The price of "anti-cancer drug" PD-1 penetrates the floor. Why are pharmaceutical companies still pouring into this red sea?

Recently, the PD-1 "Four Little Dragons" squeezed into the National Medical Insurance handed over their interim answers: BeiGene and Xinda Bio are still losing money, and Hengrui Medicine and Junshi Bio are profitable
.

How much did the PD-1 product, once known as the "anti-cancer drug", boost the performance of the above-mentioned companies? In fact, only the PD-1 sales of BeiGene and Cinda Biotechnology can be checked.
The former's tisleli beads The revenue of monoclonal antibody is about 800 million yuan, which is 1.
5 times that of the same period last year; the income of Sintilimab of the latter is about 1.
39 billion yuan
.

It can be seen that the benefits of PD-1 products entering medical insurance have not been obvious in the short term.
At the same time, each company is eager to expand sales teams and expand commercial channels, and sales expenses have increased to a certain extent
.

This has caused the market to fall into concerns about the PD-1 industry: fierce competition and compression of profit margins, what is the future prospect?

The PD-1 combined use market is broad

In the first half of 2021, Hengrui Pharmaceutical's revenue was 13.
3 billion yuan, a year-on-year increase of 17.
58%, and its attributable net profit was 2.
668 billion yuan, a year-on-year increase of 0.
21%; Junshi Bio's revenue was 2.
114 billion yuan, a year-on-year increase of 267.
77%; attributable net profit was 9 billion yuan Yuan, a year-on-year increase of 101.
56%
.

Although the benefits of PD-1 products entering medical insurance have not been shown, a senior researcher in the pharmaceutical industry (public number: Antibody Research) with the pseudonym "tracing" provided a new perspective for industry observation
.

Why is the PD-1 product called the cornerstone drug? It is because it can be used in combination with a variety of drugs to achieve the effect of "1+1>2"
.

Looking specifically at the clinical data, Merck’s PD-1 product combined with trastuzumab and chemotherapy drugs is the first-line treatment for gastric cancer.
Compared with trastuzumab alone, the objective remission rate has increased from 52% to 74%, and the complete remission has been increased from 3.
1 % Increased to 11%, and partial relief increased from 49% to 63%
.

Junshi Biologic’s PD-1 product combined with Rongchang Biologic’s new ADC drug can treat patients with locally advanced or metastatic urothelial cancer.
The overall objective response rate is 94.
1%.
The objective remission rate was 100%
.

Retrospectively, the mechanism of the combination of PD-1 products and ADC drugs is that ADC drugs can cause a large amount of tumor antigen release in the tumor microenvironment, thereby triggering immune cell responses, and PD-1 antibodies can inhibit T cell exhaustion, making T Cells continue to fight to achieve the goal of eliminating tumors
.

A person in charge of Junshi Biology told our reporter that from the perspective of immune mechanism, there are three main ideas for combination medication: the first is to release the "brake" and relieve cancer cells from immunity through immune checkpoint inhibitors such as TIGIT.
System inhibition; the second is to step on the "throttle", IL-2, IL-21 and other drugs can be used to activate the immune response; the third is to add "lubricating oil" and use vascular inhibitors to improve the immune microbes of many tumors The environment increases the infiltration of lymphocytes, allowing T cells to enter the tumor more easily after activation
.

Therefore, it can be seen that the PD-1 product market is not yet saturated
.

As the broad-spectrum diversion properties of PD-1 products continue to improve, it will also drive the commercial value of combination drugs
.

At the same time, broader overseas markets are opening up to innovative pharmaceutical companies
.

"For local innovative biopharmaceutical companies, the development goals must not be limited to the Chinese market
.
We should make innovations that take the global'first-in-class' best-in-class' as the breakthrough point
.
In recent years, The vigorous development of China's biomedical industry from the perspective of industry and policy, and China's accession to ICH also provides important conditions for domestic pharmaceutical companies to go international
.
" The person in charge said
.

Latecomers still squeeze into the Red Sea

Focusing on the domestic market, the price of PD-1 products may further decline
.

On the one hand, new products continue to be approved and competition pressure is increasing
.
For example, Kangfang Bio's PD-1 product was approved in August this year.
Through the charity drug donation program, the annual drug fee level will be adjusted to the price of the rest of the PD-1 products after medical insurance reimbursement
.
According to the Beijing Kangmeng Charity Foundation, its first round of donation policy is to buy 4 medicines + rescue 2 medicines, and then buy 4 medicines, which can help until the disease progresses
.
The total cost of medicine for two years was as low as 39,000 yuan, an average of only 19,500 yuan per year
.

On the other hand, the new year's national medical insurance negotiations are approaching again
.
Huachuang Securities Research Report believes that due to the excessive supply of domestic PD-1/L1 products, it is expected that after 2-3 rounds of medical insurance negotiations, the annualized cost of the product may drop to the range of 20,000-30,000 yuan.
Due to the high production cost and depreciation of each company, as well as the high sales expense ratio of various companies, PD-1/L1 monoclonal antibody may gradually become generalized, and the net sales rate may be less than 20%
.

Even so, some pharmaceutical companies plan PD-1 R&D out of strategic considerations
.
In this regard, retrospectively, it is believed that even if the drug companies that have already "on the car" are slow to market, they can directly use their own products when they develop new tumor drugs that require PD-1 combination, so as to firmly control it.
Pricing rights for drugs that are not from home are not controlled by others
.

From the perspective of R&D costs, on the one hand, because the target is relatively mature, there is a large amount of clinical data that can support the safety and effectiveness of the target drug.
For PD-1 products, the risk of "nine deaths" in the development of new drugs has been greatly increased.
Lower
.

However, pre-clinical candidate screening and evaluation still require a lot of effort from pharmaceutical companies
.
"There is no turning back arrow when opening the bow.
If the drug has defects in the design stage, it will definitely appear in the clinic and affect the patient's benefit.
On the contrary, if the drug has specific properties such as strong affinity and slow dissociation speed, It is also potentially helpful to improve the benefit of patients
.
" The person in charge said
.

The clinical trial design is another key node that can distinguish the superior from the inferior
.
The above-mentioned person in charge said frankly that there are currently nearly 20 PD-1 indications approved at home and abroad
.
"Repeat other people’s trials may also be approved, but the patient’s situation will not fundamentally change, but if a new treatment method is created, once successful, it will bring huge social benefits to such patients.

.
"

This is also in line with the country’s higher requirements for clinical trial design and patient recruitment, and encourage pharmaceutical companies to explore "Me better" and "First in class" new drugs
.

On July 2, the China National Center for Drug Evaluation (CDE) issued a notice to publicly solicit opinions on the "Clinical Value-Oriented Anti-tumor Drug Clinical Research and Development Guidelines" (hereinafter referred to as the "Principles")
.
The "Principles" pointed out that the best treatment methods/drugs in clinical practice should be provided to subjects as much as possible, instead of improving the success rate and efficiency of clinical trials, choosing drugs with uncertain safety and effectiveness, or being used by better drugs.
Alternative treatment
.

On the other hand, new drug research and development should provide patients with better treatment options as the highest goal.
When non-optimal treatments are selected as controls, even if the clinical trial reaches the preset research goals, it cannot indicate that the experimental drug can meet the clinical needs of patients.
Actual need, or unable to prove the value of the drug to patients
.

Undoubtedly, as the most serious segment of new drug research and development, most of the PD-1 products on the market belong to "Me too" rather than "Me better" and "First in class"
.
However, retrospectively pointed out that at the current stage in China’s pharmaceutical industry, the introductory'Me too' is a product of the times, "We will say goodbye to this era
.
But we have to allow the short-lived existence of this era
.
In fact, this can be regarded as a kind of The process of accumulation and precipitation of domestic technical knowledge
.
"

"China's basic research and translational medicine still have a very long way to go
.
China does not yet have the ability to go from 0 to 1.

However, the layout of domestic innovative pharmaceutical companies has begun to have differentiated performance, and the future will be from 1 to 10.
The path may have begun to take shape
.
" said retrospectively
.
For example, Kangfang Bio's AK104 (Cadonilimab), PD-1/CTLA-4 bispecific antibody, has achieved excellent efficacy in the second and third line treatment of cervical cancer, and is expected to become the world's first PD1/CTLA4 bispecific antibody on the market
.