On December 10, 2021, Beihai Kangcheng was listed on the Hong Kong Stock Exchange.
This is an ordinary listed company under the "18A system" of the Hong Kong Stock Exchange, but it is very special: China's first pharmaceutical enterprise with rare disease drug research and development as the main body. What does it mean for a business-like niche company to be able to access the capital markets?
"Every small group should not be abandoned!" In early December 2021, zhang Jinni, a negotiator of the National Medical Insurance Bureau, swiped the screen online. The field of rare diseases is the blue ocean, although the incidence is extremely low, but there are many diseases, and the total number of patients is not small.
Frost & Sullivan predicts that the global drug market for rare diseases will grow from $135.1 billion in 2020 to $383.3 billion in 2030, with a compound annual growth rate of 11%.
In the same period, the compound annual growth rate of the Chinese market was as high as 34.5%, which was much higher than the growth rate of the US market. Frost & Sullivan predicts that China's rare disease drug market will account for 6.8% of the world by 2030.
Chart data source: Beihai Kangcheng Prospectus
In the history of drug development for rare diseases in China, 2018 is destined to go down in history. The First Catalogue of Rare Diseases, released on May 11 of that year, was a powerful blower.
The outlet has come.
How windy was it in 2018
"Spring River Plumbing Duck Prophet." As soon as the "First Rare Disease Catalogue" was introduced, the financing of the entire rare disease field was quite active. Yan Zhiyu, CEO of Shufang Pharmaceutical, said.
Beihai Kangcheng is a representative of China's rare disease drug development enterprises. Since its inception in 2012, Beihai Kangcheng has raised a total of 10 financings, of which 4 were before 2018.
After 2018, Beihai Kangcheng quickly completed the C round to E round of financing within 4 years, and finally landed on the capital market. Xue Qun, founder of Beihai Kangcheng, revealed that the company has completed financing of more than 250 million US dollars in 10 years.
It is from 2018 that a large number of rare disease-related enterprises have gained the attention of the capital market.
Founded in 2013, Deyi Sunshine focuses on protein drug development for rare diseases. On February 7, 2021, Deyi Sunshine completed the B round of financing of tens of millions of yuan, invested by Longmen Capital.
Founded in 2016, Newfoss Bio focuses on Leber hereditary optic neuropathy, founded by Professor Li Bin of Tongji Hospital affiliated to Tongji Medical College of Huazhong University of Science and Technology, and the drug developed by his team was qualified as an FDA orphan drug in September 2020.
Newfoss Bio received angel round investment in August 2018, and in April 2020, February 2021 and November 2021, respectively, it received Series A, Series B and Series C financing.
The experience of Faith In Medicine is even more dramatic, as the company was founded on May 14, 2018, three days after the release of the First Catalogue of Rare Diseases. On August 6, 2021, its self-developed hemophilia gene therapy drug obtained clinical trial approval from the State Food and Drug Administration. Behind this start-up, there are well-known investment institutions such as Qiming Venture Capital, Eli Lilly Asia Fund, Sherpa, Matrix Partners China, Northern Lights Venture Capital, Twin Lakes Capital, Qianji Capital, and Chenling Capital.
Similarly, Zhishan Weixin and Jinlan Gene, which were established in June 2018. The two companies are engaged in the development of gene drugs for blood diseases and rare diseases, as well as gene drugs for neuromuscular diseases and inherited metabolic diseases. The introduction of the First Catalogue of Rare Diseases makes it easier for these companies to get favored by large institutions when financing.
Chart source: BCG, Health Bureau
These innovative pharmaceutical companies have one thing in common: they all have their own product pipelines and are led by excellent scientists.
Jinlan Gene is led by Wu Xiaobing, a former professor at the Fourth Military Medical University; Xiao Xiao, founder of Faith Pharmaceutical, is also a leader in the gene therapy industry; Dr. Liu Hongyu, founder of Deyi Sunshine, was a senior scientist at the biotechnology company ZymoGenetics, director of Novo Nordisk Protein Chemistry and director of the pilot workshop; Dr. Dong Biao, founder of Zhishan Weixin, has been engaged in research on new pox-adenovirus (rAAV) virus vectors for more than ten years.
After the wind rises, the sought after is not only independent research and development, but also the authorized introduction model has capital willing to pay. Beihai Kangcheng has been listed 3 products are authorized to introduce, Xue Qun was the general manager of Jianzan China before the establishment of Beihai Kangcheng, has a good understanding of the rare disease market, and naturally will choose the most suitable varieties.
Artificial intelligence and big data also play an important role in the development of drugs for rare diseases. Zero Kr Technology is a platform for providing medical data solutions and tumor big data in the field of major diseases such as tumors and rare diseases, and has carried out 6 rounds of financing since 2015.
Founded in 2015, Mingma Biotechnology, which is affiliated with WuXi AppTec and committed to precision medicine, has been deployed in the fields of genetic rare diseases, assisted reproduction, pathogen macrogenes, tumor detection and other fields, and has raised 4 rounds of financing so far.
The wind is still blowing.
The level of investment
Investment institutions are not charities, and willing to bet on rare diseases must have seen the doorway.
A domestic biomedical venture capital expert said: "Whether from the perspective of social medical needs or from the perspective of the development law of the pharmaceutical market, the development of the rare disease industry has now reached a period of strategic opportunity. ”
As an investor in Beihai Kangcheng's Series C, Lin Yunfeng, founder of Denuo Capital, believes that there is a huge unmet demand in China's rare disease field, which is an untapped market and will continue to maintain rapid growth in the future.
But at this stage, capital is still relatively cautious. Lin Yunfeng admitted that the initial investment in Beihai Kangcheng was also out of recognition of Dr. Xue Qun and his team, "They not only have rich experience in MNC pharmaceutical companies, but also do things very solidly, have a good methodology, and are very patient." ”
It is not only professional investment institutions that have placed bets, but also giants in various fields have copied their own characteristics.
Take Zero Kr Technology, for example, the company's most recent financing came from Alibaba Health. According to public information, the Alibaba Health Platform, Zero Kr Internet Hospital and Tumor Patient Service Center will be interconnected to build a patient-centered, technological innovation-driven full-disease cycle service platform for Chinese oncology patients to provide related serious disease services.
WuXi AppTec entered the market with R&D services. On the surface, when Beihai Kangcheng IPO, WuXi AppTec was the largest external shareholder, holding 10.97%; in fact, as early as April 2016, WuXi Biologics of WuXi Biologics had a strategic cooperation with Beihai Kangcheng. Under the agreement, WuXi Biologics provided Technical Services to Beihai Kangcheng in the preclinical pharmaceutical research of CAN-008, a pioneering antibody fusion protein innovation drug targeted for the treatment of glioblastoma. WuXi AppTec realized early on that China had a much greater unmet need in the field of rare diseases.
Zhou Weichang, chief technology officer of WuXi Biologics, revealed: In fact, since 2012, WuXi Biologics has undertaken rare disease business at home and abroad. "In the early days, foreign business accounted for a relatively large proportion, and due to the impact of the 2018 rare disease catalogue, it was obvious that the domestic rare disease business had grown a lot."
As a senior practitioner, Zhou Weichang has witnessed the process of Henry Mitre, the "godfather of rare diseases", from promoting the benign operation of the rare disease enterprise Jianzan to mobilizing the attention of the United States to rare diseases. Speaking of the difficulties faced by the field of rare diseases in China, Zhou Weichang understands very well:
"What the domestic rare disease market needs most is time, and there must be enough time for the whole society to pay attention to the field of rare diseases." Relying solely on policies or investment is not enough to truly solve the problems faced by the rare disease community, nor is it enough to bring a win-win situation for rare disease patients and related practitioners. "
China's advantages and hidden concerns
Rare diseases are mostly single-gene genetic diseases, the pathogenic mechanism is relatively clear, and the difficulty of drug development is not large. In addition, there are more than 7,000 rare diseases in the world, of which only 5% of patients have a cure, and the blue ocean of research and development is obvious.
The disadvantage is that the patient population is sparse, and clinical trial recruitment and patient tracking are difficult. However, as a country with a population of 1.4 billion, China's rare disease population is obviously more than other countries and regions.
Another background is that on October 25, 2016, the CPC Central Committee and the State Council issued the "Healthy China 2030" Planning Outline (hereinafter referred to as the "Outline"), which clearly stated that a multi-level medical security system with basic medical security as the main body and other forms of supplementary insurance and commercial health insurance as the supplement should be improved. In December of the same year, "orphan drugs" were included in the process of deepening medical reform in the "13th Five-Year Plan".
According to World Bank statistics, the average GDP of Chinese in 2016 was $8123, close to the current state of the U.S. economy in the 1970s. The 1970s were on the eve of the adoption of the Orphan Drug Act in the United States. Based on the similarity of the laws of social and economic development, the release of the Outline has undoubtedly released a signal to support the rare disease industry.
According to incomplete statistics from Pharmaceutical Cube, a total of 26 products from 19 Chinese companies obtained 35 FDA orphan drug qualifications in 2020, accounting for 8% of the number of orphan drug qualifications issued by the US FDA in the whole year.
More importantly, both at home and abroad, the government has given incentives such as tax reductions, independent pricing, and rapid approval to the development of rare disease drugs.
At the beginning of the domestic rare disease market, even if there is policy orientation and market demand, in the context of the immature industry, the attitude of capital is not unanimously optimistic.
In the 2021 medical insurance negotiations, Bojian's Nocinasin sodium injection was reduced to about 30,000 injections at a sky-high price of 700,000 injections. This decline has brought hope to rare disease patients, but also made the entire industry feel anxious.
Some pharmaceutical companies said: "Bojian this drug, because it has long been listed in foreign markets, so it can withstand such a large decline in China." But if new domestic drugs also have to bear this decline, it may be difficult for companies to survive. ”
The payment conundrum is the biggest obstacle to drug development for rare diseases. A well-known investment institution said that the release of the "First Rare Disease Catalog" did allow investors to see the wind direction of the rare disease market, but in fact, there is still a long way to go before forming a sound industrial chain. "Without solving the payment problem in the field of rare diseases, it is difficult to achieve real qualitative change."
Referring to the development trajectory of the foreign rare disease industry, a diversified payment system is crucial to solve the problem of patient payment and corporate revenue, and the basis for the construction of this system lies in sufficient single-disease flow data and a scientific and reasonable medical system.
Then there is the reality of China's level of diagnosis and treatment. According to the caliber of the Health Commission, as of the end of 2020, only 59.5% of the doctors in China have a bachelor's degree or above, 45.8% have intermediate or above technical titles, and 40% of the doctors with higher qualifications are unknown. The distribution of rare disease patients is accidental, and if doctors cannot accurately identify and diagnose, rare disease flow data will not come.
Third, the protection of intellectual property rights in the domestic pharmaceutical field is relatively weak, and the revenue risk borne by domestic rare disease drug research and development enterprises is much higher than that of mature countries in Europe and the United States.
"In fact, the pain points of the industry have long existed, but there is no solution, and it is too late to enter when the pain points are very prominent when the market develops, and only the companies that enter early can become the front-runners." Stau Capital Li Rui said.
This is probably the most important thing for all investors, and the upcoming "Second Rare Disease Catalogue" will make capital more motivated.
The Influence of the First National Rare Diseases Catalogue (2018-2021)
It has been 3 years since the first batch of national rare disease catalogues were implemented, how is the progress of clinical diagnosis and treatment, drug progress and policy support in the field of rare diseases in China?
From now on, the Health Bureau and the Corde Rare Disease Center will release the "Impact Assessment of the First National Rare Disease Catalogue (2018-2021)" from the six major directions of policy, industry, scientific research, clinical, society and patient organization.
This article is the third article of the industry article.
#Rare Disease Directory ##罕见病 #