple-yin breast cancer, gastrointestinal cancer and other diseases.In terms of progress, Corning Jerry's product is currently in the process of 1b/II clinical in China, while in Australia is also in phase I clinical. In its prospectuse, Corninger disclosed that phase I clinical trials currently under way in Australia and China have shown good safety and initial efficacy signals for NPC (especially PD-L1 high expression subjects) and gastrointestinal cancer (including pancreatic cancer), and that Corning Jerry has adopted a fast/first-time market entry method for selected adaptations and plans to submit KN046 for the first time in China in 2021 for Phase III or late non-removable/metastatic NPC.In addition to this product, Corninger currently has two other antibody products in its clinical pipeline, HER2 dual-specific antibody KN026, and recombinant human CTLA-4 antibody KN019.In fact, Corning Jerry has invested a lot of research and development resources in dual resistance, which is now the focus of the global pharmaceutical industry on the next generation of antibody drugs. Entering 2019, GSK entered into a global cooperation agreement with Merck of Germany for a total of US$3.2 billion to jointly develop and promote the TGF-b/PD-L1 dual-functional antibody M7824, followed by Sanofi's announcement that it would abandon several antibody projects under development within the pipeline, with a focus on strengthening the development of dual anti-drug projects. In addition, including gene Tektronick, regenerative yuan and a series of star biopharmaceutical companies, as well as Roche, Lilly and a number of old MNC, there are also many layouts in this field.However, compared with the growing enthusiasm for research and development, there are not many products already approved on the market, so far, the world has approved a total of three dual-specific antibody drugs, two of which are actually on sale, including Amgen's CD19/CD3 dual anti-Blinatumomab (Blincyto), and Roche's Hemlibra, which treats haemophilia, has previously been approved in the Chinese market, while Amgen's dual-resistance products filed a declaration for listing in China on October 30, 2019 and are currently in the priority review queue.As for the market sales situation, after several years of ambush, dual-specific antibody drugs are beginning to show the growth potential of their sales. Amjin's products were first approved in the U.S. in 2014, and after a period of undervaluation, sales in 2018 were $230 million, up 31%. Roche's products were approved only in 2017 and have sales of $261 million in 2018.From the domestic situation, because the current stage is only a Roche dual anti-product was officially approved, and the fastest progress may be approved for Anjin, including Corning Jerry, Kangfang Biological, Xinda, Reeding, Tiantian Bio, including a number of local innovative pharmaceutical enterprises have also begun to have a layout on dual-resistance products. In this case, who has a more solid technology platform, who has a faster clinical progress, to a large extent who has mastered the market's foreration and dominance.Corninger is clearly optimistic about the future of the market, an important factor is the size of the market in this area. Based on the size of China's anti-PD-(L)1/CTLA-4 BsAb market, it is expected to grow by $100 million by 2022 and $2.9 billion by 2030, with a compound annual growth rate of 47.5%, according to the prospecto.In addition to dual-resistant products, Corning Jerry's first out of the product, the probability is its PD-L1 product KN035. Data show that it has now entered the critical Phase II/III clinical phase in China, and the submission of BLA is expected to be completed by the end of 2020. Its biggest feature is that it may be the first PD-(L)1 inhibitor that can be injected subsulticly.It is worth noting that although it is generally accepted that PD-(L)1 inhibitor subsulfic injections reduce overall medical costs (savings of about 30%-65%) compared to intravenous injections and increase patient acceptance, subsopenic preparation development places greater demands on technology. A relatively large number of drugs need to be added to very limited injections, resulting in higher drug concentrations (over 200 mg/ml), and high drug concentrations are challenged by increased drug aggregation and viscosity and reduced stability, so substantial progress in this path must be made by companies with sufficient technical capacity.02 The next focus remains on research and development, and commercialization is already planned foraccording to Corning Jerry's Hong Kong IPO, which will issue 179.4 million shares at a price of HK$10.2 per share. Excluding underwriting commissions, fees and estimated expenses payable on its global offering, Corning Jerry received net proceeds from the global offering of more than HK$1.6 billion.According to previous announcements, 75 per cent of these funds will continue to be invested in the development of key drugs. Specifically, about 50% of the funds will continue to be spent on research and development (40%) and commercialization (10%), 20% on KN026 research and development (16%) and commercialization (4%), and 5% on KN019 research and development.Of the remaining 25%, about 15% will be spent on Corning Jerry's new manufacturing and research and development facilities in Suzhou, in addition to 10% for early pipeline and operating capital and general corporate use.According to the prospecto, Corninger has not yet commercialized any products, but planning has begun on commercialization. It plans to establish a team dedicated to health and government affairs in the second half of 2020 to prepare for the launch of KN046 in 2021, which will focus on health care and KOL education, increased awareness of innovative oncology therapies, and communication with government departments on insurance, pricing, and more. It is planned that by 2021 its commercialization team will be about 100 people in size.As for capacity construction, it currently uses two 1000L production lines from Suzhou CorningErry to meet current research and development needs. Corning Jerry is also building a free manufacturing and research and development facility in Suzhou to meet the requirements of the State Drug Administration and the European Union/FDA cGMP, with an estimated production capacity of more than 30,000L. Phase I of the new facility is expected to be completed by the end of 2019 with a commercial capacity of 4000L (2x2000L).
(E drug manager)