What should a Chinese pharmaceutical company License in do?

Author: head flying snow

The License in model of innovative drug companies that began to emerge in China a few years ago seems to have never been at the cusp of the storm as it is today

On the Sci-tech Innovation Board, since last year, many well-known license-in companies, including Yideng Jingang and Haihe Pharmaceuticals, have been terminated from their IPOs, making the industry continue to feel the pressure of domestic regulators on license-in

In fact, with the development of the global biotechnology industry for decades, license in, or product authorization, between different types of companies is by no means new, and it is also a perennial international business model

Development path after License in: moving or remodeling

In the European and American pharmaceutical industry, whether it is a small biotech company or a Big Pharma, it is very common to have a license in for a product under development

Domestic companies now take projects from Europe and the United States, and the commercial terms often clearly define the rights and interests of Greater China first.

However, returning to the product development path, the vast majority of domestic companies have almost become "we do not produce innovation, but only be innovative porters": they have won foreign clinical stage projects, and then prepared to copy the indications under research in Europe and the United States basically as they are in China.

Actually not

Take a familiar variety, Tianjing Bio CD47 monoclonal antibody Lemzoparlimab

Source: ClinicalTrial.

That's true of Big Pharma, and it's true of small biotech companies

Another example is Horizon Therapeutics, which developed Teprotumumab, a monoclonal antibody targeting IGF-1R, which was first developed by Genmab and Roche as popular anti-tumor targets.

Source: Ali F, Chorsiya A, Anjum V, Ali A.

It can be seen that, compared with the innovative product License in, which is followed by domestic companies, it is more common for European and American companies, whether Big Pharma or biotechnology companies, to implement an original and independent development path after obtaining a product

Chinese->

Many domestic innovative drug license in model companies are generally in this situation: the project selection basically depends on the reputation (or even gimmicks) of the cooperative company, the competitive projects basically rely on spending money, the domestic clinical development basically relies on replication, and commercialization basically relies on storytelling

Of course, many domestic companies still have their core capabilities, especially in investment and financing, BD business negotiations and product development

The research and development of innovative drugs, the so-called Research & Development, actually involves two types of work that are complementary but not the same as research and development, and run through almost every link from the initial drug discovery to the final approval for marketing

In the past, China's innovative drug industry was deficient in both research and development, and it has only begun to make up the debt in the past ten years
.
First, there is the trend of Fast follow.
Against this background, strengthening the development capacity building often results in immediate results
.
After all, Fast follow doesn’t require much research, and it’s enough to change compounds or monoclonal antibodies and copy foreign research
.
Afterwards, License in winds up, and it seems that product innovation is on a higher level, but in fact, it is still mainly the work of Development to land in China
.

Development is of course an important core capability of innovative drug companies, especially in the past ten years
.
However, today, the domestic innovative drug field has already been filled with capital, and everyone is throwing money at people quickly.
The difference brought by Development has been shrinking, at least among the companies that are the same as the top echelon
.
This means that it is difficult to build real differentiation and competition barriers for innovative drug companies and varieties based on development capabilities alone
.

Research capabilities are weak or even lacking, and only Development walks on one leg, which is probably the main reason why most domestic license in companies in Europe and the United States can only rely on spending money to snatch high prices for innovative drugs.
In many cases, several Chinese companies raise prices
.
Even from the perspective of the original pharmaceutical companies, you may be nothing more than advanced CSOs, so why not talk about money?

Let's look back at the concerns of domestic capital market regulators on License in companies
.
Taking Haihe Pharmaceuticals as an example, the exchange has mentioned it in multiple rounds of inquiries, and asked to explain:

The specific role played by the company's core technology in the research and development of major products; whether it has independently made substantial improvements and made substantial contributions to the imported or cooperatively developed core products; There are major dependencies on third-party technologies, and so on
.

It can be seen that the concerns of regulators may not be more about the license in model itself, but also the lack of the license in behavior of Research
.
If the domestic license in company truly reshapes the development path for authorized products such as Loxo for Larotrectinib, or Horizon for Teprotumumab, I believe it will be much easier to face inquiries from regulatory agencies
.

Clinical research of innovative drugs: Research is indispensable

Domestic license ins often target clinical projects in Europe and the United States that have entered Phase II/III, and most of them have accumulated a considerable amount of human data
.
Many people may think that they have reached this stage of the project, but only Development is left, where is the need for Research?

With such a concept, I am afraid that the understanding of innovative drug research is too narrow
.
In the eyes of many people, the development of new targets and new mechanisms is Research, but this is the work of the academic world; target verification and drug discovery are also Research, but after PCC, there will be no more Research, and even less when entering the clinic.

.

Indeed, according to the design of the clinical program, the results of human trials will provide many data, including OS, ORR, PFS and other indicators that are the most concerned about oncology drugs
.
If there is a beautiful and positive data result, naturally everyone is happy
.
Unfortunately, more often, especially in phase I/II trials, we can only get equivocal clinical results
.
Just looking at the clinical endpoint indicators of the design test, often only know the truth, but do not know the reason
.

what to do? If the initial human data is not significant enough (as was the case with the initial oncology clinical trial of Teprotumumab mentioned above), and if it is simply abandoned, many of the drugs that have been approved today will probably die
.

In fact, for innovative drugs, especially First in Class, the initial human data should be regarded as the hypothesis of the drug and the corresponding innovative mechanism, which should be further verified after animal experiments
.
A more reasonable approach should be a comprehensive and in-depth analysis of the initial clinical trial samples and results (not just the design endpoints and published data), combined with the preclinical experimental data carried out in the early stage and the recent scientific research progress in related fields, to comprehensively judge the drug mechanism hypothesis and The possible differences in the actual verification situation, and then on the one hand, go back and carry out more cell or animal experiments to re-verify the updated hypothesis, and on the other hand, the later clinical design, including indications, patient populations, drug regimens, combination strategies, etc.
Optimized to achieve better clinical trial results in the later Pivotal trial
.

Like all scientific research processes, the development of innovative drugs is a continuous cycle of hypothesis & validation & re-hypothesis & re-validation.
Clinical trials themselves are also an important part of the cycle, not as many people simply think, just rolling the dice to reveal the dice.
The cup is ordinary, and it is made to buy and leave the hand and be willing to admit defeat
.

From this, it can be seen that even for projects that have reached the mid-to-late clinical stage, there is still a lot of research work to be carried out.
Big Pharma like AbbVie is even more so
.
Such boldness and innovative measures are based on the premise that the enterprise itself needs to build a strong research system, including accumulating scientific cognition of diseases and projects, medical judgment, translational medical research, and experimental verification platform
.
For example, in the R&D strategy shown by Loxo, although the project source will also include License in & Acquisition, it clearly indicates that the internal independent R&D plays a leading role in the process
.

Source: Loxo Oncology Corporate Presentation

Not to mention that those innovative drug projects born in Europe and the United States have almost no knowledge of Chinese patient population characteristics, indication characteristics, and clinical treatment practices.
Many of them should require domestic companies to carry out a lot of research work after license in
.
If you just sit in an office building dressed in neat clothes, type on a keyboard, get a few contracts, and just get investors and CROs, it is absolutely impossible to carry out real innovative research on authorized projects
.

Asieris Pharmaceuticals, which is also under the license in model, made the following statement when answering the exchange's question on "the specific embodiment of the issuer's core technology and independent research and development capabilities":

Sorting out the research timeline, it proves that the issuer has carried out a large number of preclinical studies on the target of MetAP2 before the introduction; , toxicology, pharmacy, clinical development and other aspects have formed a deeper and more comprehensive understanding of APL-1202; the issuer independently selected non-muscle invasive bladder cancer NMIBC as the first indication of APL-1202, and advanced it to clinical Research phase,
etc.

From these replies, we can roughly get a glimpse of the main work carried out by Yahong after obtaining the rights and interests of APL-1202
.
As an IPO project that was finally successfully released, the work of Yahong may provide us with a lot of inspiration
.

Among domestic non-listed companies, companies that are truly exploring the development of innovative paths have also begun to emerge
.
For example, the first FAK inhibitor IN10018, founded by Dr.
Wang Zaiqi, was first developed by BI, and the Phase I results were published in early 2019, and the single drug effect was average
.
Yingshi Biology conducted in-depth research on FAK and IN0018 data.
After winning the rights and interests of this variety, it immediately carried out a large number of internal independent researches, and finally integrated relevant scientific research progress and internal unpublished data, and launched completely different indications in China and the United States, and they were all relatively A new clinical development path for the original research
.
Public information shows that the two studies are progressing very smoothly, especially IN10018 in the treatment of platinum-resistant ovarian cancer has been approved by the US FDA fast track
.

Such an in-depth digestion and research of the introduced varieties and the establishment of an innovative development strategy may be the development direction of the license in for domestic enterprises in the future
.

Conclusion: A return to truly valuable innovation

Having said that, in China, innovative drug companies based solely on the license in model are of course only a part, and the more widespread behavior should be the license in behavior
.
Whether it is traditional Pharma like Hengrui, upstarts like Baiji and Cinda, or other small biotech companies in the early stage, it has become increasingly common to supplement their own pipelines from European and American license in varieties
.

Looking at China's increasingly perfect innovative drug industry system, there are not only a huge CRO industry that is in line with international standards, but also a large number of small biotechnology companies that closely follow the international leading analysis and research capabilities.
A large number of researchers in the fields of basic medicine and biological research are rapidly developing Catch up with the world's leading research directions, especially with huge clinical resources
.
For those companies that have won the rights and interests of European and American innovative drugs in China, as long as they are truly willing to invest, it is entirely possible for them to do innovative work that is not inferior to that of European and American companies
.

Everything is available, but it has repeatedly fallen into a vicious circle of homogenization competition in which domestic companies are invoking the same target and foreign countries are competing for license in projects with high premiums
.
In the final analysis, it may be that domestic innovative drug companies, including investment institutions, have become accustomed to making quick money in recent years, and are too obsessed with concepts such as grabbing the wind, grabbing dividends, and grabbing speed
.

Where is the way out? Only by returning to the original intention and rethinking solutions for those unsatisfied clinical clinical dilemmas
.
If so, even if it is License in, I believe that domestic enterprises can also explore truly valuable innovation paths
.