Hundreds of innovative drugs have achieved "going overseas" and local drugs have gone international

Native medicine counterattacked

According to incomplete statistics, up to now, hundreds of innovative drugs in China have achieved "going overseas", and from the beginning of 2023 to October 10 alone, there have been 16 transactions.

International third-party evaluation data shows that the level of new drug research and development in China has moved from the third echelon to the second echelon. Behind this, there is not only the help of policy reforms at the drug approval level over the years, but also the improvement of the R&D strength of local enterprises. Industry insiders believe that whether it is now or in the future, domestic drugs cannot only target the local market, but must go international. Only cooperation can empower each other and create value.

The number of domestic innovative drugs approved has reached a new high

According to public data statistics, in the first three quarters of 2023, 28 innovative drugs have been approved for marketing by the State Food and Drug Administration, and domestic innovative drugs have an absolute advantage, reaching 26, which has exceeded the number of 2022 new drugs approved for marketing in 19.

In 2021, the NMPA approved a total of 27 domestic innovative drugs (excluding vaccines and traditional Chinese medicines) for marketing, a record number at that time. Earlier, in 2020, the number of domestic new drugs approved reached 11, reaching double digits for the first time in history.

Since the launch of the drug administration reform in 2015, the number of clinical research applications (IND) applications for innovative drugs in China has begun to increase, and in 2017, there was an inflection point of substantial growth, and the number of domestic innovative drugs declared has also begun to increase significantly.

At the same time as the local approval, domestic innovative drugs have also begun to go overseas. On November 2019, 11, the U.S. Food and Drug Administration (FDA) announced that zanubrutinib, a new anti-cancer drug developed in-house by BeiGene, has been approved for "Priority Review" as a "breakthrough therapy" for the treatment of patients with mantle cell lymphoma (MCL) who have received at least one prior therapy. This also marks that zanubrutinib has become the first new anti-cancer drug independently developed by a Chinese company and approved for marketing by the FDA. Since then, the "journey" of local innovative drugs to go overseas has begun, and then there has been a wave of small upsurge in going overseas, and the number of drugs going overseas has increased significantly. Since the beginning of this year, the projects of many companies such as Hansoh Pharmaceutical, Yilian Biotechnology, Hengrui Pharmaceutical, and Junshi Biosciences have "gone overseas".

ON OCTOBER 10, JUNSHI BIOSCIENCES ANNOUNCED THAT THE BIOLOGICS LICENSE APPLICATION (BLA) FOR THE SELF-DEVELOPED ANTI-PD-30 MONOCLONAL ANTIBODY DRUG TORIPALIMAB (U.S. TRADE NAME LOQTORZI) HAS BEEN APPROVED BY THE U.S. FOOD AND DRUG ADMINISTRATION (FDA), WHICH ALSO BECOMES THE FIRST INNOVATIVE BIOLOGIC DRUG INDEPENDENTLY DEVELOPED AND PRODUCED IN CHINA APPROVED BY THE FDA. The two indications approved for toripalimab cover the full line of treatment of recurrent/metastatic nasopharyngeal carcinoma, namely the combination of cisplatin/gemcitabine as the first-line treatment for adult patients with metastatic or recurrent locally advanced nasopharyngeal carcinoma; Monotherapy for adult patients with recurrent, unresectable, or metastatic nasopharyngeal carcinoma whose disease has progressed during or after prior platinum-based therapy.

In 2022, overseas licensing reached an all-time high

"License out" is one of the ways for drugs to go overseas, that is, external licensing, which can be a patent or technology, or a certain compound or product, and the introducer needs to pay the corresponding "patent fee". The license out of a local company can be traced back to 2006, when Chipscreen Biosciences licensed the global development rights of the company's product under development outside of China to HUYA at a price of US$2800 million, which also became a precedent for the "license out" of local innovative drugs.

From 2017 to 2019, the number of domestic innovative drugs going overseas in the form of license out did not exceed 10 per year. From 2019 to 2021, the cumulative number of license out transactions of Chinese pharmaceutical companies reached 100, with a cumulative transaction value of more than US$240 billion. According to Kangcheng Investment data, in 2022, there will be 44 innovative drug licensing out transactions in China, with a disclosed transaction value of US$270 billion, doubling the total transaction value in 2021. In the first half of 2023, the total amount of licensed out transactions has reached US$143.2022 billion, three times that of the same period in 20, and the maximum value of a single transaction reached US$2023 billion. According to the NextPharma pharmaceutical transaction database, in the first half of 27, the domestic innovative drug licensing out has achieved outstanding results. The 24 license out transactions involved 124 domestic companies, with a total transaction value of more than US$<>.<> billion.

In addition to licensing, more innovative drugs have been approved overseas. In 2022, Legend Biotech's self-developed cell therapy product, cilta-cel, was approved by the FDA for the treatment of patients with relapsed or refractory multiple myeloma (R/R MM) who had received four or more prior therapies, including proteasome inhibitors, immunomodulators, and anti-CD38 monoclonal antibodies, becoming the first cell therapy product approved by the FDA in China. The drug was subsequently approved by the European Commission (EC); In June this year, CStone's first-in-class precision therapy KIT/PDGFRA inhibitor avatinib tablets were approved by the FDA for the treatment of adult patients with indolent systemic mastocytosis.

After zanubrutinib, domestic innovative drugs were once dominated by PD-1, and Junshi Biosciences, Hengrui Pharmaceutical, and BeiGene were among them, and the aforementioned legendary biotech CAR-T therapy became the representative of cell therapy products. In recent years, ADC drugs have become a new track for innovative drugs to go overseas. In August 2021, Remegen entered into a global exclusive licensing agreement with Seattle Genomics, a global biopharmaceutical company in the field of oncology and ADC (antibody drug conjugate), and the total potential revenue from this transaction will be as high as US$8.26 billion, which also set a new record for a single product overseas licensing transaction by a Chinese pharmaceutical company at that time. Since the beginning of this year, many companies such as Hansoh Pharmaceutical, Yilian Biologics, and Sinovi have achieved authorized cooperation in ADC projects.

China's new drug research and development level has ranked in the second echelon

The rise of local innovative drugs is inseparable from the help of the policy level.

Since 2016, favorable policies for innovative drugs in China have been introduced one after another, and the approval of innovative drugs has been accelerated. At the international level, in June 2017, the former State Food and Drug Administration (CFDA) and the International Council for Coordination of Human Drug Registration (ICH) announced at the same time that the ICH officially approved the CFDA as its member, which is also considered to be a landmark event for China's biopharmaceutical industry to be in line with international standards and participate in international competition. In the industry, the technical guidelines issued by ICH have been accepted and translated by drug regulatory agencies in major countries around the world, and have become the core international rule-making mechanism in the field of drug registration.

The R&D strength of local companies is also accelerating. According to the 2022 China Pharmaceutical Enterprise R&D Index with China's listed pharmaceutical companies as the research object, in 2022, the R&D index of non-device Chinese pharmaceutical enterprises increased, with the average value rising from 2021.60 in 974 to 2022.61 in 018, and the median increasing from 2021.60 in 755 to 2022.60 in 817. In addition, the way of cooperation between local enterprises and foreign-funded enterprises is also quietly changing, no longer limited to joint ventures and other forms, and the number of cases of foreign-funded enterprises purchasing shares of local enterprises is gradually increasing. Industry insiders pointed out that foreign-funded enterprises previously paid more attention to the sales and production capacity of local enterprises, and the change in cooperation mode means that the innovation ability of some local enterprises has gradually been recognized by foreign-funded pharmaceutical companies. Chen Kaixian, academician of the Chinese Academy of Sciences and deputy chief engineer of major national science and technology projects for major new drug creation, has said on many occasions that at present, from the perspective of international third-party evaluation, China's new drug research and development level has entered the second echelon from the third echelon. The McKinsey report also shows that China's contribution to global pharmaceutical R&D rose to 2018%-4% in 8.

At the same time, the competition in the domestic market is also becoming increasingly fierce, with the implementation of policies such as drug "national talks", the price ceiling has emerged, which has also prompted some companies to turn their attention to overseas in order to strive for a larger market.

Of course, the road to sea is not all smooth sailing, and "return" incidents occur from time to time. Kelun Pharmaceutical's two ADC licensing projects were terminated by its partner Merck, and a number of companies such as BeiGene, InnoCare, and Jacobio were terminated by their partners. Yu Zilong, Head of Life Sciences, KPMG China, has said in public that pharmaceutical companies need to have a comprehensive and in-depth understanding of market registration and regulation, business and competition, access, investment and tax environment in the target country, and have a more flexible and agile attitude of "going global".

Beijing News reporter Zhang Xiulan