What are the trends in Qilu and other detonating innovative drugs with 14 transaction amounts that exploded in license in?

Author: Linglong

A few days ago, Genting Xinyao introduced a third-generation BTK inhibitor for the treatment of kidney disease for US$561 million
.

14 items of license in amount "explosive table"

License in (license introduction) is to pay a certain amount of down payment to the authorized party through the introduction, and agree a certain amount of milestone fees and future sales commissions, so as to obtain the commercialization rights of product development, production and sales in certain countries/regions
.

From the perspective of the total transaction amount, since 2021, there have been more than 30 license in transaction amounts exceeding 100 million U.
S.
dollars.
Among them, 14 transactions have “exploded” with over 300 million U.
S.
dollars, involving Zai Lab, BeiGene, Cinda, and Yangtze River.
And other domestic enterprises
.

From the perspective of treatment, anti-tumor drugs monopolize nearly half of the country.
The digestive system (enteritis, gastritis, antiemetics, diabetes, etc.
), nervous system (Alzheimer’s disease, epilepsy, etc.
), anti-infection (antibiotics, antiviral, anti- Fungus, etc.
), ophthalmology (dry eye, etc.
), respiratory system (sinusitis, COPD), etc.
are also involved
.

From 2021 to the present, the transaction amount exceeds 100 million US dollars in license in

Biotech companies with capital market intervention, Biopharma with commercialized products, and Big Pharma with good financial status are the mainstream importers
.

Zai Lab is recognized by the industry as the "China Innovative Drug BD Benchmark".
It has established cooperation with the head of biomedical MNC or R&D institutions to screen mature product candidates from a global scale, and rapidly expand its product line by means of parallel licensing and internal development.

.

At present, Zai Lab has three introduced products that contribute to its revenue.
In addition to niraparib, there are repetinib (KIT/PDGFRα kinase switch regulator inhibitor) and TTFields (tumor electric field therapy)
.

The transactions between Corning Jereh and CSPC, Hengrui and Wanchun Bulin, Chia Tai Tianqing and Yiyi Bio, Cinda and Jinfang Pharmaceutical have attracted the attention of the industry
.

The KN026 introduced by CSPC is a HER2 double antibody independently developed by Corning Jereh.
It is currently undergoing phase II clinical trials in China for the treatment of gastric cancer and breast cancer, which will help expand the company’s anti-tumor drug R&D pipeline; Hengrui introduced Wan Chunbulin is a GEF-H1 activator developed by punabrin.
It has submitted NDAs both at home and abroad.
It can complement the company’s innovative drug thiopefigrastim, which is already on the market.
Status
.

6 major development trends of license in

Looking at the innovative drug license in project in recent years, some development trends can be found
.

1.
The phased payment method of "down payment + milestone payment + sales share" has become the mainstream, and a small part of it will also introduce equity investment
.

2.
The disease field of license in has been enriched year by year, but the concentration of anti-tumor drugs is still the highest.
Affected by the new crown epidemic, anti-infection and new crown vaccine trading items have increased in the past two years.
In addition, skin, ophthalmology, respiratory (inhalation) ) And other specialized fields are also increasing in trading activity
.

According to data from Meinenet, the market size of terminal anti-tumor chemicals in China’s urban public hospitals, county-level public hospitals, urban community centers, and township health centers (Chinese public medical institutions) has exceeded 100 billion yuan in 2020.
Achieved an increase of 9.
63%
.

At present, innovative drugs under research in China are also concentrated in the field of anti-tumor.
The problems such as the clustering of research and development targets and the high proportion of "me-too" and "me-better" projects have become increasingly serious.
Guiding Principles for Clinical Research and Development of Anti-tumor Drugs to guide the industry, which will force companies to optimize R&D pipelines, and may also “cool down” the license in of anti-tumor drugs
.

3.
License in projects are mainly phase I/II clinical, pre-clinical projects account for a certain proportion, and there is an increasing trend
.

By introducing innovative drugs in the late clinical stage, the product line under research can be rapidly expanded, and the market and commercialization of innovative drugs can be ensured as quickly as possible, and the proportion of innovative drugs in the company’s revenue can be increased.
This model is trying to transform to R&D innovation.
Or will become more and more common among large pharmaceutical companies
.

4.
Most license in transactions occur between domestic pharmaceutical companies and multinational companies, but there is an increasing trend in transactions between domestic local companies (especially Big Pharma and Biotech)
.

5.
The total transaction amount has shown an upward trend, with a single transaction exceeding US$100 million increasing year by year; the down payment has not changed much, with an average of US$12 million to US$16 million
.

6.
License in is mainly based on imported products, but the introduction of technology platforms has an increasing trend
.
The technology platform can become the source of innovative products, and may become the source for domestic companies to develop "Best-in-class" and "first-in-class" drugs
.
Companies such as Zai Lab, BeiGene, Cinda Biological, and Pufang Biological have all started cooperation in technology introduction
.

3 analysis of the reasons for the hot license in

In recent years, the number of domestic innovative drug license in transactions has been increasing year by year, and it is expected to reach a new high in 2021
.

From a policy perspective, with the implementation of the normalization and institutionalization of volume procurement, generic drugs have entered an era of meager profit, and their contribution to corporate profits will be reduced, which may even drag down the company’s performance.
A series of encouraging policies have been introduced in terms of entry, medical insurance docking, etc.
, and the launch and volume of innovative drugs with clinical value have been greatly accelerated
.

Policies such as mass procurement have forced domestic pharmaceutical companies to transform to R&D and innovation, and innovative drugs that enjoy policy dividends are sought after
.
For traditional pharmaceutical companies that are trying to transform but have insufficient R&D capabilities, introducing innovative drugs through license in will help quickly expand the product line under research, improve R&D efficiency, and reduce R&D risks
.

From an enterprise perspective, for the importing party, through the license in, on the one hand, it can make full use of local advantages, enjoy policy dividends, and obtain market licenses quickly; on the other hand, if it can introduce advanced foreign products into the Chinese market earlier, Conducive to establishing a first-mover advantage and quickly seizing the market
.
In addition, license in is not limited to the capabilities of the existing R&D team, and can develop a variety of different products at the same time
.

For authorized parties, this is an effective way to relieve the pressure of self-research, especially biotech companies that have not yet achieved profitability.
This type of company’s economic chain is prone to faults and has not yet established a complete sales system.
Through cooperation with large pharmaceutical companies Cooperation can not only effectively alleviate economic pressure, but also rely on the strong sales capabilities of large pharmaceutical companies to ensure the normal commercialization of products after they are launched
.

From the perspective of capital, since the Hong Kong stocks and the Science and Technology Innovation Board opened the door to unprofitable biotech companies to go public, a batch of Biotech companies that were organized or incubated by the capital organization have quickly emerged.
IPO, license in has become the quickest way
.

In addition, investors’ valuation models for pharmaceutical companies are also gradually changing.
The core of pharmaceutical stock valuation is shifting from PEG to PEG+pipeline mode.
Profit will no longer be the only core element of valuation.
Companies with rich R&D pipelines are in the second The secondary market has a valuation premium.
Under the new situation, strengthening the product line has become an important issue for domestic listed pharmaceutical companies, and license in has become one of the fastest and most effective methods
.

However, it should be noted that license in is not a simple "buy, buy, buy".
How to choose the most cost-effective transaction item according to the company's situation? How to correctly evaluate the value of the project and the success rate of R&D? These are all issues that need to be emphatically considered.
At the same time, the concentration of research and development targets and the increasingly fierce competition for homogeneity must be considered
.

In addition, license in is indeed a convenient and effective way to expand the product line, but it may not provide much substantial help to the importer’s independent research and development capabilities.
Therefore, it cannot rely on this model for a long time.
The enterprise still needs to adopt independent research and development + external Introduce, mergers and acquisitions, joint ventures and other multi-models coordinated efforts to achieve sustainable development in the future
.

Source: Meinnet database, listed company announcements, Industrial Securities, etc.

Note: The data in this article are incomplete statistics, welcome to add!